The Difference Between Information & Knowledge · Key Statistics At 196.90 million hectares, India holds the 2 nd largest agricultural land in the world Accounts for 12 % of the nation’s

Confidential- For Kagashin clients only May, 2014

The Difference Between Information & Knowledge

INDIAN AGRICULTURE


Table of Contents

• Agrochemicals - Overview - Segments - Consumption - Growth Drivers - Top Companies - Key Challenges

• Insecticides, Fungicides & Herbicides

- Demand Pattern In Indian Market - Insecticides Market Share - Fungicides Market Share - Herbicides Market Share • Fertilizers - Overview - Consumption - Fertilizer – Indian Scenario

- Usage - Efficiency - Production - Imports - Subsidy

- State Contribution - Current Situation - Growth Drivers - Challenges - Policies

• Seeds - Overview - Growth Drivers - Production - Current Status - Total Cropped Area - Field Crops: Hybrid Seed Market - Vegetable Crops: Hybrid Seed

Market - Impact of new technology - Regulatory Framework &

Challenges - Productivity Challenges - Biotechnology & its effect - Way Forward - Summary

• Agriculture - Overview - Size - Major Acreages - Major Crops - Growth drivers - Major Issues


Key

Stat

istic

s At 196.90 million hectares, India holds the 2nd largest agricultural land in the world

Accounts for 12 % of the nation’s GDP, about 11% of its exports

Total Food grain production stood at 259.32 million tonnes in FY 2012

833.5 million rural population depends on agriculture as their principal means of livelihood

Overview of Indian Agriculture


Evolution of Agriculture in India


2012 GDP Contribution


Agriculture 12%

Forestry&Logging 2% Fishing

1%

Mining 2% Manufacturing

14%

Electricity 2%

Construction 8% Trade, Hotels&

Restaurant 19%

Transport 7%

Financing, Insurance 18%

Community 15%

GDP at 2004-05 prices

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

% Share 16.0% 15.5% 14.7% 14.3% 13.4% 12.3% 12.3% 12.0% 11.6%Agriculture 79.44 83.83 87.29 92.83 92.57 92.95 101.14 105.09 106.89Total GDP 495.24 542.18 594.06 649.44 693.11 752.68 822.83 873.93 917.57

16.0% 15.5% 14.7%

14.3% 13.4%

12.3% 12.3%

12.0% 11.6%

Total GDP Agriculture % ShareUSD Billion


Size

115120125130135140145150155

FY'07 FY'08 FY'09 FY'10 FY'11 FY'12

129

136.5 136.6 138

147.7 151.8

GDP by value added

CAGR:3.3%

Contribution of Agriculture & Allied Activities in GDP grew 2.8% in FY’12

GDP by value added of Agricultural and Allied activities (USD Billion)

Source: Ministry of Agriculture Confidential- For Kagashin clients only May, 2014

Budget FY14: Agriculture remains priority

• Allocation of USD 145.8 billion for agriculture credit, an increase of USD 26.04 billion over last year • Funds allocated to the Agriculture Ministry increased 22 % to USD 5.63 billion.

• USD 711.4 million is planned for farm research • Total plan outlay for agriculture in FY 14 raised to USD 3.56 billion from USD 2.87 billion in FY 2013 • Allocation of USD 208.3 million under scheme of Bringing Green Revolution to Eastern India (BGREI) • Plans to launch crop diversification programmes in Punjab and Haryana • National Food Security Mission, a scheme to bridge yields gap of major crops provided USD 468.7

million • Funds for the Integrated Watershed Programme FY14 increased from USD 0.6 billion to USD 1.12

billion in FY13

Source: Ministry of Agriculture, Union Budget 2013-14


Key Agricultural States & their contributions


Acreages of Major Crops/Major States Area - Million Hectares Year 2011-12

Crops/States MP UP MH Rajasthan AP Karnataka Gujrat West Bengal

Bihar Punjab Orissa Haryana CG Tamil Nadu

Assam HP Kerala Uttaranchal

Total

Rice 1.66 5.95 1.55 0.13 4.10 1.42 0.84 5.43 3.32 2.82 4 1.24 3.77 1.9 2.54 0.21 40.88

