1. Macro-economics ........................................................................................................ 3 1.1. 1.2. 1.3. 2. Tenth plan ............................................................................................................. 4 Eleventh plan ........................................................................................................ 6 Vision 2020 .......................................................................................................... 7

Land............................................................................................................................. 9 2.1. 2.2. Soil type................................................................................................................ 9 Waste land .......................................................................................................... 10

3.

Agriculture ................................................................................................................ 11 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. Food grains ......................................................................................................... 13 Commercial crops............................................................................................... 14 Cropping season ................................................................................................. 15 Agriculture exports ............................................................................................. 15 Irrigation ............................................................................................................. 16 Revolutions......................................................................................................... 17

A brief description of the major revolutions: ................................................................ 18 3.7. 3.8. 4. Agriculture: At A Glance ................................................................................... 18 India and world: comparison in agriculture........................................................ 20

Agri Business ............................................................................................................ 21 4.1. 4.2. 4.3. 4.4. 4.6. Fertilizer and pesticides ...................................................................................... 21 Food processing.................................................................................................. 24 Agriculture machinery........................................................................................ 25 Agriculture markets ............................................................................................ 27 Agriculture finance ............................................................................................. 28

5. 6.

Forest......................................................................................................................... 30 Agriculture Allied Activities..................................................................................... 31 6.1. 6.2. 6.3. 6.4. Horticulture......................................................................................................... 31 Poultry ................................................................................................................ 31 Dairy ................................................................................................................... 32 Sericulture........................................................................................................... 32

6.5. 6.6. 7. 8. 9.

Fish ..................................................................................................................... 33 Animal Husbandry.............................................................................................. 33

Land reforms ............................................................................................................. 35 NGOs......................................................................................................................... 37 Development schemes and indicators ....................................................................... 41 9.1. HDI index............................................................................................................... 42 9.2. IRDP....................................................................................................................... 43 9.3. Self Employment programs.................................................................................... 43 9.4. Wage Employment programs................................................................................. 44 9.5. Education................................................................................................................ 44 9.6. Health ..................................................................................................................... 46

10. 11. 12. 13. 14. 15.

Micro finance ......................................................................................................... 47 Cooperatives........................................................................................................... 48 Retail revolution and farmer .................................................................................. 50 ITC e-Choupal........................................................................................................ 52 WTO and Indian agriculture .................................................................................. 56 Important Institutions ............................................................................................. 58

Page | 2

1. Macro-economics
India is the second fastest growing major economy in the world, with a GDP growth rate of 9.4% for the fiscal year 20062007. The average for last three years is close to 9%. Beating Japan, the economy of India is expected to be the third largest in the world as estimated by purchasing power parity by the end of this fiscal year. When measured in Dollar terms, India is the twelfth largest in the world. Currently its GDP has more than US $1.0 trillion. But per capita income of the country is low at $3,800 at PPP and $735 at nominal1 due to countrys huge population. In the World Bank classified India as a low-income economy in 2006, but India will probably move into the lower middleincome country classification of per capita income by 2008. Indian foreign exchange reserves are increasing at rapid rate. During August, 2007, it was $230 billion. With the recent surge in inflows, no wonder by the time you will read this document it would be more than $250 billion. Following graph compares the growth rate of major economies2.

       

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Page | 3

The PPP picture is brighter. Following graph tells that its not far when we will catch up china and America3.
GD P on P P P bas is 16 14 U S $ t r illion 12 10 8 6 4 2 0
ia a re a ia a Ja pa n ra zi in al i ss d H U U ap o C h In o tr u re K l K S in g S

1.1. Tenth plan During tenth plan (2002-07) period India has seen the growth like never before. The table below is showing the sectoral growth rates and ICOR under Different Sectors of the economy

*Estimates by IMF: World economic outlook , September 2006

us

Page | 4

Tenth Five year Plan in a nutshell (2002-07) Macro-economics parameters of the tenth plan are given below. The most noticeable is the increase in the savings and investment rate. If an economy wants to grow with the rate of 9% or more its investments rate must be more than 35%. Investment comes from savings so higher savings rate is prerequisite of higher growth. Can you guess which country has highest savings rate. Obviously China!

Page | 5

Parameter Domestic Savings Rate (% of GDPmp) Current Account Deficit (% of GDPmp) Investment Rate(% of GDPmp) GDP Growth Rate (% per annum) Export Growth Rate(% per annum)

10th plan 26.8% 1.6% 28% 7.9% 12%

Post Plan 33% 3.1% 36% 9.4% NA

Gujarat, Karnataka and Delhi were grown fastest with the growth rate in state GDP was more than 10%. Bihar and Kerala were among the slowest with growth rate in state GDP was 6.5%. Insurgency hit north eastern (NE) states were worst performers with growth rate hovering at the lower 5%. 1.2. Eleventh plan

Eleventh plan (2007-11) is under the finalization process. Most of the policies and targets are already finalize and reports on it are available on the planning commission website. Targets growth rate for agriculture sector4 is 4 %. Growth rate for agriculture sector achieved during 10th plan: 1.8% Parameter Target for 11th plan GDP growth rate 9% Domestic Savings Rate (% 33% of GDPmp) Current Account Deficit (% 2.8% of GDPmp) Investment Rate(% of 35% GDPmp)

Montek Singh Ahluwalia, planning commission, http://planningcommission.nic.in/plans/planrel/53rdndc/dchndc53.pdf

Page | 6

In the table below, the projections for sectoral growth and Import-Export growth rates are given.

1.3. Vision 2020 Inspired with president Kalam, country has prepared a vision for 2020. Committee headed by K C Pant has prepared the vision document in 2002. Few high lights are given below. Vision 2020 at glance5

Report of the committee on vision http://planningcommission.nic.in/plans/planrel/pl_vsn2020.pdf

2020

planning

commission,

Page | 7

Page | 8

2. Land
Following tables shows some facts about the Indian land. India which is 7th largest country has 2nd largest cultivable land and largest irrigated land in the world. Parameter Total Area Land Area Percentage of World Area Forest Area6 Areable land Irrigated Area Rain irrigated Area Cereals production 2.1. Soil type Indian value 329 million hectares 297 million hectares 2.42 per cent 63 million hectares (19.4 % of the total area) 162 million hectare (43% of Total) 55 million hectares (40% of total Arable land) 60% 231 in year 2001 World Rank 7th 7th 7th

2nd (USA 1st) 1st

3rd behind China, USA

India- Land Soils Soil States Alluvial soils cover about Found in Indo-Gangetic 24% of the total land. Plains (Punjab, Haryana, UP), in the valleys of Narmada and Tapti in Madhya Pradesh and the Cauvery in Tamil Nadu. Black soils Found in the States of Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Rajasthan.
6

Useful in production of These soils are considered very good for the production of wheat, rice other cereals, pulses, oil seeds, potato, sugarcane, etc. These are also considered good for cultivation of cotton, cereals, pulses, oil seeds, citrus fruits, vegetables, etc.

Source: Data as of year 1999, planning commission website. The data on forest cover varies as different agencies have different definition of what constitute a forest

Page | 9

Red soils

Found in Tamil Nadu, These are most suited for Karnataka, Kerala, rice, ragi (millet), tobacco Maharashtra, Andhra and vegetable cultivation. Pradesh, Madhya Pradesh, Bihar and West Bengal.

2.2.

