Agriculture and Allied Industries Sector Report - February 2019

Agriculture and Allied Industries Sector Report - February 2019

1. For updated information, please visit www.ibef.org February 2019
AGRICULTURE AND
ALLIED INDUSTRIES

2. Table of Content
Executive Summary……………….….…….3
Advantage India…………………..….……..4
Market Overview.…………………….……..6
Recent Trends and Strategies …………..17
Growth Drivers…………………….............21
Opportunities…….……….......……………30
Industry Associations……………....……..33
Useful Information……….......…………….35

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EXECUTIVE SUMMARY
Indiaisthelargestproducerofspices,pulses,milk,tea,cashewandjute;andthesecondlargestproducer
ofwheat,rice,fruitsandvegetables,sugarcane,cottonandoilseeds.
Indiaiscurrentlytheworld’sfourthlargestproducerofagrochemicals.
Indiahasthelargestlivestockpopulationofaround512million.
Global standing
Source:Ministry of Agriculture, Government of India, MOSPI, BCG, Crisil
Indiaisoneofthelargestmanufacturersoffarmequipmentsuchastractors,harvestersandtillers.India
accountsfornearlyone-thirdoftheoveralltractorproduction,globally.
Tractorsalesinthecountryareexpectedtoincrease11-13percentinFY19,whilethetractorindustryis
expectedgrowat8-10percentbetweenFY17-22.
Increasing farm
mechanisation
Indiahasthe10
th
largestarablelandresourcesintheworld.With20agri-climaticregions,all15major
climatesintheworldexistinIndia.Thecountryalsopossesses46ofthe60soiltypesintheworld.Growth
inGrossValueAdded(GVA)byagricultureandalliedsectorsisestimatedat3percentin2017-18**.
StrategicgeographiclocationandproximitytofoodimportingnationsfavourIndiaintermsofexporting
processedfoods.
Favourable conditions
ConsumerspendingininIndiaislikelytoreachUS$3.6trillionby2020.
Privatefinalconsumptionexpenditure(atconstantprices)increasedby6.1**percentin2017-18and8.6
percentinApril-Junequarterof2018-19.
Rising consumption
expenditure
During2017-18*cropyear,foodgrainproductionisestimatedatrecord284.83milliontonnes.In2018-19,
GovernmentofIndiaistargetingfoodgrainproductionof285.2milliontonnes.
Record production of food
grains
Note:*as per 4th advance estimates, ** as per 2nd advance estimates
Global standing
Favourable conditions

4. Agriculture and Allied Services
ADVANTAGE INDIA

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ADVANTAGE INDIA
A large population and rising urban and rural
incomes have aided demand growth. External
demand has also been growing especially from key
markets like the Middle East.
Demand for processed food rising with growing
disposable income, urbanisation, young population
and nuclear families.
Changing lifestyle and increasing expenditure
on health and nutritional foods.
Increasing demand for agricultural inputs such
as hybrid seeds and fertilizers.`
Promising opportunities in storage facilities;
Agriculture storage capacity in India increased
at 4 per cent CAGR between 2014-17 to reach
131.8 million metric tonnes.
Investment opportunities to arise in agriculture,
food infrastructure and contract farming.
Agrochemicals industries in India present
immense growth opportunities.
India benefits from a large agriculture sector,
abundant livestock and cost competitiveness.
Lured by the size and returns of the Indian
market, foreign firms have strengthened their
presence in India.
High proportion of agricultural land (157 million hectares),
diverse agro-climatic conditions encourage cultivation of
different crops.
Leading producer of spices, jute, pulses; second largest
producer of wheat, paddy, fruits and vegetables.
Schemes like Paramparagat Krishi Vikas
Yojana helps in developing organic clusters
and make available chemical free inputs to
farmers. Setting up of National Mission on
Food Processing.
Government of India is also aiming to
double farmers’ income by 2022.
Promoting rationalisation of tariff and duties
relating to food processing sector.
ADVANTAGE
INDIA
Source:DIPP, ArancaResearch, JLL India

6. Agriculture and Allied Services
MARKET OVERVIEW -
AGRICULTURE

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GROWTH IN AGRICULTURE
Source:Ministry of Agriculture, Print Release, RBI, ArancaResearch, MOSPI, Central Statistics Office (CSO)
Agricultureistheprimarysourceoflivelihoodforabout58percentof
India’spopulation.
GrossValueAddedbyagriculture,forestryandfishingisestimated
atRs26.92trillion(US$393.86billion)inFY18**.
Agricultureandalliedsector’sGVAatconstant2011-12pricesgrew
aCAGRof10.21percentbetweenFY12-18.
AsperUnionBudget2019-20,allocationofRs140,763.97crore
(US$19.51billion)wasmadeforMinistryofAgricultureand
Farmers'Welfare.
Visakhapatnam port traffic(million tonnes)
Gross Value Added by Agriculture and Allied sectors (US$
billion) at Constant 2011-12 prices
CAGR 10.21%
233.04 236.51
249.68 249.21
370.25
402.60
393.86
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
FY12 FY13 FY14 FY15 FY16 FY17*FY18**
Notes: GDP –Gross Domestic Product, MOSPI –Ministry of Statistics and Programme Implementation, * 1st revised estimates, ** 2
nd
advance estimates

