PROJECT REPORT ON FUTURE OF AGRICULTRE MARKETING

Rice that needs no cooking, only soaking

Indian scientists claim to have developed a rice variety that requires no cooking, only soaking in water. The rice variety developed at Cutback based Central Rice Research Institute (CRRI). It is characterized by low amylase content and becomes soft on soaking in water, institute director TK Adhya said. The variety could serve specific niche consumers and make rice cooking a hassle-free affair. The new variety, named Aghanibora, tested by the institute is of 145 days duration with a yield of 4-4.5 tonnes per hectare and is at par with the currently grown rice varieties in the country. "One can get ready to eat rice after soaking it for about 45 minutes in ordinary water, and 15 minutes if soaked in lukewarm water, whereas other rice varieties need cooking," Adhya said. The rice is a local improved land variety of Assam under the `Komal chawl' category and is not GM rice. It is like any other rice variety grown and consumed in India. "However, this variety is usually prepared as parboiled rice and then it can be used for consumption after milling," the researcher said. Scientists at the institute have done extensive research over the past three years and tested its nutritional properties and other biochemical par a meters, he said. According to the institute director, the rice variety can be grown in all the eastern states of Assam, Bihar, West Bengal, Orissa and coastal Andhra Pradesh. We do not have specific data about the average household requirement of fuel. But this variety of rice will help in saving fuel, at least for cooking of rice. Moreover, it will be a relief to housewives AGRICULTURE TODAY MAGAZINE Fri 01, October 2010

PROJECT REPORT MADE & SUBMITED BY: ROLL NO. 02 NAME BAXI VISHVAK P. MBA (AGRI-BUSINESS) SEM-I

PROJECT REPORT SUBMITED TO: PROF. NUPUR SHARMA CENTRE OF MANAGEMENT STUDIES GANPAT UNIVERSITY

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PARTCULAR

HISTORY OF ARICULTURE AGRICULTURE IN INDIA INDIAN AGRO PRODUCTS CHANGING LAND USE & FUTURE OF AGRICALTURE AGRICULTURE IN THE CHANGING GLOBAL SCENARIO EXTENSION STRATEGIES TECHNOLOGICAL NEEDS AND FUTURE AGRICULTURE FUTURE OF FOOD GRAIN PRODUCTION IN INDIA CHANGING GRAIN ORIENTATION FERTILIZER USAGE PROJECTION PROJECTED VALUES CONCLUSION AGRICULTURAL TECHNOLOGY AGRICULTURAL PRODUCTS RESEARCH & DEVELOPMENT THE FUTURE OF AGRICULTURE DEPENDS ON BIODIVERSITY POSSIBILITY OF REDUCING COSTS AND MARGINS POLICY IMPLICATIONS POLICY FOR FURTHER IMPROVEMENT MARKETING CHANNELS WAREHOUSING PICTURE OF FUTURE AGRICULTURE MESSAGE

History of Agriculture
Agriculture, since its invention and inception, has been the prime and foremost activity of every culture and civilization throughout the history of mankind. Agricultural practices secured the food supply. It also resulted in establishment of farming settlements that subsequently grew in villages, towns, cities, states, countries and empires. The history of agriculture is broadly divided in four phases, differing widely in date according to the region. The four phases are 1. Prehistoric Agriculture- Believed to have started near 10,000 BC or earlier, it is considered as first prototype of agricultural modules. The main agricultural sites were in southeast and southwest Asia, in what are now India, Iran, Iraq, Israel and the adjoining areas. Nile River in Egypt, Danube in Europe and Indus-Gaga in India were the main center of the agricultural farmlands. This was the age of agricultural innovations as many new tools and practices were invented due to compulsion of planting, sustaining and harvesting the crops. Use of wooden and earthen tools as well as some domesticated animals is major highlights of this period. 2. Historical Agriculture: This age roughly covers the period from 2500 BC to 500 BC. It marks the introduction of metals in agricultural tool making. Agricultural sites meanwhile grew proficient and covered much of Southeast Asia, middle-east, Europe, North America and eastern Asia. Mechanicals improvements in agricultural implements and development of storage and irrigation method mark the highlight of this age. For the first time, trade in agriculture also started, becoming the precursor to modern agribusiness industry. 3. Feudal Agriculture: The feudal age of agriculture ranges from 500 BC to 1700 AD, reaching its height near 1000 AD and then getting static thereafter. This period is chiefly characterized by expansion of agriculture and irrigation and consolidation of agricultural methods. Use of fertilizers, in form of natural manures to boost production was a major breakthrough of this period.

The usual practice of this age was of intensive agricultural throughout Europe, Middle East and southeastern Asia. 4. Scientific Agriculture: By 17th century AD world was seeing a rapid rise in its population. This was also the age of imperial expansions in Asia, Africa, Americas and oceanic countries. These led to exploration of new methods and practices in agriculture. It also resulted in increased attention on commercial form of agriculture that was based solely on profit than subsistence purposes. Agriculture trade assumed global proportions and many new economies thrived on specialized production of one or other agricultural products. Industrial revolution also led to many new inventions for agricultural sector, particularly in irrigation, sowing, and harvesting techniques. But it was the modern inventions in biotechnology and genetics that have completely changed the form of agriculture production. New variants of seeds and plants are manufactured in laboratories and genetically modified to suit particular consumption and commercial needs. This has enabled the world to meet the food demands of for a population that is crossing 6.5 billion marks.

The entire agribusiness and its support industries are oriented towards production, packaging, marketing and sales of agricultural produces. There are a large number of items that come under agricultural produces, each of them with its own sub-products, byproducts and multiple varieties that make agribusiness such extensive and profitable sector. The major agricultural produces are divided in following categories

Animal and Animal Products Mutton Dairy Products Poultry Animal Feed

Cereals Dry and Pulses Fruits Barley Maize Wheat Rice Gram Beans Almond Cashew Coconut Peanut Walnut

Plant Products Flowers Fruits and Vegetables Sugarcane Herbs Tobacco

Seeds Cocoa Seeds Vegetable Seeds

Spices

Beverages

Asafetida Basil

Tea Coffee Wine

GM seeds Cardamom Chilly Ginger Mustard Peeper Saffron Tamarind

Agriculture in India
Indias record of progress in agriculture over the past four decades has been quite impressive. The agriculture sector has been successful in keeping pace with rising demand for food. The contribution of increased land area under agricultural production has declined over time and increases in production in the past two decades have been almost entirely due to increased productivity. Contribution of agricultural growth to overall progress has been widespread. Increased productivity has helped to feed the poor, enhanced farm income and provided opportunities for both direct and indirect employment. The success of Indias agriculture is attributed to a series of steps that led to availability of farm technologies which brought about dramatic increases in productivity in 70s and 80s often described as the Green Revolution era. The major sources of agricultural growth during this period were the spread of modern crop varieties, intensification of input use and investments leading to expansion in the irrigated area. In areas where Green Revolution technologies had major impact, growth has now slowed. New technologies are needed to push out yield frontiers, utilize inputs more efficiently and diversify to more sustainable and higher value cropping patterns. At the same time there is urgency to better exploit potential of rained and other less endowed areas if we are to meet targets of agricultural growth and poverty alleviation. Given the wide range of agro ecological setting and producers, Indian agriculture is faced with a

great diversity of needs, opportunities and prospects. Future growth needs to be more rapid, more widely distributed and better targeted. These challenges have profound implications for the way farmers problems are conceived, researched and transferred to the farmers. On the one hand agricultural research will increasingly be required to address location specific problems facing the communities on the other the systems will have to position themselves in an increasingly competitive environment to generate and adopt cutting edge technologies to bear upon the solutions facing a vast majority of resource poor farmers.

In the past agriculture has played and will continue to play a dominant role in the growth of Indian economy in the foreseeable future. It represents the largest sector producing around 28 percent of the GDP, is the largest employer providing more than 60 percent of the jobs and is the prime arbiter of living standards for seventy percent of Indias population living in the rural areas. These factors together with a strong determination to achieve self-sufficiency in food grains production have ensured a high priority for agriculture sector in the successive development plans of the country. An important facet of progress in agriculture is its success in eradication of its critical dependence on imported food grains. In the 1950s nearly 5 percent of the total food grains available in the country were imported. This dependence worsened during the 1960s when two severe drought years led to a sharp increase in import of food grains. During 1966 India had to import more than 10 million tones of food grains as against a domestic production of 72 million tones. In the following year again, nearly twelve million tones had to be imported. On the average well over seven percent of the total availability of food grains during the 1960s had to be imported. Indian agriculture has progressed a long way from an era of frequent droughts and vulnerability to food shortages to becoming a significant exporter of agricultural commodities. This has been possible due to persistent efforts at harnessing the potential of land and water resources for agricultural purposes. Indian agriculture, which grew at the rate of about 1 percent per annum during the fifty years before independence, has grown at the rate of about 3 percent per annum in the post independence era.

Indian Agro Products

Agricultural sector is the mainstay of the rural Indian economy around, which the socio-economic privileges and deprivations revolve, and any change in its structure is expected to have a corresponding impact on the existing pattern of social equality. The growth of Indias agriculture sector during the 50 years of independence remains impressive at 2.7 % per annum. About two-third of this production growth is aided by gains in crop productivity. The need based strategies adopted since independence and intensified after mid sixties primarily focused on feeding the growing population and making the country self reliant in food production.

Indian agriculture has attained an impressive growth in the production of food grains that has increased around four times during the planned area of development from 51 million tons in 1950-51 to 199.1 million tones in 1997-98. The growth has been really striking since sixties after the production and wide spread usage of high yielding varieties of seed, fertilization, pesticides, especially in assured irrigated areas.

History
Over the 10,000 years since agriculture began to be developed, peoples across the world have discovered the food value of wild plants and animals and domesticated and bred them. Primary importance of these are cereals such as rice, wheat, barley, corn, and rye; sugarcane and sugar beets; meat animals such as sheep, cattle, goats, and pigs or swine; poultry such as chickens, ducks, and turkeys; and products like milk, cheese, eggs, nuts, and oils. Fruits, vegetables, and olives are also an important category of agriculture products; feed grains for animals include field corn, soybeans, and sorghum. Modern agriculture in India primarily depends on engineering and technology and on the physical and biological sciences. Irrigation, drainage, conservation and sanitation, each of these stages are essential in successful farming, and require specialized knowledge and expert skills of agricultural engineers. Mechanization, the spectacular characteristic of late 19th and 20thcentury agriculture, has eased much of the backbreaking toil of the farmers. More importantly, mechanization has considerably increased the farm efficiency and productivity. Overview of Indian Agriculture Market History In several agricultural sectors, India is the worlds leading or one of the largest producers. For example, the country is second largest milk producing country in the world. The agricultural sector in the country is known for its high degree of product diversity. The complementary nature of a number of important Indian agricultural products, in comparison to those produced in west and other countries provide India considerable export opportunities to these markets. At present, the Indian agriculture industry is on the brink of a revolution, which will modernize the entire food chain, as the total food production in the country is likely to double in the next ten years. According to recent studies, the total turnover of Indian food market is approximately Rs.250000 corers (US $ 69.4 billion), out of which, the share of value-added food products is around Rs.80000 corers (US $ 22.2 billion). The Government of India has also sanctioned proposals for joint ventures, foreign collaborations, industrial licenses and 100% 9

export oriented units conceiving of an investment of Rs.19100 corers (US $ 4.80 billion) out of which foreign investment is over Rs. 9100 corers (US $ 18.2 Billion). The Indian agricultural food industry also assumes significance owing to country's sizable agrarian economy that accounts for over 35% of GDP and employs around 65 % of the population. Both in terms of number of joint- ventures / foreign collaborations and foreign investment, the consumer food segment has the top priority. The other salient features of the Indian agro industry, which have the capacity to lure foreigners with assuring benefits are the aqua culture, deep sea fishing, milk and milk products, meat and poultry segments.

