Agriculture Presentation

AGRICULTURE
November 2010
AGRICULTURE
November 2010
Contents
Advantage India
Market overview
Industry Infrastructure Investments Policy and regulatory framework Opportunities Industry associations
2
ADVANTAGE INDIA Agriculture November 2010
Advantage India

Indias agricultural policy focuses on food selfsufficiency, remunerative prices for farmers, and maintenance of stable prices for consumers. These goals are met by a number of measures such as minimum support prices, food subsidies for consumers, regulated markets, input subsidies for producers, and international trade policy. Since independence, the government has focused on the sector through five-year plans, and the public sector outlay in the sector as per the Eleventh Five Year Plan is US$ 29.6 billion (INR 1,363.8 billion).
India has diverse geographic features such as climate, soil, availability of water, and biodiversity due to its vast area. In 2008, arable land in India was 159 million hectares, second only to the US. In 2008, India was the second-largest producer of wheat and rice in the world, and the largest producer of pulses in the world.
Advantage India
In 2008, India was ranked second in terms of people involved in agriculture and allied activities, with approximately 583 million people involved in agriculture. Although, the share of agriculture and allied activities in GDP is estimated at 14.6 per cent, the sector is the source of livelihood for more than 50 per cent of the Indian population.
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 3 December 2010; Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es2009-10/esmain.htm, accessed 08 March 2010; Indias Macroeconomic Indicators, Third Advance Estimates of Crop Production Released, PIB press release website, http://pib.nic.in/release/release.asp?relid=61781, accessed 14 July 2010.
AGRICULTURE
November 2010
Contents
Advantage India
Market overview
4
MARKET OVERVIEW Agriculture November 2010
Market overview (1/12)

Timeline of Indian agriculture Green Revolution: The introduction of inputs, such as fertilisers, high-yielding varieties (HYV) of crops, pesticides, surface irrigation, and mechanised farming increased agricultural productivity. In a span of two decades, the food grain production had more than doubled to reach 108.4 MT in 197071. The yield stood at 872 kg/ha in 197071. National Agricultural Policy (NAP): The NAP aims to achieve an annual growth rate of 4 per cent in the agricultural sector over the next two decades. India requires a robust agriculture sector to achieve GDP growth of 810 per cent.
1950s
1960s and 70s
1980s and 90s
2000s
Post-independence: This era was characterised by low agricultural productivity and starvation across the country. In 195051, food grain production was 50.8 MT, and the yield of food grains was 522 kg/ha.
Economic reforms: The country's import and export policies are aimed at enhancing export capabilities of the sector by focusing on productivity, promoting modernisation, and competitiveness. Since 199091, Indias exports have increased approximately 12.9 times to reach US$ 18.7 billion in 200809.

Growth of food grain production in India
Share of agriculture and allied services in GDP
250
Food grain production (MT)
52.5% 56.7% 46.0% 39.9% 176.4 196.8
234.5
218.2
60%
200 150
50%
40%
129.6 108.4 82.0 50.8 34.0% 26.2% 15.7% 14.6% 30% 20% 10% 0% 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2008-09 2009-10E
100 50 0
Food grain production (Million Tonnes)
Percentage share of agriculture and allied services in GDP
The share of agriculture and allied services in GDP has been estimated at 14.6 per cent in 20092010, as the dependence of the economy has shifted to the service sector and industry.
Sources: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in/home.aspx, accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 2009-10, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf, accessed 08 March 2010; Dr R. Albert Christopher Dhas, Agricultural Crisis in India: The Root Cause and Consequences, The American College, Madurai; Third Advance Estimates of Crop Production Released, PIB Press Release, http://pib.nic.in/release/release.asp?relid=61781, accessed 14 July 2010; Indias Macroeconomic Indicators, EXIM Bank website, www.eximbankindia.com/ind-eco.pdf, accessed 14 July 2010. E Third advance estimates
Over the 50-year period, i.e. , from 195051 to 200001, food grain production in India has increased at a compound annual growth rate (CAGR) of approximately 2.7 per cent, to reach 196.8 million tonnes (MT) in 200001. The increase in food grain production is largely attributed to the Green Revolution, which took place in the 1960s and 1970s. Agri-inputs, such as fertilisers, high-yielding varieties (HYV) of crops, pesticides, surface irrigation, and mechanised farming were primarily responsible for the increase in agricultural productivity.
Sources: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in/home.aspx, accessed 18 January 2010; Second Advance Estimates of Production of Foodgrains for 2009-10, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf, accessed 08 March 2010; Dr R. Albert Christopher Dhas, Agricultural Crisis in India: The Root Cause and Consequences, The American College, Madurai; Third Advance Estimates of Crop Production Released, PIB Press Release, http://pib.nic.in/release/release.asp?relid=61781, accessed 14 July 2010; Indias Macroeconomic Indicators, EXIM Bank website, www.eximbankindia.com/ind-eco.pdf, accessed 14 July 2010. E Third advance estimates

Kharif and Rabi seasons
India has two crop seasons, Kharif and Rabi, based on the dependence of crop productivity on the monsoons. The Kharif season is during the summer and monsoon months, lasting from April to September, and rice is the main crop grown during the season. The Rabi season is during the winter months of October to March, and wheat is the main crop of this sesason.
India Kharif and Rabi (production in million tonnes)
100%= 196.8 212.9 174.8 213.2 198.4 208.6 217.3 230.8 234.5 218.2
48.1%
47.3%
50.1%
45.1%
47.9%
47.3%
49.1%
47.6%
49.6%
54.0%
51.9%
52.7%
49.9%
54.9%
52.1%
52.7%
50.9%
52.4%
50.4%
46.0%
2000-01
2001-02
2002-03
2003-04
2004-05 Kharif
2005-06 Rabi
2006-07
2007-08
2008-09
2009-10*
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Second Advance Estimates of Production of Foodgrains for 2009-10, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf, accessed 08 March 2010. *Fourth Advance Estimates as released on 19 July 2010
According to estimates by the Department of Agriculture and Cooperation, production of food grains in 20092010 is estimated to be 218.2 million tonnes, with the Rabi crops accounting for 117.83 million tonnes and Kharif crops accounting for 100.37 million tonnes. According to first advance estimates by the Department of Agriculture and Cooperation, production of food grains in 201011 is estimated to be 114.63 million tonnes.
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Second Advance Estimates of Production of Foodgrains for 200910, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf, accessed 08 March 2010. *Fourth Advance Estimates as released on 19 July 2010

