Study Notes

Agriculture and Food Industry in India

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“What you are picking now is what that you have planted before” – Iran proverb

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Study Notes

Agriculture and Food Industry in India

Introduction

Agriculture is the primary source of livelihood for about 58 per cent of India’s population.

• Gross Value Added by agriculture, forestry and fishing is estimated at Rs 18.53 trillion (US$ 271.00
billion) in FY18.
• The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of
the sales.
• The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of
the largest industries in India and is ranked fifth in terms of production, consumption, export and
expected growth.
• It contributes around 8.80 and 8.39 per cent of Gross Value Added (GVA) in Manufacturing and
Agriculture respectively, 13 per cent of India’s exports and six per cent of total industrial investment.
• India is the largest producer of spices, pulses, milk, tea, cashew and jute; and the second largest
producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds.
• India is currently the world’s fourth largest producer of agrochemicals.
• With 20 agri-climatic regions, all 15 major climates in the world exist in India.
• India is leading exporter of mangoes and bananas.
• India has the 10th-largest arable land resources in the world.
• The country also possesses 46 of the 60 soil types in the world.
• Milk production was estimated at 165.4 million tonnes during FY17, while meat production was 7.4
million tonnes. As of September 2018, total area sown with Kharif crops in India reached 105.78
million hectares.
• Production of horticulture crops is estimated at record 307.16 million tonnes (mt) in 2017-18
as per second advance estimates.
• Total agricultural exports from India grew at a CAGR of 16.45 per cent over FY10-18 to reach US$
38.21 billion in FY18.
• In April-August 2018 agriculture exports were US$ 15.67 billion. India is the largest producer,
consumer and exporter of spices and spice products. Spice exports from India reached US$ 3.1
billion in 2017-18.
• Tea exports from India reached a 36 year high of 240.68 million kgs in CY 2017 while coffee exports
reached record 395,000 tonnes in 2017-18.
• Food & Grocery retail market in India was worth US$ 380 billion in 2017.

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Agriculture and Food Industry in India

• The Electronic National Agriculture Market (eNAM) was launched in April 2016 to create a unified
national market for agricultural commodities by networking existing Agriculture Produce Marketing
Committees (APMCs).
• 585 mandis in India have been linked while 415 additional mandis will be linked in 2018- 19 and
2019-20.
• Under Union Budget 2018-19, an Agri-Market Infrastructure Fund was announced to develop and
upgrade the infrastructure in 22,000 Grameen Agricultural Markets (GrAMs) and 585 APMCs.
• The first mega food park in Rajasthan was inaugurated in March 2018.
• In 2017, agriculture sector in India witnessed 18 M&A deals worth US$ 251 million.
• India is one of the largest manufacturers of farm equipment such as tractors, harvesters and tillers.
India accounts for nearly one – third of the overall tractor production, globally.
• Tractor sales in the country are expected to increase 11-13 percent in FY19, while the tractor industry
is expected to grow at 8-10 percent between FY17-22.

India’s Position in World Agriculture

India’s Next to
%Share Rank

1. Area
2.4 Seventh Russian Federation, Canada, USA,
Total area
China, Brazil, Australia

Land area 2.3 Seventh Russian Federation, China, USA,

Canada, Brazil, Australia
Arable land 11.3 Second USA

2. Crop production (million tonnes)

9.4 Third China, USA
(A): Total Cereals
Wheat 13.1 Second China
Rice(Paddy) 21.2 Second China

Total Pulses 25.8 First

(B):Oilseeds
Groundnut (in shell) 15 Second China

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Agriculture and Food Industry in India

Rapeseed 11 Third Canada, China

• Production of Wheat, estimated at record 101.20 million tonnes, is higher by 1.33 million tonnes as
compared to wheat production of 99.87 million tonnes achieved during 2017-18. Moreover, the
production of wheat during 2018-19 is higher by 6.59 million tonnes than the average wheat
production of 94.61 million tonnes.
• Total Pulses production during 2018-19 is estimated at 23.22 million tonnes which is higher by 2.96
million tones than the Five years’ average production of 20.26 million tonnes.
• With an increase by 20.46 million tonnes over 2017-18, total production of Sugarcane in the country
during 2018-19 is estimated at record 400.37 million tonnes. Moreover, the production of sugarcane
during 2018-19 is higher by 50.59 million tonnes than the average sugarcane production of 349.78
million tonnes.
• Wheat cultivation has traditionally been dominated by the northern region of India. The northern
states of Punjab and Haryana Plains in India have been prolific wheat producers.
• With a production reaching ten times in past five years, India is today the second largest wheat
producer in the whole world.
• Top five wheat producing states of India are Uttar pradesh, Punjab, Madhya Pradesh,
Haryana,Rajasthan

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Agriculture and Food Industry in India

Name of Crop Maximum Producing state

Wheat Uttar Pradesh

Rice West Bengal

Cotton Gujarat

Sugarcane Uttar Pradesh

Jute West Bengal

Tea Assam

Coffee Karnataka

Pulses Madhya Pradesh

Rubber Kerala

• India is the largest producer of Millet in the world and second largest producer of Wheat and
Rice/Paddy.

• India is the largest producer of Chickpea and Pulses in the world.

• India is the largest producer of Ginger and Okra in the world and second for Dry Bean, Onion,
Cabbage and other brassicas.

• India is third largest producer of Cauliflowers and Broccoli and Lettuce and chicory.

• India is the largest producer of Wood fuel and forest products.

• India is the largest producer of Buffalo Milk and Cow Milk in the world.

• Andhra Pradesh is the largest producer of Tobacco in India, followed by Assam, Bihar and
Chhattisgarh.

• Maharashtra is the largest producer of Sugar in India as well as Cashew Nuts, grapes and onion.