Exports
Agricultural exports were 44 % of total exports in FY 1960; they decreased to 32 % in FY 1970, to 31 % in FY 1980, to 18.5 % in FY 1988, and to 15.3 % in FY 1993. This drop in share of agriculture in total exports was somewhat misleading because agricultural products, such as jute and cotton, which were exported in the raw form in the 1950s, have been exported as cotton yarn, fabrics, ready-made garments, coir yarn, and jute manufactures since the 1960s. The composition of agricultural and allied products for export changed primarily due to the continuing increase of demand in the domestic market. This demand cut into the excess available for export in spite of a continuing desire, on the part of government, to shore up the invariant foreign-exchange shortage. In FY 1960, tea was the major export by value. Oil cakes, cashew kernels, tobacco, raw cotton and spices were about equal in value but were only one-eighth of the value of tea exports. By FY 1980, tea was still a major export commodity; however rice, coffee, fish, and fish products came close, followed by oil cakes, cashew kernels, and cotton. In 1992-93 fish and fish products became the main agricultural export, followed by oil meals, then cereals, and then tea. The share of fish products rose steadily from less than 2 % of all agricultural exports in FY 1960, to 10 % in FY 1980, to around 15 % for the 3-year period ending in FY 1990, and to 23 % in FY 1992. The contribution of tea in agricultural exports fell from 40 % in FY 1960 to around % percent in the FY 1988-FY 1990 period, and to only 13 % by FY 1992. Excellent export prospects, competitive pricing of agricultural products and standards, which are internationally comparable have created enormous trade opportunities in the Indian agro industry. Exports of Agricultural products (2004-05)

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Major Export Markets Major destinations for export of Indian agricultural products (2006-07), include Product Major Markets USA, Japan, UK, Netherlands & Floriculture Germany Fruits & Pakistan, Bangladesh, USA, Vegetable Seeds Japan & Netherlands Bangladesh, Malaysia, Sri Fresh Onions Lanka, UAE, Pakistan & Nepal Other Fresh UAE, Bangladesh, Pakistan, Vegetables Nepal & Sri Lanka Spain, Egypt, Germany, UK & Walnuts Netherlands UAE, Bangladesh, UK, Saudi Fresh Mangoes Arabia & Nepal Netherlands, UK, UAE, Fresh Grapes Bangladesh, Belgium Other Fresh Bangladesh, UAE, Netherlands,

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Fruits Dried & Preserved Vegetables Mango Pulp

Nepal, Saudi Arabia Russia, France, USA, Germany & Spain

Saudi Arabia, Netherlands, UAE, Yamen, Arab Republic & Kuwait Pickles & Russia, USA, Belgium, Chutneys Netherlands & France Other Processed USA, Netherlands, UK, UAE & Fruits Saudi Arabia Malaysia, Philippines, Saudi Buffalo Meat Arabia, Jordan & Angola Sheep / Goat Saudi Arabia, UAE, Qatar, Meat Oman & Kuwait UAE, Kuwait, Oman, Germany Poultry Products & Japan Bangladesh, Algeria, UAE, Dairy Products Yamen, Arab Republic & Egypt Germany, Portugal, France, Animal Casings Spain & Italy Seychelles, UAE, Hong Kong, Processed Meat Germany & USA Indonesia, Malaysia, Groundnuts Philippines, UK & Singapore USA, China, Germany, Italy & Guar Gum Netherlands Jaggery & Portugal, USA, Bangladesh, Confectionery Pakistan & Nepal Nepal, Netherlands, Malaysia, Cocoa Products Yamen Arab Republic & UAE Cereal USA, UK, Nepal, Sri Lanka & Preparations UAE Alcoholic Jamaica, Thailand, UAE, Beverages Angola & Bhutan Miscellaneous UAE, Iran, USA, UK & Preparations Indonesia USA, UK, Indonesia, Maldives Milled Products & UAE Saudi Arabia, Kuwait, UK, UAE Basmati Rice & Yamen Arab Rep. Non Basmati Nigeria, Bangladesh, South Rice Africa, UAE & Ivory Coast Wheat Bangladesh, Philippines, UAE,

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Other Cereals Natural Honey Pulses

Sudan & Myanmar Bangladesh, Sri Lanka, Sudan, Benin, Thailand USA, Germany, Saudi Arabia, UK & UAE Bangladesh, Sri Lanka, Pakistan, UAE & Nepal

Product-wise Export Data (2002-03 to 2006-07) Future Forecasts According to experts, India has to play a bigger role in the global markets in agriculture products in the future. The country is expected to strengthen its position among the worlds leading exporters of rice. Presently it is the 2nd largest rice producer after China and the 3rd largest net-exporter after Thailand and Vietnam. However, recent reports state that agriculture plays an important, though declining role in Indian economy. Its contribution in overall GDP fell from 30 % in the early nineties, to below 17.5 % in 2006. The country is a world leader in specialist products, such as buffalo milk, spices and bananas, mangoes, chickpeas etc., which are considered as important in the Indian diet and are also exported. India is the 5th largest cultivator of biotech crops across the world, ahead of China. In the year 2006, around 3.8 million hectares of land were cultivated with genetically modified crops, by about 2.3 million farmers. The primary GM crop is Bt Cotton that was introduced in 2002. The future growth in agriculture sector must come from

Advanced technologies that are not only "cost effective" but also "in conformity" with natural climatic regime of the country Technologies applicable to rain-fed areas particularly Continued genetic improvements for improved seeds and yields Improvements in data for superior research, results, and sustainable planning Bridging the gap between knowledge and practice; and Judicious land use resource surveys, effective management practices and sustainable use of natural resources.

Import and Export

Since Independence, India has made a lot of progress in agriculture in terms of growth in output, yields and area under crops. It has gone through a Green Revolution (food grains), a White Revolution (milk), a Yellow Revolution (oilseeds) and a Blue Revolution (aquaculture). Today, India is one of the largest producers of milk, fruits,

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cashew nuts, coconuts and tea in the world. It is also well known for the production of wheat, vegetables, sugar, fish, tobacco and rice. Certain types of agriculture such as horticulture, organic farming, floriculture, genetic engineering, packaging and food processing have the potential to see a surge in revenues through exports. Over the past few years, the government has stressed on the development of horticulture and floriculture by creating vital infrastructure for cold storage, refrigerated transportation, packaging, processing and quality control. If India wishes to optimize the production and export potential of these commodities, then it is essential to improve these facilities, marketing and export networks much further. In recent years, the Central Government has offered different fiscal incentives for bettering storage facilities in rural areas. It also provides financial assistance to the State Governments for acquiring and distributing food grains at subsidized rates, especially to families with annual income below the poverty line. Today, the improved availability of bank credit through priority lending, favorable terms of trade and liberalized domestic and external trade for agricultural commodities have also encouraged private players to invest in agriculture. The major thrust of the policies and programmers of the Government of India relating to livestock and fisheries is in the areas of rapid genetic up gradation of mulch animals, improvement in the delivery mechanism of breeding inputs, control of animal diseases, creation of disease free zones, increased availability of nutritious feed, development of dairy activities and backyard poultry, development of processing and marketing facilities and enhancement of production and profitability of livestock.

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Total agriculture vis-a-vis total national Import/Export

(Value: million Rs)

Year Agriculture Value 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 12058.60 14782.70 28762.50 23273.30 59372.10

Import

Export

Total % Agriculture Total % (National) Agriculture (National) Agriculture to total Value to total Value Value (National) (National) 431708.20 478508.40 633745.20 731010.10 899707.00 2.79 3.09 4.54 3.18 6.60 4.80 4.76 5.70 8.17 7.45 5.29 6.63 5.92 6.12 4.59 60127.60 78380.40 90403.00 325272.80 440418.10 536882.60 18.49 17.80 16.84 18.05 15.99 19.18 20.33 19.09 18.25 15.91 14.23 14.22 13.58 12.70 11.20

125865.50 697488.50 132227.60 826734.00 203977.40 1063533.50 241612.90 1188173.20 248324.50 1301006.40 255106.40 1397517.70 253136.60 1590952.00 286573.70 2013564.50 297286.10 2090179.70 346539.40 2551372.80 372665.20 2933667.50 398633.10 3560688.88

58901.00 1226781.40 66126.00 1389198.80 87841.90 1541762.90 145664.80 1783316.90 160667.30 2155285.30 120862.30 2283066.40 162566.10 2451997.20 176088.30 2972058.70 219726.80 3591076.60 220574.90 4810641.10

Source : Agricultural Statistics at a Glance, 2005, Directorate of Economics and Statistics, Ministry of Agriculture, Govt. of India.

