This document provides an overview of opportunities in agriculture and agro-based industries in Bihar, India. It notes that Bihar has a large population, high poverty rates, and its economic performance lags behind national trends. Agriculture is the main industry, employing 80% of the workforce. The document identifies challenges like low crop productivity and fragmentation of land holdings. It also outlines opportunities for diversification into high-value crops like fruits, vegetables, spices and fisheries. Private investment opportunities exist in contract farming, processing, exports, dairy equipment and sugar mills. Overall, the document argues that strengthening agriculture and related industries can help reduce poverty and drive economic growth in Bihar.

1. Opportunities in
Agriculture and Agro-
based industries in Bihar
Dr.K.M.Singh
Director,
State Agricultural Management and
Extension Training Institute, Bihar
Global Meet for a Resurgent Bihar,
19-21 February 2007,
Hotel Maurya, Patna

2. Background
 Bihar is India’s third most populated state
with a total population of 83 million.
 It accounts for one-seventh of India’s
population below the poverty line.
 The state’s performance lags seriously
behind national trends.
 It has a strong political clout in the national
affairs with 40 members in the lower house
and a large presence in the council of
ministers.

3. N
Uttar
Pradesh
East
Champaran Sitamarhi
Madhubani
Supaul Araria
Darbhanga
Samastipur Purnia
Katihar
Bhagalpur
Khagaria
Banka
Jamui
Nawada
Gaya
PatnaBhojpur
Buxar
Rohtas
Jahanabad
Nalanda
Sheikhpura
Lakhisarai
Saran
MuzaffarpurSiwan
Gopalganj
West
Champaran
Jharkhand
West Bengal
Nepal
Present day Bihar

4. Challenges
 Nearly 40% of Bihar’s population lies below the
poverty line, the highest in India.
 Modest progress was made during the 1990s
(1993-94 to 1999-00), reducing poverty by
nearly 7 percentage points, but the rate of
poverty reduction was well below the national
average.
 By current trends Bihar is projected to fall well
behind on most of the MDG targets for 2015.
 Bihar’s rank for HDI among the Indian states
has remained unchanged at 15 since 1981
while its score has increased marginally from
0.237 in 1981 to 0.308 in 1991 to 0.267 in 2001.

5.  Bihar has a low rate of urbanization and
poverty is predominantly rural.
 Rural poverty is associated with limited
access to land and livestock, poor education
and health care, as also low-paid
occupations and social status.
 The rural poor tend to depend on
agricultural wages or casual non-farm jobs
for income.
 Social or caste characteristics are also
strongly associated with a lack of
opportunities.
Characteristics of Poverty

6. Key Ingredients
Poverty and Social Indicators Bihar India
Population (in thousands, 2003) 86774 1068214
GSDP per capita (in Rupees, 2003) 6501 24535
Poverty (% below national poverty line,2000) 39.00 22.70
Urban Population (% of total population,2001) 10.47 27.78
Life expectancy at birth (years, 1998-2002) 60.8 62.5
Infant Mortality (per 1000 live births, 1998-99) 72.9 67.6
Under Five Mortality (per 1000 live births, 1998-99) 105.1 94.9
Immunization against measles (% 1 yr olds,98-99) 11.0 42.0
Child Malnutrition/Underweight Children (% children under 5,1998-99) 54.4 47.0
Maternal Mortality Rate (per100000 live births, 1999) 451.0 408.0
Proportion of births attended by a health professional 23.4 42.3
Incidence of TB (per 100,000 population, 1998-99) 989.0 544.0
Contraceptive Prevalence Rate (%, 1998-99) 24.5 48.2
Access to an improved water source (% of population, 1998-99) 75.4 77.9
Access to improved sanitation (households with toilet facility) 16.8 36.0
Literacy (% of population, 2001) 47.5 65.4
Male 60.3 75.9
Female 33.6 54.2
Gross primary enrollment (% of school age population, 1998-99)
Male 58.0 81.0
Female 44.0 73.0

7.  Challenges
 Poverty
 Improving growth performance
 Social service delivery
 Public administration and governance
 Development Strategy
 Improving economic growth through
strengthening agriculture and investment
climate
 Strengthening social service delivery and
public administration
 Supporting Development Strategy
 Fiscal reform strategy
 The administrative reform agenda
Bihar’s Development