Waste land

Wasteland is a degraded land which does not fulfill their life sustaining potential. Wasteland can result from inherent / imposed disabilities such as by location, environment, chemical and physical properties of the soil or financial or management constraints. Wastelands statistics indicate that about 63.85 million hectares, which account for 20.17% of the total geographical area (328.72 million hectares) exist as wastelands in India7. *XOOLHG DQGRU 5DYLQRXV ODQG, /DQG ZLWK RU ZLWKRXW VFUXE :DWHUORJJHG DQG 0DUVK\
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Source: 1:50,000 scale wasteland maps prepared from Landsat Thematic Mapper/IRS LISS II/III Data

Page | 10

3. Agriculture
The Indian Agricultural sector provides employment to about 65% of the labour force, accounts for 18.5% of GDP in 2005, contributes 20-21% of total exports, 14.7% of the total export earnings, and raw materials to several industries. Area, Production and Yield of Food grains Along with Percentage Coverage under Irrigation in India

Year

Area (Million Hectare) 97.32 127.84 121.05 124.07

Production (Million Tonne)

Yield (Kg./Hectare)

% Coverage under Irrigation 18.1 35.1 43.4 NA

1950-51 1990-91 2000-01 2006-07*

50.82 176.39 196.81 211.78

522 1380 1626 1707

Growth in Agriculture Annual average Growth Rate Five Year Plan and Years Growth rate of agriculture and allied sectors Eight five year Plan 4.7 Ninth five year Plan 2.1 2003-04 10 2004-05 .07 2005-06 2.3 Growth Rates Growth rates GDP Agriculture Industrial Sector Service sector

(Percent) Overall GDP Growth Rate 6.7 5.5 8.5 6.9 7.5-8

2004-05 7.5% .7% 8.6% 9.9%

2005-06 8.2% 2.3% 9.0% 9.8%

Page | 11

Food Crops Crop Rice Wheat Millets Barley Maize Pulses Sugarcane Area West Bengal, U.P., Andhra Pradesh and Haryana. Punjab, Haryana and U.P and Madhya Pradesh Tamil Nadu, Maharashtra, Gujarat, Madhya Pradesh, U.P. and Haryana. U.P., Punjab and Haryana. Bihar, U.P., Punjab, Rajasthan, Maharashtra and Gujarat. Punjab, Rajasthan, Maharashtra, Bengal and Gujarat U.P., Bihar, Maharashtra. Non-Food crops or Cash crops Tea Coffee Oilseeds Tobacco Cotton Jut Rubber Silk Assam, West Bengal, Kerala. Karnataka, Kerala and tamil nadu. Orissa, U.P., Maharashtra, Gujarat, Andhra Pradesh. U.P., bihar, Tamil Nadu, Karnartaka and Gujarat. Maharashtra, Gujarat, Andhra Pradesh and tamil Nadu West Bengal, Assam, Bihar and Orissa Tamil Nadu, Karnataka and Kerala Karnataka, West Bengal, Assam and Kashmir.

Page | 12

3.1.

Food grains8
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Food grains Production in Millions tones Following table shows the Crop-wise Production of Food Grains in Kharif/Rabi9
Crop-wise Production of Food Grains in Kharif/Rabi Season in India (2004-2005 and 2005-2006) (Million Tonnes) 2004-05 2005 -06 Kharif Rab Tot Khar Rabi Tot i al if al 79.04 14.4 93.5 75.45 12.35 87. 6 8 - 79.5 79.5 - 75.53 75. 53 12.66 2.42 15.0 12.54 2.85 15. 8 39

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Page | 13

Pulses Total Coarse Cereals Total Pulses Total foodgrains Cotton* Jute ** Sugarcane (Cane)

6.1

9.2

15.3

28.69 5.78

7.83 9.37 105.0 8 -

36. 52 15. 15 215 165 101 .2 237 .5

113.8 15 106 Continued in Kharif and Rabi

111. 3 -

225. 1 150 106 270 0

109.9 2 165 101.2 -

Note : * : Cotton lakh bales of 170 kg each ** : Jute and Mesta lakh bales of 180 kg. each.

3.2.

Commercial crops
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3.3.

Cropping season

The Indian crops can be divided into three groups in which two are major namely Kharif & RabiKharif crop- The Kharif season is during the southwest monsoon (July-October). During this season, agricultural activities take place both in rain-fed areas and irrigated areas. Kharif crop includes Rice (Paddy), Jowar, Bajra, Maize, Cotton, Sugarcane, Seasamum, Soyabean, and Groundnut. Rabi crops- The Rabi season is during the winter months, when agricultural activities take place only in the irrigated areas. This crop is sown in October last and harvested in March/April every year. These crops include Wheat, Jowar, Barley, Gram, Tur, Rapeseed, and Mustard. Zayad Crop- In some parts of the country a crop is sown during March to June every year. Zayad crops include Melon, watermelon, Vegetables, Cucumber, Moong, Urad etc.

Kharif and Rabi season comparison: Comparison of major food grains and total production of rice and wheat. The comparison can also be seen in the table shown in the sections of food grains and commercial crops. Grains Rice Wheat Rabi (all food grains) Kharif (all food grains) Total (all food grains) 3.4. Agriculture exports 2004-05 in million tonnes 87.8 73.03 103.4 102.9 206.3

The Agri-export and EXIM policy 2004-09 emphasized the importance of agricultural exports and announced the following measures to boost the agri-ecports:

Page | 15

A new scheme called the Vishesh Krishi Upaj Yojana ( Special Agricultural Produce Scheme ) for promoting the export of fruits, vegetables, flowers minor forest produce, and their value added products have been introduced. Funds shall be earmarked under ASIDE ( Assistance to states for Infrastructure Development of Export) for the development nof Agri-Export zones. Capital goods imported under EPCG shall be permitted to be installed anywhere in the APZ.

Following tables shows the agriculture exports from india and its comparison with the total exports of the country. The figures of the year 1991 are given to highlight the fact that what is the impact of LPG (liberalization, privatization and globalization) on the agri-exports from the country.10
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3.5. Irrigation India is a monsoon dependent country for its water resources. Irrigation sector has been fundamental to Indias economic development and poverty alleviation since 25% of Indias Gross Domestic Product (GDP) and 65% of employment is based on agriculture. During the post independence period, the country has invested a huge amount of capital in the major and the medium irrigation projects. Among the states, three have already achieved 70% or more of the ultimate irrigation potential with Tamilnadu recording 100% achievement, followed by Punjab and Rajasthan at 84% and 74% respectively. Six states, i.e., Haryana, Karnataka, Jammu & Kashmir, and West Bengal are in the range of 63% to 71%, whereas in U.P. and Maharashtra, the achievement would be 56% each. The states of Bihar, Gujarat, Orissa, M.P. and Assam have achieved less than 50% of the ultimate potential. The ultimate potential under major & medium irrigation in the eastern states (except West Bengal), i.e. Bihar, U.P., M.P. and Orissa put together works out to
10

Source: Ministry of Agriculture, Govt. of India.

Page | 16

bout 50% of the total ultimate potential of the country. Irrigation potential which stood at 22.6 mha in 1950-1951, has now reached about 100 mha, and as a result food production has increased from 50 m tonnes (1951) to about 208 m tonnes (2005). The projections for future population and food requirement of the country indicate that the population of India may stabilize around 1.6 to 1.7 billion by 2050 AD and that would require about 450 m tons of food grain annually at the required level of food consumption. Area wise it is necessary to provide irrigation to at least 130 mha for food crops alone and in an area of 160 mha for all crops to be able to meet the demands of the country in 2050 AD and ensure food security. Following table give the data about the shown and irrigated land in the country. It also depicts the trend in the increase of net shown area and irrigated area. Sown and Irrigated Area in India (Million Hectare) Net Sown Area Net Gross Area Sown more Irrigated Sown Area than once * Area 131.89 182.24 190.64 13.14 40.61 49.76 20.85 49.87 55.1 Gross Irrigated Area 22.56 65.68 76.82

Year 1950118.75 51 199192 141.63 200304* 140.88

Area Irrigated more than once ** 1.71 15.81 21.71

3.6.

Revolutions

Revolutions in Indian Economy Revolutions Green Yellow White Area Agriculture Oil Seeds Milk Key Person Dr. Norman Borlaug and Dr. M.S.Swaminathan. Sam Pitroda Varghese Kurien Page | 17

Blue Pink Brown Grey Black

Fish Shrimp Masaaley Wool & Poultry Crude Oil

A brief description of the major revolutions: Operation Flood (white Revolution) has helped dairy farmers direct their own development, placing control of the resources they create in their own hands. A National Milk Grid links milk producers throughout India with consumers in over 700 towns and cities, reducing seasonal and regional price variations while ensuring that the producer gets a major share of the price consumers pay. The bedrock of Operation Flood has been village milk producers' cooperatives, which procure milk and provide inputs and services, making modern management and technology available to members. Operation Flood's objectives included : * Increase milk production ("a flood of milk") * Augment rural incomes * Fair prices for consumers

The Green Revolution is a term used to describe the worldwide transformation of agriculture that led to significant increases in agricultural production between the 1940s and 1960s. This transformation occurred as the result of programs of agricultural research, extension, and infrastructural development, instigated and largely funded by the Rockefeller Foundation, along with the Ford Foundation and other major agencies.[1] The Green Revolution in agriculture helped food production to keep pace with worldwide population growth. It has had major social and ecological impacts. The Office of Special Studies in Mexico became an informal international research institution in 1959, and in 1963 it formally became CIMMYT (The International Maize and Wheat Improvement Center). The second nation to which the Green Revolution spread was India. The Ford Foundation had a presence in the nation, and their social scientists had decided that the technological development of agriculture was important to the future of India . At the same time C.Subramaniam, the former Indian Minister. The Foundation and Indian government collaborated to import a huge amount of wheat seed from CIMMYT 3.7. Agriculture: At A Glance Agriculture growth rate target for Tenth Plan (2002-2007) is 4%,but achived was merely 1.8%. target for 11th plan is again 4%.