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Export Procedure

A successful exporter should thoroughly research the markets. The fewer intermediaries a person have the better as every intermediary needs a percentage for his share in his business. This leads to fewer profits. The first thing you need to do is set up a business organization depending on your export needs. If you decide to incorporate a private limited company, then you have to register the same with the Registrar of Companies. There are two types of exporters - merchant exporters who buy goods from the market or from manufacturers and sell them to foreign buyers and a manufacturer exporter who manufactures the goods he exports. The second thing you need to do is to open a current account in the name of the organization in whose name you intend to export, at a bank that is authorized to deal in foreign exchange. Carefully select the products you wish to export and study current export trends. Also, find out about the import regulations of the commodity in the importing countries. Send export letters to targeted companies with information about your company, product, pricing and other services offered. Negotiate with buyers for a good deal. Once an export order is received it must be processed and a contract that lists item specifications, payment conditions, marketing requirements, arbitration, shipping and insurance must be drawn out. Exporters face risks such as credit risk, currency risk, carriage risk and country risk. These can be countered through steps like insisting upon an irrevocable letter of credit from the overseas buyer and taking out a marine insurance policy. All exporters have to register with a regional licensing authority that provides them with an Import Export Code (IEC) number. To get benefits and concessions under the export-import policy, exporters should register with an appropriate export promotion agency by obtaining a registration-cum-membership certificate. Goods that are exported are eligible for exemption from both Sales Tax and Central Sales Tax. For this purpose, you should get yourself registered with the Sales Tax Authority of your State. Agricultural products have to go through quality control and pre-shipment inspections before export. Under the about 1,000 commodities under the major groups of food and agriculture, fishery, minerals, organic and inorganic chemicals, rubber products, jute products and coir are subject to compulsory pre-shipment inspection. However, products that has an ISI Certification Mark or Agmark do not need to be inspected by any agency. All goods should be labeled, packaged, packed and marked before export

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Import Procedure

Imports to India are governed by the Foreign Trade (Development and Regulation) Act 1992). Under this Act, imports of all goods are free except for the items regulated by the policy or any other law in force. The present, foreign trade arrangements for different commodities are stated in the EXIM Policy of 2004-2009. This policy is announced once every five years with annual supplements coming out every year. It is also known as the Foreign Trade Policy or Export Import Policy. Items on the 'Prohibited' list like tallow, fat or oils of any animal origin, animal rennet and wild animals including their parts and products and ivory cannot be imported. For import of items that appear in the 'Restricted' list you need secure an import license. Import of items that are enumerated in the canalized list of items are permitted to be imported through canalizing Agencies. All other products can be freely imported. Registration with a regional licensing authority is a precondition for the import of goods. Customs officials will not permit clearance of goods unless the importer gets an Import Export Code (IEC) number from the regional licensing authority. Import Procedure for Livestock Products Livestock products include meat and meat products of different types that comprise fresh, chilled and frozen meat as well as tissue or organs of poultry, pig, sheep and goat. It also consists of egg and egg powder; milk and milk goods; pet foods of animal origin and embryos, ova or semen of cows, sheep and goats. No livestock product may be imported into India without a valid sanitary import permit. All livestock products with valid sanitary import permits may be brought into India only through seaports or airports where Animal Quarantine and Certification Services Stations are situated. These stations are located in the cities of Delhi, Mumbai, Kolkata and Chennai. When livestock products arrive at the checkpoint, they will be checked by the Officer-in-charge of the Animal Quarantine and Certification Services Station or any other veterinary officer duly approved by the Department of Animal Husbandry and Dairying. Import Procedure for the Fisheries Sector License under EXIM policy is not required for the import of 125 species/groups of fish, crustaceans, mollusks and other aquatic invertebrates covered under FREE policy under the EXIM policy. Import of five groups of live fish is permitted under Restricted Policy. Import of Whale Shark (Rhincodon types) and parts and products of the species is restricted. for import have also been steadily brought down. Under a bilateral agreement with Sri Lanka, duty free import of spices is permitted. This is useful for value addition and reexportation. 17

Changing Land-Use and Future of Agriculture

Although Indias population growth rate has slowed from 2.1 percent in 1980s to 1.8 percent in the 1990s and is expected to slow further in the coming decades, yet the population is projected to reach 1.33 billion by 2020 from the current one billion. The urban share of total population is projected to increase from 26 percent to 35 percent of the total population. Although incidence of poverty is falling, it is estimated that in 93-94 (unto which data is available) 320 million people constituting 36 percent of the population were below the officially defined poverty line. The nature of the poverty line has been shifting. About 30 years ago 48.4 percent of those living in rural areas were poor and 20 percent of those living in the urban areas were classed as poor. Recent studies show that the number of poor in urban areas has been increasing at relatively higher rate compared to the rural areas. At present those below the poverty line in rural sector constitute 37 percent of the population while in the urban sector the percentage is 32 percent. In the context of poverty alleviation, therefore, emphasis will be required to be placed both on production of food by the poor as well as on the availability of food for the urban poor. It needs to be recognized that a large proportion of the rural poor are located in regions of low potential for food production e.g. arid and semi-arid areas, hilly regions, and degraded land and forest areas. Widespread hunger and malnutrition are the direct manifestation of poverty and will call for increasing efforts to produce more food at affordable price. Increasing population and economic growth are changing patterns of land use making potentially unsustainable demands on the countrys natural resources.

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Agriculture in the Changing Global Scenario

Steady globalization of trade has profound implications for future agricultural development. The diversity of Indias agro-ecological setting, high bio-diversity and relatively low cost of labor provide potential for agricultural competitiveness in a globalize economy. It is expected that with increasing globalization of markets over the years there will be demands for agricultural intensification. This will also be favored because of greater backward and forward linkages between agriculture and food industry. Therefore, increase in production and productivity is bound to be strategically important to economy. Intensification will not only favor alleviation of rural poverty but will also improve resource conservation particularly in the small farming sector where farmers can be encouraged to take up organized production of high value crops such as fruits, specialty vegetables, flowers medicinal and aromatic herbs etc. Stronger demands for crops of the small farmers will not only improve incomes and welfare but will also make investments in technology and resource conservation more attractive. The General Agreement on Tariff and Trade (GATT) and liberalization of global trade is bound to have impact on future land use and production pattern. Understanding the local, national and international environment under which agricultural production is taking shape will be crucial in developing our own strategies.

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Extension Strategies
Since early fifties a number of public by funded agricultural development programmers have been sponsored. These have included programmers like the National Extension Service (NES) Blocks in 1953, the Intensive Agricultural District Programmed (IADP) in 196162, the Intensive Agricultural Area Programmed (IAAP) 1964-65, the High Yielding Variety (HYV) programmed 1966-67 and the Small and Marginal Farmers Development Programmers (SMFDP) in 1969-70. Though these programmers had a perceptible impact the efforts did not get replicated over different areas and categories of farmers. In mid seventies based on pilot level project in Rajasthan Canal and Chamber command area a Training and Visit (T&V) system of extension was promoted in different states. Extension efforts of the Indian Council of Agricultural Research through its research Institutes and the State Agricultural University were largely limited to demonstration of new technologies through such programmers as National Demonstration Project, Operational Research Project, the Lab to Land Programmed and the Kristi Vegan Kendras. However, there appears much to be desired in the way that extension programmers are conceived and implemented. At present extension programmers are implemented in largely a top-down fashion leaving little scope for localized planning and action. Farmers are almost passive receivers and their involvement in the process of technology generation and adoption is almost absent. Extension services, at present, are almost exclusively in the public sector domain and there is no effort or institutional support for other operators e.g. the NGOs, the corporate bodies etc. Extension programmers sponsored by the government operate largely in isolation and there appears a strong need to view the extension programmers as an integral part of the research and development process. The challenges facing agricultural development call for fundamental changes in our approach to technology transfer/extension programmers. Changes are necessary in the context of changing economic environment following policy adjustments in relation to privatization, deregulation and globalization calling for greater efficiency and effectiveness of the extension system. More importantly there is need for

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Greater emphasis on providing producers with knowledge and understanding needed to overcome the problems or to exploit opportunities of their own specific production systems. Correspondingly there will be a need to de-emphasize package of practices or the blanket recommendations, top down approach followed thus far. Shift in the focus of public extension systems from promoting inputs use to one on sustainable management of resources and improvements in the production system as a whole. Closer interaction between farmers, extension scientists and production system researchers in diagnosing problems and identifying location specific recommendations emphasizing participation and education rather than being prescriptive. Widening the range of extension delivering agencies. While the publicly operated extension systems will continue to be important, there will appear a greater role for NGOs, farmers associations and corporate sectors in particular situations. Role of commercial suppliers of seeds, agrochemicals, machinery, vaccines and medicines in providing advisories, as is already being done in a limited way, will need to be encouraged and factored into public systems own priorities. Wider and more creative use of mass media in tune with current developments in information technology to get information across to the farming community whose ability to overcome constrains at farm level will increasingly depend on access to reliable and up-to-date information.

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Technological Needs and Future Agriculture

It is apparent that the tasks of meeting the consumption needs of the projected population are going to be more difficult given the higher productivity base than in 1960s. There is also a growing realization that previous strategies of generating and promoting technologies have contributed to serious and widespread problems of environmental and natural resource degradation. This implies that in future the technologies that are developed and promoted must result not only in increased productivity level but also ensure that the quality of natural resource base is preserved and enhanced. In short, they lead to sustainable improvements in agricultural production. Productivity gains during the Green Revolution era were largely confined to relatively well endowed areas. Given the wide range of agro ecological setting and producers, Indian agriculture is faced with a great diversity of needs, opportunities and prospects. Future growth needs to be more rapid, more widely distributed and better targeted. Responding to these challenges will call for more efficient and sustainable use of increasingly scarce land water and germless resources. Technical solutions required to solve problems will be increasingly location-specific and matched to the huge agro ecological/climatic diversity. Detailed indigenous knowledge and greater skills in blending modern and traditional technologies to enhance productive efficiency will be more than ever before, key to the farming success and sect oral growth. Most technological solutions will have to be generated and adapted locally to make them compatible with socio-economic conditions of farming community. New technologies are needed to push the yield frontiers further, utilize inputs more efficiently and diversify to more sustainable and higher value cropping patterns. These are all knowledge intensive technologies that require both a strong research and extension system and skilled farmers but also a reinvigorated interface where the emphasis is on mutual exchange of information bringing advantages to 22

all. At the same time potential of less favored areas must be better exploited to meet the targets of growth and poverty alleviation. These challenges have profound implications for products of agricultural research. The way they are transferred to the farmers and indeed the way research is organized and conducted. One thing is, however, clear the new generation of technologies will have to be much more site specific, based on high quality science and a heightened opportunity for end user participation in the identification of targets. These must be not only aimed at increasing farmers technical knowledge and understanding of science based agriculture but also taking advantage of opportunities for full integration with indigenous knowledge. It will also need to take on the challenges of incorporating the socio-economic context and role of markets. With the passage of time and accelerated by macro-economic reforms undertaken in recent years, the Institutional arrangements as well as the mode of functions of bodies responsible for providing technical underpinning to agricultural growth are proving increasingly inadequate. Changes are needed urgently to respond to new demands for agricultural technologies from several directions. Increasing pressure to maintain and enhance the integrity of degrading natural resources, changes in demands and opportunities arising from economic liberalization, unprecedented opportunities arising from advances in biotechnology, information revolution and most importantly the need and urgency to reach the poor and disadvantaged who have been by passed by the green revolution technologies. Another important implication of increasing globalization relates to the need for greater attention to the quality of produce and products both for the domestic and the foreign markets. This would imply that production must be tuned to actual rapidly changing product demand. Such adaptation to global markets would require state of the art research, which can be achieved only by setting global standards of research, focus on well defined priorities and mechanisms which permit close interaction of farmers with researchers, the private sector and markets.

23

Land Use
In FY 1987, field crops were planted on about 45 percent of the total land mass of India. Of this cultivated land, almost 37 million hectares were double-cropped, making the gross sown area equivalent to almost 173 million hectares. About 15 million hectares were permanent pastureland or were planted in various tree crops and groves. Approximately 108 million hectares were developed for nonagricultural uses, forested, or unsuited for agriculture because of topography. About 29.6 million hectares of the remaining land were classified as cultivable but fallow, and 15.6 million hectares were classified as cultivable wasteland. These 45 million hectares constitute all the land left for expanding the sown area; for various reasons, however, much of it is unsuited for immediate cropping. Expansion in crop production, therefore, has to come almost entirely from increasing yields on lands already in some kind of agricultural use. Topography, soils, rainfall, and the availability of water for irrigation have been major determinants of the crop and livestock patterns characteristic of the three major geographic regions of India--the Himalayas, the Indo-Gangetic Plain, and the Peninsula--and their agroecological sub regions. Government policy as regards irrigation, the introduction of new crops, research and education, and incentives has had some impact on changing the traditional crop and livestock patterns in these sub regions. The monsoons, however, play a critical role in determining whether the harvest will be bountiful, average, or poor in any given year. One of the objectives of government policy in the early 1990s was to find methods of reducing this dependence on the monsoons.