Key crop varieties in India
Production (million tonnes)
300 250 241.1 277.8
200
154.3 150 100 53.6 50 0 Sugarcane Rice Wheat 1980-81 Nine-Oilseeds 1990-91 2009-10* Cotton Maize Soyabean 74.3 89.1 36.3 55.1 24.9 9.4 18.6 7.0 9.8 23.9 7.0 9.0 16.7 0.4 2.6 10.1 80.7
Over the 59-year period, i.e. , from 195051 to 20092010*, the production of rice and wheat has increased at a CAGR of approximately 2.6 per cent and 4.5 per cent, respectively. The production of maize and cotton has increased at a CAGR of 4 per cent and 3.6 per cent, respectively over the same period.
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Second Advance Estimates of Production of Foodgrains for 2009-10, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf, accessed 08 March 2010; Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in, accessed 18 January 2010. *Fourth Advance Estimates as released on 19 July 2010; Note: For cotton production is in million bales of 170 kg each
10

The yield of crops has witnessed an increase since the Green Revolution. Between 195051 and 2009 2010*, the yield of rice and wheat has increased by 3.3 and 4.4 times, to reach 2,130 kg/ha and 2,830 kg/ha, respectively. The yield of sugarcane has doubled since 195051 to reach around 66,922 kg/ha in 201011**.
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Second Advance Estimates of Production of Foodgrains for 2009-10, http://dacnet.nic.in/eands/Advance_Estimate/2ndAdvance_Estimates_2009-10(English).pdf, accessed 08 March 2010; Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in, accessed 18 January 2010. *Fourth Advance Estimates as released on 19 July 2010; ** First Advance Estimates as released on 23.09.2010. Note: For cotton production is in million bales of 170 kg each
11

Wheat production and yield
100
Wheat production
Rice production and yield

2,830 3,000 2,500
Rice production
2,708 2,281 1,630 1,307 851 55.1 11.0 23.8 36.3 69.7
100 1,901
2,177
2,500
80 60 40 20 0
80
60 1,013 40 20 0
1960-61 1970-71 1980-81
1,740 1,336 1,123 74.3 34.6 42.2 53.6 85.0 80.41
2,000
1,500 1,000 500 0
Yield
2,000
Yield
1,500
80.7
1,000
500 0
1960-61 1970-71 1980-81 1990-91 2000-01 2009-10*
1990-91
2000-01 2010-11**
Production (Million Tonnes)
Yeild (Kg/hectare)
Yeild (Kg/hectare)
The principal crops of the Indian agriculture sector include rice, wheat, jowar, bajra, maize, pulses, nine oilseeds, soya bean, sunflower, cotton, jute, mesta, and sugarcane.
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es2009-10/esmain.htm, accessed 08 March 2010. *Fourth Advance estimates; **First Advance Estimates as released on 23 September 2010
12

The increase in production has primarily been due to the introduction of HYV of crops. The yield of wheat has increased by approximately four times, while the yield of rice has grown more than three times.
Area under cultivation (million hectares)

50 40 30 20 10 18.2 12.9 34.1 37.6 40.2 42.7 44.7 41.9 28.5
22.3
24.2
25.7
0
1960-61 1970-71 1980-81 1990-91 2000-01 2009-10* Rice Wheat
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es2009-10/esmain.htm, accessed 08 March 2010. *Fourth Advance estimates
13

Sugarcane production and yield
400 Sugarcane production
Nine oilseeds production and yield

66,922 80,000 60,000 Yield 40,000 20,000 0 30 25 Nine-Oilseeds 20 15 10 5 0
1960-61 1970-71 1980-81 1990-91 2000-01 2009-10*
65,395
300 45,549 200 100
110.0 126.4
68,577
955 771 507 579 532 18.6 7.0 9.6 9.4 18.4 24.9 810
1,200 1,000 800 Yield 600 400 200 0
57,844 48,322
296.0 241.1 154.3 324.9
0
1960-61 1970-71 1980-81 1990-91 2000-01 2010-11**
Yeild (Kg/hectare)
Yeild (Kg/hectare)
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es2009-10/esmain.htm, accessed 08 March 2010. *Fourth Advance estimates; **First Advance Estimates as released on 23 September 2010
14

Maize production and yield
15 1,822 Maize production 10 926 5 7.5 7.0 1,518 1,279 1,159 9.0 12.0 14.1 1,500 1,000 500 0
1960-61 1970-71 1980-81 1990-91 2000-01 2010-11**
Cotton production and yield

1,959 2,500 Cotton production 2,000 Yield 40 30 518 600 500
400
Yield 20 10 0 125 5.6
1960-61
225
152
190
33.5
300 200
106
4.8
1970-71
4.1
0
7.0
1980-81
9.8
1990-91
9.5
2000-01 2010-11**
100 0
Yeild (Kg/hectare)
Yeild (Kg/hectare)
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010; Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es2009-10/esmain.htm, accessed 08 March 2010. *Fourth Advance estimates; **First Advance Estimates as released on 23 September 2010; Note: For cotton, production is in million bales of 170 kg each
15

Leading food grain-producing states in India
Share of states in food grain production
196.6 MT Other
16.3% 6.1% 5.2% 5.6% 5.2% 6.8% 7.0% 5.1% 8.2% 12.9% 11.6% 21.7%

