rome 30-31 may 2008 dr amit mitra secretary general federation of indian chambers of commerce and...

Rome 30-31 May 2008

Dr Amit MitraDr Amit Mitra

Secretary General

Federation of Indian Chambers of Commerce and Industry (FICCI)

US $ 1 Trillion Economy

INDIA - Strong Macro Economic FundamentalsINDIA - Strong Macro Economic Fundamentals

3.5

5.7

6

8.89.6

8.7

0

2

4

6

8

10

Average Growth Rate (%)Average Growth Rate (%)

Improving Fiscal Situation


5.66.2 5.9

4.54 4.1

3.4 3.12.5

0

1

2

3

4

5

6

7

Fiscal DeficitFiscal Deficit

FDI Inflows on the Rise [US$ Million]

40296130 5035 4322

60518961

2207925455

0

5000

10000

15000

20000

25000

30000

Foreign Direct Investment (FDI)Foreign Direct Investment (FDI)


Rapidly Increasing Global Trade [US$ Billion]

0

50

100

150

200

250

1990-91 1995-96 2000-01 2005-06 2006-07 2007-08

Exports

Imports

306240

96

6942

392

Total trade


2.2 1754.1

146

313.53

0

50

100

150

200

250

300

350

1990-91 1995-96 2001-02 2005-06 25/04/2008


World’s Fourth Largest Foreign Exchange Reserves

US $ 313 Billion as on April 25, 2008

Forex ReservesForex Reserves

Agriculture in India

Contributes 18.5% to the National GDP

Provides Employment to Nearly 50% Workforce or

70% of Population

Second Largest Arable Land in the World. Highest

Arable Land to Land Size Ratio

Largest Irrigated Land Network

Favorable & Diverse Agro-climatic Conditions for a

variety of crops

INDIA - AgricultureINDIA - Agriculture

MilkLargest Producer

91 Mn T

F & V#2 in the world

129 Mn T

Food Grains#2 in the world

(218 Mn T)

Sugarcane# 2 in the world

(245 Mn T)

Cattle / buffaloesLargest in the world

283 million

FisheriesMarine: 2.7 Mn TInland : 3.1 Mn T

TeaLargest Producer

(0.85 Mn T)

Goat & Sheep182 million

WHEATWHEAT

RICERICE

INDIA - Agriculture INDIA - Agriculture

Dominating CropsDominating Crops

Food Grains Production (Million Tonnes)

INDIA - AgricINDIA - Agric ultureulture

RICE

95.68

76.78

39.67

11.13 15.19

9391.79

83.1388.82

71.8272.11

75.8169.35

68.6465.76

38.12 33.9234.0633.4626.07

14.113.3913.1314.940

20

40

60

80

100

120

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

WHEAT COARSE CEREALS PULSES

2007-08 figures pertain to III Advanced Estimates

227.32174.78

213.99

198.36

208.59

216.83

TOTAL FOODGRAIN

Commercial Crops Production (Million Tonnes)

INDIA - AgricultureINDIA - Agriculture

14.84

27.98

23.26

28.21

13.8716.43

18.5

23.19

11.63

25.29

24.35

8.62

21.04

11.28

11.23 11.3410.8410.27

0

5

10

15

20

25

30

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

OILSEEDS COTTON JUTE & MESTA

287.38237.31 237.09

281.17333.04

344.23

0

50

100

150

200

250

300

350

SUGARCANE

2007-08 figures pertain to III Advanced EstimatesCotton – Million bales of 170 kg each Jute & Mesta – Million bales of 180 kg each

Source: NSSO, 2005

3.0%

4.5%

5%

46%

64%

54%

1.5%

0.3%

1.0%

0.5%

0.5%

0.5%

1983 2000 2006

Allied sectors

Ag Services

Livestock

Crop production

Total = 68%

(207 M)

Total = 60% (238

M)

Food grain production (Mt) : 129 210 209

Acreage (M ha) : 125 123 122

Labor/ area : 1.6 1.9 2.0

Tractor Pop. (M) : 0.7 2.5 3.1

Total = 52% (250

M)

Need for Mechanization

INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery Sector

Even though Agriculture still Supports the Majority of Indian Population, Yet

Non-farm activities in rural areas are witnessing a rise in entrepreneurship and employment. As a result, number of people involved in agriculture is declining over the years.

Crop Diversification

Migration

To Achieve Higher Productivity

Monsoon Dependent (less Time lag for Manual Operations)

15 11 9 6 6 3

45

2717

10 82

7

2030

42 4750

0

0 0 1 12

1824 23 20 18

20

14 18 21 21 21 23

1971-72 1981-82 1991-92 2001-02 2005-06 2019-20

Ag worker Animal Tractor

Power Tiller Diesel Engine Electric Motor

Source: Indiaagristat.com, Zinnov Research, 2007, Vision 2020 India, John Derre

0.350.45

0.8

1.291.45

2.00

1971-72 1981-82 1991-92 2001-02 2005-06 2019-20

Percentage share of Power usage in Indian agricultural

sector

Total Power Consumption (kW/ha)

Changing Focus on Agri-mechanization - Automation


INDIA – Agriculture Machinery SectorINDIA – Agriculture Machinery SectorComparison of Mechanization with Other Countries, 2003

Sl. Sl. No.No.

CountryCountry Farm PowerFarm Power

(kW/Ha)(kW/Ha)

No. of Tractors No. of Tractors per 1000 Ha.per 1000 Ha.