Himalayas
The Himalayan region, with some 520,000 square kilometers of land, ranks well behind the other two regions in agricultural importance. Despite generally adequate rainfall, the rugged topography allows less than 10 percent of the land to be used for agriculture. The sandy, loamy soils on the hillsides and the alluvial clays in the region's premier agricultural sub region, the Vale of Kashmir--located in the northwestern part of the state of Jammu and Kashmir--provide fertile land for agricultural use. The main crops are rice, corn, wheat, barley, millet, and potatoes. Most of India's temperate-zone fruits (apples,

24

apricots, cherries, and peaches) and walnuts are grown in the vale. Sericulture and sheepherding also are being undertaken. In the eastern Himalayan sub region, the soils are moderately rich in organic matter and are acidic. Although much of the farming is done on terraced hillsides, there is a significant amount of shifting cultivation, which has resulted in deforestation and soil erosion. Rice, corn, millet, potatoes, and oilseeds were the main crops in the early 1990s. The region also is well known for the tea plantations of the mountainous Darjiling (Darjeeling) area in the northern tip of West Bengal.

Indo-Gangetic Plain
The vast Indo-Gangetic Plain, extending from Punjab to Assam, is the most intensively farmed zone of the country and one of the most intensively farmed in the world. Rainfall, most of which comes with the southwest monsoon, is generally adequate for summer-grown crops, but in some years vast areas are seared by drought. Fortunately, much of the land has access, or potential access, to irrigation waters from wells and rivers, ensuring crops even in years of drought and making possible a winter crop as well as a summer harvest. Wheat is the main crop in the west, rice in the east. Pulses, sorghum, oilseeds, and sugarcane are among other important crops. Mango orchards are common. Other fruits of the sub region include guavas, jackfruit, plums, lemons, oranges, and pomegranates. In the Great Indian Desert, rainfall is scanty and erratic. About 20 percent of the total area is under cultivation, mostly in Haryana and Gujarat states, and comparatively little in Rajasthan. The Indira Gandhi Canal--begun in 1958 as the Rajasthan Canal--was designed to bring water from the north. Progress was slow, and only the first stage was close to completion by the end of the Seventh Five-Year Plan (FY 198589). By then, the canal had substantially increased the area under cultivation in Rajasthan, and a new completion date of 1999 is anticipated, the cultivable area is expected to expand further with the development of the canal's second stage during the 1990s. The leading crops of the sub region are millet, sorghum, wheat, and peanuts. Vast expanses of sparse vegetation provide sustenance for sheep and goats. In the late 1980s, dairy farming became important in locations that had sufficient pastureland.

Peninsular India
The east and west coasts, the coastal plains, and the deltaic tracts that extend inland for some 100 to 200 kilometers in Peninsular India benefit from both the June-to-September southwest monsoon and the October-to-November northeast monsoon. Farther inland, as the 25

topography and climate change, so does the pattern of agriculture. The proportion of land under cultivation ranges from about 50 percent along the coastal plain and in the western part of Andhra Pradesh to about 25 percent in eastern Madhya Pradesh. Except in areas of certain developed river valleys, double-cropping is rare. Rice is the predominant crop in high-rainfall areas and sorghum in low-rainfall areas. Other crops of significance along the east coast and in the Central Highlands in the early 1990s were pigeon peas, mustard, peanuts, millet, linseed, castor beans, cotton, and tobacco. On the Deccan Plateau, deep, alluvial black soils that retain moisture for a long time are the basis for much of the region's output of farm products. However, the region also has many farming areas that are covered by thin, light-textured soils that suffer quickly from drought. Whether a crop is made or lost is, therefore, often dependent on the availability of supplementary water from ponds and streams. About 60 percent of the land in the state of Maharashtra was under cultivation in the early 1990s, less in Madhya Pradesh. About 75 percent of the cropland of the Deccan during this period was planted in food crops, such as millet, sorghum, rice, wheat, and peanuts; most of the remaining cropland was planted in fodder crops. In the far south of the Peninsula, the area under cultivation varies from about 10 percent in the Western Ghats, to 25 percent in the western coastal tract, to 55 percent on the Karnataka Plateau. Here is the India--the land of spices--that Vasco da Gama and other European navigators came searching for in the fifteenth century. On the Karnataka Plateau, sorghum, millet, pulses, cotton, and oilseeds are the main crops on the 90 percent of the cultivated land that is dryfarmed; rice, sugarcane, and vegetables predominate on the 10 percent that was irrigated in the late 1980s. Coconuts, areca, coffee, pepper, rubber, cashew nuts, tapioca, and cardamom are widely grown on plantations in the Nilgiri Hills and on the western slopes of the Western Ghats.

Land Tenure
Matters concerning the ownership, acquisition, distribution, and taxation of land are, by provision of the constitution, under the jurisdiction of the states. Because of the diverse attitudes and approaches that would result from such freedom if there were no general guidelines, the central government has at times laid down directives dealing with the main problems affecting the ownership and use of land. But it remains for the state governments to implement the central government guidelines. Such implementation has varied widely among the states. 26

Landholding Categories
India is a land of small farms, of peasants cultivating their ancestral lands mainly by family labor and, despite the spread of tractors in the 1980s, by pairs of bullocks. About 50 percent of all operational holdings in 1980 were less than one hectare in size. About 19 percent fell in the one-to-two hectare range, 16 percent in the two-to-four hectare range, and 11 percent in the four-to-ten hectare range. Only 4 percent of the working farms encompassed ten or more hectares. Although farms are typically small throughout the country, the average size holding by state ranges from about 0.5 hectare in Kerala and 0.75 hectare in Tamil Nadu to three hectares in Maharashtra and five hectares in Rajasthan. Factors influencing this range include soils, topography, rainfall, rural population density, and thoroughness of land redistribution programs. Many factors--historical, political, economic, and demographic--have affected the development of the prevailing land-tenure status. The operators of most agricultural holdings possess vested rights in the land they till, whether as full owners or as protected tenants. By the early 1990s, there were tenancy laws in all the states and union territories except Nagaland, Meghalaya, and Mizoram. The laws provide for states to confer ownership on tenants, who can buy the land they farm in return for fair payment; states also oversee provision of security of tenure and the establishing of fair rents. The implementation of these laws has varied among the states. West Bengal, Karnataka, and Kerala, for example, have achieved more success than other states. The land tenure situation is complicated, and it has varied widely from state to state. There is, however, much less variation in the mid-1990s than in the postindependence period. Independent India inherited a structure of landholding that was characterized by heavy concentration of cultivable areas in the hands of relatively large absentee landowners (zamindars--see Glossary), the excessive fragmentation of small landholdings, an already growing class of landless agricultural workers, and the lack of any generalized system of documentary evidence of landownership or tenancy. Land was important as a status symbol; from one generation to the next, there was a tendency for an original family holding to be progressively subdivided, a situation that continued in the early 1990s. This phenomenon resulted in many landholdings that were too small to provide a livelihood for a family. Borrowing money against land was almost inevitable and frequently resulted in the loss of land to a local moneylender or large landowner, further widening the gap between large and small landholders. Moreover, inasmuch as landowners and moneylenders tended to belong to higher castes and petty owners and 27

tenants to lower castes, land tenure had strong social as well as economic impact By the early 1970s, after extensive legislation, large absentee landowners had, for all practical purposes, been eliminated; their rights had been acquired by the state in exchange for compensation in cash and government bonds. More than 20 million former zamindar-system tenants had acquired occupancy rights to the land they tilled. Whereas previously the landlord collected rent from his tenants and passed on a portion of it as land revenue to the government, starting in the early 1970s, the state collected the rent directly from cultivators who, in effect, had become renters from the state. Most former tenants acquired the right to purchase the land they tilled, and payments to the state were spread out over ten to twenty years. Large landowners were divested not only of their cultivated land but also of ownership of forests, lakes, and barren lands. They were also stripped of various other economic rights, such as collection of taxes on sales of immovable property within their jurisdiction and collection of money for grazing privileges on uncultivated lands and use of river water. These rights also were taken over by state governments in return for compensation. By 1980 more than 6 million hectares of waste, fallow, and other categories of unused land had been vested in state governments and, in turn, distributed to landless agricultural workers.

Land Reform
A major concern in rural India is the huge number of landless or nearlandless families, many of whom are wholly dependent on a few weeks of work at the peak planting and harvesting seasons. The number of landless rural families has grown steadily since independence, both in absolute terms and as a proportion of the population. In 1981 there were 195.1 million rural workers: 55.4 million were agricultural laborers who depended primarily on casual farm work for a livelihood. In the early 1990s, the rural work force had grown to 242 million, of whom 73.7 million were classified as agricultural laborers. Approximately 33 percent of the employed rural workers were classified as casual wage laborers. Because of the large number of landless farmers and the frequent neglect of land by absentee landlords in the early years of independence, the principle that there should be a ceiling on the size of landholdings, depending on the crop planted and the quality of the land, was embodied in the First Five-Year Plan (FY 1951-55). An agricultural census was conducted to provide guidance in setting such ceilings. During the Second Five-Year Plan (FY 1956-60), most states legislated fixed ceilings, but there was little uniformity among the 28

states; ceilings ranged from six to 132 hectares. Certain specialized branches of agriculture, such as horticulture, cattle breeding, and dairy farming, were usually exempted from ceilings. All the states instituted programs to force landowners to sell their overthe-ceiling holdings to the government at fixed prices; the states, in turn, were to redistribute the land to the landless. But adamant resistance, high costs, sloppy record keeping, and poor administration in general combined to weaken and delay this aspect of land reform. The delays in legislation allowed large landowners to circumvent the intent of the laws by spurious partitioning, sales, gifts to family members, and other methods of evading ceilings. Many exemptions were granted so that there was little surplus land. To ensure more uniformity in income, to combat evasion of the intent of the laws, and to secure more land for distribution to the landless, the central government in the 1970s pushed for greatly reduced ceilings. For a family of five, the central government guidelines called for not more than 10.9 hectares of good, irrigated land suitable for double-cropping, not more than 10.9 hectares of land suited for one crop annually, and not more than 21.9 hectares for orchards. Exemptions were continued for land used as cocoa, coffee, tea, and rubber plantations; land held by official banks and other government units; and land held by agricultural schools and research organizations. At the option of the states, land held by religious, educational, and charitable trusts also could be exempted. To protect the states from legal challenges to their land reform laws, the constitution was amended in 1974 to include in its Ninth Schedule the state laws that had been enacted in conformance with national guidelines. Land reform laws enacted after 1974 also were included in the amendment. By the beginning of the 1990s, all states and union territories, except Goa, Arunachal Pradesh, Nagaland, Manipur, Mizoram, and Tripura, had passed ceiling laws to conform to central government guidelines. In Maharashtra, for example, the revised ceiling law that became effective in 1975 set upper limits at perennially irrigated land, 7.2 hectares; seasonally irrigated land, 10.8 hectares; paddy land in an assured rainfall area, 14.6 hectares; and other dry land, 21.9 hectares. By the early 1980s, about 150,000 hectares had been declared surplus under this act, about 100,000 of which had been distributed to 6,500 landless persons. A 1973 land reform amendment in Bihar set a range of ceilings on holdings for a family of five, from six to eighteen hectares depending on land quality, and offered an allowance for each additional family member, subject to a maximum of one-and-one-half times the holding. Within five years, the Bihar government had acquired 94,000 hectares of surplus land and had distributed 53,000 29