In India, 10 states account for approximately 80 per cent of the total food grain production. In 200809, West Bengal was the leading producer of rice in India, accounting for approximately 15.2 per cent of the total production, followed by Andhra Pradesh and Uttar Pradesh, accounting for 14.4 per cent and 13.2 per cent, respectively. Uttar Pradesh was the leading producer of wheat in India in 200809. It accounted for 35.4 per cent of the total wheat production, followed by Punjab and Haryana, accounting for 19.5 per cent and 13.4 per cent, respectively. In 200809, Andhra Pradesh was the leading producer of maize in India. The state accounted for 21 per cent of the total production followed by Karnataka and Rajasthan at 15.4 per cent and 9.3 per cent, respectively.
230.5 MT
19.3% 4.7% 5.2% 5.3% 6.6% 6.6% 7.0% 7.0% 8.4%
Bihar Madhya Pradesh Karnataka Maharashtra

Haryana West Bengal Rajasthan Andhra Pradesh Punjab
Uttar Pradesh
18.3%
200001
200708
Source: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in/home.aspx, accessed 18 January 2010; Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 3 December 2010. Note: Total production does not include Union Territories 16
EXIM scenario (1/4)
Between 200506 and 20092010P, the value of agricultural exports and imports has grown at a CAGR of 16.2 per cent and 28.7 per cent.
Indias agri imports and exports (US$ billion)

25 20 15 10.7 10 5 0 2005-06 2006-07 2007-08 2008-09 2009-10P 4.7 6.4 6.5 8.0 13.6 17.2 19.5 12.9
18.7
Agriculture Exports
Agriculture Imports
Source: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010. P Provisional
17
EXIM scenario (2/4)
India is a net exporter of agricultural products. However, it faces challenges related to tradedistorting subsidies, tariffs and trade barriers.
Agri imports and exports as a percentage of total national exports and imports
16 14 12 10 8 6 4 2 0 13.6 12.7 11.1 6.1 4.6 3.3 10.8 10.9 3.5 3.1 12.2
5.9
200203
200304 200405 200506
200607 200708 P
Percentage of agri exports to total national exports

Percentage of agri imports to total national imports Source: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010. P Provisional
18
EXIM scenario (3/4)
In 200809, Indias export of cereals amounted to US$ 3.29 million, with Saudi Arabia, the UAE and Malaysia being the leading export destinations. Rice (basmati and non-basmati) and other cereals were the leading cereals exported from the country.
Key agri products exported by India, 20092010* (US$ billion)

100%= US$ 19.5 billion 8.8% 12.1% 47.8% Oil Meals Rice Basmati Marine Products Spices Paper/Wood products Meat & Preparations Sugar Other
11.0% 6.9% 7.0% 0.1% 6.3%
Source: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010. *Provisional
19
EXIM scenario (4/4)
Vegetable oil is a leading agricultural product imported by India from developing countries such as Malaysia and Indonesia.
Key agri products imported by India, 20092010* (US$ billion)

100%= US$ 12.9 billion
Vegetable Oils Fixed (Edible) 26.1% 44.6% 0.4% Wheat 16.3% 12.6% Other Wood & Wood Products Pulses
Source: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010. *Provisional
20
Growth drivers (1/2)

Growth in population and wealth
With a population of more than a billion, India has a huge domestic demand for agri products. Although food deficit declined from 290 kcal/person/day in 199092 to 260 kcal/person/day in 2004 06, there is a challenge with respect to meeting the total demand for food. Indias economic growth has, however, put into motion factors such as increasing private final consumption expenditure and disposable incomes, which have driven the agricultural sector.
Land and irrigation
Indias land under cultivation has continued to rise since the 1950s, and more than 50 per cent of Indias workforce is involved in agriculture and allied activities. In 200708 (P), the countrys gross irrigated area stood at 87.3 million hectares, in comparison to 28 million hectares in 196061.
Fertilisers
Fertilisers comprise a key agri input, which has resulted in higher production of crops and yield. Fertiliser consumption per hectare has grown significantly from 0.55 Kg in 1950 to more than 125 Kg by 2009.
21
Growth drivers (2/2)

Mechanisation
The Indian farmer has adapted modern agricultural techniques, such as the use of tractors and tillers. The farm power used in India has increased by five times to 1.502 kW/ha in 200506 from 0.0295 kW/ha in 197172, decreasing the contribution of human power from 15 per cent in 197172 to 5.8 per cent in 200506. High yielding varieties (HYVs) of seeds and an organised seed sector have been instrumental in driving agricultural productivity across the country. The area under certified seeds in India has increased from around 500 hectares in 196263 to more than 0.5 million hectares in 19992000, improving the yield of crops. Institutional credit has reduced the role of traditional money lenders in the Indian agricultural sector, thereby, creating an organised credit market. The share of institutional credit, which stood at approximately 7 per cent in 1951, has increased to more than 60 per cent in 2002; whereas the share of non-institutional credit, which primarily comprises money lenders, has declined to approximately 40 per cent in 2002, from 92.7 per cent in 1951.
Seeds
Institutional credit
22
Growth drivers population and wealth (1/2)
India has the second-largest population in the world, accounting for more than one-sixth of the worlds population.The countrys inherent need to feed more than a billion people, is a driving force for domestic agriculture.
India population (million)

1,400
1,200
1,000 800 600 400 200 0 359.0 434.0 541.0 679.0 839.0
1,154.0 1,019.0
1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2008-09
Population (Million) Sources: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in/home.aspx, accessed 18 January 2010; India Agricultural Policy Review, Agriculture and Agri-Food Canada website, www.agr.gc.ca, accessed 18 January 2010.
23
Growth drivers population and wealth (2/2)
Indias PFCE has been boosted by the economic reforms, which began in the 1990s.The growth in PFCE has resulted in the growth of the agriculture sector. Growth in the country's population and wealth has accelerated domestic demand, thereby transforming the country from a net importer to a net exporter of agricultural products (food crops).
India private final consumption expenditure (PFCE)