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MAJOR SEASONS: KHARIF AND RABI
Source:Ministry of Agriculture and Farmers’ Welfare
TherearetwomajoragriculturalseasonsinIndia:KharifandRabi.
KharifseasonlastsfromApriltoSeptember(summer);rice(paddy)istheseason’smaincrop.
RabiseasonlastsfromOctobertoMarch(winter);wheatistheseason’smaincrop.
AsofOctober
1
2018,totalareasownwithkharifcropsinIndiareached105.24millionhectares.
38.42
13.5517.54
17.59
5.16
0.74
12.24
Rice Pulses Coarse Cereals
Oilseeds Sugarcane Jute & Mesta
Cotton
Visakhapatnam port traffic(million tonnes)Kharif Area Sown in 2018-19
2
(million hectares)
29.85
15.63
8.04
4.87
3.40
Wheat PulsesOilseedsCoarse CerealsRice
Visakhapatnam port traffic(million tonnes)Rabi Area Sown in 2018-19
1
(million hectares)
Notes:
1
–As on February 15, 2019,
2
–As on October 10, 2018

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INCREASING PRODUCTION
Source:Ministry of Agriculture and Farmers’ Welfare
Since2010,productionaswellasyieldofbothmajorcrops-riceandwheathasincreasedsignificantly.Asperfourthadvanceestimates,
productionofriceisestimatedatrecord112.91milliontonneswhileproductionofwheatisestimatedat99.70milliontonnesin2017-18cropyear.
Indiarankssecondinglobalproductionoffruitsandvegetablesandisaleadingexporterofmangoesandbananas.
ProductionofhorticulturecropsinIndiaisestimatedatrecord307.20millionmetrictonnes(MMT)in2017-18**,implyingaCAGRof3.82percent
betweenFY08-18.
India'swheatproductionmaysurpassrecord100milliontonnes(MT)in2018-19cropyear.
Note:* As per 4th advance estimates,**as per 2nd advance estimates,
1
as of September 26, 2018, *** estimate as per the Indian Cotton Federation
211.2 214.7
223.1
240.5
257.3
268.8
277.3 280.5 283.4
300.6
307.2
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
FY18**
Visakhapatnam port traffic(million tonnes)India’s Horticulture Production (MMT)
CAGR 3.82%
Crop 2011-12 2017-18* 2018-19
1
Rice 105.30 112.91 99.24
Wheat 94.88 99.70 -
Total Cereals 242.20 259.59 132.37
Total Pulses 17.09 25.23 9.22
Total Foodgrains 259.29 284.83 141.59
Oilseeds 29.80 31.31 22.19
Sugarcane 361.04 376.91 383.89
Cotton (million bales of
170 kg each)
35.2 34.89 37.3
***
Jute & Metsa(million
bales of 180 kg each)
11.40 10.14 10.17
Foodgrains and Commercial Crops Production (million tonnes)

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SURGE IN DEMAND OF INDIAN AGRICULTURAL
PRODUCTS…(1/2)
11.30
15.60
24.70
29.20
42.86
38.70
32.08
33.87
38.21
31.30
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
FY10FY11FY12FY13FY14FY15FY16FY17FY18FY19*
Source:World Trade Organisation, APEDA, DGCIS
Indiawastheninthlargestexporterofagriculturalproductsin2017.
TotalagriculturalexportsfromIndiagrewataCAGRof16.45per
centoverFY10-18toreachUS$38.21billioninFY18.BetweenApr
2018-Jan2019agricultureexportswereUS$31.30billion.
TheAgricultureExportPolicy,2018wasapprovedbyGovernmentof
IndiainDecember2018.ThenewpolicyaimstoincreaseIndia’s
agriculturalexportstoUS$60billionby2022andUS$100billionin
thenextfewyearswithastabletradepolicyregime.
Visakhapatnam port traffic(million tonnes)Agricultural
1
exports from India (US$ billion)
CAGR 16.45%
Notes:CAGR is up to FY18,
1
Principal Agriculture commodities, *up to January 2019