hectares to 138,000 landless families. Success nationwide was limited. Of the 2.9 million hectares of land declared surplus, nearly 1.9 million hectares had been distributed by the end of the seventh plan, leaving 1 million hectares still to be distributed as of early 1993. By the early 1990s, nearly all the states had enacted legislation aimed at the consolidation of each tiller's landholdings into one contiguous plot. Implementation was patchy and sporadic, however. By the early 1980s, the work had been completed only in Punjab, Haryana, and western Uttar Pradesh and had begun in Orissa and Bihar. In most of the other states, nothing had been accomplished by the early 1990s. The Sixth Five-Year Plan (FY 1980-84) set a goal for the completion of the consolidation of holdings within ten years, which was not achieved. In order to protect tenants from exorbitant rents (often up to 50 percent of their produce), the states passed legislation to regulate rents. The maximum rate was fixed at levels not exceeding 20 to 25 percent of the gross produce in all states except Andhra Pradesh, Haryana, and Punjab. The states also adopted various other measures for the protection of tenants, including moratoriums on evictions, minimum periods of tenure, and security of tenure subject to eviction on prescribed grounds only. By the early 1980s, most of the cultivated area had been surveyed and records of rights prepared. In most states, revenue assessment--the tax on land--against farmland had been revised upward in keeping with a rise in farm prices. Several states, steps were taken to associate village assemblies, or panchayat, with the maintenance of land records, the collection of land revenue, and the management of lands belonging to government; the results of these efforts have frequently been unsatisfactory.

30

Future of Food grain production in India

In the past, India has made great progress in providing food security for its people. However the growth rate of agriculture has decreased from 3.2 during 1985-90 (seventh plan) to 2.1 during 19972002 (Ninth plan). There has also been a decline in the growth rate of food grain production from 3.22 (1960) to 1.23 (1997). Food grain production is becoming a matter of concern again. The challenge facing the country is in achieving a higher production of food production over the next 23 decades (Daniel 2000). According to a study by Bhalla et.al (1999), baseline projection for total cereal demand in 2020 is 246 million tons for direct human consumption. The relevant question that arises is whether India would be able to increase the food grain production in the coming years with the net-cropped area remaining same? Much of the additional food demand in the future will have to be met through productivity enhancement. What factors have contributed most to the productivity growth in the past? Reaching towards the goal of sustainable agriculture with high yield requires a crucial role of irrigation and other factors. In the paper, we explore the marginal contribution of factors like irrigation and fertilizer on yield of food grain using a regression model. We also test the hypothesis that marginal effect of fertilizer on yield depends much on the irrigated conditions. Over the past 15 years, increase in irrigated area has mainly taken place from groundwater source. Yields in areas irrigated by groundwater are often substantially higher than the yield from surface water sources. Research indicates that yields in groundwater irrigated areas are higher by one third to one half than in areas irrigated from surface sources, and as much as 70-80% of Indias agricultural output may be groundwater dependent (Marcus 1996). Higher yields from groundwater-irrigated areas are in large part due to increase in the reliability of water supply. In the paper, we explore how irrigated area driven by groundwater irrigation expansion will contribute in increasing the irrigation intensity.

31

Much of the contribution in yield change in the last two decades is caused by high fertilizer usage (Daniel 2000; Ahluwalia 1996). High use of fertilizer in agricultural production is also contributed by expansion of irrigation as the latter reduces the risk of investment in fertilizer. Two decades back, farmers applied only 30 kg of mineral fertilizers (nitrogenous, phosphatic and potassic fertilizers) to their land. Today, they apply 29kg per hectare which is three times as much. In the same period, food grain yields have increased every year, from about 1.023 tonnes/ha to 1.67 tonnes/ha. One of the concerns regarding the factors constraining the yield growth is imbalanced use of fertilizer. The pattern of fertilizer use is distorted to great extent. Data suggests extreme overuse of nitrogenous fertilizer, and to large extent it is due to under market price of nitrogenous fertilizer. The excessive use of nitrogenous fertilizer usage is sticking mainly in the irrigated area of the north zone. With declining ground water table over use of nitrogenous fertilizer may slow down the yield growth in future. We hypothesize both time series and cross section variation in yield and the factors influencing the latter across the states in India. Using a panel data, we investigate the yield of food grains, and assess the future impacts of increasing irrigated area and fertilizer usage. We have used annual time series and cross section data of 15 major states in India, which constitutes more than 95 % of the agrarian economy of India, for the period 1990-2001. Based on the regression results, we analyze the contribution of the different factors in the relative changes in yield growth. To get into further insights we also assess the contribution of the factors in relative change in yield in different zones of India, for instance North, South, East and West Zones.1 It is essential to project Indias future food production, as the current concern is to meet the food demand of the increasing population. The proportion irrigated area, fertilizer usage and gross cropped area are determined using a quadratic time trend of the last decade; and then based on the regression results and time trend values of the factors, we project the yield of food grains in 2010, 2025 and 2050. The structure of the paper is as follows. In the first section, we discuss about the past agricultural scenarios .In the next section, we explore the yield of food grains and the relative contribution of the factors in changing its growth. In the fourth section, we make future projections of yield and food production. Finally, the last section summarizes the findings and results of the paper.

32

Changing Grain Orientation

With technologies developments in agriculture and rising demand of non-food grain, traditional farming is changing into modern commercial farming. From a very generalized perspective, Indian agriculture is increasingly getting influenced more and more by economic factors (Hazra 2000). This is not surprising because development of irrigation driven by groundwater expansion, infrastructure development, development and spread of short duration and drought resistant crop technologies have all contributed to minimizing the role of non-economic factors in crop choice of even small farmers (Hazra 2000). In the last decade, we have observed a decrease in grain orientation and diversification in crops. Crop diversification is intended to give a wider choice in the production of a variety of crops in a given area so as to expand production related activities on various crops and also to lessen risk. Between 1990-91 and 2000-01, around 4 percent of the gross cultivated area (GCA) representing approximately about 6.7 million hectares (m/ha) - has shifted from food grain crops to non-food grain crops. Among the food grain crops, the area under superior cereals, i.e., rice and wheat, is increasing; while that of coarse cereals (millets) is on decline. While cereals and pulses have lost area, the major gainers of this area shift are the non-food grain crops especially oilseeds. If we look at the grain orientation of agriculture defined as a ratio of gross cropped area 33

for food grain to total cropped area, we observe a declining trend. Grain orientation of agriculture during the last decade has decreased from 71% to 67%. Most of the change in grain orientation, however, is taking place under rained conditions to reduce the risk factor of crop failures due to drought or less rain. Although comparative advantage, yield difference and crop rotation considerations often favour diversification in irrigated areas.

Fertilizer Usage
With ground water tables declining, there are growing pressure to increase the yield. The key factor behind high yield growth could be the development of new technology that will produce higher yields per hectare, and fertilizer remains a key player in this most important task as it has been in the past. However, fertilizer application should be optimum in quantity to meet the crops nutrient requirement fully so as to achieve the set yield target. Table 2.8 shows the usage of fertilizer per hectare of gross cropped area in year 1990-91.The table illustrates significant difference in the consumption of fertilizer in the irrigated and rain fed area. Mainly, the nitrogenous fertilizer usage is almost double in the irrigated area than in the rainfed area. The pattern of fertilizer use is distorted to great extent. On the basis of agronomic efficiency the ratio of N: P: K should be 4:2:1, whereas usage is 8:3:1 in irritated area and 8:4:1 in the rain fed area. The distortion in the pattern of fertilizer usage is caused by under price of nitrogenous fertilizer (Ahluwalia 1996). There is substantial subsidy on both domestic production and imports of nitrogenous fertilizer, while the prices of phosphatic and potassic fertilizers are largely market 34

determined. The excessive use of nitrogenous fertilizer usage is sticking mainly in the irrigated area of the north zone. With declining ground water table over use of nitrogenous fertilizer may slow down the yield growth.
Consumption of fertilizer per hectare of gross cropped area (kg) Irrigated Irrigated rain fed Total N P K Total 85.5 33.1 10.1 128.8 43.9 22 5.7 71.5 66.6 28 8.1 102. 8

Table 1.1: Usage of fertilizer per hectare of cropped area during 2001; Source: Fertilizer Association of India Government of India Note: N-nitrogenous fertilizer, P- phosphatic fertilizer and K- potassic fertilizer

Zones Nutrient N P K Total N P K Total N P K Total

East

North

Consumption (' 000 tonnes) 2002-03 Kharif Rabi Total 743.5 810.8 1554.4 262.5 347.6 610.12 153.1 230.2 383.26 1159 1389 2547.7 1861 2481 4341.5 380.5 919.2 1299.7 58.04 141.9 199.92 2299 3542 5841.1 1030 1133 2163 452.6 484.5 937.1 315.9 338.3 654.22 1799 1955 3754.3

South

35

West

N P K Total

1268 620.1 187.6 2075

1148 551.8 176.2 1875

2415.3 1171.9 363.76 3950.9

Table 1.2: Total consumption of fertilizer in different geographic zones during 2002-03 Note: N-nitrogenous fertilizer, P- phosphatic fertilizer and K- potassic fertilizer Source: Fertilizer Association of India Government of India

Projection
The challenges facing Indian agriculture today are more serious, complex and exceed those that we encountered prior to the Green Revolution period. India faces the growing challenge to meet the food demand of increasing population. In this paper, we project from the supply side, the potential food production in future. Based on the estimation results and the projected values of the explanatory variables, we project the yield of food grains of India in year 2010, 2025 and 2050. The time dimension for the projections has also been adopted by both National Commission on Integrated Water Resource Development Plan (NCIWDP) and the Indian Water resource Society (IWRS). A longer time frame with target year, 2050 has been chosen as many water development projects involve a long gestation period, while a shorter time span with 2025 as a target year has been chosen to allow institutional changes in Indian irrigation scenario. Year 2010 represent closer to present scenario as much growth in factors

36

influencing irrigation are not expected to take place during the next five years.
From the regression results, we have determined the marginal effect of the factors influencing yield of food grains. The growth rates of proportional irrigated area, usage of fertilizer per hectare of cropped area and gross cropped area are determined using a quadratic time trend from the last decade. Then using the regression results explaining the yield, we project the latter. Such estimation procedure has been taken to achieve realistic and reasonable growth rates of the factors determining irrigation intensity.