35,100 30,100 25,100 20,100 15,100 10,100 5,100 100 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2008-09 Sources: Handbook of Statistics on the Indian Economy 2008-09, Reserve Bank of India website, www.rbi.org.in/home.aspx, accessed 18 January 2010; India Agricultural Policy Review, Agriculture and Agri-Food Canada website, www.agr.gc.ca, accessed 18 January 2010. Values indexed to 100 as of 195051
24
Growth drivers agricultural land in India
India ranks seventh in the world in terms of total geographic area. In 2008, arable land as a percentage of total land in India stood at 53.5 per cent, in comparison to the world average of 10.9 per cent. The area under irrigation in the country has grown at a steady pace since the Green Revolution, with net irrigated area accounting for 18.9 per cent of total land area in India in 200708P.
Sources: Agricultural Statistics At a Glance 2010," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/latest_2006.htm, accessed 17 November 2010 P Provisional
Land use (million hectares)

225 195.8 185.7 185.4 200 172.6 165.8 175 152.8 140.9 143.0 141.4 140.0 150 140.3 133.2 125 100 75 50 25 0
196061 197071 198081 199091 200001 2007-08P
Total cropped area
Net area sown
25
Growth drivers improved irrigation facilities in India
The government has taken several initiatives through five-year plans to improve irrigation facilities in India. The Working Group on Water Resources for the Eleventh Five Year Plan (2007 2012) has proposed creation of irrigation potential of 16 million hectare during the Eleventh Five Year Plan period. The total irrigation potential in the country has increased from 81.1 million ha in 199192 to 102.77 million ha by March 2007.
Irrigated area (million hectares)

100 90 80 70 60 50 40 30 20 10 0 87.3 76.6 63.2 49.8 38.2 28.024.7 31.1 38.7 48.0 55.1 62.3
1960-61 1970-71 1980-81 1990-91 2000-01 2007-08P Gross Irrigated Area Net Irrigated Area
Sources: "Agricultural Statistics At a Glance 2008, Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/At_Glance_2008.htm, accessed 18 January 2010; "Agricultural Statistics At a Glance 2009," Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/pdf%20files/tb14.5U.pdf, accessed 14 July 2010; P Kataria and AS Joshi, Energy Use in Indian Agriculture, Department of Economics, Punjab Agricultural University, Ludhiana, India; Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es200910/esmain.htm, accessed 08 March 2010. P Provisional
26
Growth drivers increasing role of fertilisers

Fertilisers production and consumption
30 25 20 15 10 5 0 1960-61 1970-71 1980-81 1990-91 2000-01 2008-09 Production (Million Tonnes) Consumption (Million Tonnes) 0.2 0.3 1.1 2.2 3.0 9.0 5.5 12.5 19.7 14.8 14.3 24.9 140 120 100 80 105.5 111.8 116.8
Fertiliser consumption per hectare

128.6
88.9
60
40 20 0 2000-01 2005-06 2006-07 2007-08 2008-09
Consumption (Kg/ha)
In 1950, per hectare use of fertilisers in India was 0.55 Kg. However, backed by government policies and initiatives, the consumption increased to more than 125 Kg per hectare by 2009. The government has taken various policy initiatives for the fertiliser sector, such as pricing policy for indigenous urea, new investments in the urea sector, nutrient-based pricing, production and availability of fortified and coated fertilisers, uniform freight subsidy on all fertilisers under the fertiliser subsidy regime, concession scheme for decontrolled phosphatic and potassic fertilisers, etc.
Source: Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es2009-10/esmain.htm, accessed 08 March 2010.
27
Growth drivers mechanisation of Indian agriculture (1/2)

Farm power in India (kW/ha)
The country has witnessed a surge in the sale of tractors and power tillers. In 2005, India was ranked second in the world, after the US, in terms of tractor usage.
2.0 1.50 1.5

CAGR (200408) 4.8%
1.23
1.0
0.76 0.47 0.30
0.5
0.0
197172
198182
199192
200102
200506
Sources: Annual Report 200910, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India website, http://agricoop.nic.in/AnnualRepor2009-10/AR.pdf, accessed 14 July 2010; P Kataria and AS Joshi, Energy Use in Indian Agriculture, Department of Economics, Punjab Agricultural University, Ludhiana, India.
28
Growth drivers mechanisation of Indian agriculture (2/2)

Sale of tractors
500,000 400,000 300,000 200,000 100,000 0 2004-05 2005-06 2006-07 2007-08 2008-09 247,531 CAGR(200509): 8.5 per cent 296,080 352,835 346,501 342,836 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2004-05 2005-06 2006-07 2007-08 2008-09 17,481
Sale of power tillers

CAGR(200509): 19.2 per cent 22,303 24,791 26,135 35,294
Following the Green Revolution, Indian agriculture has moved towards mechanisation. The farm power used in India has increased by five times to 1.502 kW/ha in 200506 from 0.0295 kW/ha in 197172, decreasing the contribution of human power from 15 per cent in 197172 to 5.8 per cent in 200506.
Sources: Annual Report 200910, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India website, http://agricoop.nic.in/AnnualRepor2009-10/AR.pdf, accessed 14 July 2010; P Kataria and AS Joshi, Energy Use in Indian Agriculture, Department of Economics, Punjab Agricultural University, Ludhiana, India.
29
Growth drivers role of seeds in Indian agriculture

Seed production (billion tonnes)
140 120 100 80 60 40 20 0 2005-06 2006-07 2007-08 2008-09 2009-10A 6.9 7.4 9.2 9.4 10.5 74.0 79.7 85.3 114.6 120.0
Certified/quality seed distribution (billion tonnes)

