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Rome 30-31 May 2008
Dr Amit MitraDr Amit Mitra
Secretary General
Federation of Indian Chambers of Commerce and Industry (FICCI)
US $ 1 Trillion Economy
INDIA - Strong Macro Economic FundamentalsINDIA - Strong Macro Economic Fundamentals
3.5
5.7
6
8.89.6
8.7
0
2
4
6
8
10
Average Growth Rate (%)Average Growth Rate (%)
Improving Fiscal Situation
INDIA - Strong Macro Economic FundamentalsINDIA - Strong Macro Economic Fundamentals
5.66.2 5.9
4.54 4.1
3.4 3.12.5
0
1
2
3
4
5
6
7
Fiscal DeficitFiscal Deficit
FDI Inflows on the Rise [US$ Million]
40296130 5035 4322
60518961
2207925455
0
5000
10000
15000
20000
25000
30000
Foreign Direct Investment (FDI)Foreign Direct Investment (FDI)
INDIA - Strong Macro Economic FundamentalsINDIA - Strong Macro Economic Fundamentals
Rapidly Increasing Global Trade [US$ Billion]
0
50
100
150
200
250
1990-91 1995-96 2000-01 2005-06 2006-07 2007-08
Exports
Imports
306240
96
6942
392
Total trade
INDIA - Strong Macro Economic FundamentalsINDIA - Strong Macro Economic Fundamentals
2.2 1754.1
146
313.53
0
50
100
150
200
250
300
350
1990-91 1995-96 2001-02 2005-06 25/04/2008
INDIA - Strong Macro Economic FundamentalsINDIA - Strong Macro Economic Fundamentals
World’s Fourth Largest Foreign Exchange Reserves
US $ 313 Billion as on April 25, 2008
Forex ReservesForex Reserves
Agriculture in India
Contributes 18.5% to the National GDP
Provides Employment to Nearly 50% Workforce or
70% of Population
Second Largest Arable Land in the World. Highest
Arable Land to Land Size Ratio
Largest Irrigated Land Network
Favorable & Diverse Agro-climatic Conditions for a
variety of crops
INDIA - AgricultureINDIA - Agriculture
MilkLargest Producer
91 Mn T
F & V#2 in the world
129 Mn T
Food Grains#2 in the world
(218 Mn T)
Sugarcane# 2 in the world
(245 Mn T)
Cattle / buffaloesLargest in the world
283 million
FisheriesMarine: 2.7 Mn TInland : 3.1 Mn T
TeaLargest Producer
(0.85 Mn T)
Goat & Sheep182 million
WHEATWHEAT
RICERICE
INDIA - Agriculture INDIA - Agriculture
Dominating CropsDominating Crops
Food Grains Production (Million Tonnes)
INDIA - AgricINDIA - Agric ultureulture
RICE
95.68
76.78
39.67
11.13 15.19
9391.79
83.1388.82
71.8272.11
75.8169.35
68.6465.76
38.12 33.9234.0633.4626.07
14.113.3913.1314.940
20
40
60
80
100
120
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
WHEAT COARSE CEREALS PULSES
2007-08 figures pertain to III Advanced Estimates
227.32174.78
213.99
198.36
208.59
216.83
TOTAL FOODGRAIN
Commercial Crops Production (Million Tonnes)
INDIA - AgricultureINDIA - Agriculture
14.84
27.98
23.26
28.21
13.8716.43
18.5
23.19
11.63
25.29
24.35
8.62
21.04
11.28
11.23 11.3410.8410.27
0
5
10
15
20
25
30
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
OILSEEDS COTTON JUTE & MESTA
287.38237.31 237.09
281.17333.04
344.23
0
50
100
150
200
250
300
350
SUGARCANE
2007-08 figures pertain to III Advanced EstimatesCotton – Million bales of 170 kg each Jute & Mesta – Million bales of 180 kg each
Source: NSSO, 2005
3.0%
4.5%
5%
46%
64%
54%
1.5%
0.3%
1.0%
0.5%
0.5%
0.5%
1983 2000 2006
Allied sectors
Ag Services
Livestock
Crop production
Total = 68%
(207 M)
Total = 60% (238
M)
Food grain production (Mt) : 129 210 209
Acreage (M ha) : 125 123 122
Labor/ area : 1.6 1.9 2.0
Tractor Pop. (M) : 0.7 2.5 3.1
Total = 52% (250
M)
Need for Mechanization
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector
Even though Agriculture still Supports the Majority of Indian Population, Yet
Non-farm activities in rural areas are witnessing a rise in entrepreneurship and employment. As a result, number of people involved in agriculture is declining over the years.
Crop Diversification
Migration
To Achieve Higher Productivity
Monsoon Dependent (less Time lag for Manual Operations)
15 11 9 6 6 3
45
2717
10 82
7
2030
42 4750
0
0 0 1 12
1824 23 20 18
20
14 18 21 21 21 23
1971-72 1981-82 1991-92 2001-02 2005-06 2019-20
Ag worker Animal Tractor
Power Tiller Diesel Engine Electric Motor
Source: Indiaagristat.com, Zinnov Research, 2007, Vision 2020 India, John Derre
0.350.45
0.8
1.291.45
2.00
1971-72 1981-82 1991-92 2001-02 2005-06 2019-20
Percentage share of Power usage in Indian agricultural
sector
Total Power Consumption (kW/ha)
Changing Focus on Agri-mechanization - Automation
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery SectorComparison of Mechanization with Other Countries, 2003
Sl. Sl. No.No.