Variable Irrigation Coverage Consumption of Fertilizer per Ha of cropped area (AP) Gross cropped area of food grains

constant
0.0193

trend
-0.0001

Trend-sqr
0.2542

3.3013

-0.0198

110.4969

187.6321 Table 4.1: Regression Results: Quadratic time trend

-7.024

121410.2

Table 4.2 shows the different scenarios that may guide the development of irrigated water demand in India in future. The first scenario, which may be looked as a business as usual scenario, illustrates the growth of the factors based according to the time trend during the period 1990-2000.Such scenario is plausible with no major changes in the government agricultural and irrigation policy in the next 45 years. In a longer time frame, many may view this as unreasonable given India had experienced two major structural economic policy changes in the first fifty years of its independence. Keeping the possibility of some changes in policy with the potential of altering the factors responsible for changes in irrigation intensity, we have developed alternative scenarios. The alternative scenarios are developed based on the faster rate of change the factors, irrigation coverage (GIAfg/GSAfg), fertilizer usage per hectare of cropped area.2

In the last decade groundwater irrigation has played a crucial role in influencing the net irrigated area and meeting the irrigated water demand of India in the past. With good groundwater governance, and higher productivity of groundwater, the contribution of groundwater may increase in future. The role of surface water irrigation may also increase with the implementation of national interlinking of rivers project. In the fourth scenario analysis, we assume a 50% per year faster growth in irrigated coverage. The second scenario assumes the condition if the growth of fertilizer consumption is 50% faster per year, with all other factors
2

37

maintaining the time trend. In the final scenario, we consider the case where both the factors may change at a faster rate specified by scenario 2and 3. Scenario 1 Scenario 2 Scenario 3 Scenario 4-all factors changing Both factors changing more than time trend.
Table 4.2: Description of scenarios

Proportional irrigated area for food grain and consumption of fertilizer per hectare is changing according to the time trend The rate of increase in the proportional irrigated area for food grain is 50% more than time trend. The growth rate of fertilizer per hectare of cropped area is 50% more than time trend.

In the past, Indias groundwater irrigation has played an influencing role in increasing the irrigated area. According to the time trend, the growth rate of proportional irrigated area for food grains driven by groundwater irrigation would be 2.82% in 2010,1.64% in 2025 and 0.62% in 2050,and at those growth rates the irrigation coverage would be 48%, 59% and 67% respectively. The growth assumes no major changes in surface water. However, if we assume 50% higher growth rate in irrigation coverage for exogenous reasons, the proportional irrigated area for food grain (GIA-fg/ GSA-fg ) will increase to 0.88 in 2050. Our projection suggest in India, consumption of fertilizer usage will increase at the rate of 2.94% in 2010,1.17% in 2025 and by 0.63% in 2050 following the 1990-2000 time trend. Given such growth rate, the fertilizer usage per hectare is expected to be 195 and 226 kg per hectare in 2025 and 2050 respectively. In the scenario with 50% higher growth rate the corresponding figures would be 237 in 2010 and 284 in 2050.

Year

Irrigation Coverage

Consumption of Fertilizer per Ha of cropped area (AP)

2.82 2.94

Gross cropped area of food grains

2010

0.19

38

2025 2050

1.64 0.62 Table 4.3: Growth rate according to time trend

1.17 0.63

-0.26 -1.09

Scenarios

Irrigation-GIAfg/GSAfg

Fertilizer per hectare of gross cropped area

Yield of food grains

2010 Scenario 1 time trend Scenario 2proportional irrigated area changing at a faster rate Scenario 3consumption of fertilizer changing at faster rate Scenario 4-all factors changing at faster rate

2025

2050

2010

2025

2050

2010

2025

2050

0.48

0.59

0.67

165.58

195.20

226.57

1.84

2.15

2.41

0.59

0.76

0.88

171.09

203.67

238.18

2.12

2.58

2.97

0.48

0.59

0.67

193.12

237.56

284.61

1.87

2.21

2.50

0.59

0.76

0.88

195.88

241.79

290.41

2.16

2.65

3.09

Table 4.4: Projected values of proportional irrigated area of food grains, consumption of fertilizer per hectare of cropped area and yield of food grains during 2010, 2025 and 2050.

Projected values
Given the projected irrigated area of food grains and fertilizer consumption, we have estimated the yield of India in 2010, 2025 and 2050. In 1999-2000 the average yield of food grain of India was 1.67. Our projection results suggest that under business as usual scenario,

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yield of food grain will increase to 1.84 in 2010 and to 2.41 in 2050. In scenario 2 with higher contribution of irrigation, the yield will increase to 2.97 in 2050. Higher change in fertilizer consumption alone, however, would not change the projected yield much. Faster development in irrigation will induce higher usage of fertilizer, and in scenario 4 with both factors changing at a faster rate, the average yield would be 3.09 in 2050. In the recent past, we observe not much change in the gross sown area of food grains. In fact, the average gross sown area for food grains was 127 million hectares during 1980-1990 and it has reduced to 123 million hectares in 1990 2000.Our projection, based on time trend, suggests that the gross sown area of India will increase slowly till 2010 and then it will start declining. Taking those growth rates as described in table 4.5 the gross sown area would be 128 million hectares in 2010, 125 million hectares in 2025 and in 2050 it would be 112 million hectares. With attainable increase in irrigation and fertilizer according to time trend, the production of food production will be around 271million tons in 2050 and according to higher growth rate scenario the production of food grains would be 322 and 334 million ton in 2025 and 2050 respectively. This is a supply side projection. India s consumption of food grains can change dramatically as economy grows. As projected, if more land is brought under irrigation, then farmers would response more to economic factors like price, and we could expect a projection figure. year GSAfg Production of food grains According to time trend Production of food grains if the growth of irrigation is 50 % more per year.
271.89 322.65 334.79 of food grains in 2010,

2010

128.25 235.98 2025 125.06 268.88 2050 112.72 271.65 Table 4.5: Projected values of gross sown area and production 2025 and 2050.

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Conclusion
From the above analysis it is evident that supply response of food production is greatly influenced by irrigation and fertilizer usage. Irrigation is a crucial factor for reducing the fluctuation in food production in last decade. It is however, true that now with over 50% of the area under rained, rainfall is still one of the most important factors determining average yield. Due to vagaries in rainfall, we observe fluctuation in yield. In year 2000 out of 89 million tonnes of rice production nearly30 million tonnes are produced in the unirrigated area. In case of wheat, out of 56 million tonnes only 6 % of the total production comes from rain fed area. There is also a growing concern about the growth rate of yield. In the period 1980-1990, yield of food grain was increasing at 3.2% per year but in the next decade the growth has slowed down to 1.7%. The slow growth in yield may be contributed by declining ground water table, salinity intrusion and over use of fertilizer. This slow growth of yield is prominent in the north zone where growth in food grain yield is not significantly higher compare to other geographic zones. This is also the region where fertilizer usage is very high and contributes more than 30% of the relative change in yield. In the paper, we have projected the future food production of India. Our methodology is based on sensitiveness of the factors, aided with quadratic time trend of those factors. Projection according to time trend only suggests that the food production of India will be 268 million tonnes in year 2025 and it will not change much after that. It means food production will increase by 3.42 metric tonnes per year. According to a projection study by Kumar et. al, the cereal demand is expected to be 296 metric tonnes in 2020. Given the time trend, India would be deficient in food production. However, if the growth of irrigation is 50% more, then India could enjoy self-sufficiency in food production. The projection results indicate that there is need of a policy to achieve a higher irrigation growth to meet the growing food demand and to sustain the self-sufficiency in food production. (Incomplete)

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Appendix: Table A.1: States and the geographical zones

North Punjab Haryana Uttar Pradesh Himachal Pradesh East Assam Bihar Orissa West Bengal Karnataka Kerala Tamil Nadu Andhra Pradesh Madhya Pradesh Rajasthan Gujarat Maharashtra

South

West

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Agricultural Technology
The era of modernization is viewed in the entire sectors especially in the agriculture sector. Gone are the days when farmers meant a poor man laboring hard to meet his needs. In the modern times, farmers are equipped with agriculture technology that is latest and trouble free. With the entry and increasing influence of the science in the traditional farming, the agriculture industry of the nation is celebrating green revolution each moment. The new technologies have helped in utilizing even the small land into loads of profit making source. Farmers whether small or big are getting more and more aware of the fact that technology is very beneficial to them and the future of the agriculture industry. The technology has resulted into the many innovative equipments that have reduced time and energy invested in to the farming. The newest tractors are capable of plowing big piece of land at the swiftest speed and less consumption of the fuel. Also, for harvesting there are several new equipments that have reduced man power and burden. Also, agriculture technology has revolutionized the irrigating methodology. Now water is easily distributed to the remotest parts with the tunnels especially in dry and hilly areas. The booming agriculture technology serves with the latest ploughs that are light in weight and superior in quality level. Apart from cropping machines and tools, technology has made farmers to use the weather and conditions in intelligent manner. The witty style of farming reduces the losses in the farming and eliminates dependency over weather for farming. Agriculture technology is based on the scientific researches of experts and botanist who have guided the path to the modernization. Also it is all due to new technologies that are awaking farmers to cultivate new crops like bio diesel apart from the traditional horticulture and crops ultimately making farmers rich. The tardiest pesticides including chemical and organic are result of the upgrading agriculture technology. The agriculture technological enhancements have also compelled the retail sector to join the agriculture sector. In the recent developments, like western countries, in developing nations like India, several MNC and retail tycoons have intruded the trade. They all have been emphasizing on the most advance technologies for agricultural that does well to farmers. Govt. of all countries has realized the potential of the agriculture sector and that is why several policies are being implanted that is favorable for agriculture. If the agriculture technology keeps on advancing at same momentum the day is near when, agriculture will retain the old glory and triumph of past in no matter of time 44

Agricultural Products
Agriculture is a broad space that comprises multifarious streams like animal husbandry, traditional farming, horticulture and many more. The best thing is that all the streams are making money at high scale by serving countless agricultural products. These agriculture products are available in great variety and have appealed the masses very much. Following are some of the named from the gamut of agriculture products Food the main focus of the agriculture is to serve the food. The food is comprised of milk to meat, vegetables, fruit and fruit juices and many others. In market there are variety of food like dehydrated food, canned food, processed food and many others demanded in great scale. Medicinal Farming of herbs for medicinal prospects is also hugely demanded. Even cosmetics are made by herbal ingredients. Drugs are made by floras like neem and other and that is why this sort of farming is encouraged. Animals Husbandry is integral part of agriculture yielding products like meats, pets, and many more. Products like dried meat, leather for clothing and shoes, milk products etc are globally known. Fish farming and poultry farming is giving ample opportunity to all the classes of the society. Machineries Agriculture products comprise tools and equipments used for the landscaping and other purposes. The innovative tractors, harvesting machines are lessening the burden of the farmers. That is why it presumed that marketing agricultural products is going to be very profitable. At agriculture-industry one is facilitated to enhance ones business range with the names of the agro sector serving all the kinds of agriculture products. Also one can send queries and trade leads to the desired destinations. Agriculture-industry. Is the finest place as whole database is available in the simplest manner that saves ones valuable time and energy. Agriculture-industry is getting countless hits regarding agriculture products that show the reliability and accountability of agriculture-industry.

