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Agriculture
Industry

India is one of the major players in the agriculture sector worldwide and it is the primary source of livelihood for ~55% of India’s population. India has the world's largest cattle herd (buffaloes), the largest area planted for 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. The 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 a means of sustenance.

Foodgrain production in India touched 330.5 million metric tonnes (MT) in 2022-23 (3rd Advance Estimate). India is the world’s 2nd largest producer of food grains, fruits, and vegetables and the 2nd largest exporter of sugar. A total of 521.27 LMT rice has been anticipated for procurement for the upcoming KMS 2023-24, up from 496 LMT produced during the previous KMS 2022-23.

Company Case Studies

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Agriculture Industry Case Study

GROWTH

  • The agriculture industry, growing steadily, has reached a market size of a whopping ₹ 71,220 Bn in the year 2021.

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  • With a compounded annual growth rate(CAGR) of 12.3% over the period of 2022-2027, this same market size is expected to reach ₹ 142,280 Bn by 2027.

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  • Even after the dip in the Indian economy due to COVID-19, the agriculture industry continued to grow by 3.6% from 2020-21.

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  • With the inevitable need and demand for food, the agriculture industry has proved itself to be resilient and crisis-proof, thus maintaining its growth steadily over the years.

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In terms of exports, the sector has seen good growth in the past year. India’s agricultural and processed food products exports stood at US$ 53.12 billion in 2022-23. The exports for principal commodities (April 2023–June 2024) were the following:

  • Wheat and Other Cereals: US$ 253.19 million.

  • Non-Basmati Rice: US$ 1.52 billion.

  • Oil Meal: US$ 445.79 million.

  • Raw Cotton: US$ 231.26 million.

  • Sugar: US$ 711.43 million.

  • Spices: US$ 1.11 million.

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KEY FACTORS and INVESTMENT

  • The rural and urban population segments are seeing a major income boost, resulting in a growing demand for agri-products

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  • The rapid rise in the Indian population has also led to major boom in the Agriculture industry

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  • Also, the demand for products such as hybrid seeds and fertilizers and related services such as warehousing and cold storage is growing rapidly in India

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  • Government schemes such as the PLI, with an incentive of almost ₹ 10,900 Cr; and the Krishi UDAN 2.0, have encouraged farmers and the entire industry to participate and innovate in the industry.

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  • The diverse climatic condition has led to the growth of a diverse set of crops around the country.

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  • The government has set up a special fund called the Food Processing Fund (FPF) of approximately US$ 265 million in the National Bank for Agriculture and Rural Development (NABARD) for extending affordable credit to designated food parks and food processing enterprises in the designated food parks.

  • The sector has also recorded a sharp increase in investments with a cumulative FDI inflow of US$ 2,708.72 million between April 2000-December 2022.

  • India’s agricultural and processed food products exports stood at US$ 9,598 million in FY23 (April-July 2022), up by 30% YoY.

  • 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.

  • 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 crores (US$ 9.1 billion) by 2025 from Rs. 2,700 crores (US$ 386.32 million) in 2015.

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  • As per the economic survey 2022-23, Rs. 13,681 crore (US$ 1.6 billion) were sanctioned for Post-Harvest Support and Community Farms under the Agriculture Infrastructure Fund.

  • Private investment in agriculture increased to 9.3% in 2020-21.

  • From 2017 to 2020, India received ~US$ 1 billion in agritech funding. With significant interest from investors, India ranks third in terms of agritech funding and the number of agritech start-ups. By 2025, Indian agritech companies are likely to witness investments worth US$ 30-35 billion.

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VARIOUS SECTORS OF AGRICULTURE INDUSTRY

The agriculture industry in itself is a massive industry by size and the population involved in it. Here are the 17 major sectors of the Agri industry:

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  • Farming (largest market share)

  • agriculture equipment

  • Fertilizers

  • Pesticides

  • Warehousing

  • cold chain

  • food processing

  • dairy market

  • Floriculture

  • Apiculture

  • Sericulture

  • Seeds

  • Fisheries

  • Poultry

  • animal husbandry

  • animal feed

  • Bio-agriculture

TECHNOLOGY IN AGRICULTURE INDUSTRY

  • Technological adoption in agriculture is not very new, with countries like the USA, Netherlands, Australia, and Israel, already testing and scaling the industry through technological advancements.

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  • Tech like AI & ML, big data, remote sensing, blockchain, and IoT, is transforming agricultural value chains and modernizing the operations

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  • The Digital Agriculture Mission over the period of 2021–2025, has signed 5 MoUs with CISCO, Ninjacart, Jio Platforms Limited, ITC Limited, and NCDEX e-markets Limited (NeML)

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  • In August 2019, Cisco developed the Agricultural Digital Infrastructure (ADI) solution to improve farming and knowledge sharing.

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  • Launched in February 2020, the Jio Agri (JioKrishi) platform digitizes the agricultural ecosystem and empowers farmers along the entire value chain.

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  • ITC proposed the creation of a personalized site-specific crop advice service that transforms traditional generic crop-level advice into personalized site-specific crop advice for farmers.

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  • Artificial Intelligence/Machine Learning (AI/ML) algorithms generate actionable insights in real-time to improve crop yields, control pests, aid soil screening, and provide farmers with actionable data. and reduce the workload.

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  • Blockchain technology provides tamper-proof and accurate data on farms, inventory, fast and secure transactions, and food tracking. As a result, farmers no longer need to rely on paperwork and files to collect and store critical data.

Agriculture Drone

FUTURE

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. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers.

In the next five years, the central government will aim for 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. 

The government of India has continued the umbrella PMKSY scheme with an allocation of Rs. 4,600 crore (US$ 559.4 million) till March 2026.

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