• Tamil Nadu is the largest producer of cassava in India as well as largest producer of bananas,
followed by Gujarat and Maharashtra.

• West Bengal is the largest fish producing states in India, Catla fish is one of the very popular
freshwater fish in West Bengal and has very high growth and market demand.

• Andhra Pradesh state is the second largest contributor of fisheries in India, Farmers in coastal
Andhra Pradesh are doing the Aquaculture and Pulasa fish is the special fish of Godavari river.

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Agriculture and Food Industry in India

• The state of Gujarat is known for tilapia fish farming, freshwater prawn farming and the fisherman of
Gujarat bags award for open sea cage farming.
• The backwaters of Kerala are the most prominent place for fish farming in India, Karimeen fish is the
most popular fish of Kerala along with Edible Oyster and vannamei shrimp.
• The coastal state of Tamil Nadu has very important area for commercial fish farming, Rohu, tilapia,
Snakehead and Catla fish are the most popular freshwater fish of Indian rivers.
• The states of Maharashtra, Uttar Pradesh, Karnataka, Bihar and Jharkhand also accounted for total
fish production in India using the hectares of ponds, canals and tanks.
• There are five main fishing harbors in India – Raichak, Mangalore, Chennai, Vishakhapatnam and
Kochi in Kerala. Major and minor fisheries harbours of India also include Mumbai fishing
harbour,Chennai fishing harbour, Kollam fishing harbour and goa fishing harbour.

AGRICULTURAL AND PROCESSED FOOD PRODUCTS EXPORT DEVELOPMENT AUTHORITY

The Agricultural and Processed Food Products Export Development Authority (APEDA) plays a significant
role in tapping India’s agricultural strengths and works towards expanding the export potential of Indian
agricultural and food products.

Government Initiatives
• Agriculture and allied sector’s GVA at constant 2011-12 prices grew a CAGR of 3.56 percent between
FY12-18.
• As per Union Budget 2019 -20, allocation of Rs 140,763.97 crore (US$1.95trillion) was made for The
Agriculture Ministry.
• The Government of India plans to triple the capacity of food processing sector in India from the
current 10 per cent of agriculture produce and has also committed Rs 6,000 crore (US$ 936.38
billion) as investments for mega food parks in the country, as a part of the Scheme for Agro-Marine
Processing and Development of Agro-Processing Clusters (SAMPADA).
• The Government of India has allowed 100 per cent FDI in marketing of food products and in food
product e-commerce under the automatic route.

Some of the recent major government initiatives in the sector are as follows:

• Prime Minister of India, launched the Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan) and
transferred Rs 2,021 crore (US$ 284.48 million) to the bank accounts of more than 10 million
beneficiaries on February 24, 2019.

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Agriculture and Food Industry in India

• The Government of India has come out with the Transport and Marketing Assistance (TMA) scheme
to provide financial assistance for transport and marketing of agriculture products in order to boost
agriculture exports.
• The Agriculture Export Policy, 2018 was approved by Government of India in December 2018. The
new policy aims to increase India’s agricultural exports to US$ 60 billion by 2022 and US$ 100 billion
in the next few years with a stable trade policy regime.
• In September 2018, the Government of India announced Rs 15,053 crore (US$ 2.25 billion)
procurement policy named ‘Pradhan Mantri Annadata Aay SanraksHan Abhiyan' (PM-AASHA), under
which states can decide the compensation scheme and can also partner with private agencies to
ensure fair prices for farmers in the country.
• In September 2018, the Cabinet Committee on Economic Affairs (CCEA) approved a Rs 5,500 crore
(US$ 820.41 million) assistance package for the sugar industry in India.
• The Government of India is going to provide Rs 2,000 crore (US$ 306.29 million) for computerisation
of Primary Agricultural Credit Society (PACS) to ensure cooperatives are benefitted through digital
technology.
• With an aim to boost innovation and entrepreneurship in agriculture, the Government of India is
introducing a new AGRI-UDAAN programme to mentor start-ups and to enable them to connect with
potential investors.
• The Government of India has launched the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) with an
investment of Rs 50,000 crore (US$ 7.7 billion) aimed at development of irrigation sources for
providing a permanent solution from drought.
• The Government of India plans to triple the capacity of food processing sector in India from the
current 10 per cent of agriculture produce and has also committed Rs 6,000 crore (US$ 936.38
billion) as investments for mega food parks in the country, as a part of the Scheme for Agro-Marine
Processing and Development of Agro-Processing Clusters (SAMPADA).
• The Government of India has allowed 100 per cent FDI in marketing of food products and in food
product e-commerce under the automatic route.

Achievements in the sector

• Sugar production in India has reached 27.35 million tonnes (MT) in 2018-19 sugar season, as of
March 15 2019, according to the Indian Sugar Mills Association (ISMA).
• The Electronic National Agriculture Market (eNAM) was launched in April 2016 to create a unified
national market for agricultural commodities by networking existing APMCs. Up to May 2018, 9.87

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Agriculture and Food Industry in India

million farmers, 109,725 traders were registered on the e-NAM platform. 585 mandis in India have
been linked while 415 additional mandis will be linked in 2018-19 and 2019-20.
• Agriculture storage capacity in India increased at 4 per cent CAGR between 2014-17 to reach 131.8
million metric tonnes.

References: IBEF, Agricultural and Processed Food Products Export Development Authority (APEDA),
Department of Commerce and Industry, Union Budget 2018–19, Press Information Bureau, Ministry of
Statistics and Programme Implementation, Press Releases, Media Reports, Ministry of Agriculture and
Farmers Welfare, Crisil

“Agriculture was the first occupation of man, and as it embraces the whole earth, it is the
foundation of all other industries” - Edward W. Stewart

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