CAGR(FY0610): 18.8 per cent
1,943.1 1,405.0 1,481.8 2,797.2 2,503.5
2,500
2,000 1,500 1,000 500 0
2005-06
2006-07
2007-08
2008-09
2009-10A
Foundation seed production
Breeder seed production
Certified/Quality seed distribution
HYV seeds have played a prominent role in the success of the Indian agriculture sector, resulting in higher production of food grains. During the Green Revolution, the Indian Council for Agricultural Research developed new strains of HYV seeds, and focused mainly on wheat and rice. The Seeds Act, 1966 and the New Policy on Seeds Development, 1988, form the basis of promotion and regulation of the Indian seed industry.The objectives of the National Seeds Policy, is to create an appropriate climate for the seed industry, safeguard the interests of Indian farmers, and the conservation of agro biodiversity.
Source: Annual Report 200910, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India website, http://agricoop.nic.in/AnnualRepor2009-10/AR.pdf, accessed 14 July 2010. A Anticipated
30
Growth drivers improved agricultural credit

Flow of institutional credit to agriculture and allied activities (US$ billion)
8.7% 34.1% 8.7% 31.0% 9.9% 25.1% 8.4% 22.0% 8.9% 18.5% 9.9% 19.0% 9.8% 13.5%
57.2%
60.3%
65.0%
69.5%
72.6%
71.1%
76.7%
2002-03
2003-04
2004-05 Commercial banks
2005-06
2006-07 RRBs
2007-08
2008-09P
Cooperative banks
100%= US$ billion
15.1
18.9
27.2
39.2
49.9
55.4
57.5
Institutional credit, which comprises loans from commercial banks, cooperatives societies and banks as well as regional rural banks (RRBs), has grown at a CAGR of about 25 per cent between 200203 and 200809. In 200809, the amount disbursed by all banks (including cooperative banks and RRBs) to agriculture and allied activities stood at US$ 57.5 billion (INR 2,644.6 billion), with commercial banks accounting for more than three-fourth of the amount disbursed.
Sources: Annual Report 200910, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India website, http://agricoop.nic.in/AnnualRepor2009-10/AR.pdf, accessed 14 July 2010; Flow of institutional credit to agriculture and allied activities, Economic Survey 200809; Ramesh Golait, Current Issues in Agriculture Credit in India: An Assessment, Summer 2007, Reserve Bank of India Occasional Papers, RBI website, http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/82933.pdf, accessed 18 January 2010. P Provisional
31
AGRICULTURE
November 2010
Contents
Advantage India
Market overview
32
INDUSTRY INFRASTRUCTURE Agriculture November 2010
Industry infrastructure Agriculture Export Zones (AEZs) (1/2)

State AEZ Focus Products State AEZ Focus Products
Andhra Pradesh
Assam Bihar Gujarat Himachal Pradesh
Mango pulp, fresh vegetables, grapes, mangoes, gherkins, chillies

Fresh and processed ginger Litchis Mangoes, vegetables, dehydrated onions, sesame seeds Apples
Punjab
Rajasthan Sikkim Tamil Nadu Tripura
Vegetables, potatoes, basmati rice

Coriander, cumin Ginger, flowers (orchids) and cherry pepper Flowers, mangoes, cashew nuts Pineapples Potatoes, mangoes, vegetables, basmati rice Basmati rice, litchis, flowers, medicinal and aromatic plants Pineapples, litchis, potatoes, mangoes, vegetables, Darjeeling tea
Jammu & Kashmir

Jharkhand Karnataka Kerala Madhya Pradesh Maharashtra Orissa
Apples and walnuts

Vegetables Gherkins, rose onions, flowers, vanilla Horticulture products, medicinal plants Potatoes, onions, garlic, seed spices, wheat, lentils, grams, oranges Grapes and grape wine, mangoes including Kesar mango, flowers, onions, pomegranate, banana, oranges Ginger and turmeric
Uttar Pradesh
Uttaranchal West Bengal
33
INDUSTRY INFRASTRUCTURE Agriculture November 2010
Industry infrastructure Agriculture Export Zones (AEZs) (2/2)