No. of Combine No. of Combine Harvesters per 1000 Ha.Harvesters per 1000 Ha.

1.1. IndiaIndia 1.361.36 15.7515.75 0.0260.026

2.2. JapanJapan 8.758.75 461.22461.22 236.98236.98

3.3. U.K.U.K. 2.502.50 88.3488.34 8.308.30

4.4. FranceFrance 2.652.65 68.5068.50 4.934.93

5.5. ItalyItaly 3.013.01 211.08211.08 4.714.71

6.6. GermanyGermany 2.352.35 79.81779.817 11.4111.41

7.7. ArgentinaArgentina ---- 10.7410.74 1.791.79

8.8. BrazilBrazil ---- 13.6613.66 0.9150.915

9.9. ChinaChina ---- 6.986.98 2.532.53

1010 PakistanPakistan ---- 16.4716.47 0.080.08

1111 EgyptEgypt ---- 30.7030.70 0.790.79

Source: FAO Yearbook 2003

Indian Farm Equipment Market is expected to grow at a CAGR of ~5%

Indian Agriculture Farm Equipment Market is now widely exposed to International Trade

Favourable Factors:

Monsoon

Government Declared Support Prices for Crops

Supportive Credit Policy of Banks


6.66.94

7.37.68

8.08

0

2

4

6

8

10

in US

D

2006 2007 2008 2009 2010

Indian Agriculture Equipment Market

Usage Trends of Major Farm Equipment

1351

1465

1551

1614

1200

1300

1400

1500

1600

1700

in '

000

1994 1998 2002 2006

Number of Threshor

407

416

422

427

395

400

405

410

415

420

425

430

in '

000

1994 1998 2002 2006

Number of Harvestor

2782

6779

9602

11595

0

2000

4000

6000

8000

10000

12000

in '

000

1994 1998 2002 2006

Number of Reapers

78

101

116126

0

20

40

60

80

100

120

140

in '

000

1994 1998 2002 2006

Number of Maize Shellers



Use of Tractors has witnessed an increase of more than 78% since 1994

There are nearly 13500 tractors per million hectares at present in India

1540

2057

24502749

0

500

1000

1500

2000

2500

3000

in '

000

1994 1998 2002 2006

Number of Tractors

Tractors

Combines Migration - Rabi and Kharif

Wheat- From Punjab & Haryana to MP and Maharashtra (till end of March) and then to Haryana and UP (till 10th April).Return back to Punjab (by 15 Apr)

Combines Migration - Rabi and Kharif

Rice & Soyabean-From Punjab & Haryana to MP and Maharashtra for Soyabean(till Oct 15) and then to Haryana and UP for Rice (till Oct end).Return back to Punjab (by 1st week of Nov)

Future Requirements of Farm Equipments


Equipment for Seed Bed Preparation

Roto Tillage

Strip Till Drill

Zero Till Drill

Irrigation Equipments

Sprinkler Irrigation System

Drip Irrigation System

Surge Flow Irrigation

Plant Protection Equipments

Power Weeder

Plastic Mulching

Electro Static Spraying

Orchard Sprayer

Pneumatic Precision Planter

Sugarcane Sett Cutter Planter

Vegetable Transplanter

Potato Planter & Rice Transplanter

Harvesting & Threshing

Sowing and Planting

Strip Harvestor cum Reaper Windrower

Mechanical Cotton Picker

Grain Combine Harvestor

High Capacity Multicrop Threshor


Agriculture Machinery Trade (Million US$)

110.11

68.58

190.57

27.86

92.8465.6649.13

40.4

36.49

50.51

108.7184.79

50.8

37.590

50

100

150

200

250

EXPORTS IMPORTS

Requirement for Farm Mechanization

Farm Power Requirement by 2020: 2KW/Ha

Removal of Regional Disparities

Infrastructural & Institutional Framework

Adequate Engineering Infrastructure at Implementation Levels

Effective Training and Extension Service

Repair & Maintenance Facilities

Machinery Banks for Custom Hiring Services

Credit at Simpler Terms

Appropriate Farm Machines & Equipments

For Small and Marginal Land Holdings

Crop Specific & Quality Machines

For Hill Agriculture

Gender Specific

Policy Mandate

Training

Establishment of Four Farm Machinery and Technology Training Institute (FMTTI)

Demonstration

Large Scale Demonstration of Equipment at Farmers Field

Incentives for Purchase of Equipment

Subsidy Through MMA, NFSM, NHM and Similar Other Schemes Available to all Categories of Farmers

Incentives for establishment of Machinery Banks at Block Levels for Custom Hiring Services

Identification of Machines

Hill Agriculture

Gender frienfdly Tools and Equipments

Crop Specific Package of Machines

Policy Initiatives by the Government of India to Promote Farm Mechanization

Manufacturing Sector

De-reservation of Manufacturing of Agricultural Machines from Small Scale Sector

Training on Manufacturing Technologies Introduced

Quality of Machines

Minimum Performance Standards for Tractors, Power Tillers & Combine Harvesters Framed

Standard Specifications for All Machines

Equipment Promotion Through Subsidy: Testing by FMTTI or BIS certification is mandatory

Credit

NABARD Refinance available & Financing Norms Simplified

Agro Processing Sector

Scheme on Post Harvest Technology

Technologies Developed by ICAR / CSIR Promoted

Policy Initiatives by the Government of India to Promote Farm Mechanization

Rome 30-31 May 2008

rome 30-31 may 2008 dr amit mitra secretary general federation of indian chambers of commerce and...

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