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SURGE IN DEMAND OF INDIA AGRICULTURAL
PRODUCTS…(2/2)
1.0 1.1
1.9
3.1
3.6
4.0
4.2
7.4
0.7
1.2
1.7
2.7
2.5
3.1
3.6
5.9
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
FY18FY19*
Source:Ministry of Agriculture and Farmers’ Welfare, APEDA, Tea Board India
MarineProducts,BuffaloMeatandricearelargestagriculturalexport
itemsintermsofvalue.Othermajorexportitemsarespices,cotton,
oilproducts,teaandcoffee.
MarineproductexportsreachedUS$7.39billioninFY18,followed
byBasmatiriceatUS$4.16billionandbuffalomeatatUS$4.03
million.
Tea exports from India reached a 36 year high of 251.91million kgs
in CY 2018 while coffee exports reached record 395,000 tonnes in
2017-18.
By early 2019, India will also start exporting sugar to China, while
exports of Indian grapes to China is expected to increase 200 per
cent by 2020. In November 2018, an agreement to export fish meal
and fish oil from India to China was also signed.
Key agricultural and allied sector exports from India in
(US$ billion)
Note:CY –Calendar Year, * up to January 2019

12. Agriculture and Allied Services
MARKET OVERVIEW –
FOOD PROCESSING

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FOOD PROCESSING INDUSTRY IN INDIA…(1/2)

1
ThefoodandgrocerymarketinIndiaisthesixthlargestintheworld.Thefoodprocessingindustrycontributes32percentofthisfoodmarket
andisalsooneofthelargestindustriesinthecountry,contributing13percentoftotalexportsandsixpercentofindustrialinvestment.
Dairysector’srevenueinIndiawereestimated
4
atRs5.7lakhcrore(US$88.44billion)inFY18andareexpectedtoreachRs7.5lakhcrore(US$
116.37billion)byFY21.
Indiaalsohastherequiredinfrastructuretoenablethegrowthoffoodprocessingindustrywith7,845coldstoragechainswithacapacityof35.88
milliontonnesand42megafoodparkssanctionedasof2017.Outofthese,25megafoodparkswillbeoperationalisedby2018end.
Therearemorethan37,175foodprocessingunitsinIndia,asper2016-17asperAnnualSurveyofIndustries.
Segment Size
Food Industry Output 258
Food Exports 39.4
Food Imports 30.2
Retail 380
Food Service 48.3
Indian Food Industry in 2017
1
(US$ billion)
Cold Storages
2
7,845
Cold Storages’ Capacity (million
MT)
2 35.88
Mega Food Parks Sanctioned
3
42
Agri Export Zones
3
60
Infrastructure for Food Processing Industry (as of 2017)
Source:
1
USDA -India’s Food Processing Sector Poised for Growth 2018,
2
Ministry of Agriculture and Farmers’ Welfare,
3
Ministry of Food Processing Industries,
4
Crisil

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FOOD PROCESSING INDUSTRY IN INDIA…(2/2)
Product
2017 Sales
(US$ billion)
Growth compared to
2013 Sales (%)
Oils & Fats 20.74 144.02
Dairy 18.53 79.54
Rice, Pasta, and Noodles 5.83 98.74
Sweet and Savory Snacks 4.56 110.62
Biscuits and Snack Bars 4.44 49.22
Confectionery 4.06 77.33
Sauces, Dressings, and
Condiments
2.49 98.03
Baked Goods 2.27 48.58
Ice Cream and Frozen
Desserts
1.81 84.59
Sales of Processed Foods in India
1
Source:
1
USDA -India’s Food Processing Sector Poised for Growth 2018;exchange rate 64.80,
2
DIPP,
3
German Engineering Federation,
4
Crisil
Salesofprocessedfoodinthedomesticmarkethavebeenincreasingatafastpace.PackagedfoodindustryinIndiaisexpectedtocrossUS$65
billionby2020
3
andbecomethethirdlargestmarketforpackagedfood.
ThesectorhasalsowitnessedsharpincreaseininvestmentswithcumulativeFDIinflowsreachingUS$8.83billionbetweenApril2000and
September2018.Organiseddairiesinthecountryareexpected
4
toinvestRs14,000crore(US$2.17billion)overFY18-21.
Note:
*
up to September 2018
Visakhapatnam port traffic(million tonnes)
FDI Inflows
2
into Food Processing Industries between April
2000-September2018 (US$ billion)
1.230.18
0.40
3.98
0.52
0.51
0.73
0.90
0.388.83
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
FY01-11
FY12 FY13 FY14 FY15 FY16 FY17 FY18
FY19*
FY01-19*

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EXPORTS OF PROCESSED FOOD AND RELATED
PRODUCTS
Processedfruits&juicesexportsinFY18reachedUS$646million,followedbymiscellaneousprocesseditemsatUS$574millionandprocessed
vegetableexportsatUS$283million.
ExportsofreadytoeatitemsfromIndiareachedUS$689.80millioninFY18andhavereachedUS$544.88millioninFY19(uptoDecember
2018).
MainexportdestinationsforprocessedfoodproductsfromIndiainFY18wereUSA,EUandMiddleEast.
TheIndusFood–aninternationalfoodandbeveragetradeshowwasorganizedinJanuary2018,witnessingparticipationfromaround500
prominentglobalbuyersfromthefoodandbeverageindustry.
Source: APEDA
Exports of Processed Food and Related Products (US$ million)
265
458
582
283
574
646
239
537
518
0
100
200
300
400
500
600
700
Processed
Vegetables
Miscellaneous
Processed Items
Processed Fruits &
Juices
FY17FY18FY19*
Product Countries
Processed Vegetables USA, Germany, Belgium, UK, Spain
Processed Fruits & Juices
USA, Netherlands, Saudi Arabia, UK,
Germany
Processed Meat
UnitedArab Emirates, Vietnam, Qatar,
Bangladesh, Bhutan
Top Importers of Processed Items from India in 2017-18
Note: *up to January 2019