Total number of AEZs in India is 60
Distribution of AEZs among states
8 20 6
Maharashtra West Bengal Andhra Pradesh Madhya Pradesh Distribution of AEZs among states 5 Karnataka Uttaranchal Uttar Pradesh Tamil Nadu Others
4 4 4 4
Source: Agri Export Zones of India, Agricultural and Processed Food Products Export Development Authority website, www.apeda.com/apedawebsite/trade_promotion/Agri_Export_Zone.htm, accessed 29 December 2009.
34
AGRICULTURE
November 2010
Contents
Advantage India
Market overview
35
INVESTMENTS Agriculture November 2010
Investments (1/4)
The sector has transformed from agriculture to agribusiness, providing value to each stakeholder in the farm to fork value chain. In the recent past, the sector has witnessed investments from the corporate sector in the form of organic farming, contract farming, and setting up hubs for the procurement of farm produce.
M&A scenario Period: January 2009 to July 2010
Key domestic deal in 2010:The largest deal in the sector was the acquisition of Agro Dutch Industries Ltd by Penta Homes Pvt Ltd,Vishwa Calibre Builders Pvt Ltd, and a private investor for US$ 85.4 million (INR 3.9 billion).
Deal type 2009 Inbound Domestic 2010 Inbound Outbound Domestic
No of deals 4 1 3 2 5
Deal value (US$ million) N/A 2.2 35.7 N/A 87.5
Sources: Transactions, Bloomberg, accessed 12 January 2010 (for deals pertaining to 2009); M&A Transactions, Thomson One Banker, accessed 5 August 2010 (for deals pertaining to 2010); Consolidated FDI Policy, Department of Industrial policy and promotion website, www.dipp.nic.in, accessed 9 August 2010
36
Investments (2/4)
Examples of investment by private players
In March 2010, Bharti Walmart Private Limited, the joint venture between Bharti Enterprises and Walmart Stores Inc, launched the sustainable agricultural programme in Punjab. The programme provides sanitation and energy-efficient solutions through community toilets and bio-gas plants that impact the yield and quality of the farm produce. In March 2010, the Mauritius-based private equity fund, India Agri Business Fund, agreed to invest US$ 10 million (INR 460 million) in The Global Green Company Limited, the foods division of the Avantha Group. In July 2007, Cadbury India Ltd and the Tamil Nadu Horticulture Department entered an agreement to promote cocoa farming. The five-year agreement aims to bring 50,000 acres under cocoa farming, which would provide coconut farmers an additional income of US$ 17.4 million (INR 80 million) a year. In August 2006, Reliance Retail entered an agreement with the Punjab government for agricultural and retail projects entailing an initial investment of US$ 108.7 million (INR 5.0 billion). The company plans to set up rural hubs for procurement of vegetables, fruits, pulses and other farm produces. In 2003, Mahindra Shubhlabh Services Ltd, a subsidiary of Mahindra & Mahindra Ltd, and Punjab Agro Food grains Corporation, entered an agreement to divert about 100,000 acres of land from paddy (rice) to maize under contract farming.
Sources: Transactions, Bloomberg, accessed 12 January 2010 (for deals pertaining to 2009); M&A Transactions, Thomson One Banker, accessed 5 August 2010 (for deals pertaining to 2010); Consolidated FDI Policy, Department of Industrial policy and promotion website, www.dipp.nic.in, accessed 9 August 2010; Bharti Walmart launches Sustainable Agri Program in Punjab, UNI (United News of India), 30 March 2010, via Dow Jones Factiva, (c) 2010 HT Media Limited; Global Green to get $10-m funding, Business Line (The Hindu), 13 March 2010, via Dow Jones Factiva, (c) 2010 The Hindu Business Line; Cadbury India in pact with TN Horticulture Dept, Business Line (The Hindu), 2 July 2007, via Dow Jones Factiva, (c) 2007 The Hindu Business Line; Punjab, Mahindras sign farm pact, Business Line (The Hindu), 14 March 2003, via Dow Jones Factiva, (c) 2003 The Hindu Business Line; Reliance Retail inks MoU with Punjab govt for agri project, The Press Trust of India Limited, 1 August 2006, via Dow Jones Factiva, (c) 2006 Asia Pulse Pty Limited.
37
Investments (3/4)
Key state-wise contract farming initiatives by private sector State Crop Company/Corporate Area (Hectares)
Maharashtra
Madhya Pradesh Punjab Punjab
Soyabean
Wheat Rice (Basmati) Rice (Basmati), Groundnut & Potato, tomato, chilli
Tinna Oils and Chemicals

Hindustan Lever Ltd (HLL) Satnam Overseas, DD Intenational Inc, Amira Foods India Ltd (Escorts Ltd & Grain Tech) PepsiCo India Ltd
134,800
15,000 14,700 ~6,000
Karnataka
Punjab Punjab
Marigold & Caprica Chili

Rice (Basmati), Maize Barley
AVT Natural Products Ltd

Satnam Overseas United Breweries Ltd
4,000
4,000 2,270
Sources: Agriculture and Food Management, Economic Survey 2009-10, Government of India: Union Budget and Economic Survey website, http://indiabudget.nic.in/es2009-10/esmain.htm ,accessed 08 March 2010.
38
Investments (4/4)
Total investment in the agriculture and allied sectors in 200809 amounted to US$ 28.87 billion (INR 1,386 billion), of which the private sector accounted for 82 per cent (US$ 23.78 billion).
Sources: Socio Economic Survey, 20092010
Cumulative FDI inflows Period: April 2000 to September 2010 Sector Agricultural services Amount (US$ million) 1,540.5
Food-processing industries
Fermentation industries Vegetable oils and vanaspati Agricultural machinery
1,102.0
787.72 185.69 150.3
Fertilisers Tea and coffee Sugar Total
121.27 94.57 41.7 4,023.8
Sources: Fact Sheet on Foreign Direct Investment (FDI), Department of Industrial Policy and Promotion website, http://dipp.nic.in/fdi_statistics/indian_FDI_September2010.pdf , accessed 26 November 2010.
39
AGRICULTURE
November 2010
Contents
Advantage India
Market overview
40
POLICY AND REGULATORY FRAMEWORK Agriculture November 2010
Policy and regulatory framework (1/8)

The various ministries within the Government of India and other agencies responsible for the development of the agricultural sector include

Ministry of Food Processing Industries Department of Agriculture & Cooperation (National Horticulture Board) Department of Animal Husbandry, Dairying and Fisheries Ministry of Commerce and Industry (commodity boards for rubber, coffee, tea and spices) National Dairy Development Board (NDDB)
41

The major acts and rules pertaining to the agro industry:

Agriculture Produce (Grading & Marking) Act, 1937 Fruit Products Order, 1955 Coconut Development Board Act, 1979
National Cooperative Development Corporation (NCDC Act), 1962

Seed Act, 1966 Seeds Control Order, 1983
42

FDI policy
100 per cent FDI is allowed under the automatic route in floriculture, horticulture, development of seeds, cultivation of vegetables and mushrooms under uncontrolled conditions and services related to the agriculture and allied sectors. 100 per cent FDI is allowed in the tea sector, including tea plantations, under the government route, subject to the following conditions:
Compulsory divestment of 26 per cent equity of the company in favour of an Indian partner/the public within a period of five years. Prior approval of the state government, in the event of any future land use change.
43

Government initiatives
1. Vishesh Krishi Gram UdyogYojana (VKGUY) special agriculture and village industry scheme The objective of this scheme is to promote exports in the following areas

Agricultural produce and its value-added products Minor forest produce and its value-added variants Gram udyog products Forest-based products Other products
44

Government initiatives
2. Rashtriya Krishi VikasYojana (RKVY) RKVY was launched in 2007 to achieve the objective of attaining 4 per cent growth in the agricultural sector during the Eleventh Plan Period. The key objectives of the scheme are:

To incentivise states to increase public investment in agriculture and allied sectors To ensure the preparation of agriculture plans in the districts and states, based on agro-climatic conditions, and the availability of technology and natural resources To maximise returns to farmers engaged in the agriculture and allied sectors To bring about quantifiable changes in the production and productivity of various components of agriculture and allied sectors by addressing them in a holistic manner
Sources: Department of Agriculture and Cooperation, Department of Industrial Policy and Promotion
45

