Table Of Content© 2009, IMA India
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IInnddiiaann AAggrriiccuullttuurree
CChhaalllleennggeess aanndd PPrroossppeeccttss
IMA India
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DDiissccllaaiimmeerr
This document has been prepared by International Market Assessment India Private
Limited. It provides an analysis of the key challenges facing the agricultural sector in India
and IMA’s assessment of the sector’s prospects in the years ahead.
This report is not intended for decision making purposes. Whilst the information contained
in the following pages is accurate to the best of our knowledge and belief, IMA India cannot
assume any responsibility for the outcome of actions initiated, or decisions taken, as a
result of this document. Moreover, IMA’s assessment is based on conditions as they
existed at the time of writing this report, and these may no longer be applicable consequent
upon changes in political, economic or trade conditions within the Republic of India or
elsewhere.
The contents of this report are the intellectual property of IMA India and are copyright
protected. Unauthorised copying, reproduction or distribution of the information contained
in this report would amount to an infringement of law and would invite applicable penalties,
as per Indian laws.
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CCoonntteennttss
1. About IMA India 4
2. The Scenario Planning approach for building 7
strategy: an overview
3. Indian Agriculture: challenges and prospects 12
4. Summary and drawings 40
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UUnnddeerrssttaannddiinngg tthhee ddrriivveerrss ooff aaggrriiccuullttuurree
Policy
factors
• The performance of the agriculture Macro-
economy
sector depends on several drivers,
which, rather than impacting the
Market Global
forces factors
sector in isolation, interact with each
other and also depend on sub-
drivers, consequently strengthening Climatic
Technology factors
or weakening specific trends
• The key drivers that directly impact
Performance of the agriculture sector
output can be grouped into 6 categories
– Technology (farming and crop technology)
– Government policy (availability of credit, crop specific programmes, etc)
– Cropping pattern (which depends on profitability, awareness, etc)
– Environmental factors (water availability, soil degradation, climate change, etc)
– Market forces (market openness, pricing, transparency, integration with
downstream sectors)
– Global factors (supply-demand, trade norms and restrictions, etc)
Source: IMA research and analysis wwwwww..iimmaa--iinnddiiaa..ccoomm
© 2009, IMA India
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BBuutt tthheeyy ccaannnnoott bbee eexxaammiinneedd iinn iissoollaattiioonn……
One factor alone – cropping patterns – is a function of several
inter-related drivers and sub-drivers
Cropping pattern Cropping intensity Changes in land use Input usage
intensity
Profitability Irrigation Quality of land New crop Awareness Contract farming
technologies
Market price Yield Cost of cultivation Availability of Crop-specific Contract
credit/insurance programmes farming
Demand Input usage Labour cost
supply (fertiliser, seed, CP Govt policy on
Input cost Food retail
situation products, etc) rural finance Govt policy on
crop focus
Market Cost of fertiliser,
Technology
openness electricity, water, Penetration of Economic
(Hybrid, GM crops,
etc financial sector Demand
growth
etc)
Govt policy supply
on trade Cost of living Penetration of situation
Urbanisation
Economic (CPI AL) media/IT
growth Procurement Political
by food Alternative outlook
Public & private Policy on CF
Consumption processing occupation
investment in R&D
pattern industry
Migration
Source: IMA research and analysis wwwwww..iimmaa--iinnddiiaa..ccoomm
© 2009, IMA India
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IInnddiiaann aaggrriiccuullttuurree iiss nnoott ‘‘oonnee’’ ccoonncceepptt
• The dynamics for each crop are different in each state –
yields, acreage, farmer awareness and psyche, cost
structures, Government infrastructure
– Upstream issues vary substantially – labour availability, credit,
soil fertility and agronomy, irrigation, input and technology
availability, training
– Downstream markets are even more varied across states and
crops – market openness, procurement chains, processing
infrastructure, food retail, etc
HHeennccee,, tthheerree iiss aa nneeeedd ffoorr aa ggrraannuullaarr aasssseessssmmeenntt ((bbyy
ccrroopp,, bbyy ssttaattee//rreeggiioonn,, bbyy iissssuuee)) iiff aa bbuussiinneessss oorr
iinnvveessttmmeenntt ddeecciissiioonn iiss aatt ssttaakkee
Source: IMA research and analysis wwwwww..iimmaa--iinnddiiaa..ccoomm
Description:It provides an analysis of the key challenges facing the agricultural sector in India
. Cost of cultivation. Crop-specific programmes. Profitability. Contract farming.
