Fostering Agripreneurship in Revamping Indian Agro Sector through Food Processing Industry

Nisha. K.M (Research Scholar)

Department of Commerce

Aligarh Muslim University, Aligarh

IntroductionAgriculture is scaling new heights by focusing

on diversification, value addition, hi-tech farming, precision and organic farming, agribusiness etc

Agricultural based entrepreneurship or Agripreneurship, brings professionalisation and commercialisation in Indian agriculture, boosting agribusiness in primary, secondary and tertiary sectors

Agripreneurship in Food Processing Industry brings immense benefits to the economy by raising agricultural yields, enhancing productivity, creating employment opportunities and improving the standard of living of people

•PRODUCTION •PROCESS (LAND, LABOUR, ENVIRONMENT)• CONSUMPTION

SUPPLIES OF PRODUCTION INPUTS

•FERTILIZERS•OTHER CHEMICALS•MACHINERY

RESEARCH AND EDUCATION

•BREEDING•PEST AND DISEASE MANAGEMENT•MECHANISATION•PROCESSING•EXTENSION AND FEEDBACK

PRODUCTION PROCESS

•LAND•LABOUR•ENVIRONMENT•MACHINERY•CHEMICALS•IRRIGATION/DRAINAGE MANAGEMENT MARKETING

PROCESS

•STORAGE•PROCESSING•PACKAGING•TRANSPORTING

CONSUMPTION

AGRIBUSINESSTRADITIONAL AGRICULTURE

TRANSFORMATION

TRANSFORMATION OF TRADITIONAL AGRICULTURE TO AGRIBUSINESS

Objectives of the Present StudyExamine the nascent areas of agripreneurial

development in IndiaAnalyse the performance of Food Processing Industry

in India in terms of • revenue generation• contribution to GDP• value of export and • FDI in India

The study is based on secondary data through review of the relevant literature related to agripreneurship, agribusiness and food processing industry

Data sources include data drawn from National Sample Survey Organisation (NSSO), Annual Survey of Industries (ASI) reports, Annual Reports of Ministry of Food Processing Industry (MOFPI), CSO, FICCI, APEDA, IBEF, Department of Agriculture & Cooperation, DIPP, National Accounts Statistics etc

Percentage analysis along with relevant tables and graphs were used to support the data consolidation, presentation and interpretations

Nascent Areas of Agripreneurship Development in India

Nascent Areas of Agripreneurship Development in India

(i) Input Management

Livestock feed, fodder

Machineries and equipments

Fertilizers, pesticides

(ii) Agro Infrastructure

Transport and communication services

Power, irrigation, diesel

Cool chain infrastructure, cold storages devices

(iii) Agro based Production

High-yield varieties of seeds

Floriculture, Horticulture, Pisciculture,

Fisheries

Animal husbandry, Livestock, Dairy farming

Nascent Areas of Agripreneurship Development in India (Contd..)

Nascent Areas of Agripreneurship Development in India (Contd..)

(iv) Agri Processing

Fruit processing - jams, squash, canned

fruits

Sugarcane processed- sugar grains,

candies, jaggery

Dairy products- curd, butter, milk powder,

ghee

(v) Trade and Others Contract farming, Cooperative farming

Retailing of agricultural products

Value chain management and marketing logistics

(vi) Agri Marketing and Agri Services Agricultural finance and Insurance

Transportation

Storage and warehousing

Sorting, grading, standardisation,

Packaging, labeling, advertising

(vii) Agri Science and Technology

Agro climate studies

Disaster Management

Pre harvest and post harvest technology(viii) Agri Management

Input management

Farm management

Finance Management

Risk Management

Production management

Agricultural Marketing Management

Nascent Areas of Agripreneurship Development in India (Contd…)

Sectorial-wise Classification of Food Processing Industry

Sectors Products

Commodity Sugar, Food Grains, Spices, Edible Oils

Dairy Whole Milk Powder, Skimmed milk powder, Condensed milk, Ice cream, Butter and Ghee, Cheese

Fruits & Vegetables

Beverages, Juices, Concentrates, Pulps, Slices, Frozen & Dehydrated products, Potato Wafers/Chips, etc

Grains & Cereals

Flour, Bakeries, Starch Glucose, Cornflakes, Malted Foods, Vermicelli, Beer and Malt extracts, Grain based Alcohol

Fisheries Frozen & Canned products mainly in fresh form

Meat & PoultryFrozen and packed - mainly in fresh form, Egg Powder

Convenience Food

Snack food, Namkeens, Biscuits, Ready to Eat food, Alcoholic and Non-alcoholic beverages

Sector Primary Processed Products Value Added Products

Agriculture

Milled Grains, SpicesBeverages, Ready to Eat or Cook/ Drink Products/ Bakery Product, Processed Dry Fruit

Fruits and Vegetable

Tea and Coffee

Sugar Confectionery

Edible Oil (Depending on Processing Level)

Livestock, Dairy and Poultry

MilkMilk Powder, Ghee, Butter, Cheese, Ice Cream

Eggs, MeatEgg Powder, Packaged Meat and Preparations

Fisheries Processed Aquatic Food (Depending on Processing Level)

Sector-wise Categorisation of Primary Processed and Value Added Products

Primary Products

Value Added Products

Source: MOSPI Annual Report, 2011-12.

Source: Government of India, Ministry of Statistics and Programme Implementation (2010)

Share of Major Components of Food Processing Industry in Revenue Generation

Sl.