Page | 18

Agriculture sector provides employment to 58.4% of countrys workforce and is the single largest private sector occupation. India holds first position in the world in the production of sugarcane and sugar, Brazil closely follow us and many times its production is more than ours. Brazil is also largest producer of Ethanol. Cashew nuts assume an important place in the Indian Economy. India produces 45% of the global production of cashew. India is the largest producer, processor, consumer & exporter of cashew in the world. India contributes about 13% to the world vegetable production and occupies first rank in the production of Cauliflower, second in onion and third in cabbage in the world. Indias share in the world production of mango is about 54%. India occupies the first rank in banana production of 1.16 Million tones. Animal husbandry output constitutes about 30% of the countrys agriculture output. U.P. is the highest wheat producing state, Punjab and Haryana hold 2nd & 3rd positions respectively. Rice is the main food crop in India. The highest rice producing State is West Bengal, U.P & Punjab are 2nd & 3rd respectively. The highest pulses & Soyabean producing state is Madhya Pradesh. The highest cereals producing state is Maharashtra. India is the largest producer & consumer of tea in the world and accounts for around 27% of world production and 13% of world trade. Karnataka, which is the largest producer of coffee in the country, accounts for 56.5% of total coffee production in India. India ranks sixth in the world coffee production. Kerela is the main rubber producing state, which produces 90% of the rubber in the country and accounts for over 85% of the area under cultivation. India is the largest Milk producing country in the world. India is the third highest tobacco producing country in the world. India ranked first in production of vegetable in the world. Besides India is the second largest producer of fruits in the world. The Horticulture sector contributed 28% of GDP in agriculture.

Crop Rotation- The practice of growing more than one crop simultaneously in a single field in a single season gives additional harvest. Thus, this practice increases the over all yield and ensures maximum use of the soil and nutrients. If there is danger of loss to any crop due to adverse weather conditions or diseases, there are some better chances for the other crop in the field if the system of Page | 19

multiple cropping is adopted. The two and three years rotation is also adopted in the country and is as follows: First Year Bajra & Pea Jowar & Arhar Kharif Rabi Sugar-cane Sugar-cane Second Year Green manuring & Wheat Cotton& Peas Green manuring Wheat Third Year Cotton Preparation for Sugar-cane

Sugar cane is generally sown in three years rotation. The areas, near the help of organic manures and fertilizer. In such areas three to four crops in a year are taken such as maize, early potato, late potato and pumpkin. In these areas the fertility of the fields is maintained by adding manure with the soil.

3.8.

India and world: comparison in agriculture

Leading production countries and Indias rank in the world11 Crop Paddy Wheat Maize Sugarcane Tobacco Milk Fruits and vegetable Live stock Leader China China USA Brazil China India China India Indias Rank 2nd 2nd 7th 2nd 2nd 1st 2nd 1st

India is leading producer of Banana and Mango also.

11

FAO estimates

Page | 20

4.

Agri Business

Definition12: Agribusiness is sum total of all the opereations involved in a) manufacturing and distribution of farm supplies, b) production activities on the farm, c) and the storage processing and distribution of the farm commodities and the items made from them. Agribusiness Brief: As per recent studies the turnover of the total food market is approximately Rs.250000 crores (US $ 69.4 billion) out of which value-added food products comprise Rs.80000 crores (US $ 22.2 billion). The Government of India has also approved proposals for joint ventures, foreign collaborations, industrial licenses and 100% export oriented units envisaging an investment of Rs.19100 crores (US $ 4.80 billion) out of which foreign investment is over Rs. 9100 crores (US $ 18.2 Billion). The agricultural food industry also assumes significance owing to India's sizable agrarian economy, which accounts for over 35% of GDP13 and employs around 65 per cent of the population. Both in terms of foreign investment and number of joint- ventures / foreign collaborations, the consumer food segment has the top priority. The other attractive features of the Indian agro industry that have the capacity to lure foreigners with promising benefits are the deep sea fishing, aqua culture, milk and milk products, meat and poultry segments14.

4.1. Fertilizer and pesticides A fertilizer is a Organic or inorganic plant foods, which may be either liquid or granular, used to amend the soil in order to improve the quality or quantity of plant growth Our farm needs 18 different elements to survive but most of them are already provided to the farm from the soil and natural surroundings. However, three primary elementsNitrogen (N), Phosphorus (P), and Potassium(K) need to be added to farm in the form of fertilizer to increase productivity in total. The idea ratio of N: P: K fertilizer is 4:2:1. India is the 3rd largest producer and consumer after China and States with 17.7 million tonnes of installed capacity. Annual consumption increased from 70,000 mt in 1951-52 to 203.4 lakh mt in 05-06. Per hectare consumption increased from less than 1 kg in 1951-52 to 106 kg in 05-06. Achieved self sufficiency in Nitrogenous fertilizers production, adequacy in Phosphates but for Potash depended on imports.

12 13

Davis and Goldberg, Harvard Business School Only agriculture and allied activities account for 18.3 % in 2006. But agriculture and related agro industry which inculedes food processing, warehousing and export accounts for close to 35% of the GDP. 14 Source: http://www.agriculture-industry-india.com/agro-industry-overview/

Page | 21

Punjab tops with 184 kg per hectare and Orissa at bottom with 41.4 kg per hectare consumption. Still we are behind even from country like Pakistan and Bangladesh.

Fertilizer Use: Large and medium farmers use fertilizer mostly, small farmers use less. The landholding above 5 acres or 2-5 acres farmer use it more almost 70% of total consumption. The use of fertilizer is varying from state to state. Punjab is highest user of fertilizer less then one percent farmers do not use it regularly. At National level 30 % farmers do not use it regularly Distribution: Availability of fertilizer is the most important in its sell, Nutrients determine the purchasing decision. Brands have got lesser important in fertilizer market Fertilizers are distributed through three main channels institutional channel, company outlets and private dealers. Share of private dealers is 65 % of total fertilizer distribution

Types of Fertilizers & their composition Nitrogenous Fertilizers Urea Ammoniam Sulphate (As) Ammoniam Chloride (ACl) Calcium Ammoniam Nitrate (CAN) Phosphatic & Potassic Fertilisers Single Super Phosphate (SSP) Muriate of Potash (MOP) Sulphate of Potash (SOP) Di-ammonium Phosphate (DAP) Rock Phosphate (RP) 16% P2O5 60%K2O 48%K2O 18% N 46%P2O5 16 - 20% P2O5 46%N 21%N 26%N 25%N

Page | 22

Bio-fertilizers are environment friendly (free of inorganic chemicals) and cheaper source of plant nutrients. Decision about setting up of National Bio-fertilizer Development Cost (NBDC) and six regional bio-fertilizers centers is taken in ninth five year plan. Government Policy: It has been highly Government regulated production and marketing sector. It has been regulated under Essential Commodities Act. After August 1992, except Urea all P and K fertilizers were decontrolled. New Fertilizer Policy came in April 2003, now manufacturers of Urea can market up to 50% of production. Installed manufacturing capacity and share is given in the next table Capacity Capacity Percent share N 29.0 26.27 44.73 100 Present share P 7.65 30.27 62.08 100

Sector Public sector Cooperatives sector Private sector Total

N 34.98 31.69 53.94 120.61

P 4.33 17.13 35.13 56.59

Joint Ventures: due to the high cost of raw materials Indian fertilizer producers are eyes the countries where natural gas, a main raw material and fuel, is cheap. It has created a need for countries to create joint ventures outside India, especially in Middle East and North Africa. Following is the list of such ventures. Joint Ventures Abroad 1. IFFCO and Southern Petroche. Ind. Ltd. 2. JV in Jordan 3. JV with Morocco 4. JV with Oman Under Implementation 1. JV in UAE 2. JV in Egypt 3. JV in Tunisia