Public sector outlays and expenditure under agriculture and allied activities (US$ billion)
35 30 25 20 15 10 5 0 9.2 12.8 4.9% 3.9% 4% 3.7% 3% 2% 1% 0% 29.6 5% 6%
India has pursued a policy to attain food self-sufficiency, with a focus on expanding cultivated and irrigated areas, implementing land reforms, adopting HYV crops, promoting increased use of chemical fertilisers and pesticides, and restructuring rural credit institutions, and community development. In 2000, the government announced its first comprehensive agricultural policy statement the National Agricultural Policy (NAP). The NAP aims to achieve an annual growth rate of 4 per cent in the agricultural sector by 2020.
Ninth Plan (19972002)

Plan Outlays
Tenth Plan (200207)
Eleventh Plan (20072012)
Percentage share of agriculture and allied activities to total outlay
Sources: Share of Public Sector Outlays and Expenditure under Agriculture and Allied Activities during Ninth Plan, Tenth Plan, and Eleventh Plan, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/At_Glance_2008/Agriculture_new.html accessed 18 January 2010; Source: "Agricultural Statistics At a Glance 2008, Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/At_Glance_2008.htm, accessed 18 January 2010.
46
Currently, Indias agricultural policy focuses on food self-sufficiency, remunerative prices for farmers, and maintaining stable prices for consumers. These goals are met by a number of instruments such as minimum support prices (MSP), food subsidies for consumers, regulated markets, input subsidies for producers, and international trade policy. Since independence, the country has focused on the agricultural sector, through five year plans. The governments Eleventh Five Year Plan (20072012), focuses on inclusive growth, and rests upon substantial increase in public sector outlay. In the Eleventh Plan, the public sector outlay towards agriculture and allied activities stands at US$ 29.6 billion (INR 1,363.8 billion).
Sources: Share of Public Sector Outlays and Expenditure under Agriculture and Allied Activities during Ninth Plan, Tenth Plan, and Eleventh Plan, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, http://dacnet.nic.in/eands/At_Glance_2008/Agriculture_new.html accessed 18 January 2010; Source: "Agricultural Statistics At a Glance 2008, Economics And Statistics, Ministry of Agriculture, Government of India website, http://dacnet.nic.in/eands/At_Glance_2008.htm, accessed 18 January 2010.
47

The Union Budget 201011 focused on the following:
Provision of US$ 86.9 million (INR 4 billion) to extend the Green Revolution to the eastern region of the country, comprising Bihar, Chhattisgarh, Jharkhand, Eastern Uttar Pradesh, West Bengal and Orissa. Provision of US$ 65.2 million (INR 3 billion) to organise 60,000 pulses and oil-seed villages in rain-fed areas in 201011 and to provide an integrated intervention for water harvesting, watershed management and soil health to improve productivity of the dry land farming areas. Provision of US$ 43.4 million (INR 2 billion) to sustain the gains already made in the green revolution areas through conservation farming, which involves concurrent attention to soil health, water conservation and preservation of biodiversity. Banks have been consistently meeting the targets set for agricultural credit flow in the past few years. For the year 201011, the agricultural credit flow target has been set at US$ 81.5 billion (INR 3.7 billion). In addition to the 10 mega food park projects already being set up, the government has decided to establish five more similar parks. External commercial borrowings are to be available for cold storage or cold room facility, including those for farm level pre-cooling, for preservation or storage of agricultural and allied products, marine products and meat.
Source: India Agricultural Policy Review, Agriculture and Agri-Food Canada website, www4.agr.gc.ca/AAFC-AAC/displayafficher.do?id=1201538787839&lang=eng, accessed 18 January 2010.
48
AGRICULTURE
November 2010
Contents
Advantage India
Market overview
49
OPPORTUNITIES Agriculture November 2010
Opportunities (1/3)
Demandsupply gap of cereals in India (MT)
350 300 245.1 250 209.7 200 242.2 260.2 277.2
150
100 50 0
188.5
2011P
2021P Demand Supply
2026P
The demand-supply gap for food in India shows that in the short to medium term, supply will meet demand requirements; from 2021 demand will outstrip supply for cereals, pulses, edible oil and sugar. Food commodity prices are likely to be high and volatile for the next 10 15 years. India needs a pulses revolution in order to meet the increasing demand.
Sources: Surabhi Mittal, Working Paper No 209: Demand-Supply Trends and Projections of Food in India, Indian Council For Research On International Economic Relations (ICRIER) website, www.icrier.org, accessed 22 January 2010; India needs a pulses revolution, The Economic Times website, http://economictimes.indiatimes.com/opinion/perspectives/India-needs-a-pulses-revolution/articleshow/5035613.cms, accessed 21 September 2009.
50
Opportunities (2/3)
Demand-side growth along with government initiatives expected to help India become a leading agro country
India ranks among the fastest-growing global economies and is the worlds converging point of focus amidst narrowing boundaries and well-connected international regions. The massive agrarian employment base in Indias rural population is directly responsible for driving such unsurpassed growth dynamics. The Indian population is projected to reach approximately 1.6 billion in 2050, thereby creating a huge domestic demand for agricultural products. The various policies and growth initiatives of the Government of India are expected to further boost growth in this sector. According to the Organisation for Economic Co-operation and Development Food and Agriculture Organization, India is estimated to account for 12.1 per cent and 21.8 per cent of the worlds wheat and rice production, respectively by 2015.
Sources: Surabhi Mittal, Working Paper No 209: Demand-Supply Trends and Projections of Food in India, Indian Council For Research On International Economic Relations (ICRIER) website, www.icrier.org, accessed 22 January 2010; India Agricultural Policy Review, Agriculture and Agri-Food Canada website, www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1201538787839&lang=eng, accessed 18 January 2010.
51
Opportunities (3/3)
Agricultural inputs expected to grow due to increased production levels
With the production levels expected to grow, agricultural input such as fertilisers, farm equipment and machinery, irrigation facilities, institutional credit, and research and development are expected to be driven towards a higher target. These inputs are an essential part of the agribusiness, and provide opportunities across different levels in the agriculture value chain.
Private sector involvement expected to boost Indian agriculture further
Agriculture is expected to be a point of focus for the private sector in India, as a number of private players are expected to venture into organic farming, contract farming, and setting up hubs for the procurement of farm produce.
Increased corporate investment in this sector is expected to offer a new frontier of growth across many areas such as economies of scale through advanced models of farming, effective distribution systems and food security.
Increased private equity (PE) investment in the food processing and agri-based companies is also expected to boost further employment in this sector. PE players have invested US$ 300 million in these companies during JanuaryJune 2010.
Sources: Surabhi Mittal, Working Paper No 209: Demand-Supply Trends and Projections of Food in India, Indian Council For Research On International Economic Relations (ICRIER) website, www.icrier.org, accessed 22 January 2010; India Inc urged to invest more in agriculture, Business Line (The Hindu), 23 September 2010, via Dow Jones Factiva, 2010 The Hindu Business Line; PE funds invest $300 mn in food processing, agri-based companies, Business Standard, 21 July 2010, via Dow Jones Factiva, 2010 Business Standard Ltd.
52
AGRICULTURE
November 2010
Contents
Advantage India
Market overview
53
INDUSTRY ASSOCIATIONS Agriculture November 2010
Industry associations (1/3)