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FOOD PROCESSING SEGMENTS and PRIVATE
PLAYERS
Segments Private Players
Fruits, Vegetables and Processed
Grains
Milk and Milk Products
Meat, Poultry and Marine Products
Consumer Food
(Alcoholic beverages, Soft drinks,
Packaged drinking water and Packaged
food)

17. Agriculture and Allied Services
RECENT TRENDS
AND STRATEGIES

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Foodprocessingcompaniesareservinghealthandwellnessasanewingredientinprocessedfood,given
thathealthconsciousconsumerspreferfoodproductswithlowercarbohydratecontentandwithlow
cholesteroledibleoils.e.g.zero-percenttransfatsnacksandbiscuits,slimmilk,wholewheatproducts,etc.
ITCisplanningtolaunchmultigrainBingotoincreaseitsshareinhealthysnacksmarket.
Emphasis on Healthier
Ingredients
NOTABLE TRENDS…(1/2)
Widearrayofproducts,coupledwithincreasingglobalconnectivity,hasledtoachangeinthetastesand
preferenceofdomesticconsumers
Thistrendhasbeenbolsteredbyrisingincomes,increasingurbanisation,ayoungpopulationandthe
emergenceofnuclearfamilies.Consumerpreferenceismovingtowardshealthiersnacks.
Changing consumer tastes
Source:Ministry of Agriculture and Farmers’ Welfare, Government of India, News Sources
StrategicgeographiclocationandcontinuousincreaseinrawmaterialproductionhelpIndiatosupply
cheaperproductstoothercountries
CompanieslikeHaldiram’sandBikanerwalahaveapresenceinover70countries,wherebytheyprovide
Indiansnacks.
Rising demand on Indian
products in international
market
LiberalisationandgrowthoforganisedretailhavemadetheIndianmarketmoreattractiveforglobalplayers
Withalargeagriculturesector,abundantlivestock,costcompetitiveness,Indiaisfastemergingasa
sourcinghubofprocessedfood.Danone,Nestle,KraftFoods,MondelezInternational,Heinzarethe
internationalplayersinfoodprocessingmarketinIndia
ItalianconfectionerymanufacturerFerrerowillinvestRs2,000crore(US$310.3million)by2021tomake
Indiaahubfordevelopingnewproducts.
HindustanCoca-ColaBeveragesisestablishingtwogreenfieldplantsatAhmedabadandNellore,withan
investmentworthUS$148.74million
Expansion of international
companies

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InFY18,MinistryofFoodProcessingIndustriesgrantedfundofRs268.8crore(US$41.7million)forthe
ongoingMegaFoodParksscheme.
HeritageFoods,aHyderabad-basedcompany,hasplanstoaddfivemoremilkprocessingunitsinthenext
fiveyearsforaninvestmentofUS$22.31million,beingapartoftheformerexpansionplantoachieveUS$
1billionturnoverby2022.
Inthefirsthalfof2018,venturecapitalinvestmentsinstartupsworkinginagricultureandalliedareas
reachedUS$32million.
ContractfarminghasbeenoperationalinIndiaforalongtimenow;however,theexperienceoftheprivate
sectorplayersinvolvedthereinhasbeenamixedbagofsuccessesandfailures
Largely,ithashelpedboththeprocessingcompanies,viaincreasingsalesandthereforeaugmentingtheir
incomes,aswellasprovidingaccesstobettertechnologyandfetchingbetterpricesbysecuringanassured
marketforIndianfarmers.
NOTABLE TRENDS…(2/2)
Thereisasurgeindemandforfruitsandvegetablesasaresultofashiftinconsumption.Accordingly,
Indianfarmersarealsoshiftingproductiontowardshorticulturecropstocashinonthegrowingdemand
FreshfruitexportsfromIndiareachedUS$736.1millioninFY18whilefreshvegetableexportsreachedUS$
775.5million.
CocaColaisaimingtoimproveitssourcingoffruitsforaerateddrinksandjuicebeveragescategories.Asof
May2017,thecompanysources200,000tonnesfruits,andisplanningtofurtherincreaseitbysourcing
throughits'fruitcirculareconomy'initiative.
Higher Consumption of
Horticulture Crops
Source:Ministry of Agriculture and Farmers’ Welfare, Government of India
Strengthening Procurement
via Direct Farmer-Firm
Linkages
Product Innovation as the
Key to Expansion