Page | 23

4.2. Food processing India is the world's second largest producer of food next to China, and has the potential of being the biggest with the food and agricultural sector. The total food production in India is likely to double in the next ten years and there is an opportunity for large investments in food and food processing. India's food processing sector covers fruit and vegetables; meat and poultry; milk and milk products, alcoholic beverages, fisheries, plantation, grain processing and other consumer product groups like confectionery, chocolates and cocoa products, Soya-based products, mineral water, high protein foods etc. A strong and dynamic food processing sector plays a significant role in diversification of agricultural activities, improving value addition opportunities and creating surplus for export of agro-food products. This would, however, require policies and plans for improvement of food processing infrastructure including up gradation of technology & enforcement of quality standards, promoting investment in food processing, activating domestic market with focus on exports. The food processing was thought to be one of the most promosing sector to attract FDI. It was one of the earliest sector to be privatized. The figures for FDI during the last few years are given below. Inflow of Foreign Direct Investment (FDI) in Food Processing Industries (FPI) Sector in India15 (1999-2000 to 2006-2007) (Rs. in Crore) Year FDI Inflow Received in FPI Sector 444.06 1999-00 198.13 2000-01 1036.12 2001-02 176.53 2002-03 510.85 2003-04 174.08 2004-05 182.94 2005-06 222 2006-07 (Apr-Dec.)

15

Source : Ministry of Food Processing Industries, Govt. of India

Page | 24

The export of the processed food items are given in the next table.

Items
Processed Fruits and Vegetables Animal Products Other Processed Food (Guar Gum, Ground nut, Alcohol, Beverages, milled Products, etc.) Rice Walnuts Marine Products Total

1996-97
473.77 803.59 1835.92

200102
1100.6 1500.9 1780.1

2002-03
(Targets) 1400 1750 1600

3172.35 78.93 4121.36 10485.92

3173 117.98 5957.1 13630

3750 100 6000 14600

4.3.

Agriculture machinery

Mechanization refers to injection of machinery between man and materials handled by them. There is scope of mechanization in every aspect of production agriculture, post harvest and agro processing. It is not a surprise that Indian rural transport and tractor industry is one of the largest in the world. In the year 2006, with the sale of 3.52 lakh tractors India is already the largest market by volume and second largest by value. Today industry comprises of 14 players, including 3 MNCs. The opportunities still are huge considering the low farm mechanization levels in the country, when compared to other developed economies across the world. After a downturn during last 3-4 years, the industry is back on a growth path, which we believe would sustain in coming years as well. Key concern for the industry is its dependence on agricultural income in hands of farmers and the state of monsoon. The overcapacity, increasingly good quality and lower price provides a good export opportunity UP, Punjab, MP, Bihar, AP, Rajasthan and Maharashtra are the biggest market for the tractors. State wise sales figures are provided in the annexure. It clearly shows that north and central India has the highest number of tractor sales.

Page | 25

Various market segments for tractors and dominant players the respective segments
Segments Horse Power (HP) 21-30 Market Share (%) 23-25 Suitability Dominant Player(s)

Small Tractors Medium Tractors Large Tractors Large Tractors

31-40

53-56

41-50

17

>50 Hp

04-Jun

Tractors suited for soft soil conditions and preferred in well irrigated northern states. Used in southern and western region due to hard soil conditions. Rich farmers with larger land holdings, especially in Punjab and Haryana. Used in Turnkey project sites such as building sites for canals, dams and civil construction projects.

Eicher, M&M

M&M, Farmtrac

M&M, Farmtrac

John Deere, HMT

Export potential on Indian farm equipment is immense. With overcapacity in country, good quality, lower price India is poised to become a big exporter of farm equipment. One prime example is Mahindra. Mahindra has already emerged as the fourth-largest tractor brand in the US, with a 5% share of the 15-90 horse power (HP) segment, that is also known as the hobby or consumer segment. Following tables shows the production and sales of tractors and power tillers.

Production and Sale of Tractors and Power Tillers in India16 (1990-91 to 2006-2007) Year Production (No.) Sale (No.) Tractors Power Tractors Power Tillers Tillers 139233 6228 139831 6316 1990-91 292908 22303 2005-06 - 263146* 13375* 2006-07 (Upto 31 Dec., 06)

16

Source : Ministry of Agriculture, Govt. of India.

Page | 26

4.4.

Agriculture markets

Agricultural Marketing is a process which starts with a decision to produce a saleable farm product and involves all aspects of market structure or system, both functional and institutional, based on technical and economic consideration. Agricultural marketing is a State subject. One of the main problems that have been encountered by the Indian farmers is that of marketing their agricultural produce at the right place and time and for the right compensation. The middlemen, who buy their produce at low rates, exploit the poor and uneducated farmers. An efficient system of marketing needs to be evolved so that the agricultural productivity can be improved. The following measures can be considered for improving the agricultural marketing mechanism in India: Establishment of regulated markets. Provision of storage and warehousing facilities. Introduction of Co-operative marketing structure.

Agricultural Price Policy- In an agrarian economy like India, the prices of agricultural commodities have a major influence on the overall price structure. Sudden and unwarned fluctuations in the prices of the agricultural products lead to a corresponding destabilizing effect on the prices of other commodities as well. A decline in the agricultural prices will result in a great fall in the income of the farmers. After the Agricultural Price Commission was set up in 1965, the sector witnessed a more stable and meaningful price and distribution policy. The main thrust areas of the Agricultural Price Policy were: Announcement of minimum support prices of major food grains. Fixation of procurement prices for purchasing a part of the marketable surplus at below market prices. Running a Public Distriburtion System(PDS) for the benefit of the low income consumers. Building up of buffer stocks to meet the emergency situations and to safeguard against the price fluctuations.

Price stability is of utmost importance for agriculture. In order to stabilize the agricultural prices, the government adopts three measures: 1. Minimum Support Price 2. Buffer stock 3. Import of the commodity Page | 27

Agricultural markets: The agricultural markets in India can be broadly classified into the following categories: 1. 2. 3. 4. Wholesale markets. Retail markets. Daily and weekly mandis in the rural areas. Annual and occassional fairs and Haat.

Today India has 7000-plus APMC (agriculture produce and marketing committee) mandi for farm commodities. Mandi works through a series of middleman or commission agents which have a vice like grip on the trade of every farm commodity. From an example from Delhi mandi, 60-75% of the paid by the customers is cornered by these middlemen. It means that farmer gets only 25-40% of the retail price. Hundreds of crore collected in mandi taxes rarely be reinvested in the distribution infrastructure back. Agricultural taxation: Agricultural tax is being collected as a federal tax, but it is being levied only on income from plantations. All other agricultural income is fully exempt from tax. Agricultural property was subject to stamp duties and registration fees. All property transactions have to be made on official, stamped forms, and registration fees have to be paid to register transactions. Countrys main terminal market is set up in Chandigarh and 6 other are in pipe line. Safal market created by NDDB at the outskirts of the Bangalore is state of the art facility. Terminal markets provide all facilities like grading and sorting, electronic accounting, quality testing labs, cold storage and important banking facilities.