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Research & Development

In countries like India, the backbone of the economy is the agriculture. The agro sector is the dominant part that serves more than a half a percent of direct and indirect employment to the masses. However the traditional agricultural practices have not changed and that is why the need of the research and development was realized for the betterment of this sector. Green revolution few decades ago was only possible because of use advance agricultural practices at the time. Since then, the govt. set up ministries and boards especially for the research and development. Apart from the govt. authorized research and developments there are numerous organizations that carry out researches for the up gradation of agriculture. However its a tough ask to introduce new techniques for agriculture sector as very few of them are capable to meet up the expectations of farmers and masses as well. One of the prime are of research is to cultivate hybrid crops that grows abundant in a small piece of the land. The traditional crops are good but not grow not in that much quantity that is profitable for the farmers. Thence, researches main focus is to harvest the original quality of crops in plenty of amount. There have been several successes in these, as today we have high quality rice and other cops supplied to all over the globe. Also research is carried about the money making crops like herbs, bio-fuels and others. The research is about the good and bad of this farming as there is great demand of such crops at international marketplace. Also, there are several other researches and developments are taking place for example the renovating the traditional plowing tactics. It was seen that weather dependency very much has affected the local farmers. The newest researches say that not only farmers will be less reliant on the weather but will invest lesser energy for cropping same fields. The recent developments have been observed all around the nation, the latest machinery and techniques have reduced the burden of the hard working farmers. Farmers are getting aware and are conscious about the quality level of the crops. Even they are going to the help centers for any query or else. They are using the bio-fertilizers over the chemical ones and are assisted by the biotechnologies. Farmers who have adapted the modernization are making good money as they know which crop to cultivate that is best for them. Such a towering uplifting of agriculture was possible due to the ongoing research and developments by the govt., managed by world class experts and botanists.

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The Future of Agriculture Depends on Biodiversity

On World Food Day 2004, FAO stresses that safeguarding and using the potential and diversity of nature is critical for world food security Scientists have identified about 1.4 million unique species of plants and animals on the planet -- so far. Nearly every day, it seems, a new species is added to the list. This variety of life is essential to human existence. We depend on it for food, water, energy, shelter, and in numerous other ways as well. But as the planet's human population continues to expand, this biodiversity is coming under increasing threat. The most visible harm is caused by damage to natural habitats. Wild species become extinct when the places where they live are destroyed. Pollution, urbanization, deforestation and conversion of wetlands force out wildlife. Mismanagement of agriculture, forestry and fisheries can further accelerate this destructive process. At the same time, over 40 percent of Earth's surface is comprised of agricultural lands -biodiversity is just as important on farms and in fields as it is in deep river valleys or mountain cloud forests. This agricultural biological diversity consists of countless farmed plants that feed and heal people, crop varieties and aquatic species with specific nutritional characteristics, livestock species adapted to harsh environments, insects that pollinate fields and microorganisms that regenerate agricultural soils. But on the farm, too, biodiversity is at risk. Humankind increasingly depends on a reduced amount of agricultural biological diversity for its food supplies. Worrisome trends Some 10 000 years ago, humanity began a great experiment. Using the natural biodiversity around them, they started harvesting wild seeds and plants and domesticating them, choosing those varieties that yielded the most food, or the best rope, or which did well even in drought years. Around the same time, they began domesticating animals as well, harnessing their power, eating their meat and drinking their milk. The diversity of the plants and animals the first farmers had to work with allowed them to select strains of plants and breeds of animals specifically tailored to meet specific needs. Today, genetic diversity remains essential for the continued sustainability of world agricultural production.

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Farmers and agricultural scientists need it in order to adapt plants to changing conditions or expand production in new, previously unfarmed areas. The hidden genetic diversity of plants holds the key to improved yields, and crops that not only produce more to eat, but more nutritious food as well. Yet currently, four plant species -- wheat, maize, rice and potato -- provide over half of plant-based calories in the human diet, while around a dozen species of animals provide 90% of the animal protein consumed globally. Beyond the number of species used to produce food -- known as species diversity -genetic diversity within species and populations is crucial as well. Demand from a growing, urbanized population, however, has encouraged many farmers to adopt uniform high-yielding types of plants or animals. When food producers abandon diversity, varieties and breeds may die out -- along with specialized traits. Diversity brings benefits This rapidly diminishing gene pool worries experts. Having a broad range of unique characteristics allows plants and animals to be bred to meet changing conditions. It also gives scientists the raw materials they need to develop more productive and resilient crop varieties and breeds. In those places where hunger is worst, the resource-poor countries of the developing world, farmers may be more likely to need crops that grow well in harsh climates, rather than strains that yield well under good conditions, or animals that are smaller but possess higher resistance to disease. Indeed, for the poorest farmers, the diversity of life may be their best protection against starvation. Consumers in the developed and developing world alike also benefit when they have access to a wide choice of plants and animals. This contributes to a nutritious diet, particularly important for rural communities with limited access to markets. Finally, with plants, animals and their environments left intact, a range of essential services provided by nature are preserved. Livestock, fungi and micro-organisms decompose organic matter, transferring nutrients to the soil. Ants and other insects control pest populations. Bees, butterflies, birds and bats pollinate fruit trees. Swamps and marshes filter out pollutants. Forests prevent flooding and reduce erosion. In the ocean, intact ecosystems help keep fish populations stable and healthy, ensuring tomorrow's catch. Guaranteeing the future To feed a growing population, agriculture must provide more food. It will also be essential to increase its resilience by protecting a wide array of life forms with unique traits, such as plants that survive drought or livestock that reproduce in harsh conditions. Sustainable agricultural practices can both feed people and protect the oceans, forests,

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prairies and other ecosystems that harbour biological diversity. Global efforts to conserve plants and animals in gene banks, botanical gardens and zoos are vital. But an equally important task is to maintain biodiversity on farms and in nature, where it can evolve and adapt to changing conditions or competition with other species. As custodians of the world's biodiversity, farmers can develop and maintain local plants and trees and reproduce indigenous animals, ensuring their survival. To learn more about agricultural biodiversity and how FAO is working with countries around the world to preserve it, read the related articles that make up this Focus on the issues package, linked to the right.

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POSSIBILITY OF REDUCING COSTS AND MARGINS POLICY IMPLICATIONS

The major problem areas for reduction on marketing costs and margins are different by regions and by commodities. Therefore, any diagnosis of policy measures to be taken should be specific to the particular region and to a particular produce. However, it is possible from the most common problem areas in the agricultural commodity marketing system, which draws particular attention. These are transportation, processing, and physical losses and dealers margins. TRANSPORTATION Transport is the most significant marketing cost component in almost all commodities. A well developed and efficient system of transport helps in expanding the size of the market reduces transit time and economies cost of transportation. In India, Railways play a crucial role in food grain transport. However, it has been noted that the Railway system is faced with the problem of transporting the procured food stocks from the surplus states to the deficit states on time, which accentuates storage problems in such states. Further, there occur significant losses in quality and quantity at railway platforms in food grains needing transportation by road to long distances is not significant as transportation is important for transportation to the market, from market to godowns and from godowns to the railway station for dispatch to deficit areas. On the whole, the transport facilities for inter-state movement of food grains are inadequate. Transport system for perishable is very costly, time consuming and sub-standard. Transport costs can also the reduced through car lot shipment for which there must be enough quantity of cargo to charter at least one wagon or truck and to use it on a regular basis. This can be done most effectively under group marketing arrangement. Efficient use of return oading capacity, if planned well, will also reduce the transport cost. Removal of various official or semi-official levies and road taxes which truck drivers and cargo owners must pay will also make substantial contribution to reducing transport costs. PROCESSING

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Processing is also found to be one of the significant cost items in marketing. All major agricultural commodities, namely, cereals, fibres, pulses and oilseeds, require processing before consumption. There is an increased trend towards processing to raise their demand to improve quality of the product-mix. For example, export of pineapple from Arunachal Pradesh will not be economical, but export of pineapple juice concentrates will be paying. Reduction in processing costs is directly related with the increase in processing efficiency. In the case of fruits and vegetables, commercial processing is becoming increasingly improvement in view of the steadily increasing demand for processed foods. However, the foods and vegetable processing industry has a relatively inefficient production technology, high cost of containers, and high taxes. No wonder due to these handicaps, the quantity processed as percent of marketed surplus is less than one percent of marketed surplus is less than one percent for mango , citrus , tomato , onion and potato and slightly more than one percent for pineapple and apple. Also, development of modern dairy and poultry farming critically depends on the supply of processed feed items. Again, as already discussed elsewhere, competitiveness in the export market for agricultural commodities will critically depend upon the extent of agro-processing. Hence policies designed to reduce processing costs should receive highest priority in sgricultural development strategy. PHYSICAL LOSSES Another important cost element is physical losses, which result from spoilage, contamination, attack by insect, birds and deterioration in storage. The Expert Committee of the Govt. of India on Assessment of Losses of Food grains during the post-harvest handling has estimated the losses. The field losses in fruits and vegetables are estimated to be 6 to 8 percent. The losses in marketing orange between 1.5 to 2.0 per cent at wholesale level and 6 to 8 percent at the retail level. Further, there are losses to the extent of 2 percent in transportation. Some losses due to driag might amount to 10 per cent in certain cases. It would also be pertinent to point out that the losses in fruits and vegetables are much higher in summer than in winter as decomposition sets in much more rapidly in summer season leading to quality deterioration of the produce. On the whole, the total losses in fruits and vegetables vary from 25 to 30 percent from producer to consumer depending upon the 51

nature of the product, the distance involved, the type of the package and the mode of transport, etc. DEALERS MARGINS The most significant portion of marketing costs and margins constitutes dealers margins in most of the commodities. This is mainly due to the clubbing of different marketing function, such as financing and risk bearing under dealership. A recent F.A.O study on marketing costs and margins for fertilizers in developing countries showed that interest on capital tied up in stocks is a major cost item amounting to 20-50% of the total marketing cost in a number of countries. It indicates that financing of stocks has to be carefully reviewed. More efficient stock management, for example, faster turnover, timely subsidy payment by governments and easier access to institutional credit, could help to bring down capital costs and dealers margins. Again, high incidence of taxes levies on trade, paucity of market intelligence, and frequent changes in government policies necessitate a higher risk premium on the part of market intermediaries. Policies to reduce such levies and sharing of market intelligence with trade would result in reducing marketing costs. Method of reducing dealers margin is through the policy of promoting completion among dealers. This may be achieved through more efficient dealers. This may be achieved through more efficient sealers licensing system, easy entry to business, increases in number of wholesale and retail markets, improvement of the efficiency in the operation and management of these markets and accelerated turnovers.