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Low-costpricestrategyisadoptedsoastomaketheproductaffordabletotheconsumersbyguaranteeing
themvalueformoney.Themainaimistoprovidequalityproductstotheconsumersatminimumcost,e.g.,
AmulMilk.ParleandSunfeastworksontheirpricingandcostssoastomaketheproductsavailableat
economicalprices.
In2017,agriculturesectorinIndiawitnessed18M&AdealsworthUS$251million.
Cropprotection,soilenhancement,increasedproductivityarethemajorsegmentsfortheindustry.
Rallisacquiredaresearch-ledseedscompany‘Metahelix’andlaunchedaPGNproductinthenameof
‘Ralligold’.
Companieshavebeenmovingupthevaluechain;forexample,cooperativesaretransitioningfrombeing
pureproducersofmilktoofferingawiderangeofdairyproducts.
Bothdomesticandglobalfirmshavebeenfocusingonproductinnovationtocatertodomestictastes,while
alsointroducinginternationalflavours;forexampleRuchiSoyaisinnovatingbyenteringintotheready-to-
cooksegmenttomeettheneedsofpeoplewithsignificanttimeconstrainttoprovidearichsourceofprotein
inthebreakfastcategory
STRATEGIES ADOPTED
Rising business and
product innovation
Source:Ministry of Agriculture and Farmers’ Welfare, Government of India
Mergers and Acquisitions
Low -cost price strategy
Research

21. Agriculture and Allied Services
GROWTH DRIVERS

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GROWTH DRIVERS OF INDIAN AGRICULTURE
Source:Note: MSP -Minimum Support Price
Growth
drivers
Demand-side
drivers
Policy
support
Supply-side
drivers
Hybrid and genetically
modified seeds
Favourable climate for
agriculture; wide variety of
crops
Mechanisation
Irrigational facilities
Green Revolution in Eastern
India
Growing institutional credit
Increasing MSP
Introduction of new schemes
like Paramparagat Krishi Vikas
Yojana, Pradhanmantri Gram
Sinchai Yojana, Sansad Adarsh
Gram Yojana
Opening up of exports of wheat
and rice
Approval of National Mission on
Food Processing.
Population and income growth
Increasing exports
Favourable demographics

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GROWING AREA UNDER IRRIGATION
54.715
56.489
58.55 59.512
60.415
58.122
61.065 61.612 61.632
68.4
0
10
20
30
40
50
60
70
80
FY05FY06FY07FY08FY09FY10FY11FY12FY13FY18*
Source:Food and Agricultural Organisation US, Ministry of Agriculture, *Ministry of Agriculture and Farmers’ Welfare Annual Report 2017-18
Grossirrigatedareaunderfoodgrainsisestimatedtohavegrownto
68.4millionhectaresinFY18*.
OfthewidevarietyofcropsinIndia,riceandwheatarethemost
irrigated.
Withgrowinginvestmentsinirrigation,thedependenceonmonsoons
hasdeclinedconsiderablyovertheyears.
AsperUnionBudget2019-20,PradhanMantriKrishiSinchayee
Yojana(PMKSY)allocatedRs3.5trillion(US$485.10million).
AlongtermirrigationfundhasbeensetupinNABARD.InUnion
Budget2017-18,additionofUS$3.10billiontothiscorpuswas
announced.Also,adedicatedmicroirrigationfundwillbesetupin
NABARDtoachievethegoal,‘perdropmorecrop’.Theinitial
corpusofthefundwillbeUS$775.67million.
Around285newirrigationprojectswillbeundertakenin2018to
provideirrigationfor18.8millionhectaresofland.
Visakhapatnam port traffic(million tonnes)Gross irrigated area (million hectares)

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INSTITUTIONAL CREDIT AND INVESTMENTS ON A
RISE
Source:Ministry of Agriculture and Farmers’ Welfare, RBI, VCCEdge’sFood and Agri Report 2018, AgFunder
AgriculturalcreditdisbursaltargetofRs10trillion(155.16billion)wasmetfor2017-18.
Thetargetfor2018-19hasbeensetatRs11trillion(170.67billion).AsofDecember*2018,creditofRs10.82trillion(US$150billion)was
deployedtoagricultureandalliedactivitiesinIndia.
Agrifoodstart-upsinIndiareceivedfundingofUS$1,66billionbetween2013-17in558deals.InDecember2018,Ninjacartreceivedfundingof
US$35million,makingitthebiggestinvestmentroundinIndia’sagritechsector.
Visakhapatnam port traffic(million tonnes)
Investment Deals in Agriculture and Food Sector of India (US$
million)
Note:**as of December 21, 2018, *up to October 2018
Visakhapatnam port traffic(million tonnes)
Credit to Agriculture & Allied Activities (outstanding) (US$
billion)
85
92
103
119
137
154
160
150
-
20
40
60
80
100
120
140
160
180
FY12FY13FY14FY15FY16FY17FY18FY19**
488
Food-tech
881 147
Packaged Foods
582
19
Beverages & Breweries
81 12
Others
1,200