Wheat 4.89 9.73 2.94 0.01 0.23 1.35 0.32 2.14 3.53 2.52 0.05 0.36 0.37 28.44

Total Pulses 5.19 2.42 3.27 4.36 1.93 2.3 0.96 0.16 0.52 0.83 0.18 0.81 0.67 23.60

Cotton 0.71 4.13 0.47 1.88 0.55 2.96 0.56 0.64 11.90

Soybean 5.67 3.01 0.9 0.13 0.19 9.90

Bajra 0.18 0.89 0.84 5.02 0.07 0.29 0.87 0.58 0.05 8.79

Gram 3.04 0.58 1.05 1.43 0.57 0.8 0.24 0.02 0.06 0.24 8.03

Maize 0.86 0.79 0.88 1.05 0.86 1.35 0.52 0.10 0.68 0.13 0.22 0.28 0.29 8.01

Jowar 0.39 0.19 3.38 0.55 0.28 1.14 0.12 0.07 0.2 6.32

Groundnut 0.21 0.3 0.42 1.31 0.68 1.69 0.07 0.39 5.07

Rapeseed & Mustard 0.79 2.5 0.42

0.09 0.03 0.54 0.24

4.61

Arhar(TUR) 0.53 1.23 0.48 0.77 0.24 0.03 0.14 3.42

Sugarcane 1.02 0.20 0.43 0.22 0.08 0.35 0.03 0.11 2.44

Sesamum 0.36 0.36 0.11 0.55 0.12 0.09 0.19 0.30 0.02 0.05 0.01 2.16

Potato 0.08 0.52 0.03 0.04 0.39 0.15 0.06 0.01 0.01 0.01 0.09 1.39

Mangoes 0.25 0.17 0.38 0.14 0.07 0.16 0.14 0.01 1.33

Jute 0.6 0.13 0.07 0.80

Chillies 0.05 0.01 0.10 0.20 0.11 0.06 0.08 0.01 0.05 0.02 0.69

Masoor 0.59 0.59

Onion 0.06 0.18 0.05 0.04 0.16 0.01 0.03 0.54

Sunflower 0.38 0.02 0.40

Tobacco 0.12 0.15 0.27

Garlic 0.06 0.03 0.03 0.01 0.01 0.14

Ragi 0.04 0.04

Pome Fruits 0.02 0.02 0.04 Grapes 0.04 0.04

Total 25.31 21.73 21.31 20.40 12.60 11.21 9.94 7.68 7.43 7.21 5.82 5.78 4.86 4.12 3.06 0.65 0.21 0.48 169.82

Major Crops Production

Production: Million tonnes


Major States Production of major Crops Year - 2012-13

Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation

Production : Million Tonnes


Growth Drivers

Demand- side drivers

Growth Drivers

Policy Support Supply-side drivers

• Population & income growth

• Increasing exports • Favorable demographics

• Growing institutional credit

• Increasing MSP’s • Introduction of new

schemes • Opening up of

exports of wheat and rice

• Hybrid & genetically modified seeds

• Mechanization • Irrigation facilities • Green Revolution

in Eastern India Confidential- For Kagashin clients only

Why India..?

1960-61 2011-12

Food grain production: 69.3 million tonnes

Food grain production: 259.3 million tonnes

• Large population • Rising urban and rural incomes • Increasing external demand

Robust Demand Attractive Opportunities

Policy Support Competitive advantages

Advantage India

• Increasing demand for hybrid seeds and fertilizers

• Potential storage capacity

expansion of 35 million tonnes

• High proportion of agricultural land • Leading producer of jute, pulses;

second largest producer of wheat, paddy, fruits and vegetables

• Increasing MSP • Schemes to incentivize states to

increase private investment in agriculture and allied sectors

• Launched National Food Security Mission (NFSM) to increase food production


Issues in Agriculture

Reducing Arable Land

•Reduction in agricultural land due to industrialization

Declining Holding Size & Fragmented Land Holdings

• Average size of the holdings declined from 2.28 hectares in 1970-71 to 1.16 hectares in 2010-11


Water Management

•Low utilization of rain water (~28.3 percent), due to lack of infrastructure

Climate Change

•Impact due to climate changes is expected to cause a drop between 4.5 and 9 percent by 2039 and by 25 percent by 2099

