India is one of the major players in the agriculture sector worldwide and it is the primary source of livelihood for about 58% of India’s population. India has captured nearly 50% of the world market for rice in FY22.
The Australian agribusiness sector is known for its advanced technologies and innovative practices, which have enabled it to compete effectively in global markets. In Australia, the agribusiness sector is well-established and known for its advanced technologies and innovative practices. The sector has already made significant contributions to the country’s economy, and the demand for high-quality, sustainable food products is expected to continue to increase.
ADVANTAGES AND OPPORTUNITIES:
RISE IN INVESTMENTS:
India has the world’s largest cattle herd (buffaloes), largest area planted to wheat, rice, and cotton, and is the largest producer of milk, pulses, and spices in the world. It is the second-largest producer of fruit, vegetables, tea, farmed fish, cotton, sugarcane, wheat, rice, cotton, and sugar. India is one of the major players in the agriculture sector worldwide and it is the primary source of livelihood for about 58% of India’s population. Agriculture sector in India holds the record for second-largest agricultural land in the world generating employment for about half of the country’s population. Thus, farmers become an integral part of the sector to provide us with means of sustenance. The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year due to its immense potential for value addition, particularly within the food processing industry. The Indian food processing industry accounts for 32% of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth.
As per First Advance Estimates for FY 2022-23 (Kharif only), total food grain production in the country is estimated at 149.92 million tonnes. Rapid population expansion in India is the main factor driving the industry. According to Inc42, the Indian agricultural sector is predicted to increase to US$ 24 billion by 2025. Indian food and grocery market is the world’s sixth largest, with retail contributing 70% of the sales. The rising income levels in rural and urban areas, which have contributed to an increase in the demand for agricultural products across the nation, provide additional support for this.
In accordance with this, the market is being stimulated by the growing adoption of cutting-edge techniques including blockchain, artificial intelligence (AI), geographic information systems (GIS), drones, and remote sensing technologies, as well as the release of various e-farming applications.
INVESTMENTS AND GROWTH
Some major investments and developments in agriculture are as follows:
The sector has also recorded a sharp increase in investments with cumulative FDI inflow of US$ 2,600.70 million between April 2000-June 2022.
India’s agricultural and processed food products exports stood at US$ 9,598 million in FY 2022-23 (April-July 2022), up by 30% YoY.
Consumer spending in India will return to growth in 2022 post the pandemic-led contraction, expanding by as much as 7%.
The organic food segment in India is expected to grow at a CAGR of 10% during 2015-¬25 and is estimated to reach Rs. 75,000 crore (US$ 10.73 billion) by 2025 from Rs. 2,700 crore (US$ 386.32 million) in 2015.
In August 2022, a Special Food Processing Fund of Rs. 2,000 crore (US$ 242.72 million) was set up with National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit for investments in setting up Mega Food Parks (MFP) as well as processing units in the MFPs.
Some major initiatives taken by the Government of India are as follows:
In 2022, the Government of India is planning to launch Kisan Drones for crop assessment, digitization of land records, spraying of insecticides and nutrients.
In October 2022, Prime Minister Mr. Narendra Modi inaugurated PM Kisan Samman Sammelan 2022 and released PM-KISAN Funds worth Rs. 16,000 crore (US$ 1.93 billion).
In the Union Budget 2022-23, Rs. 1.24 lakh crore (US$ 15.9 billion) has been allocated to Department of Agriculture, Cooperation and Farmers’ Welfare. Also, Rs. 8,514 crore (US$ 1.1 billion) has been allocated to the Department of Agricultural Research and Education.
In July 2022, PM Formalisation of Micro food processing Enterprises (PMFME) scheme was launched for providing financial, technical and business support for setting up/ upgradation of micro food processing enterprises in the country with an outlay of Rs. 10,000 crore (US$ 1.27 billion).
A network of 729 Krishi Vigyan Kendras has been established at the district level across the country to ensure that newer technologies such as improved variety seeds of crops, new breeds/ strains of livestock and fish, and improved production and protection technologies reach farmers.
NABARD will assist the creation of a blended capital fund with a focus on the agricultural start- up ecosystem which will be used to fund agriculture and rural enterprise startups that are related to the farm product value chain.
THE FUTURE AHEAD
In the next five years, the central government will aim US$ 9 billion in investments in the fisheries sector under PM Matsya Sampada Yojana. The government is targeting to raise fish production to 220 lakh tonnes by 2024-25. India is expected to achieve the ambitious goal of doubling farm income by 2022. The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing and cold storage.
Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing industry will offer several benefits. The agri export from India is likely to reach the target of US$ 60 billion by the year 2022. Also, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be self-sufficient in pulses in the coming few years due to concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price.
Australia has the ability to export goods to India, including cereals, pulses, horticulture, oilseeds, and items with value-added, as well as specialised services to Indian institutions, governments, and farmers. Australia provides ‘top up’ pulses, and the better quality of Australian pulses helps ensure robust and enduring demand from Indian consumers. Australian efforts should focus on the Central Government for market access and policy issues, and target states which are responsive to reforms, willing to spend on infrastructure, and have conditions conducive to trade and investment.