A executive summary for Indian agriculture industry done for Deloitte consulting

1. Agriculture – Empowering the Indian Farmers
An Introspection by
Karthick L
Piyushree N
Sivarajkumar N Y
BIM Trichy - Team Anthaprerna

2. Executive Summary
In this information era, we find the glamorous service
industry to rule the economy of India, which contributes
to 60% of GDP. If we ask a youngster to join the
agricultural industry the immediate response would be
“Are you crazy?” and a grinning smile. Yes, Indian
agriculture and farming is in a bad shape and future
generation doesn’t give importance to this industry as
they do for a service sector because agriculture isn’t a
lustrous job and doesn’t reap rewards. How do we go
about changing this? How does technology enabled
smart eco system going to lead the way to future of
agriculture? How do we improve the utilization of the
produced food from food to fork?
India is rich in agro ecological diversities such as
rainfall, soil and temperature gives it a larger scope of
nesting various types of crops. The sun favors the land
throughout the year in most of the region along with 3
trillion cubic meters of water, 14 major, 44 medium and
55 minor rivers share about some 85% of the drainage
basin. About 214 billion cubic meters of water is
available as underground water. India’s total
geographical area accounts to 328.73 million hectares
of which only 306.4 million hectares are reported area
of land under use. The net area that is cultivated
comprises about (46.6%) 142.6 million hectares,
Forest accounts to (22.5%) 68.97 million hectares,
13.9 million hectares comes under cultivable
wasteland and 9.91 million hectares under fallow
lands. Only 30% of these area are irrigated and rest of
the area are rain fed.
India is the highest contributor to Agriculture as a % of
GDP (14.1%) but only $255 billion as of FY 2012. The
significance of Agricultural sector does not limits itself
to the contribution for GDP but has an impact on
poverty alleviation and rural development. More than
58% of the population’s employment is dependent on
agriculture as on date. But inefficient methods of
farming, fragmented land, poor funding, unavailability
of R&D facility, monetary motivation and information
reach has made this sector lackluster. Identifying and
targeting these problem helps us in the future growth
of this sector.
Most important area that is to be targeted is the
agriculture technology. The statistics say that India
ranks in top 3 on the list of producing cereals like
paddy, wheat, maize and pulses; but in the table of
productivity it is rated at 36th position. India produces
10% of the fruits and vegetable the world produces but
it isn’t in the list of top productive countries. Major
reason behind this is India’s traditional farming and
storing food.
Farmers used animals for the farming and used old
barns for storing crops. Mechanization hasn’t been
implemented in India in full phase.
An average of 1.66kW/ha is being used which is the
reason behind it. Effectively storing the food involves
lots of cold storage devices and other technologies to
reduce wastage and improve productivity. India has a
long way to move towards modern technology.
Benefits are improving utilization of food from producer
to consumer, reducing food insecurity, promoting more
rural employment, going low on labor input cost and
price of the food. A right technology mix can increase
above benefits to its optimum level. Although lots can
be argued over words, there are lot of hindrance for the
same mentioned opportunities. The hurdles rise up as
tradeoff between technology and environment, manual
labor and cultural ethics etc. There is also another face
of this scenario that technology bring about is greed,
wherein companies in private sector deny to lower
prices stating the technology used in the process.
Companies make profit but status of the country to
bring down food insecurity becomes a marshalling
point.
As a coin always has both sides so does this. The
challenges facing in the above mentioned process will
involve the following





Ravaging out and bringing in synergy between
new and old technology into the agricultural arena
so that focus is more about bringing in effective
ways and means to improve and empower the
farmers at optimum cost.
Identifying an effective investment portfolio for
bringing about the technologies available in the
hands of the farmer
Strategizing an efficient supply chain wherein
there is an higher utilization of food in the hands of
consumers
Bringing clear policy goals that will give an
effective bond between technology, price, labor
and development in farming
Developing higher incentives for the risk the
farmer takes and as well as to add more
entrepreneurs in farming and agriculture
BIM Trichy - Team Anthaprerna
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3. Year
Area in hectares
1970
2.28
1976
2.00
1980
1.84
1985
1.69
1990
1.55
1996
1.41
2000
1.33
2006
1.23
2010
20102011
1.14
Sources
2000-2001
Cooperative banks
39.20
RRB
15.70
8.00
9.80
52.60
74.40
Other agencies
0.20
Table 4: Sources of Institutional Agricultural Credit
Percentage
0.10
Commercial banks
source :Department of agriculture and cooperation
Table 1: Average size of land holdings
source :Department of agriculture and cooperation
Total Geographic Area
328.73
Land Fit for use
284.73
Net land cultivable
195.10
Land under Multiple cultivation
74.17
Forest
69.64
Cultivable waste land
26.48
Fallow lands
24.82
Land not cultivable
89.63
Land not fit for use
Capacity (in MT)
FCI
32.05
CWC
10.07
SWCs
21.29
State Civil Supplies Department
11.3
Total Public Sector
74.71
Cooperative Sector
15.07
Private Sector
18.97
108.75
Total
44.00
Table 5: Agriculture Warehousing Capacity in the Country
Source: Report of Sub-Group on Warehousing and Bulk
Handling
Table 2: Geographical area distribution in India
source :Agriculture census, Ministry of
Agriculture
Crop
Institution
Cumulative Wastage
(percent)
Cereals
Pulses
3.9-6
Year
Agricultural
workers
Draught
animals
Tractors
Power
tillers
4.3-6.1
6
1971-72
10.64
52.86
8.45
0.11
5.8-18
1981-82
9.2
33.55
18.46
0.11
Milk
0.8
1991-92
7.22
20.5
26.14
0.16
Fisheries
2.9
2001-02
5.7
11.76
36.77
0.36
Meat
2.3
Poultry
3.7
2005-06
5.39
9.97
38.45
0.44
2009-10
5.12
8.55
41.67
0.52
Table 6: Percentage share of different farm power sources in
Indian agriculture
source :Department of agriculture and
cooperation
Oil Seeds
Fruits & Vegetables
Table 3: Wastage in the Various Crops
sources : CIPHET,
Ludhiana
BIM Trichy - Team Anthaprerna
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