CountryCountry Farm PowerFarm Power
(kW/Ha)(kW/Ha)
No. of Tractors No. of Tractors per 1000 Ha.per 1000 Ha.
No. of Combine No. of Combine Harvesters per 1000 Ha.Harvesters per 1000 Ha.
1.1. IndiaIndia 1.361.36 15.7515.75 0.0260.026
2.2. JapanJapan 8.758.75 461.22461.22 236.98236.98
3.3. U.K.U.K. 2.502.50 88.3488.34 8.308.30
4.4. FranceFrance 2.652.65 68.5068.50 4.934.93
5.5. ItalyItaly 3.013.01 211.08211.08 4.714.71
6.6. GermanyGermany 2.352.35 79.81779.817 11.4111.41
7.7. ArgentinaArgentina ---- 10.7410.74 1.791.79
8.8. BrazilBrazil ---- 13.6613.66 0.9150.915
9.9. ChinaChina ---- 6.986.98 2.532.53
1010 PakistanPakistan ---- 16.4716.47 0.080.08
1111 EgyptEgypt ---- 30.7030.70 0.790.79
Source: FAO Yearbook 2003
Indian Farm Equipment Market is expected to grow at a CAGR of ~5%
Indian Agriculture Farm Equipment Market is now widely exposed to International Trade
Favourable Factors:
Monsoon
Government Declared Support Prices for Crops
Supportive Credit Policy of Banks
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector
6.66.94
7.37.68
8.08
0
2
4
6
8
10
in US
D
2006 2007 2008 2009 2010
Indian Agriculture Equipment Market
Usage Trends of Major Farm Equipment
1351
1465
1551
1614
1200
1300
1400
1500
1600
1700
in '
000
1994 1998 2002 2006
Number of Threshor
407
416
422
427
395
400
405
410
415
420
425
430
in '
000
1994 1998 2002 2006
Number of Harvestor
2782
6779
9602
11595
0
2000
4000
6000
8000
10000
12000
in '
000
1994 1998 2002 2006
Number of Reapers
78
101
116126
0
20
40
60
80
100
120
140
in '
000
1994 1998 2002 2006
Number of Maize Shellers
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector
Use of Tractors has witnessed an increase of more than 78% since 1994
There are nearly 13500 tractors per million hectares at present in India
1540
2057
24502749
0
500
1000
1500
2000
2500
3000
in '
000
1994 1998 2002 2006
Number of Tractors
Tractors
Combines Migration - Rabi and Kharif
Wheat- From Punjab & Haryana to MP and Maharashtra (till end of March) and then to Haryana and UP (till 10th April).Return back to Punjab (by 15 Apr)
Combines Migration - Rabi and Kharif
Rice & Soyabean-From Punjab & Haryana to MP and Maharashtra for Soyabean(till Oct 15) and then to Haryana and UP for Rice (till Oct end).Return back to Punjab (by 1st week of Nov)
Future Requirements of Farm Equipments
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector
Equipment for Seed Bed Preparation
Roto Tillage
Strip Till Drill
Zero Till Drill
Irrigation Equipments
Sprinkler Irrigation System
Drip Irrigation System
Surge Flow Irrigation
Plant Protection Equipments
Power Weeder
Plastic Mulching
Electro Static Spraying
Orchard Sprayer
Pneumatic Precision Planter
Sugarcane Sett Cutter Planter
Vegetable Transplanter
Potato Planter & Rice Transplanter
Harvesting & Threshing
Sowing and Planting
Strip Harvestor cum Reaper Windrower
Mechanical Cotton Picker
Grain Combine Harvestor
High Capacity Multicrop Threshor
INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector
Agriculture Machinery Trade (Million US$)
110.11
68.58
190.57
27.86
92.8465.6649.13
40.4
36.49
50.51
108.7184.79
50.8
37.590
50
100
150
200
250
EXPORTS IMPORTS
Requirement for Farm Mechanization
Farm Power Requirement by 2020: 2KW/Ha
Removal of Regional Disparities
Infrastructural & Institutional Framework
Adequate Engineering Infrastructure at Implementation Levels
Effective Training and Extension Service
Repair & Maintenance Facilities
Machinery Banks for Custom Hiring Services
Credit at Simpler Terms
Appropriate Farm Machines & Equipments
For Small and Marginal Land Holdings
Crop Specific & Quality Machines
For Hill Agriculture
Gender Specific
Policy Mandate
Training
Establishment of Four Farm Machinery and Technology Training Institute (FMTTI)
Demonstration
Large Scale Demonstration of Equipment at Farmers Field
Incentives for Purchase of Equipment
Subsidy Through MMA, NFSM, NHM and Similar Other Schemes Available to all Categories of Farmers
Incentives for establishment of Machinery Banks at Block Levels for Custom Hiring Services
Identification of Machines
Hill Agriculture
Gender frienfdly Tools and Equipments
Crop Specific Package of Machines
Policy Initiatives by the Government of India to Promote Farm Mechanization
Manufacturing Sector
De-reservation of Manufacturing of Agricultural Machines from Small Scale Sector
Training on Manufacturing Technologies Introduced
Quality of Machines
Minimum Performance Standards for Tractors, Power Tillers & Combine Harvesters Framed
Standard Specifications for All Machines
Equipment Promotion Through Subsidy: Testing by FMTTI or BIS certification is mandatory
Credit
NABARD Refinance available & Financing Norms Simplified
Agro Processing Sector
Scheme on Post Harvest Technology
Technologies Developed by ICAR / CSIR Promoted
Policy Initiatives by the Government of India to Promote Farm Mechanization
Rome 30-31 May 2008