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RISING INCOME AND GROWING MIDDLE CLASS TO
DRIVE DEMAND FOR PROCESSED FOOD
Stronggrowthinper-capitaincomehasresultedingreaterdemand
forfooditems
PercapitaGDPofIndiaisexpectedtoreachUS$3,274in2023from
US$2,135in2018.
PackagedfoodindustryinIndiaisexpectedtocrossUS$65billion
by2020andbecomethethirdlargestmarketforpackagedfood.
MinistryofFoodProcessinghasbeenallocatedRs1,196.60crore
(US$165.85million)inUnionBudget2019-20.
Therehasalsobeenashiftindemand:
•Fromcarbohydratestomeatproducts(inlinewiththevarious
phasesofeconomicgrowth);&
•Toconveniencefoods,andorganicanddietfoods
1,482 1,486
1,610 1,639
1,749
1,983
2,135
2,334
2,539
2,762
3,007
3,274
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Visakhapatnam port traffic(million tonnes)GDP Per Capita at Current Prices* (US$)
Source:International Monetary Fund, World Economic Outlook Database, April 2018, Euromonitor
Notes:* estimates after 2013

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COMPETITIVE ADVANTAGE
India’scomparativeadvantageliesinitsfavourableclimate,large
agriculturesectorandlivestockbase,longcoastlineandinlandwater
resources.
Indiaalsohasanedgeincostofproductioncomparedtoits
competitorsinAsiaandthedevelopedworld.
Product
Production in 2017-18 (million
tonnes)
Milk 176.3
Pulses 24.51
Meat 7.7
Banana 29.29
Mango 20.52
Tea (million kgs) 1,325.05
Rice 111.52
Sugarcane 355.01
Wheat 98.61
Source: Ministry of Agriculture and Farmers’ Welfare, Tea Board, Department of Animal Husbandry, Dairying & Fisheries
Units Global Rank
Arable land
(million hectares)
161 2
Area under irrigation
(million hectares)
55 1
Coast line
('000 kilometers)
7.5 7
Cattle (million) 3.1 1

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FAVOURABLE POLICIES ARE SUPPORTING THE
SECTOR GROWTH … (1/2)
Thisschemeensuresthepromotionoforganicfarming.US$45.05millionhasbeenallocatedforthe
schemeduringtheyear2019-20.
Between2014-18,10,000clustersundertheschemehavebeenapproved.
ParamparagatKrishiVikas
Yojana
(PKVY)
Source:Ministry of Agriculture and Farmers’ Welfare, Union Budget, ArancaResearch
InMay2018,GovernmentofIndiafinalisedtheModelContractAct,toincludeallservicesintheagriculture
valuechainunderitsambitalongwithcontractfarmingactivity.Theacthaslaidspecialemphasison
protectingfarmers’rightsinthecountry.
Model Contract Farming &
Services Act 2018
Theschemeensuresaccesstothemeansofirrigationtoallagriculturalfarmsinthecountrytoproduce
‘perdropmorecrop’,thusbringingmuchdesiredruralprosperity
Toincreaseagriculturalproductionandproductivitybyincreasingavailabilityofwateranditsefficientuse.
Pradhan Mantri Krishi
SinchaiYojana (PMKSY)
InUnionBudget2019-20,theGovernmentofIndiaannouncedRs15,000crore(US$207.90million)
procurementpolicy,underwhichstatescandecidethecompensationschemeandcanalsopartnerwith
privateagenciestoensurefairpricesforfarmersinthecountry.
Pradhan Mantri Annadata
AaySanraksHanAbhiyan'
(PM-AASHA)
NewexportpolicyclearedbyGovernmentofIndiainDecember2018.
TargetsincreasingIndia’sagriculturalexportstooverUS$60billionby2022.
Agriculture Export Policy,
2018