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Policy For Further Improvement

Regular review of marketing costs and margins with particular reference to adequacy of services and cost is essential for increasing efficiency and effectiveness; as also to mount more meaningful action programmers in future. Marketing Extension. Small farmers require more advisory service than large farmers. In the case of farmers can become agronomic and marketing principles and is given enough incentive to promote fertilizer application. Margins for retailers are, therefore tube adequate to compensate for additional efforts required. Similarly not grudge the additional cost of training small producers in the proper grading and packing of their produce, as the gained from these services will far outweigh the cost. Vertical integration. Careful scrutiny of the logistics of distribution for a number of commodities reveal reduced by straight shipment to final retailers, so also with fruits and vegetables, trans-shipment and losses can be minimized through direct access to retail outlets or processing facilities. To cite an example, to secure or processing facilities. To cite an example, to secure an optimum quantity of sugar from cane, Maharashtra cooperative sugar mills carry in the cane is assessed before harvesting field by field and only mature cane is crushed. This has been made possible by the mills themselves harvesting the cane according to optimum maturity standard, and transporting the same to the mills according to their requirement, instead of individual farmers doing it. This has resulted in significant improvement in sugar recovery from cane. These, however, require a vertically well integrated marketing system with adequate incentives at each level for seasonal and volume discounts to encourager group marketing according to desired schedules. This contributes to minimizing unit marketing costs and margins.

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Marketing Channels AgriMeaning: Farmers producing agricultural produce are scattered in remote Knowledge villages while consumers are in semi-urban and urban areas. This produce has to reach consumers for its final use and consumption. There (Agricultural Marketing) are different agencies and functionaries through which this produce Storage and Warehousing passes and reaches the consumer. A market channel or channel of distribution is therefore defined as a path traced in the direct or indirect transfer of title of a product as it moves from a producer to an ultimate consumer or industrial user. Thus, a channel of distribution of a product is the route taken by the ownership of goods as they move from the producer to the consumer or industrial user. Factors affecting channels: There are several channels of distribution depending upon type of produce or commodity. Each commodity group has slightly different channel. The factors are : Perishable nature of produce .e.g. fruits, vegetables, flowers, milk, meat, etc. Bulk and weightcotton, fodders are bulky but light in weight. Storage facilities. Weak or strong marketing agency. Distance between producer and consumer. Whether local market or distant market. Types of Market Channels: Some of the typical marketing channels for different product groups are given below: Channels of rice: Producermiller->consumer (village sale) Producermiller->retailerconsumer (local sale) Producerwholesaler->millerretailerconsumer Producermillercum-wholesaler-retailer-consumer Producervillage merchantmillerretailerconsumer Producergovt. procurementmillerretailerconsumer Channel of other foodgrains: Producer consumer (village sale) Producervillage merchantconsumer (local sale) Producerwholesaler-cum-commission agent retailerconsumer Producerprimary wholesalersecondary wholesaler retailer Consumer ProducerPrimary wholesalermillerconsumer (Bakers). Producer->govt.procurementretailerconsumer. Producergovernmentmillerretailerconsumer. Channels of cotton: Producervillage merchantwholesaler or ginning factory wholesaler in linttextile mill (consumer) ProducerPrimary wholesalerginning factorysecondary wholesaler consumer (Textile mill) Producer Trader ginning factory wholesaler in lint consumer (Textile mill) Producergovt. agencyginning factoryconsumer (Textile mill). ProducerTraderginning factorywholesalerretailer consumer (nontextile use). Channels of Vegetables: Producersconsumer (village sale) Producerretailerconsumer (local sale) ProducerTradercommission agentretailerconsumer. Producercommission agentretailerconsumer

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Storage is an important marketing function, which involves holding and preserving goods from the time they ae produced until they are needed for consumption. Necessary

The storage of goods, therefore, from the time of production to the time of consumption, ensures a continuous flow of goods in the market. Storage protects the quality of perishable and semi-perishable products from deterioration; Some of the goods e.g., woolen garments, have a seasonal demand. To cope with this demand, production on a continuous basis and storage become necessary; It helps in the stabilization of prices by adjusting demand and supply; Storage is necessary for some period for performance of other marketing functions. Storage provides employment and income through price advantages.

Types Underground Storage Structures Underground storage structures are dugout structures similar to a well with sides plastered with cowdung. They may also be lined with stones or sand and cement. They may be circular or rectangular in shape. The capacity varies with the size of the structure. Advantages

Underground storage structures are safer from threats from various external sources of damage, such as theft, rain or wind. The underground storage space can temporarily be utilized for some other purposes with minor adjustments; and The underground storage structures are easier to fill up owing to the factor of gravity.

Surface storage structures

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Food grains in a ground surface structure can be stored in two ways bag storage or bulk storage.

I. Bag storage

Each bag contains a definite quantity, which can be bought, sold or dispatched without difficulty; Bags are easier to load or unload. It is easier to keep separate lots with identification marks on the bags. The bags which are identified as infested on inspection can be removed and treated easily; and The problem of the sweating of grains does not arise because the surface of the bag is exposed to the atmospheres.

I. Bulk or loose storage Advantages

The exposed peripheral surface area per unit weight of grain is less. Consequently, the danger of damage from external sources is reduced; and Pest infestation is less because of almost airtight conditions in the deeper layers. The government of India has made efforts to promote improved storage facilities at the farm level.

Improved grain storage structures I. For small-scale storage

PAU bin

This is a galvanized metal iron structure. It s capacity ranges from 1.5 to 15 quintals. Designed by Punjab Agricultural University.

Pussa bin

This is a storage structure is made of mud or bricks with a polythene film embedded within the walls.

Hapur Tekka

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It is a cylindrical rubberized cloth structure supported by bamboo poles on a metal tube base, and has a small hole in the bottom through which grain can be removed. I. For large scale storage

CAP Storage (Cover and Plinth)

It involves the construction of brick pillars to a height of 14" from the ground, with grooves into which wooden crates are fixed for the stacking of bags of foodgrains. The structure can be fabricated in less than 3 weeks. It is an economical way of storage on a large scale.

Silos

In these structures, the grains in bulk are unloaded on the conveyor belts and, through mechanical operations, are carried to the storage structure. The storage capacity of each of these silos is around 25,000 tonnes.

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Warehousing
Warehouses are scientific storage structures especially constructed for the protection of the quantity and quality of stored products. Importance

Scientific storage

The product is protected against quantitative and qualitative losses by the use of such methods of preservation as are necessary.

Financing

Warehouses meet the financial needs of the person who stores the product. Nationalized banks advance credit on the security of the warehouse receipt issued for the stored products to the extent of 75 to 80% of their value.

Price Stabilization

Warehouses help in price stabilization of agricultural commodities by checking the tendency to making post-harvest sales among the farmers.

Market Intelligence

Warehouses also offer the facility of market information to persons who hold their produce in them. Working of Warehouses

Acts: - The warehouses (CWC and SWCs) work under the respective Warehousing Acts passed by the Central or State Govt.

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Eligibility: - Any person may store notified commodities in a warehouse on agreeing to pay the specified charges. Warehouse Receipt (Warrant): - This is receipt/warrant issued by the warehouse manager/owner to the person storing his produce with them. This receipt mentions the name and location of the warehouse, the date of issue, a description of the commodities, including the grade, weight and approximate value of the produce based on the present prices. Use of Chemicals: - The produce accepted at the warehouse is preserved scientifically and protected against rodents, insects and pests and other infestations. Periodical dusting and fumigation are done at the cost of the warehouse in order to preserve the goods. Financing - The warehouse receipt serves as a collateral security for the purpose of getting credit. Delivery of produce: - The warehouse receipt has to be surrendered to the warehouse owner before the withdrawal of the goods. The holder may take delivery of a part of the total produce stored after paying the storage charges.

Types of warehouse 1. On the basis of Ownership a. Private warehouses: These are owned by individuals, large business houses or wholesalers for the storage of their own stocks. They also store the products of others. b. Public warehouses: These are the warehouses, which are owned by the govt. and are meant for the storage of goods. c. Bonded warehouses: These warehouses are specially constructed at a seaport or an airport and accept imported goods for storage till the payment of customs by the importer of goods. These warehouses are licensed by the govt. for this purpose. The goods stored in this warehouse are bonded goods. Following services are rendered by bonded warehouses: i. The importer of goods is saved from the botheration of paying customs duty all at one time because he can take delivery of the goods in parts. ii. The operation necessary for the maintenance of the quality of goods - spraying and dusting, are done regularly. iii. Entrepot trade (re-export of imported goods) becomes possible.

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2. On the basis of Type of Commodities Stored a. General Warehouses: These are ordinary warehouses used for storage of most of food grains, fertilizers, etc. b. Special Commodity Warehouses: These are warehouses, which are specially constructed for the storage of specific commodities like cotton, tobacco, wool and petroleum products. c. Refrigerated Warehouses: These are warehouses in which temperature is maintained as per requirements and are meant for such perishable commodities as vegetables, fruits, fish, eggs and meat. Warehousing in India Central warehousing corporation (CWC) This corporation was established as a statutory body in New Delhi on 2nd March 1957. The Central Warehousing Corporation provides safe and reliable storage facilities for about 120 agricultural and industrial commodities. Functions

To acquire and build godowns and warehouses at suitable places in India. To run warehouses for the storage of agricultural produce, seeds, fertilizers and notified commodities for individuals, co-operatives and other institutions, To act as an agent of the govt. for the purchase, sale, storage and distribution of the above commodities. To arrange facilities for the transport of above commodities. To subscribe to the share capital of state Warehousing corporations and To carry out such other functions as may be prescribed under the Act. The Central Warehousing Corporation is running air-conditioned godowns at Calcutta, Bombay and Delhi, and provides cold storage facilities at Hyderabad. Special storage facilities have been provided by the Central Warehousing Corporation for the preservation of hygroscopic and fragile commodities. The corporation has also evolved techniques for the storage of spices, coffee, seeds and other commodities.

State Warehousing Corporations (SWCs) 60

Separate warehousing corporations were also set up in different States of the Indian Union. The areas of operation of the State Warehousing Corporations are centers of district importance. The total share capital of the State Warehousing Corporations is contributed equally by the concerned State Govt. and the Central Warehousing Corporation. Food Corporation of India Apart from CWC and SWCs, the Food Corporation of India has also created storage facilities. The Food Corporation of India is the single largest agency which ahs a capacity of 26.62 million tonnes.

PICTURE OF FUTURE AGRICULTURE

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MESSAGE:

IF WE CHOOSE AGRICULTURE FILED THEN THIS IS OUR RESPOSIBLITY THAT NOBODY IN THIS WORLD SLEEP WITHOUT FOOD.

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