Unwanted Crop Diversification

• Diversification to commercially attractive crops even in adverse agro climatic conditions observed

Issues in Agriculture..Cont’d


Rural Credit

•Inefficiencies in disbursement of rural credit to farmers undermine the development of agriculture

Excessive Government intervention

•Government interventions in factor markets and in output markets has constrained growth of the rural non-farm sector

Over-regulation of domestic agricultural trade

•Over- regulation has led to increased costs, price risks and uncertainty



Fertilizer Overuse

•Overuse of fertilizer has resulted in nutrient imbalance, micro-nutrient deficiency and deterioration of soil health



AGROCHEMICALS


Table of Contents











Overview India is the fourth largest producer of Agrochemicals after United States, Japan and China.

Technical Grade Manufacturer

Raw Material Supplier

Formulator

Distributor End User

Industry Structure

Retailer

Loss caused by Pests (% FY2012)

Rodents & Others 15%

Weeds 33%

Diseases 26%

Insects 26%


Market Share by Segments

Indian Market -2012 US $ 2 Bn


Crop wise Agrochemical Consumption, FY2012

Cotton 50%

Plantation & Crops

Paddy 18%

Cereals, Millets & Oilseeds

7%

Fruits & Vegetables

14%

Sugarcane 2%

Others 1%

Source: Industry reports, Analysis by Tata Strategic


State wise key Statistics

Punjab, 0.25

Haryana, 0.11 Madhya Pradesh,

0.15

Gujrat, 0.08

Uttar Pradesh,

0.10

Rajasthan, 0.08

Chattisgarh, 0.06

Maharashtra, 0.32

Andhra Pradesh, 0.37

Orissa, 0.06

Karnataka, 0.11

Kerala , 0.02

Tamil Nadu, 0.09

West Bengal,

0.09

Bihar, 0.05

Assam & North East,

0.03

Others, 0.03

AP 24%

Maharashtra

13% Punjab 11%

Karnataka 7%

Gujrat 7%

MP& Chhattisgar

h 8%

Tamil Nadu

5%

Haryana 5%

West Bengal

5% Others

15%

Agrochemicals Consumption FY2012

Market Share Contribution (Indian Market: US $ 2 Bn), FY2012


Growth Drivers

Growth Drivers

Export Drivers

Domestic Drivers

• Excess production capacity • Low manufacturing cost • Patent expiry – Opportunity market estimated

over USD 3 Bn

• Increasing population • Limited farmland availability • Growing exports • Growth of horticulture & floriculture, • Initiatives taken by Government


Potential

COUNTRY WISE PESTICIDE CONSUMPTION

Country Pesticide Use (kg/ha)

Korea 16.56

Japan 10.80

China 2.0-2.5

Europe 1.90

USA 1.50

Thailand 1.37

Indonesia 0.58

INDIA 0.38

Country Agrochemicals Regd

Europe 600

Pakistan 495

Vietnam 432

USA 755

INDIA 210

No. OF PRODUCT REGISTERED

Crop Avoidable Loss (%) Cost : Benefit

Cotton 40-90 1 : 7

Paddy 21-51 1 : 7

Mustard 35-75 1 : 12

Sunflower 36-51 1 : 8

Groundnut 29-42 1 : 26

Maize 20-25 1 : 3

Pulses 40-88 1 : 4

Sugarcane 8-23 1 : 13

Vegetables 30-60 1 : 7

Fruits 20-35 1 : 4

INDIAN CROP YEILDS

CAGR of 14.7% expected during FY'2014-FY'2018 in the Indian crop protection business


Top companies


Company Wise Market Share – FY 2013


Key Challenges

R&D costs

•High costs (~USD 180 Mn) and long time (~9 years) required for developing a new molecule

Genetically Modified (GM) seeds

•Self immunity of GM seeds negatively impact the business of agrochemicals

Inefficient Distribution systems

•Inefficiencies in retail distribution exists because of large end user base and improper management

Support for Integrated Pest Management (IPM) & rising demand for organic farming

•Increasing awareness of IPM, zero budget farming and usage of bio-pesticides


Cyclical Nature of Demand

•More demand for agrochemicals for kharif crops (~70% of annual consumption of Pesticides)

