India's focus going forward: India's focus going forward: Agriculture or Agriculture or

manufacturing and servicesmanufacturing and services

-Sriram Vangara (07927849)-Sriram Vangara (07927849)

-Arijit Majumdar (07927865)-Arijit Majumdar (07927865)

WHY AGRICULTURE?

EMPLOYMENT FOR MASSESEMPLOYMENT FOR MASSES

Employment for massesEmployment for masses

Agriculture currently employs 60% of the Agriculture currently employs 60% of the country's population.country's population.

Natural advantages India possessesNatural advantages India possesses

IndicatoIndicatorr

YearYear IndiaIndia WorldWorld

Agriculture Agriculture Land as % of Land as % of Total Land Total Land

19911991 57.057.0 11.511.5

20012001 57.157.1 11.711.7Agriculture Agriculture PopulationPopulation

as % of Total as % of Total PopulationPopulation

19911991 57.857.8 46.046.0

20012001 53.253.2 42.042.0

FOOD FOOD SECURITYSECURITY

Food securityFood security

Effects of the green revolution are drying Effects of the green revolution are drying outout

The ministry of agriculture estimates that The ministry of agriculture estimates that within next five years, India will be short of within next five years, India will be short of 20 million tonnes wheat, rice and pulses 20 million tonnes wheat, rice and pulses

WheatWheat

- India currently grows 67 kilograms of - India currently grows 67 kilograms of wheat per person annually wheat per person annually

- India’s per capita wheat consumption is - India’s per capita wheat consumption is nudging 73 kg and is on the upswing . nudging 73 kg and is on the upswing .

Food securityFood security Over the period 1990-91 to 2000-01Over the period 1990-91 to 2000-01

- the growth rate of foodgrain production dropped - the growth rate of foodgrain production dropped to 1.66 per cent per annum(from 2.5 percent)to 1.66 per cent per annum(from 2.5 percent)

- population growth rate over the same period - - population growth rate over the same period - 1.9 per cent1.9 per cent

Food securityFood security

104105106107108109110111112113

2003-04

2004-05

2005-06

2006-07

Population

190

195

200

205

210

215

2003-04

2004-05

2005-06

2006-07

Foodgrainsproduction

INFLATIONINFLATION

InflationInflation

Foodgrains’ price is one of the major Foodgrains’ price is one of the major contributor to Inflation ,along with oil contributor to Inflation ,along with oil in the Indian economyin the Indian economy

Inflation due to foodgrains’ price hits Inflation due to foodgrains’ price hits poor the mostpoor the most

Often Inflation due to increase in Often Inflation due to increase in food prices have caused electoral food prices have caused electoral losses to the ruling party.losses to the ruling party.

InflationInflationYears of poor rainfall and effect on InflationYears of poor rainfall and effect on Inflation

Years of Years of poor poor rainfallrainfall

Rainfall % Rainfall % departure departure from from normalnormal

% change % change foodgrain foodgrain productioproductionn

Avg Avg inflationinflation

1972-731972-73 -24-24 -7.7-7.7 10.010.0

1974-751974-75 -12-12 -4.6-4.6 25.225.2

1979-801979-80 -19-19 -16.8-16.8 17.117.1

1982-831982-83 -14-14 -2.8-2.8 4.94.9

1986-871986-87 -13-13 -4.7-4.7 5.85.8

1987-881987-88 -19-19 -2.1-2.1 8.28.2

2002-032002-03 -19-19 2.62.6

Food and general inflationFood and general inflation

On a whole price inflation has been On a whole price inflation has been more marked for food items than for more marked for food items than for all commodities all commodities

RAW MATERIALRAW MATERIAL

Raw material Raw material Sugar industrySugar industry Vegetable OilsVegetable Oils TextilesTextiles Medicinal plantsMedicinal plants Biofuel industryBiofuel industry Fruit and vegetable pulpFruit and vegetable pulp

Besides industries like fertilizers ,herbicides,Besides industries like fertilizers ,herbicides,Insecticides, tractors depend totally on Insecticides, tractors depend totally on

agriculture for their sustenance.agriculture for their sustenance.

