Indian Agriculture Sector At The Cusp Of A Revolution

In the recent years, India has put up an impressive growth performance at the agricultural front, almost 30% as per the latest report. Thanks, to the public and private sector investments flowing in at a continuous pace.

Agriculture is Indian economys mainstay and it comprises 18.5 per cent of the gross domestic product (GDP).

In the last two years agriculture and its allied sectors have registered a noteworthy growth rate of 4% as opposed to the average annual growth rate of 2.5% during the 10th Five-Year plan.

The current thrust on the Agricultural Sector has been mainly possible due to sizeable number of initiatives adopted in the recent years. Say, for instance, public sector investment in the farm sector has grown from 1.8% in 2000-01 to 3.5% in 2006-07, private sector investment has increased from 8.9% in 2003-04 to 9.9% in 2006-07.

According to a report, agri-biotech sector in India has been growing at a mind-blowing rate of 30% since the last five years, and it is likely to maintain this growth rate in the future. The report further adds that agriculture biotech in India has immense growth opportunities and the country could become a forerunner in the production of transgenic rice and several other genetically engineered vegetables by 2010.

The food processing sector, which is considered to the prime driver of the Indian Economy, is currently growing at 13.5% as opposed to 6.5% in 2003-04.


Riding on the back of agro-climatic conditions and rich natural resource base, India, today has become the worlds largest producer of numerous commodities,

The country is the leading producer of coconuts, mangoes, milk, bananas, dairy products, ginger, turmeric, cashew nuts, pulses and black pepper. Further, it is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables.

According to the report of Centre for Monitoring Indian Economy (CMIE), crop production is estimated to increase by 1.7 per cent during FY 10. Foodgrain production is projected to rise by 1.1 per cent. Of which, wheat production may remain at the same level of 80-million tonnes as estimated for FY 09. Rice production may swell by 1.1 per cent to 98.8-million tonnes. Manufacturing of coarse cereals and pulses is also expected to rise in FY 10.

Also, India is the second-largest producer of cotton. The yield may rise 10% to about 32 million sales in 2009-10. Cotton output in 2008-09 is being pegged at 29 million bales, as per the projections by state-owned Cotton Advisory Board.

Indias coffee yield is estimated to touch at 3.1 lakh tonne in 2009-2010, 4.4% higher compared to 2008-09, according to the Coffee Board.


According to APEDA- government’s agri-trade promotion body- India’s Agricultural and processed food products clocked a 38 per cent increase in the 200708 fiscal, on the back of increased shipments of coarse cereals like maize, jowar and barley. According to official report, India exported 17.5 million tonnes worth of agricultural and processed foods valued at US$ 6.39 billion in FY 200708 as opposed to 10.9 million tonnes in the previous year.

APEDA believes that exports will grow further due to growing demand from Asian and African markets that are vigorously obtaining rather cheaper Products from emerging markets like India.

Today, 70 per cent of the countrys agricultural and processed foods exports are send to developing countries in the Middle East, Asia, Africa and South America.


* India may shell out US$ 14.05 million for the development of organic spices by 2012, specially turmeric, chilli, and ginger.

* Monsanto Company is planning to spend US$ 9.8 million to set up scholars program to support research and production of rice and wheat, through plant breeding techniques.

* DuPont has taken over Nandi seeds for US$ 8.3 million.

* To cultivate drought hit areas of the Telangana region, the Andhra Pradesh government has approved US$ 773.68 million for the Pranahita-Chevella Lift Irrigation Scheme to be made functional here.

* Tata Chemicals will be setting up a manufacturing plant for customised fertilisers at Babrala in Uttar Pradesh. The company is planning to invest US$ 10.02 million in this facility which is having a production capacity of 20 tonne per hour.

Government Initiatives

Few of the initiatives taken by the government to speed up growth include:

* The government has given approval for 60 Agricultural Export Zones (AEZs).

* The National Food Security Mission aspires to enhance the production of rice, wheat and pulses by 10 million tonnes, 8 million tonnes and 2 million tonnes, respectively by the end of the 11th Plan.

* The Rashtriya Krishi Vikas Yojana was introduced in 2007. Under this scheme the States will be offered US$ 5.01 billion over the 11th Plan period for investment in various projects.

* Agro and allied sectors have been allowed 100 per cent foreign direct investment (FDI) via the automatic route.

Road ahead

With the governments special focus on this sector, the agriculture segment is all set to play a more proactive role in the economy.

In the 200910 budgets, the government has initiated various steps to support the growth of this sector in order to achieve self-sufficiency in food grains.

Agriculture credit may probably touch US$ 67.14 billion for the year 2009-10. In 2008-09 agriculture credit flow was at US$ 59.3 billion.