Increased Reliance on Exports

•Cyclical nature ,declining demand, resulting in increase exports for better capacity utilization

Shift in Government Policies in Recent Years

•Stringent registration and export formalities of products delays growth of agrochemicals in India

Longer period for registration of innovative products

•In India, registration of new products takes 3-5 years which discourages domestic manufacturers

Key Challenges..Cont’d


INSECTICIDES, FUNGICIDES & HERBICIDES


Table of Contents






Fertilizers -Overview -Consumption -Fertilizer – Indian Scenario

-Usage -Efficiency -Production -Imports -Subsidy

-State Contribution -Current Situation -Growth Drivers -Challenges -Policies

Insecticides, Fungicides & Herbicides - Demand Pattern In Indian Market - Insecticides Market Share - Fungicides Market Share - Herbicides Market Share


Demand Pattern

Category Year- 2013 CAGR % Insecticides 1.00 10

Fungicides 0.41 21

Herbicides 0.45 18

Others 0.13 20

Total 2.00 13

USD Billion

• Increase in Wages & Scarcity along with consistent increased farmer’s awareness driving Herbicide

demand

• Growing demand of Fruits & Vegetables due to change in dietary pattern leading to more

demand for Fungicides & Plant Nutrition Products

Growth Drivers


Insecticides Market Share


Fungicides Market Share


Herbicides Market Share


FERTILIZERS


Table of Contents






• Fertilizers - Overview - Consumption - Fertilizer – Indian Scenario




- Category Pattern In Indian Market - Insecticides Market Share - Fungicides Market Share - Herbicides Market Share


Salient Features

Contributes to 40-50% of the agricultural productivity

India ranks 3rd in the world for fertilizer production

57 large-sized and 64 medium sized chemical fertilizer production units

Production of 37.6 Mn tonnes (9% rise yoy) of fertilizer in the year 2012-13

yoy- year over year basis


Contribution of Fertilizer industry in the Indian Economy

Agricultural development

•Played a vital role in the green revolution

Capital Investment

•Has more than USD 95 Billion investment

Corporate Development

•Many JV’s, multinationals and cooperatives formed in fertilizer Industry

Regional development

•States having fertilizers plants have a positive impact on their economy

Employment •Support given to 3.5 lakh families during the last three decades


Fertilizer Consumption country wise

396 375

284

204.9 188.3 156.1

122.1 114 101

N+P+K Consumption(kg/ha)


Nitrogen Fertilizer – India Scenario

Demand Application by Crop


Fertilizer Usage

0

5

10

15

20

30 25

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

N

P2O5

K2O

Total

Million MT

Nutrient 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

N 12.72 13.77 14.42 15.09 15.58 16.56 17.31

P2O5 5.20 5.54 5.51 6.51 7.27 8.05 7.66

K2O 2.41 2.43 2.64 3.31 3.63 3.51 2.66

Total 20.33 21.74 22.57 24.91 26.48 28.12 27.63

Kg/hectare 106 112 115 127 135 144 145


Fertilizer use efficiency

Year Fertilizer Consumption

Food grain Production

MMT growth rate %

MMT growth rate %

1990-91 12.5 8.5 176.4 3.1

2000-01 18.1 4.1 209.8 1.9

2005-06 20.3 10.6 208.6 5.2

2006-07 21.6 4.4 230.7 1.6

2007-08 22.6 4.4 230.7 6.2

2008-09 24.9 10.4 234.5 1.6

2009-10 26.3 5.6 218.2 6.7

2010-11 28.1 6.8 241.5 9.6

Declining productivity of soil Imbalance in nutrient distribution Confidential- For Kagashin clients only May, 2014

Fertilizer Production

Complex

5 0

10

25 20 15

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

Urea

DAP

Million MT


Imports

3 2 1 0

5 4

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

N

P

K

Year N P K Total

2005-06 1.39 1.145 2.764 5.299

2006-07 2.704 1.373 2.076 6.153

2007-08 3.708 1.391 2.668 7.767

2008-09 3.756 3.067 3.417 10.239

2009-10 3.488 2.85 3.19 9.528

2010-11 4.57 3.739 3.896 12.205

Major product imports 2011-’12

Urea 7.80

DAP 6.90

NP/NPK 4.41

MoP 4.00

million MT


Fertilizer Subsidy

Mounting subsidy bill over the years! 25

20

15

10

5

0

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Urea

P&K

Total

Product 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Urea 2.386 2.636 3.539 5.124 6.777 4.001 4.30