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FAVOURABLE POLICIES ARE SUPPORTING THE
SECTOR GROWTH … (2/2)
Source:Ministry of Agriculture and Farmers’ Welfare, Union Budget, ArancaResearch
MOFPIlaunchedanewCentrallySponsoredScheme(CSS)NationalMissiononFoodProcessingto
promotefacilitiesforpost-harvestoperations,includingsettingupoffoodprocessingindustriesinIndia.In
UnionBudget2016-17,governmentannouncedtospendUS$1.1millioninUnionterritoriesonly.
National Mission on Food
Processing
Notes:RKVY -RashtriyaKrishi Vikas Yojana, * As of July 27, 2017, ** up to December 2017
Thesectorhasbeenassignedprioritystatusforbankcredit.
60AgriExportZones(AEZ)havebeensetupacrossthecountry
InUnionBudget2018-19,governmenthasallocatedRs4.56lakhcrore(US$63.20billion)forthe
infrastructuresector.
Between2014-15and2017-18**capacityof2.3millionmetrictonneswasaddedingodownswhilesteel
siloswithacapacityof625,000werealsocreatedduringthesameperiod.
BetweenFY06-17,4,392coldstorageprojectsweresanctionedinIndiaand236coldstorageprojects
havebeenapprovedin2017*.
Focus on infrastructure
Moreover,thegovernmentplanstolaunchaprogrammenamedas'SAMPADA'forfoodprocessingsector,
withinvestmentsworthUS$892.46milliontointegratecurrentwithnewschemes,withanaimtoreduce
wasteanddoublefarmer'sincome.
InSeptember2017,NestlestartedIndia’sfirstfoodsafetyinstituteinManesar.
InOctober2018,aworldclassfoodtestinglabwasannouncedinthestateofGoatobesetupbythe
ExportInspectionAgency(EIA)andQualityCouncilofIndia(QCI).
Focus on R&D and
modernisation
TheElectronicNationalAgricultureMarket(eNAM)waslaunchedinApril2016tocreateaunifiednational
marketforagriculturalcommoditiesbynetworkingexistingAPMCs.UptoMay2018,9.87millionfarmers,
109,725traderswereregisteredonthee-NAMplatform.585mandisinIndiahavebeenlinkedwhile415
additionalmandiswillbelinkedin2018-19and2019-20.
CumulativetradeontheplatformreachedRs41,855crore(US$6.49billion)byMarch2018.Interstate
tradeofagriculturalproductswasstartedonthee-NAMinJanuary2019.
APMC farmers go cashless

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HIGHLIGHTS OF UNION BUDGET 2019-20
Source:Union Budget 2019, News article
Theallocationtocrophusbandryhasseenasignificantuptickinallocationfromtheearlierbudgeted[2018-19:Rs14,700crore
(US$2.04billion)to2019-20:Rs86,600crore[US$12billion)].Thissubstantialuptickshouldbringinsubstantialimprovementto
irrigationprovisionsandoverallsoilhealth,andtherebyreducewageringimpactofmonsoonstoacertainextent..
Rs7500crore(US$1.04billion)hasbeenallocatedfordailydevelopmentand“gaumata”schemes.
MinimumSupportPriceforall22crops,policywillsupportproductionofagriculturecommodities.
Rs75,000crore(US$10.4billion)allocatedforIncomeSupportScheme.Theschemeis100percentfundedbygovernmentto
provideincomesupportforfarmers.
MinistryOfAgricultureAndFarmers'Welfarehasbeentaken5.2percentshareoftotalUnionBudget.
AgriculturesectorbudgetincreasedfromRs57,600in2018-19(US$7.98billion)toRs140,764crore(US$19.51billion)in2019-
20.
Overallbudgetslopedtowardbostingconsumerspendingandprovidingsupporttoagriculturalincome.

30. Agriculture and Allied Services
OPPORTUNITIES

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OPPORTUNITIES
New agri business, which provides
inputs such as seeds, fertilizers along
with providing advice and training
farmers on latest agricultural practices
It introduces efficiencies into the whole
gamut of agri practices
Provides assistance to sell products at
appropriate prices
In June 2017, Bhoomee, a startup from
Bengaluru created an app which offers a
one-stop platform that enables farmers
to connect to traders and vice-versa
through their online portals and call
centers.
Farm management services
Limited arable land against growing
population makes agricultural inputs crucial
Huge opportunity exists for agri input
segments like seeds and plant growth
nutrients
In India, commercial seeds only account for
minor percentage (25 per cent) and huge
demand is expected for quality branded
seeds
Global supermarket majors looking at India
as a major outsourcing hub
The government has helped by investing in
AEZs, mega food parks, easier credit
The establishment of food parks –a unique
opportunity for entrepreneurs, including
foreign investors to enter in the Indian food
processing sector.
As of July 2018, out of the 42 approved
mega food parks in the country, eight had
been made operational.
Potential global outsourcing hub
Agriculture storage capacity in India increased
at 4 per cent CAGR between 2014-17 to reach
131.8 million metric tonnes.
Cold storage capacity needs to grow rapidly
from the current level of 24 million tonnes
Private warehouse operators are supported by
multiple income streams, subsidy and available
of credit
It is expected that 4 per cent growth in the food
grain storage capacity would restructure
agricultural sector over the next few years
Both firms and the government are eager to
boost efficiency and access to markets
Investment potential of US$ 22 billion in food
processing infrastructure; 100 per cent FDI in
this area
Firms increasingly taking recourse to contract
farming in order to secure supply
Supply chain infrastructure –this niche has
investment potential in food processing
infrastructure, the government’s main focus is
on supply chain related infrastructure like cold
storage, abattoirs and food parks.
Supply chain infrastructure and contract
farming
Source:Ministry of Agriculture and Farmers’ Welfare, Ministry of Food Processing Industries

