marketing reforms

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1

New Delhi

22-2-2006

Marketing Reforms

&

Enhancing competitiveness



An overview of Indian Agriculture

(Production side)

Comparative advantages:

Second largest arable land in the world

Diverse agro-climatic zones across the country,

Round the year sunshinePotential to cultivate a vast range of agricultural products

Large marketable surpluses and abundant raw material for

processing

Vast pool of skilled manpower in research and extension

These advantages being leveraged, for India to be a leading food

supplier to the world.



Area and production of Agricultural products(Production in million tonnes)

India India¶s Rank in

World Production

Arable Land (Million ha) 151 2

Irrigated Land (Million ha) 55 1

Wheat 72 2

Rice, Paddy 124 2Coarse grains (including maize) 29 3

Milk 91 1

Fruits 47 2

Vegetables 82 2

Edible Oilseeds 25 3

Pulses 15 1

Sugarcane 245 2

Tea 0.85 1

Cattle (million) 186 2



4

India is the front ranking producer of many perishable commodities

India produces

» 41% of world s mango,

» 23% of Banana,

» 24 % of cashew nut,

» 10% of onion,

» 30% of cauliflower,

» 36% of Green Peas.

China : $195 bn; USA : $150 bn; India - $105 bn.

India has

53% of world s buffalo

and

17% of goat

And a 8000 km of coastline



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India rising high on food demand curve

Evolution of global food demand

Source: Rabobank International

Afr ica(Sub- Sahar an)

India , China,

Latin Amer ica

Easter

nEur ope

Nor tth Amer ica,Japan, Wester nEur ope,Austr alia

Surviving Mass

Market

Convenience

Food Service

Snacking

Quality

Hygiene

High Technology

Diet /f unctional /

or ganic f oods

Convenience

f oodsSnacks /pr epar edmeals

Dair y, meat,fr esh fr uitsfr uit juices,

bever ages

Car bohydr atestaples



15%

11%

0% 5% 10% 15% 20%

Fruits

Vegetables

India's shar e in global p

r oduction (2001-03)

63%

53%

0% 20% 40% 60% 80% 100%

Fruits

Vegetables

ndian pr ices as a % of wor ld pr ices (2001-03)

0.5%

1.7%

0.4%

2.1%

0% 2% 4% 6% 8%

Fruits

Vegetables

India's shar e in global expor ts

(2001-03

(1991-93

Source: UN COMTR ADE Statistics, World Bank Staff Estimates

India s competitiveness in global markets

(Low cost pr oduce

r )

What is wrong?

(Lar ge pr oducer )

(Nominal)



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Food processing still at a nascent stage

Level of processing

(Fruits & Vegetables)

USA - 80 %

France - 70 %

Malaysia- 80 %

Thailand- 30 %

India - 1.3 %

Level of Processing (Perishable products)

Organized Unorganized Total

Fruits / Vegetables 1.3% 0.8% 2.2%

Milk /milk products 13% 22% 35%

Buffalo Meat 21% - 21%

Poultry 6% - 6%

Marine Products 8% 15% 21%



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Present Scenario in Value Chain

Cost Build Up For One Kg. Basket Of Fruit

F ARMER TRADER WHOLESALER RETAILER CONSUMERPRICE

3.3

4.1

1.72.5 11.6

Retail Markups

F ARM GATE PRICES MILK FISH FRUITS &VEGETABLES

350

220160

100



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Domestic markets scenario

Infrastruct ure for marketing of perishables

Primary grading / collection centers - non existent

Warehousing and cold storage - inadequate

Cold chain - non existent

Qualit y certification system - non existent

Transportation for perishables - non existent

Rural markets - complete lack of infrastruct ure

Wholesale markets - in government control, lack modern

facilities Private / direct markets - not permitted

Post harvest losses: 25 to 30 % in perishables



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APMC Reforms - Stat us

States where reforms not done

Orissa, Assam, Mizoram Arunachal,Tripura, Meghalaya,

J&K, Uttaranchal, Goa,

West Bengal, Pondicherry,Chattisgarh,

Bihar and Jharkhand

States where reforms done partially

Haryana, Karnataka,NCT of Delhi,

Chandigarh,

Maharashtra, UP

Guj

arat



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AGMARKNET

Market nodes connected - 2408

Markets reporting data 1295

Good performing States AP, Maharashtra, Karnataka,Gujarat

States requiring Improvement HP, Assam, Kerala,Uttaranchal, BiharJharkhand,

Things to do:

Posting data on daily basis

Creating awareness on the information portal

Suggest user-friendly formats for data dissemination

Utilization of f unds for market led extension



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Rural Godown Scheme

Storage capacit y created 158.68 lakh MTs

Excellent performance Punjab, Andhra Pradesh,Madhya Pradesh, Maharashtra,Haryana

Poor off-take in Bihar, Gujarat, West Bengal,Uttaranchal, et c

Scope exists for more storage space near to farmers



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Infrastruct ure Scheme

S.No. State No. of Pro jects

Financialoutlay

Rs in crores

Eligiblesubsidy

Rs. in crores

1 AndhraPradesh

17 15.4 1.96

2 Kerala 39 30.2 1.08

3 MadhyaPradesh

35 28.59 6.71

4 Punjab 33 4.94 1.19

5 Tamil Nadu 54 35.27 1.69

Total 178 114.36 12.62



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Vent ure Capital Scheme

SF AC provides up to 26% of the pro ject equit y as Vent ure capital

+ PDF for detailed pro ject reports

Progress since July, 2005

38 pro jects f unded

involving 11.62 crores vent ure capital

investment of 125.42 crores,

direct employment for 3221 people and

assured market to 26,650 families

All States should make use of the scheme



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Terminal market

Hub-and-Spoke Format: Terminal Market (the hub) to be

linked to number of collection centres (the spokes).

Collection centres (Spokes) to be conveniently located at key

production centres to allow easy access to farmers

Provide state of art facilities for

Electronic auction,

Grading, washing and packing lines,

Processing and exports, Banking

Transport including reefer vans et c.

Advisory on input, price and qualit y



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Thanks

marketing reforms

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