4.6. Agriculture finance Agricultural production in this country depends upon millions of small farmers. It is the intensity of their effort and the efficiency of their technique that will help in raising yields per acre. Because of inadequate financial resources and absence of timely credit facilities at reasonable rates, many of the farmers, even though otherwise willing, are unable to go in for improved seeds and manures or to introduce better methods or techniques. Works of minor irrigation like wells owned by the cultivators either get into disuse or are not fully utilized for want of capital. Types of Financing: Finance required for production can be divided broadly into : (a) short-term (for periods up to 15 months) ; (&) medium-term (from 15 months up to 5 years) and (c) long-term (above 5 years). Short-term loans are required for purchasing seeds, manures and fertilizers or for meeting labour charges, etc. These are expected to be repaid after the harvest. Medium-term loans are granted for purposes such as sinking of wells, purchase of bullocks, pumping plants and other improved implements, etc. Loans repayable over a longer period (i.e. above 5 years) are classified as long-term loans. Page | 28

These are utilised for payment of old debts, purchase of the heavier machines, making permanent improvements and increasing the size of the holding17. Primary sources of agricultural credit are: The following agencies provide finance to the cultivators : 1. Private agencies: (a) Money lenders and landlords ; (b) Commercial banks. 2. Public or semi-public agencies: (a) The State (b) Co-operative societies (c) Regional Rural banks Co-operatives: Commercial and regional rural banks are institutional lenders whereas moneylenders which operate in the villages and talukas are non-institutional lenders. Moneylenders have exploited the farmers and small landowners. With increased institutional intervention in the rural finance sector, this exploitation has reduced considerably and the farmers are no longer at the mercy of the whimsical moneylenders for the satisfaction of their financial requirements. NABARD: NABARD, which is considered to be the leading institution in the agricultural sector, was set up on July1, 1982. Since its inception, NABARD has taken over the functions of the Agricultural finance department of RBI and the Agricultural Refinance and Development Corporation (ARDC). NABARD is responsible for the development, planning, operational matters, coordination, monitoring, research, training and consultancy in relation to rural credit. NABARD maintains two funds, viz National Rural Credit (Long term operations) and the National Rural Credit (Stabilization) Fund. Both the Central and the State governments contribute to these funds. It operates throughout the country through its 16 regional offices and 3 Sub-offices. Crop Insurance Scheme: the United Front government on an experimental basis in selected districts during the Rabi 1997-98 season introduced The Crop Insurance scheme. The limit of insurance cover was fixed at Rs. 10000 irrespective of the losses incurred by them. Under the new scheme, the farmers will themselves deal with the insurance provider directly and the government will not provide any subsidiary directly to the farmers. Both premium and claims were shared between the central and the state governments in the ratio of 4:1.
17

Planning commission of India: http://planningcommission.nic.in/plans/planrel/fiveyr/1st/1planch16.html

Page | 29

National Agricultural Insurance Scheme (NAIS): The National Agricultural Insurance Scheme (NAIS) was introduced in the country from the1999-2000 Rabi season, replacing the Comprehensive Crop Insurance Scheme (CCIS), which was in operation in the country since1985. The General Insurance Corporation (GIC) on behalf of the Ministry of Agriculture implements this scheme. The main objective of the scheme is to protect the farmers against losses suffered by them due to crop failure on account of natural calamities, such as, drought, flood, hailstorm, cyclone, fire, pest/diseases etc.

5. Forest
The overall forest cover in India is around 19.3% in the year 1999. The estimate is done by the planning commission of India. One would find different figure from different sources precisely because different agencies have different definition of what constitute a forest. The latest assessment on forest cover (FSI 1999) indicates that 11.48 per cent of the total geographical area is dense forest (over 40 per cent crown density) and 7.76 per cent is the open forest (10-40per cent crown density). Dense forest 37.73 m ha 11.48% Open forest 25.51 m ha 7.76 % Mangroves 0.49 m ha 0.15%

Page | 30

6. Agriculture Allied Activities

Following are the major agriculture allied activities. 6.1. Horticulture Horticulture refers to the practice of growing and cultivating garden plants. Horticulture involves working in the field of plan, crop production, plant breeding and genetic engineering, plant biochemistry, plant physiology, and the storage, processing, and transportation of fruits, berries, nuts, vegetables, flowers, trees, shrubs, and turf. It helps in the improvement of crop yield, quality, nutritional value, and resistance to insects, diseases, and environmental stresses. Horticulture has 5 primary areas of study. These are: Floriculture: production and marketing of floral crops Landscape Horticulture: production, marketing and maintenance of landscape plants Olericulture: production and marketing of vegetables Pomology: production and marketing of fruits Post harvest Physiology: maintenance of quality and preventing spoilage of horticulture crops. 6.2. Poultry

Poultry is one of the fastest growing segments of the agricultural sector in India today. While the production of agricultural crops has been rising at a rate of 1.5 to 2 percent per annum, that of eggs and broilers has been rising at a rate of 8 to 10 percent per annum. As a result, India is now the world's fifth largest egg producer and the eighteenth largest producer of broilers. Country produced 46 billion eggs in 2005-06.
Production of Egg, Broiler & Poultry, Meat in India18 (2002) Egg Year 2002 (Million) 35000 Broiler (Million) 800 Poultry, Meat (Thousand Tons) 975

18

Source : Annual Report 2002-03, Ministry of Food Processing Industries

Page | 31

6.3.

Dairy

Milk and Dairy Products in India Production/Per Capita Availability of Milk in India Year 1950-51 1991-92 2001-02 2006-07** Milk Production (Million Tonne) 17 55.7 84.4 100 Per Capita Availability (gm./day) 124 178 225 245

Procurement of Milk by Co-operative Sector in India during the year 2005-06 was 214 lakh Kg. which is close to 20% of total mil produced in the country. To know more about the operation flood please refer to the information given in the section of revolutions in India. The details about the cattle are given in animal husbandry section. Recent important news about the ban in the export of SMP and other milk product to cool the domestic prices must be kept in mind. Negotiations are on and ban may be lift by the end of Oct, 2007.

6.4.

Sericulture

It is the rearing of silkworms for the production of raw silk. Although there are several commercial species olf silkworms, Bombyx mori is the most widely used and intensively studied. According to Chinese records, the discovery of silk production from B. mori occurred about 2,700 B.C. Today, China and Japan are the two main producers, together manufacturing more than 50% of the world production each year. The high cost of production in Japan presents bug opportunity for Indian silk. Indian silk is yet to achieve the reputation of high quality silk.

Page | 32

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6.5. Fish Fish Production of Marine and Inland in India: Country produced 28 lakh tonnes marine and 37.5 lakh tonnes inland fishes (total 65.7 lakh tonnes) in 2005-06 Pisciculture: It involves raising fish commercially in tanks or enclosures, usually for food. A facility that releases juvenile fish into the wild for recreational fishing or to supplement a species' natural numbers is generally referred to as a fish hatchery. Fish species raised by fish farms include salmon, catfish, tilapia, cod and others. Fish Production of Marine and Inland in India20 (1991-1992 to 2005-2006) (in lakh Tones) Year Marine Inland Total 24.47 17.1 41.57 1991-92 28.16 37.55 65.71 2005-06

6.6.

Animal Husbandry

Animal Husbandry: Animal husbandry is the agricultural practice of breeding and raising livestock. Animal husbandry constitutes about 30% of the total agricultural output of the country. India has the largest livestock population of the world. It accounts for 60% of the worlds buffalo population and 15% of the cattle population. India has 27 indigenous breeds of cattle and 7 breeds of buffaloes. As a result of these efforts, India has become the largest
19 20

6RXUFH0LQLVWU\RI7H[WLOH*RYWRI,QGLD

Source : Ministry of Agriculture, Govt. of India.

Page | 33

producer of milk in the world. Following table gives the details of Indian livestock as per the animal census conducted in 2003. Results of Livestock Census in India21 -2003 (Number in ' 000) Category Total cattle Total buffaloes Total yaks Total Bovine Total Sheep Total Goats Total horses & ponies Total camels Total Livestock1 Total Poultry Rural 175651 91930 60 267888 57992 117479 680 618 456768 449139 Urban 9530 5993 4 15557.4 3478 6878 71 14 28233.5 39873 Total 185181 97922 65 283446 61469 124358 751 632 485002 489012

You know: Rural India buys

-------------------46% of soft drinks sold 49% of motor cycles 59% of cigarettes 18 million TV sets are in rural India Of 2 million BSNL mobile connections, 50 % are in small towns/villages 11% of rural women use lipstick Source: MART
21

Source : Ministry of Agriculture, Govt. of India.