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GOVERNMENT INITIATIVES THAT WILL FURTHER
PROP UP THE SECTOR
Source:Ministry of Agriculture and Farmers’ Welfare, DIPP, ArancaResearch; Note: RFID –Radio Frequency Identification
InSeptember2018,theCabinetCommitteeonEconomicAffairs(CCEA)approvedaRs5,500crore(US$820.41million)assistancepackagefor
thesugarindustryinIndia.
InMarch2018,theGovernmentofIndiaextendedtheureasubsidytothefarmerstill2020withtheaimofensuringsupplyofureaatstatutory
controlledprices.Ureasubsidyfor2018-19isestimatedatRs45,000crore(US$6.95billion).
TheCoffeeBoardispositioningIndiaasa“CoffeeNation”andasthedrinkforPrimeMinisterNarendraModi'svisionofNewIndia.
InDecember2017,theDepartmentofAgriculture,Cooperation&FarmersWelfareproposedNationalProgrammeonuseofSpaceTechnology
forAgriculture(NPSTA),whichwilluseintegratedspaceandgeospatialtoolsformapping,monitoringandmanagementofagriculture.
AllocationofUS$3.9billionforRFID,US$234millionforlong–termruralcreditfund,US$7.03billionforshort–termcooperativeruralcredit
financefund,US$3.9billionforshort–termRRBrefinancefund
TheFoodProcessingIndustrieshavetakenfewinitiativesfordevelopingthefood–processingsectorthatwouldenhancetheexportsofagroand
processedfoodsandincomeoffarmers
GovernmentisplanningtoinvestUS$8billionsoastorevivefourfertilizerplantsandsettinguptwoplantstoproducefarmnutrients
FinancialOutlayofUS$35.47millionhasbeenannouncedundertheNationalDairyDevelopmentBoard(NDDB)toboostmilkoutputandper
animalproductionofmilk

33. Agriculture and Allied Services
INDUSTRY
ASSOCIATIONS

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INDUSTRY ASSOCIATIONS
Agency Contact Information
National Institute of Agricultural Extension Management
Rajendranagar, Hyderabad–500 030, Andhra Pradesh
Phone: [phone] to 706
Fax: [phone]
National Institute of Agricultural Marketing (NIAM)
Bambala, Kota Road
Jaipur–302033, Rajasthan
Phone: [phone]
Fax: [phone]
Central Insecticides Board and Registration Committee
MachinaryStore Building,
N.H.IV Faridabad
Phone: [phone].
Coconut Development Board
Kera Bhavan, SRVHS Road, Kochi
Kerala–682011
Phone: [phone]
Fax: [phone]
National Dairy Development Board (NDDB)
PB No 40, Anand–388 001
Phone: [phone]
Fax: [phone]
National Horticulture Board (NHB)
Ministry of Agriculture, Government of India
85, Institutional Area, Sector-18
Gurgaon–122015, Haryana
National Oilseeds and Vegetable Oils Development Board (NOVOD)
Krishi Bhavan, New Delhi 110 114
Phone: [phone]

35. Agriculture and Allied Services
USEFUL
INFORMATION

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GLOSSARY
AIBP: Accelerated Irrigation Benefit Programme
Breeder seeds: Seeds move from germ-plasm(research) stage to breeder stage
CAGR: Compound Annual Growth Rate
Certified/quality seeds: Foundation seeds are further multiplied to get certified seeds, which are sold to farmers
FMTTI: Farm Machinery Training and Testing Institutes
Foundation seeds: Breeder seeds are multiplied as foundation seeds
FY: Indian Financial Year (April to March) –FY12 implies April 2011 to March 2012
KCC: KisanCredit Card
MSP: Minimum Support Prices
NFSM: National Food Security Mission
NMAM: National Mission on Agricultural Mechanisation
PGN: Plant Growth Nutrients
RKVY: RashtriyaKrushiVikas Yojana is a central government scheme providing funds to state governments to spend on agriculture
Wherever applicable, numbers have been rounded off to the nearest whole number

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EXCHANGE RATES
Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)
Year INR INR Equivalent of one US$
2004–05 44.95
2005–06 44.28
2006–07 45.29
2007–08 40.24
2008–09 45.91
2009–10 47.42
2010–11 45.58
2011–12 47.95
2012–13 54.45
2013–14 60.50
2014-15 61.15
2015-16 65.46
2016-17 67.09
2017-18 64.45
Q1 2018-19 67.04
Q2 2018-19 70.18
Q3 2018-19 72.15
Year INR Equivalent of one US$
2005 44.11
2006 45.33
2007 41.29
2008 43.42
2009 48.35
2010 45.74
2011 46.67
2012 53.49
2013 58.63
2014 61.03
2015 64.15
2016 67.21
2017 65.12
2018 68.36
Source:Reserve Bank of India, Average for the year

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