Autonomous Bodies
National Institute of Agricultural Extension Management (MANAGE) Rajendranagar, Hyderabad500 030, Andhra Pradesh Phone: 040-24016702 to 706 Fax: 040-24015388 National Institute of Agricultural Marketing (NIAM) Bambala, Kota Road Jaipur302033, Rajasthan Phone: 0141-2770027 Fax: 0141-2771938, 2770027
54

Boards
Central Insecticides Board and Registration Committee Machinary Store Building, N.H.IV Faridabad Phone: 0129 -2413002 Coconut Development Board Kera Bhavan, SRVHS Road, Kochi Kerala682011 Phone: 0484-2376265, 2377267, 2376553 Fax: 0484-2377902 National Dairy Development Board (NDDB) PB No 40, Anand388 001 Phone: 02692-260148/260149/260160 Fax: 02692-260157
55

Boards
National Horticulture Board (NHB) Ministry of Agriculture, Government of India 85, Institutional Area, Sector-18 Gurgaon122015, Haryana National Oilseeds and Vegetable Oils Development Board (NOVOD) 86, Institutional Area, Sector-18 Gurgaon122015, Haryana
Councils
Indian Council of Agricultural Research (ICAR) Krishi Bhavan, New Delhi 110 114
56
NOTE Agriculture
November 2010
Note
Wherever applicable, numbers in the report have been rounded off to the nearest whole number.
Conversion rate used: US$ 1= INR 48 and INR 46
57
AGRICULTURE
November 2010
DISCLAIMER
India Brand Equity Foundation (IBEF) engaged Ernst & Young Pvt Ltd to prepare this presentation and the same has been prepared by Ernst & Young in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Ernst & Young and IBEFs knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Ernst & Young and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Ernst & Young nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
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AGRICULTURE

ADVANTAGE INDIA Agriculture November 2010

MARKET OVERVIEW Agriculture November 2010

Market overview (1/12)

1960s and 70s

1980s and 90s

MARKET OVERVIEW Agriculture November 2010

Market overview (2/12)

52.5% 56.7% 46.0% 39.9% 176.4 196.8

Food grain production (Million Tonnes)

Percentage share of agriculture and allied services in GDP

MARKET OVERVIEW Agriculture November 2010

Market overview (3/12)

MARKET OVERVIEW Agriculture November 2010

Market overview (4/12)

MARKET OVERVIEW Agriculture November 2010

Market overview (5/12)

MARKET OVERVIEW Agriculture November 2010

Market overview (6/12)

MARKET OVERVIEW Agriculture November 2010

Market overview (7/12)

MARKET OVERVIEW Agriculture November 2010

Market overview (8/12)

Rice production and yield

1,740 1,336 1,123 74.3 34.6 42.2 53.6 85.0 80.41

1960-61 1970-71 1980-81 1990-91 2000-01 2009-10*

Production (Million Tonnes)

Production (Million Tonnes)

MARKET OVERVIEW Agriculture November 2010

Market overview (9/12)

Area under cultivation (million hectares)

MARKET OVERVIEW Agriculture November 2010

Market overview (10/12)

Nine oilseeds production and yield

1,200 1,000 800 Yield 600 400 200 0

Production (Million Tonnes)

Production (Million Tonnes)

MARKET OVERVIEW Agriculture November 2010

Market overview (11/12)

Cotton production and yield

Production (Million Tonnes)

Production (Million Tonnes)

MARKET OVERVIEW Agriculture November 2010

Market overview (12/12)

19.3% 4.7% 5.2% 5.3% 6.6% 6.6% 7.0% 7.0% 8.4%

Bihar Madhya Pradesh Karnataka Maharashtra

MARKET OVERVIEW Agriculture November 2010

EXIM scenario (1/4)

Indias agri imports and exports (US$ billion)

MARKET OVERVIEW Agriculture November 2010

EXIM scenario (2/4)

200304 200405 200506

Percentage of agri exports to total national exports

MARKET OVERVIEW Agriculture November 2010

EXIM scenario (3/4)

Key agri products exported by India, 20092010* (US$ billion)

11.0% 6.9% 7.0% 0.1% 6.3%

MARKET OVERVIEW Agriculture November 2010

EXIM scenario (4/4)

Key agri products imported by India, 20092010* (US$ billion)

MARKET OVERVIEW Agriculture November 2010

Growth drivers (1/2)

Land and irrigation