Page | 34

7. Land reforms
Historical perspectiveUnder the British rule, there were three types of land tenure systems in India. i. Zamindari- This system was introduced by Lord Cornwallis in Bengal in 1973. Under this system, there used to be number of intermediaries between the Zamindars and the actual tillers of the soil. The system took were various forms such as Zamindari, Jagirdari, Inamdari, etc. In many cases revenue collectors were raised to the status of landowners. In this system, tillers of the soil were exploited by way of exorbitant rents. There were no incentives for them to improve the land or to use better cultivation practices. There were many other social evils of the system. It is said that the British introduced Zamindari system to achieve two objectives. First, it helped in regular collection of land revenue from a few persons i.e. Zamindars. Secondly, it created a class of people who would remain loyal to the British ruler in the country. Mahalwari: under this system, the village communities held the village lands jointly, the members of which were jointly and severally responsible for the payment of land revenue. Land revenue was fixed for the whole village and the village headman (Lumberdar) collected it for which he received Panchatra i.e. 5 per cent as commission. Rayatwari: Sir Thomas Munro first in Madras state and then in Bombay State introduced it. In this system, there was a direct relationship between Government and the tenant or Rayat i.e. individual landholder. Every registered holder was recognized as its proprietor and he could sell or transfer the land. He was assured of permanent tenure as long as he paid the land revenue. The landholder was also allowed to sublet his land. It was a better system as compared to Zamindari or Mahalwari and similar other forms of tenure.

ii.

iii.

Of these three systems, the Zamindari system was the most widely prevalent and had an influence on the other two systems also. There was no proper revenue record under the British rule and the situation was like that even at the time of independence.

Page | 35

Agricultural legislation: During the post independence period, the agricultural legislation was of four types: 1. Abolition of intermediaries: The intermediary system included various types of interests between the owner and the cultivator. These intermediary interests lacked enthusiasm in the development of agriculture through sustained investment. This resulted in the stagnation of agriculture. Due to this reason, the state formulated legislation for the abolition of such tenures by 1955. The implementation of these measures has been completed all over India. 2. Tenancy reforms: The major part of the tenurial system in India was Rayatwari, with no intermediary between the state and the actual holder. However, in this system also some tenancy prevailed and the lands were leased out to the actual cultivators. This situation also called for legislation for the protection of the interests of the tenants. These measures were: Security of tenure. Eviction of the tenant cannot take place Fixation of rent, which was one fifth to one sixth of the gross produce. Right to purchase land

3. Ceiling on land holdings: The redistribution of agricultural land in rural areas was accepted as a measure for securing social justice. To enable surplus land to be distributed, legislative measures were passed in almost all the states to restrict the size of agricultural holdings. It was decided that on the completion of implementation of this legislation, the surplus land would be distributed among the landless farmers. 4. Bhoodan and Gramdan Act: The Bhoodan movement started in early 1950s and spread all over the country. The purpose of the act was to collect donations of land for the distribution among the landless. In all 18 lakh hectares of land were collected under this act in various states.

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8. NGOs22
India has Long tradition of voluntarism and people with some beliefs and notions have started their own initiative to contribute to the society and thus formed Non Government Organizations. Presently we see the growing influence of NGOs in development. They are recognized by the State and global agencies of the role of Civil Society. Definition of an NGO is difficult due to diverse and changing forms and purposes not a very well structured. It is an organization in civil society which is purposeful and role bound. It works for public cause with altruism and voluntary basis. For example, Philanthropic Organizations and Public Trusts and Societies. Now there is a need to dwell further into the cause of these NGOs. The three Actors (Sectors) of Development: State: This is mandated by Social Contract (Constitution) and social welfare and benevolency are the driving force. The state works through Govt. and bureaucracy for development initiatives. Market: The market consists of Corporates / Business entities who contribute financially and with their influence. They work on demand driven basis for profit they are likely to earn. Civil Society: The civil society consist of individuals, households, communities, organisations (formal and informal), social movements who work on the principles of altruism, reciprocation & voluntarism. Civil Society is called Third /Voluntary sector for the same reason. The role of Civil Society for development emerges in the context of failure of State and market for development. Goals / Objectives of an NGO Their objective is to take care of poor and destitute and attain sustainable and equitable development. The NGOs mobilize people and create awareness. The poor feel empowered when they get choices and an NGO helps in the same strengthen the civil society. The NGOs like MYRADA, Bangalore influence developmental agenda and approach (locally and globally). To achieve the desired goals an NGO does the following activities: Relief/ Rehabilitation
22

Provide Services (Education, health etc) Livelihood development(IGP,Training, etc) Mobilise and organise poor Build peoples institutions

Source: NGO expert Shikha Thaman, IRMAN

Page | 37

Create Awareness/ Public advocacy Build models of development for replication Support other NGOs thru training/networkin

What exactly makes an NGO or sail through opposition and fund scarcity? The answer lies in the strength of an NGO which is dedicated to the cause of development. The people of this organization exhibit high levels of commitment / motivation towards their mission. Moreover an NGO has flexible /informal methods which give the members full freedom to work in the way they are comfortable and also the way they are convinced to achieve the goal. The organization encourages Innovative ideas and is also cost efficient. They have the ability to reachout to poor & needy and hence are very effective. They promote participatory approach which makes the beneficiaries experience ownership for the programme being carried out. They also address the problem of state and market failure for the poor due to which they are always in demand.

NGOs in World Name of NGO CRY Child Rights and You America (formerly Child Relief and You) The International Red Cross and Red Crescent Movement Action aid Amnesty International Important Area of Operations Persons & 5 <  Z R U N V  Shefali W R Z D U G V  Sunderlal U H V W R U L Q J  E D V L F (President) U L J K W V  W R  X Q G H U S U L Y L O H J H G Srivatsan F K L O G U H Q   Rajan H V S H F L D O O \  (Honorary , Q G L D Q  Director & Treasurer) Founded in Key Its mission is to protect human life and health 1863 in persons Geneva, Henry Switzerland. Dunant and Henry Davison Established in To alleviate poverty and improve quality of life. 1972 Established in Protection of human rights. 1961, headquarterPage | 38 Establishment year Established in the US in 2002.

london. CARE Established in International 1946, headqurter Brussel, Belgium.

Aiming to relieve human suffering, to provide economic opportunity, and and to build sustained capacity for self-help.

NGOs In India Name of NGO Cancer Patients Aid Association (CPAA) Self Employed women association (SEWA) Child Aid Foundation (CAF) Important Persons Area of Operations Founder Chairman, Cancer Mr. Y.K. Sapru, Siloo Jasdanwalla SEWA is a trade FoundersEla Poor womens growth. union registered in Bhatt, Arvind Buch 1972 July 1st, 1993. The founder and Children's aid and care. director Dr. A. Goswami (adopted Indian name) Founded in the Founder-Mr. Development of Women year 2001 in Ravindra Bhaurao & Child Prisoners Amravati, Vaidya. Maharashtra (India). Founded in Founders-Tarun A non-profit organization September 1999. Talwar and in USA to promote and Sandeep Tandon support educational and developmental efforts in India. Establishment year 1969,

VARHAD

Prayas

Page | 39

HelpAge India

Formed in 1978

Centre for Formed in 1980 Health Education, Training and Nutrition Awareness (CHETNA) Deepalaya Started in July 16, 1979.

Founder- Mr. Cecil Jackson Cole, founder member of Help the Aged in United Kingdom Chairpersons-Dr. Sharada Jain, Director Dr.Dileep Mavlankar

Organization working for Elder Care in India

Nutrition, health, education and development of society.

This orgn is for Economically and socially deprived, the physically and mentally challenged children. Kiran This orgn deals with drug addicts.

Navjyoti

Established in 1987 FounderBedi

Page | 40

9. Development schemes and indicators

Some Important Indicators of Social Development

Page | 41

Table 8: India and Comparator Countries

Poverty projections for 2006-07 Urban: 5 crore (15% of urban population) Rural: 17 crore (21% of rural population) Total: 22 crore (19% of rural population) 9.1. HDI index Population (m) Per-capita GDP (PPP US$) HDI ranking (/177) Life expectancy (years) Combined gross enrolment (%) % Population under $2 per day Internet users (per 1000) Cellular subscribers (per 1000) 1,071 2,892 127 63.3 60 79.9 17 25