NoIndustry 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

2010-11

(Q)

2011-12

(R)

I Agriculture,

Forestry,

Fishing

19.0 18.3 17.4 16.8 15.8 14.7 14.5 14.0

Agriculture 16.0 15.5 14.7 14.3 13.4 12.4 12.3 -----

Forestry and

Logging 2.1 1.9 1.8 1.7 1.6 1.5 1.4 -----

Fishing 0.9 0.9 0.9 0.8 0.8 0.8 0.7 -----

II Industry 27.9 28.0 28.7 28.7 28.1 28.1 27.8 27.0

III Services 53.0 53.7 54.0 54.4 56.1 57.2 57.7 59.0

GDP at Factor

Cost 100 100 100 100 100 100 100 100

Table: 1 Percentage Share of GDP at 2004-05 Prices (Rs in Crore)

Source: Central Statistics Office, Govt. of India. Q- Quick Estimates R-Revised Estimates

Export Share of Various Countries in the World Processed Food Market

Source: National Manufacturing Competitiveness Council, GOI, 2009

Sl.

NoItem

2008-09 2009-10 2010-11

Qty. Value Qty. Value Qty. Value

1Cotton Raw

incl. waste 457.56 2865.85 1357.99 9537.08 1258.09 12981.04

2Marine

products 465.00 7066.37 709.88 9899.98 800.95 11547.97

3 Oil Meals 6742.93 10269.24 4671.13 7831.79 6797.86 10845.91

4 Rice Basmati 1556.41 9477.03 2016.87 10889.6 2186.45 10581.51

5 Sugar 3332.08 4448.74 44.74 110.21 3241.34 10339.01

Source: Annual Report- 2011-12, Department of Agriculture & Cooperation, Ministry of Agriculture, GOI.

Table: 2 Top Five Agricultural Exports of India- from 2008-11.

Sl. No

Item

2008-09 2009-10 2010-11

Qty. Value Qty. Value Qty. Value

1Vegetable Oils Fixed Edible 6719.35 15837.46 8033.92 26483.3 6717.72 29442.11

2 Pulses 2474.11 6246.39 3509.58 9813.37 2591.25 6979.95

3Fruits & Nuts (excl. Cashew nuts) ------ 2372.89 ------- 2873.15 ------- 3684.25

4 Sugar 386.10 583.16 2551.14 5965.8 1198.38 2787.27

5 Cashew Nuts 614.46 2672.42 755.96 3047.5 504.14 2479.75

Source: Department of Agriculture & Cooperation, Ministry of Agriculture, GOI, 2011-12

Table: 3 Top Five Agricultural Imports of India- from 2008-11

Particulars 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12CAGR

(5Years)

GDP at Factor

Cost29,71,464 32,53,073 35,64,364 38,96,636 41,58,676 45,16,071 49,37,006 52,43,582 8.0

1.GDP

Agriculture*5,03,786 5,31,745 5,54,395 5,89,383 5,88,757 5,92,110 6,43,111 6,67,446 3.8

2.GDP

Manufacturing4,53,225 4,99,021 5,70,458 6,29,073 6,56,302 7,30,435 8,01,477 8,23,023 7.6

3.GDP – FPI 44,355 47,689 52,161 57,320 60,378 58,752 67,508 78,094 8.4

Registered 22,148 26,780 30,709 34,753 39,253 37,813 45,042 51,877 11.1

Unregistered 22,207 20,910 21,453 22,568 21,125 20,939 22,467 26,217 4.1

Source: National Accounts Statistics, 2013 Compound Annual Growth Rate (CAGR) *Excludes Forestry & logging

Table: 4 Contribution of Food Processing Industry (FPI) to GDP at 2004-05 Prices (Value in Crore)

Source: DGCIS

Value of Export of Food Processing

Sector

Amount of FDI Inflow% Share of

Total FDIIn Crores In US$ million

1 Food Processing Industries 5872.16 1286.53 0.89

2 Fermentation Industries 4269.92 979.74 0.65

3 Vegetable Oils and Vanaspathi 1103.22 238.72 0.17

4 Tea and Coffee 446.61 99.38 0.07

Total Food Processing Sector 11691.91 2604.37 1.78

Total FDI 658586.43 147088.13 100

Table: 5 Foreign Direct Investments in Food Processing Sector from April 2000 to August 2011

Source: Department of Industrial Policy and Promotion, Ministry of Commerce.Note: Data includes some investment for rubber, which is not a food processing industry

MAJOR FINDINGSThe share of major components of food processing industry in

revenue generation during the year 2010 shows that Food grain milling has the highest share in revenue generation followed by bread and bakery, dairy products, meat and poultry, soft drinks etc

The percentage share of agriculture in Indian GDP has been decreasing and that of service sector is on a rising trend

USA has the highest share in the world food processed market with 10.57%. Netherlands, France and Germany have a share of 7.91%, 7.72% and 6.09% respectively and India’s share in the world food processing market is 1.17%

Top 5 commodities exported from India - Raw cotton, marine products, oil meals, basmathi rice and sugar

Top 5 agricultural imports of the commodities - vegetable oil, pulses, fruits and nuts, sugar and cashew nuts

The percentage share of amount of FDI inflows to total FDI was 0.89% in the case of food processing industries, the total FPI share to total FDI is 1.78%

Major Findings

(Contd…..)

Agripreneurship could play a key role in the revamping Indian agro based sectors by giving special emphasis on the promotion of food processing sector

India is among the world’s major producers of food products and Food Processing Industry can be a key in boosting the economic growth of the country

It is in the top position in the production of cereals, livestock, milk, fruit and vegetables

Good investment opportunities exist in areas of food processing industries like fruit & vegetable processing, meat, fish & poultry processing, packaged, convenience food and drinks, milk products etc

THANK YOU