8.  Bihar is a predominantly
agrarian economy with a small
manufacturing base.
 While the share of agriculture
has declined, it is still very
large.
 The share of industry is very
small and has remained nearly
the same.
 The share of services has
increased from 41% to nearly
50% of GSDP, and remains
roughly on track with the all
India average.
 Overall Bihar’s economy has
experienced little structural
change and is not well
diversified.
Sectoral Distribution of GSDP, 1993
and 2003
0%
20%
40%
60%
80%
100%
Bihar 1993 Bihar 2003 AI1993 AI2003
Agriculture Industry Services
Structure of the Economy

9.  Agriculture
 Education
 Health
 Physical Infrastructure
 Improving Investment Climate
 Improving Service Delivery
Priority Areas for Development

10.  Agriculture is the bedrock of Bihar’s
economy, employing 80% of the workforce and
hence is key to reducing poverty.
 Agriculture output is volatile.
 Crop productivity has been below the Indian
average for most cereals.
 The causes for the large yield gap include:
 low investment rates,
 lack of water management with annual flooding of
the Gangetic plain,
 weak transport and marketing infrastructure.
 Severe fragmentation of land holdings.
Role of Agriculture

11. Bihar is well endowed with:
 Fertile land
 Plenty of water
 Varied agro-climatic conditions
 Abundance of raw material for agro based
industries
Some success stories and opportunities to build in
Bihar’s agriculture include:
 Diversification from cereals to Aromatic crops
(Mentha, Lemongrass etc.)
 Makhana value addition by private
entrepreneur
 Export of organic Basmati rice
 Export of Litchi & Snow peas
 Honey production and marketing
 Kishanganj tea
Role of Agriculture

12. Recent trends in Bihar include:
 Specialized & localized production
 Market - led Production
 Use of hybrid seeds
 Uniform quality
 Contract farming
 Diversification based on market demand
 Repeal of APMC Act opens new opportunities for:
 Establishment of Market Yards by private sector.
 Establishment of specialty and Terminal markets
under P-P-P mode.
 Value addition, and Contract farming and
 Export of fresh and processed fruits and vegetables
from the state.
Trends and New Initiatives in Agriculture

13. Quality Land
Resources
Type – Alluvial Plain *Texture – Loam
pH – 6.5 – 7.5 *Medium to rich in NPK
Quality Water
Resources
Annual Rainfall – 1297.2 mm.
Irrigation Potential:
 Surface water – 6.33 million Ha
Ground water – 4.85 million Ha
Total – 11.19 million Ha
Irrigated Area – 4.88 million Ha
Quality Human
Resources
1145 Agriculture graduates trained in
agri clinic /agri-business management
Hard working farmers
Agriculture: The Core Competence of Bihar
We can take three crops (Kharif, Rabi & Summer ) a year !!!

14. AGRICULTURAL PROFILE & LAND USE
Land Use classification of Bihar Area in lakh hect.
Total Geographical Area 93.60
Forest 6.16
Barren and non-cultivable land 4.37
Land put to non-agricultural uses 16.35
Culturable Waste land 0.48
Permanent pasture grazing land 0.18
Miscellaneous crops and groves 2.30
Other fallow (2 to 5 years) 1.41
Current fallow 5.95
Net area sown 56.38
Gross Cropped Area 80.26
Area sown more than once 23.58
Cropping Intensity 143.00%

15. Agricultural Production Scenario in Bihar
Crop/
Enterprises
Annual
Production
(Million MT)
Bihar’s
Share in
National
Pool (%)
Marketable
Surplus (%)
Vegetables 8.59 9.0 100
Fruits 3.35 8.0 80
Food Grains 11.90 5.6 75
Sugarcane 13.00 5.5 100
Fish 0.27 8.3 100
Milk 4.06 4.4 100

16. Potential Areas for
Diversification in Bihar

17. TRENDS
Diversification towards:
Horticultural Crops
Fruits
Vegetables
Medicinal & Aromatic
Plants

18. Maize
Present Production:1.5
million MT (10% of country
production)
Targeted
Production(2015):4.5 million MT
 Maize is grown round the
year
 Productivity is above the
national average
 Producers’ price is
comparable to export parity
price making maize
internationally competitive.
Opportunities for investment:
 Contract Farming
 Ethanol, Corn oil, Feed,
Starch industry
 Export of Baby corn

19. Sugarcane
• Present Production: 13.00
million MT
• Targeted Production(2015):
46.72 million MT
Opportunities for investment:
• New green field Sugar
mills
• Capacity expansion of
existing mills
• Ethanol manufacturing
• Molasses based alcohol
• Cogeneration of power
• Bagasse based paper