Source: UNDP Human Development Report 2005

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9.2. IRDP

O Launched in 1980 O A Credit-linked-self employment program O Assists the identified Rural poor households to augment their income & help them O For Income generating activities in primary, secondary and tertiary sectors of
rural economy. O Assistance through O Subsidy by government O Term credit advanced by financial institutions commercial banks, RRBs, Cooperative banks O Implemented through DRDA (A Broad based representative body for guidance & directions for program implementation) 9.3. Self Employment programs Providing and Generating Employment is a Major Approach to Poverty Alleviation Lack of sustained employment is a major cause of Poverty, both Chronic as well as Transient Chronic Poverty: Household suffering poverty on a long-term basis due to continued deprivation (asset/skill/income/ employment) and failure of policies especially based on trickle down approach Transitory Poverty: Household momentarily falling into poverty or poverty worsening due to sudden fall in income and employment for reasons like natural calamities, sickness, etc. It is essential that both types of poverty are taken care of, as they can be mutually reinforcing. Provision of Employment can be useful in tackling poverty for certain categories of poor (those capable of taking up employment) Employment Programmes are designed under the Direct Attack strategy to provide employment to the poor Two categories of Employment Programmes meant broadly to take care of two types of poverty: - Self-employment programmes for Chronic Poverty - Wage-employment programmes for Transient Poverty cross poverty line

Page | 43

Advantages of Self-Employment Helpful to overcome failure of trickle-down Occupational mobility for poor Make poor entrepreneurs Help poor to be self-reliant Promote Diversification in rural areas

Disadvantages of Self-Employment Poor may lack skill and entrepreneurial abilities Not suited for tackling transient poverty Risk to be borne by poor Problems in selecting poor / target group Requires organized/sustained efforts to develop micro-entrepreneurial activities on a large scale Failure to provide integrated services may lead to failure of activities Requires sustained growth in demand for non-farm activities of the Self-employed people Competition from organised sector for the poor

9.4. Wage Employment programs Large number of wage-employment program implemented, FWP, RLGEP, NREP, JRY, JGSY, SGRY, EGS, NFWP, NREGA. Rationale behind using wage employment for poverty elevation is that Need for direct employment generation for tackling poverty chronic and transient Inability of self-employment program to tackle transient poverty Very poor cannot take advantage of self employment program Limited impact of self-employment program Need for multi-pronged strategy for poverty alleviation.

9.5. Education Our country has compulsory and free education for all children up to the age of 14 (Art. 45, Directive Principle). The Compulsory Education Acts has been passed by many states to make primary education compulsory. The policy has also been enforcing education is the National Policy on Education (1986/92) and now the Universal Elementary Education (6-14 years)has been made compulsory. The government has targeted to spend 6% of GDP on education.

Page | 44

After the constitutional amendment Education has become a Fundamental Right (2002). The state will endeavor to provide education. The Right to Education Bill 2005 in Parliament will give effect to the Constitutional Amendment. There have been many interventions like Operation Black Board (1987): To provide infrastructure , additional teachers and teaching materials, District Primary Education Program (DPEP): (1994): Universalization of Education in low female literacy districts, National Literacy Mission (1988):To attain literacy level of 75% , Adult literacy (15-35 group),Mahila Samakya ( Focus on Women through group approach).Sarva Shiksha Abhiyan (2001) is currently running all over the country where the target to put all Children in schools by 2005. The Mid Day Meal Scheme (2004) is universalised in all public schools in the country which has drawn a lot of children to schools. Following table shows the census data about the literacy in India. Recent data is based on the sample survey conducted by the nation. They are estimates not the exact values. The last sample survey reports that literacy rate in india during 2007 was close to 75%.

Year

Male

Female

Total

1951

Rural Urban Total

19.02 45.60 27.16 71.40 86.70 75.85

4.87 22.33 8.86 46.70 73.20 54.16

12.10 34.59 18.33 59.40 80.30 65.38

2001

Rural Urban Total

Expenditure: (Centre and States)

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% to GDP (Norm 6%) 1950-51 1989-90 1997-98 2004-05 1.2% 3.8% 3.8% 3.5%

The target was to raise expenditure in education to 6% of total budgetary expenditure, but it was still to be achieved. When comparing the literacy rate with other countries we find that, states, 19.8% of men and 41.1% of women were not literate as of 2006. As per the 2001 India census, India's national literacy is only 65.2 percent. Literacy drive is spreading slowly to other states. India's youth (age 15 to 24) literacy rate was 76.4% between 2000 and 2004. At current rates India will take no less than 20 years for a literacy of 95%. Literacy in India is not homogeneous; some states in India have more impressive literacy rates than others. Kerala, a south-Indian state widely recognized as the well-educated state in India, recorded an impressive 90.92% literacy rate in 2001. On the other hand the north-Indian state of Bihar lags behind with 47.53%. India's adult literacy rates (61.3% in 2002), is just a little better compared to other nations in South Asia except Sri Lanka's 92%, with Nepal next at 44%, Pakistan at 50-54% and Bangladesh the lowest at 43.1% Many Indians have argued that illiteracy, especially in the rural areas, gives undue advantage to contemporary politicians, who can keep on neglecting real issues of socio-economic development, and continue with corruption.

9.6. Health As defined by WHO Health is a state of not mere absence of diseases but a state of complete physical mental and social well-being. Indias Health Policy asks for Health for all by 2000 AD which is made possible by making primary health care universally accessible and affordable. The expected value of IMR (Infant mortality rate) is less than 60 & Life expectancy is 64 Years. The National Health Policy- 2002 has the objectives to eradicate/Control Major Diseases by 2015 and make IMR to <30 by 2010. Rural Health Service mainly constitutes of PHCs which have been there since 1952. One PHC / 27,364 & One SC / 4579 is the main idea behind the service of PHCs. The Role of PHCs is to give primary medical care and control of communicable diseases along with focusing on maternal & Child Care and family planning/ Health education. Page | 46

Health Status / Progress 1951 Life expectancy Death rate(per 1000) IMR (1000 Births) Doctors (Modern) (Lakh) Beds (lakh) Dispensaries/Hospitals 32.1 27 146 0.62 2003/04 65 8.0 60 6.25

1.18 9209

9.14 38,031

Government has introduced National Rural Health Mission (NRHM)( 2005)to improve the availability and access to health delivery and care by increased allocation in 18 less developed states and increase Public Health Spending to 2-3 % of GDP. They aim to strengthen Rural Hospitals; (one CHC with 30-50 beds / lakh for curative purpose) and create accredited Social Health Activist in the villages (ASHA) along with formation of Village health and sanitation committee. Despite the entire rosy picture there are problems of Health Sector like the health Standards below norm and there has been a other diseases. This is due to poor state of PHC rise of non-communicable and System and low Public Health Expenditure which is (1.3 % of GDP) only.

10. Micro finance

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is a term for the practice of providing financial services, such as microcredit, microsavings or micro-insurance to poor people. By helping them to accumulate usably large sums of money, this expands their choices and reduces the risks they face. As suggested by the name, most transactions involve small amounts of money, frequently less than Rs 10000. Microfinance is the latest buzzword in the world of banking and finance. Operating at the bottom of pyramid, it has challenged and changed the way banking and financial services have been delivered since the onset of capitalism. I would call it the banking of east. It has spread fast during the last decade. The number of customer world wide reached to 100 million23 in 2006. In India this numbers reached to 20 million24. The potential is immense as the number of poor who wanted and needed the microfinance services are estimated to be over 600 million. Microfinance came into international limelight when last years Nobel Prize for Peace was awarded to Mohammad Younus of Grameen Bank of Bangladesh. The Grameen model of micro credit is a proven model. It has been successfully replicated in India and around the world. In India, Share Micro-Finance limited, Spandana, Bandhan, Cashpor, SKS, SKRDP, BASIX are major microfinance institutions operating mainly in rural areas. The un-served market is vast and a huge opportunity for growth is present in both the rural & urban segments. The reach of microfinance was marginal in the rural areas but virtually non-existent in the urban.

The microfinance in Asia was the brain child of Mohammad Younus the founder of Grameen Bank. It started as small scale experiment in the villages adjacent to Chittagong University where he was teaching economics. Continuous experiment and refinement resulted into a model which in microfinance parlance called Grameen Model.

11. Cooperatives

23 24

http://www.unitus.com/sections/poverty/poverty_mf_main.asp (http://www.uncdf.org/english/microfinance/pubs/newsletter/pages/2005_06/news_india.php) One study shows that more than 80,000 customer can make a rural microfinance institution viable. How many needed to make an urban one?