CONSUMPTION POWERCONSUMPTION POWER

Reasons at a glance …Reasons at a glance …

Provides employment to 3/5Provides employment to 3/5thth of the of the populationpopulation

food securityfood security inflationinflation raw material to industriesraw material to industries security net in rural areassecurity net in rural areas population pressure-food + population pressure-food +

employmentemployment purchasing powerpurchasing power

Major problems faced by Indian Major problems faced by Indian agricultureagriculture

Low productivity Low productivity IrrigationIrrigation Lack of storage facilitiesLack of storage facilities TransportationTransportation Water supply Water supply Decreasing farm sizesDecreasing farm sizes

Low productivity-Rice,Wheat and Low productivity-Rice,Wheat and Maize(2002)Maize(2002)

CountryCountry YieldYield

IndiaIndia 29152915

EgyptEgypt 91359135

USAUSA 73727372

JapanJapan 65826582

BangladeBangladeshsh

34483448

MyanmarMyanmar 35323532

WorldWorld 39163916

CountryCountry YieldYield

IndiaIndia 27702770

U.KU.K 80438043

FranceFrance 74497449

ChinaChina 38853885

BangladesBangladeshh

21642164

PakistanPakistan 22622262

WorldWorld 27202720

CountryCountry YieldYield

IndiaIndia 17051705

ItalyItaly 95609560

FranceFrance 88138813

EgyptEgypt 77897789

ChinaChina 50225022

PakistanPakistan 17691769

WorldWorld 43434343

RICE WHEAT MAIZE

Low productivity causesLow productivity causes

Low quality of seedsLow quality of seeds Low level of mechanisationLow level of mechanisation Inefficient plant protection measuresInefficient plant protection measures Huge post harvest lossesHuge post harvest losses Poor irrigation facilitiesPoor irrigation facilities

Post Harvest issuesPost Harvest issues a 20 % reduction in transportation costs a 20 % reduction in transportation costs

will reduce final prices by as much as 10 will reduce final prices by as much as 10 pppp

without more efficient logistics, increasing without more efficient logistics, increasing production — through subsidised credit, production — through subsidised credit, power and fertilisers — can lead to gluts power and fertilisers — can lead to gluts that hurt rather than help farmers. that hurt rather than help farmers.

30% of the fruits and vegetables wasted 30% of the fruits and vegetables wasted due to cold storage problem (due to cold storage problem (40 million 40 million tons amounting to US$ 13 billiontons amounting to US$ 13 billion).).

IrrigationIrrigation

Vicious cycle in irrigationVicious cycle in irrigation

Problems in irrigation sectorProblems in irrigation sector

Competition from households and Competition from households and industriesindustries

Canal irrigation systems - stagnating Canal irrigation systems - stagnating or declining from mid-1980sor declining from mid-1980s

Ground water-Rapid depletion, Ground water-Rapid depletion, salinization and pollution related salinization and pollution related problems. problems.

Decreasing farm sizesDecreasing farm sizes

Land sizeLand size Proportion of Proportion of farmersfarmers

Near landless (0-0.099 Near landless (0-0.099 ha)ha)

9.99.9

Marginal(0.1-1 ha)Marginal(0.1-1 ha) 55.655.6

Small(1.001-2 ha)Small(1.001-2 ha) 18.118.1

Semi-medium(2.001-4 Semi-medium(2.001-4 ha)ha)

10.610.6

Medium(4.001-10 ha)Medium(4.001-10 ha) 4.84.8

Large(> 10 ha)Large(> 10 ha) 0.90.9

growth originating in agriculture is at growth originating in agriculture is at least twiceleast twice as effective in reducing as effective in reducing poverty as GDP growth originating poverty as GDP growth originating outside agricultureoutside agriculture

World Development ReportWorld Development Report

20082008

AREAS TO INVESTAREAS TO INVEST

Areas to invest (cont)Areas to invest (cont)

AGRICULTURE IS THE SOLUTIONAGRICULTURE IS THE SOLUTION

THANK YOU !THANK YOU !