20. Litchi
Present Production:0.28
million MT( 71% of national
production)
Targeted
Production(2015):0.5 million MT
Litchi’s whole sale price in
Bihar is less than that of
competing states, giving
comparative advantage for
domestic and export market
Opportunities for investment:
Contract Farming
Export of fresh fruits
Processing & export
Litchi Honey

21. An Aquatic organic crop rich
in Protein-10% and
low in fat- 0.02% !!!
Present Production- 0.003
million MT
(85 % of national production)
Targeted Production (2015):
0.050 million MT.
Opportunities for investment:
Contract farming
Processing & Export
Makhana

22. Mango
Present Production: 1.4
million MT (13% of country
production)
Targeted roduction(2015):
3.0 million MT
Varieties
Jardalu, Langra, Krishna
bhog, Jarda, Dudhiya Maldah
Opportunities for investment:
Contract Farming
 Export of fresh fruits
 Cool chain
 Processing & export

23. Present Production: 0.05
million MT
Targeted roduction(2015): 2.40
million MT
Opportunities for investment:
 Contract Farming
 Cool chain
 Plant propagation &Tissue
culture
 Processing
Banana

24. Vegetables
 Present Production:8.60 million
MT (9% of country production)
 Pointed Guard, Lady Finger,
Brinjal, Cauliflower cucurbits of
Diara (1.1 million ha.) with annual
production of 48000 MT.
Production can be substantially
increased with market support
 Targeted Production(2015): 12.4
million MT
Opportunities for investment:
 Organic Farming
 Contract Farming
 Processing & export
 Cool chain

25. Honey
Present Production: 1300
MT
(13% of national production)
Targeted Production
(2015):3900 MT
Opportunities for
investment:
 Processing
 Contract Farming
 Marketing
 Export markets

26. Fisheries
Present Production :
0.27 million lakh MT
Targeted Production
(2015): 0.43 million
MT
Opportunities for
investment:
 Feed manufacturing
units
 Cold chain
 Marketing
 Aqua tech and
amusement parks

27. Aromatic Rice
Present Production: 0.015
million MT
Targeted roduction(2015):
0.05 million MT
Opportunities for investment
Contract Farming
Modern rice mill
Export

28. Dairy
 Milk Production (Present) :
4.06 million MT
 Targeted Production (2015):
8.46 million MT
 COMPFED:A Success Story
 COMPFED has established
5023 DCS with 2.54 lakh
members (highest in Eastern
India)
 Opportunities for investment
 Dairy equipment
 Fodder block making units
 Processing infrastructure
(Milk powder, Packaging
material)
 Marketing infrastructure

29. Medicinal Plants Suitable for Bihar
 Gurmar (Gymnema sylvestris)
 Sarpgandha (Rauvolfia serpentine)
 Kalmegh (Andrographis paniculata)
 Kalihari ( Gloriosa superba)
 Brahmi (Centella asiatica)
 Buch (Acorus calamus)
 Pippli (Piper longum)
 Shatawari (Asparagus racemosum)
Aromatic Plants Suitable for Bihar
Lemon grass
Palma rosa
Java citronella
Jama Rosa, CN 5
Mentha
Tulsi
Vetiver
Patchouli

30. Some Aromatic crops being grown in
Bihar* (Year 2006-07)
Crop No. of
farmers
Area
(ha.)
Oil yield
(kg./Ha.)
Total oil
(kg.)
Lemon grass 1485 900 140 126000
Java citronella 387 130 125 16250
Mentha 2730 2100 120 252000
Palma rosa 158 220 100 22000
Tulsi (Basil) 169 45 100 4500
Jama rosa/CN-5 154 107 155 16585
Total 5083 3502 437335
* Author’s estimates based on field survey

31. Areas for Private Investment in Agribusiness Sector
Crop Processing Value
addition
/Cool
Chain
Export Contract
Farming
Ethanol/
Corn Oil
/Starch
Industry
Modern
Rice Mill
Litchi
Honey
Makhana
Banana
Mango
Maize
Vegetables
Aromatic rice
Fish
Aromatic Crops
Organic
Vegetables

32. Crop Capacity
Expansion
New
Mill
Ethanol Contract
Farming
Power
Generation
Cool
Chain
Equip
ment
Manufa
cturing
Milk
Powder
Plant
Paper
Industry
Sugar
cane
Milk
(Contd.)
Areas for Private Investment in Agribusiness Sector

33. THANKS