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Cooperatives work on the basis of user owner principle. The user-owner principle means the people who use the cooperative own and finance the business. Cooperatives are financed by members purchasing stock, paying membership fees, or accepting selfimposed assessment on products purchased and/or sold or fees for services. In some cooperatives, members reinvest their earnings (profits) to capitalize the business. Cooperative movement is very strong in India. Since independence the cooperative movement has enable Indian farmers and other small producer to cooperate and achieve a size that would help them to compete in the market place. Following are the list of major cooperatives in India. AMUL the well know Indian company is a brand owned cooperative only. a. AMUL Amul (Anand Milk-producers Union Limited), formed in 1946, is a dairy cooperative movement in India. It is a brand name managed by an apex cooperative organization, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.41 million milk producers in Gujarat, India. It is based in Anand town of Gujarat and has been a sterling example of a co-operative organization's success in the long term. The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world. It is also the world's biggest vegetarian cheese brand. b. IFFCO It is Indias largest cooperative. It produces fertilizers. To overcome this lacuna and to bridge the demand supply gap in the country, IFFCO was formed as a unique venture in which the farmers of the country through their own Cooperative Societies created this new institution to safeguard their interests. The numbers of co-operative societies associated with IFFCO are 155 at present. The mission of the organization is, "to enable Indian farmers to prosper through timely supply of reliable, high quality agricultural inputs and services in an environmentally sustainable manner and to undertake other activities to improve their welfare" c. Sugar Cooperatives Sugar cooperatives are another group of cooperatives which are very effective, especially in the state of Maharashtra and Gujarat. Sugar cooperatives in North (like UP and Bihar) are plagued with politics and are not performing as well as cooperatives of other states. d. PACS Page | 49

PACS are producers agriculture cooperative societies. These are lowest level cooperative societies operating in almost all the states. There purpose is to distribute the agriculture input like fertilizers and seeds to the farmers. In many states they are largely defunct and highly politicized. e. National Cooperative Union of India (NCUI) Industries have apex body like CII or ASOCHAM; similarly NCUI is the Apex Cooperative Organization in India which represents all the segments of Indian Cooperatives. Its objectives are to promote and develop the cooperative movement in India. It was established in 1929 as All India Cooperative Institutes and renamed to National Cooperative Union of India in 1961

12. Retail revolution and farmer

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Industry Evolution
S

Traditionally retailing in India can be traced to the emergence of the neighborhood Kirana stores catering to the convenience of the consumers. The era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission The decade of 1980s experienced slow change as India began to open up economy. Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers. For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books. Post 1995 onwards saw an emergence of shopping centers, mainly in urban areas, with facilities like car parking, it targeted to provide a complete destination experience for all segments of society Emergence of hyper and super markets trying to provide customer with 3 Vs - Value, Variety and Volume Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid.

Retailing formats in India a. Malls: The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment; all under a common roof. Examples include Shoppers Stop, Piramyd, Pantaloon. b. Department Stores: Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai and now has more than seven large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop!. c. Specialty Stores: Chains such as the Bangalore based Kids Kemp, the Mumbai books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors. d. Hypermarts/Supermarkets: Large self service outlets, catering to varied shopper needs are termed as Supermarkets. These are located in or near Page | 51

residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales. e. Discount Stores: As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods In this rapidly evolving industry, every day new formats are coming like Dollar store, Convenient store etc. Major retailers with their market share are given below.

13. ITC e-Choupal

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With over US$ 2 billion sales, ITC Limited is one of India's leading companies. Traditionally a tobacco and cigarette producer, it has grown into a conglomerate dealing in hotels, packaging, agribusiness, information technology, and fast moving consumer goods (FMCGs). Its diversification into consumer goods includes recent entry into the garment, prepared food, greeting card, gift and matchbox industries. The US$ 155 million International Business Division (IBD) of ITC's Agri Business segment was created to market India's agricultural produce internationally. This division also sources agricultural raw material for its domestic FMCG business (e.g. branded wheat flour, rice etc). Aiming to integrate more closely with its rural suppliers, while also developing new markets for its own and third-party goods, ITC began deploying its eChoupal network in early 2000 through its International Business Division. Business model Its business model centers around the deployment of a network of Internet-connected kiosks, known as e-Choupals, throughout agricultural areas in India. An e-Choupal is a high-tech version of the traditional "choupal," or "village gathering place" in Hindi, where farmers are provided with the latest weather reports, local and international produce prices, and farming best practices. Costing rupee 1-2.5 lakh each to set up, they also serve as procurement and purchase points, allowing farmers not only to sell their produce to ITC, but also to buy agricultural inputs and consumer goods for daily household use. Each e-Choupal is managed by an ITC-appointed "Sanchalak", a respected farmer of the community who takes a public oath of office upon accepting the position. While ITC covers equipment, the day-to-day operating costs, which consist primarily of electricity and Internet connection charges, are covered by the e-Choupal Sanchalak. .

Marketing channel prior to e-choupal The figures in the bracket are the margins at different stages. Page | 53

Mandi operations pre- e-Choupal operations Page | 54

The mandi was inefficient and both for the farmers as well as the ITC. The middlemen were the people who were cornering most of the profit. Inefficiencies were in all the operations right from the inbound logistics to final payment of the farmer and outbound supply to the ITC. To create the win-win solution for both the following value chain was developed.

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Following were the benefits for both the parties:

Farmers
Better information center Better information timing better price of produce due to Decreased transaction time Weighing accuracy Transportation cost Professionalism and dignity

ITC
Long term suppliers relationship with farmers Decreased cost Quality control Disintermediation savings

There are many positive social Impact of e-Choupals: it has provided an inaccessible village with a window to the world .Socio impact can be categorized as under: Improved agriculture Better lifestyle Brighter future It has Improved Agriculture by Bridging the Information gap: Weather Better practices Customized solutions Cheaper and smarter Inputs Low costs Aggregation Intelligent deployment of products Farmers as a source of innovation

14. WTO and Indian agriculture

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WTO Fact File Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986-94) Membership: 149 countries (on 11 December 2005) (Saudi Arabia is the last member) Budget: 175 million Swiss francs for 2006 Secretariat staff: 635 Head: Pascal Lamy (Director-General) Functions: Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training for developing countries Cooperation with other international organizations

WTO & Agriculture: The WTO Agriculture Agreement was negotiated in the 198694 Uruguay Round and is a significant first step towards fairer competition and a less distorted sector. It includes specific commitments by WTO member governments to improve market access and reduce trade-distorting subsidies in agriculture. These commitments are being implemented over a six-year period (10 years for developing countries) that began in 1995. Participants have agreed to initiate negotiations for continuing the reform process one year before the end of the implementation period, i.e. by the end of 1999. These talks have now been incorporated into the broader negotiating agenda set at the 2001 Ministerial Conference in Doha, Qatar. The original GATT did apply to agricultural trade, but it contained loopholes. For example, it allowed countries to use some non-tariff measures such as import quotas, and to subsidize. Agricultural trade became highly distorted, especially with the use of export subsidies, which would not normally have been allowed for industrial products. The Uruguay Round produced the first multilateral agreement dedicated to the sector. It was a significant first step towards order, fair competition and a less distorted sector. It was implemented over a six-year period (and is still being implemented by developing countries under their 10-year period) that began in 1995. The Uruguay Round agreement included a commitment to continue the reform through new negotiations. These were launched in 2000, as required by the Agriculture Agreement.

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15. Important Institutions

Important Institutions NABARD National Bank for Agriculture and Rural Development. NABARD is formed through the Act 61 of 1981and came into existence on 12 July 1982. Dr. Y S P Thorat is present Chairman of NABARD National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) was established on the auspicious day of Gandhi Jayanti on 2nd October 1958. Ajit Kumar Singh is chairman of NAFED Indian Council of Agricultural Research Dr. Mangala Rai-Director General.

NAFED

ICAR

GCMMF

Gujarat Cooperative Milk Marketing Federation. Chairman of GCMMF is Mrs. Parthi Bhatol, MD is Mr. Vyas

Tribal Co-operative Marketing Development Federation of India Ltd. For interested readers following documents are freely available on internet. This is most authenticated data and updated as per the end of tenth plan, that is, year 2006-07. 1. http://planningcommission.nic.in/plans/planrel/fiveyr/10th/volume2/v2_ch 5_1.pdf (for detailed agriculture data and analysis) 2. http://planningcommission.nic.in/plans/planrel/fiveyr/welcome.html (for every parameter of Indian Economy) 3. http://planningcommission.nic.in/plans/planrel/fiveyr/10th/volume1/v1_ch 2.pdf (for macro economic indicators of the economy

TRIFED

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