P&K 1.143 1.466 2.288 3.763 14.522 7.767 6.70

Total 3.529 4.102 5.827 8.887 21.299 11.768 13.17

USD Billion


Objectives laid down for sector growth

• Expansion and efficiency enhancement through revamping of existing fertilizer plants • Setting up JV projects in countries having abundant and cheaper raw material resources • Exploring the use of alternative energy sources like liquefied natural gas, coal gasification,

etc. to overcome the constraints in the availability of conventional energy sources • Looking at possibilities of revival of some of the closed units by setting up Brownfield units

subject to availability of gas

Source: Ministry of Chemicals & Fertilizers, India


% Share of Various States (Major) in Consumption vis-à-vis Cultivable Area


Current Situation

Successful Capacity Build up Current status

Production

129.21 Lakh MT of Nitrogen and 47.55 Lakh MT of Phosphates production in 2012-13


Successful Joint Ventures Government is encouraging Indian companies to establish Joint Ventures in Countries with abundant raw material

Current Situation..Cont’d

Growth Drivers

• Fast Growing Population Pressure on land, shall demand increasing productivity

• New JV’s • 2/3rd population dependent on farming for source of income • Agricultural credit facilities/subsidies • Globally competitive products.

• Manufacturing expertise

Year Population (Million)

Food grain (Million MT)

2010 1170 218

2020 1330 277

2030 1450 306

1600

1400

1200

1000

800

600

400

200

0 2010 2020 2030

Population Food grain


Challenges

• Efficiency Decreasing efficiency of fertilizers due to lack of R&D , wastage and improper handling • Investment This sector is characterized by low investment • Capacity Insufficient capacity to meet growing demand • Competition Indian production cost (high) and quality (low) compared to international standards • Changing Government subsidy policies • Decrease in nominal value of subsidy due to INR Depreciation

• Uncertainty on natural gas prices


Policies – Fertilizer Sector

RPS (1970-1990)

Reform Initiatives (1992-2003)

NPS Regime and FMS (2003-2009)

Objectives Objectives

Objectives

- Enhance consumption - Create Indigenous capacities

- Concerns on subsidy - Dec- control not in true sense - MRP’s untouched - Production norms lightened

- Incentives for increasing production efficiency and capacity utilization

- Data capturing through FMS

Impact Impact

Impact

- Progress in consumption, production

- Surplus food grain production

- Stagnation in production - Skewed usage of N - Learning period for domestic

industry

- No Capacity additions - Liquidity and profitability of

industry affected - Uncertain subsidy rates - Import price highly volatile


Nutrient Based Subsidy Scheme (2010): NBS for P&K Fertilizers

- Unshackling of fertilizer industry with floating MRP and fixed subsidy

- Availability of right mix of nutrients according to soil and crop needs at reasonable prices

- Access to efficient fertilizer products

2010-2011 - Impacting the revenue dynamics for domestic producers - Availability of fertilizers improved- Encouraged new entrants - Farmer’s prices of fertilizers remained reasonable - Fertilizer subsidy more or less in line with the provisions

Policy Objectives

Impact of NBS


NBS for P&K Fertilizers..Cont’d 2011-12 - Removal of cap on MRP leading to price fluctuations

- Low benchmark prices in the beginning led to delay in import decisions resulting in availability constraints

during initial Kharif, 2011

- Revised benchmark prices enabled improved availability from September 2011 onwards

- Mopping of subsidy on closing stocks of previous FY created uncertainty about stability of the policy

- Weakening of Rupee against Dollar impacted farmer’s price

- Adequate Stocks – phenomenon of brand pull noticed


Govt. intention of extending NBS Policy to Urea

- Urea producers reimbursed on cost plus basis - This includes cost of production plus a normative profit - Better urea pricing, reduce the government’s subsidy bill and Balanced Fertilization

- Shift from “fixed price- floating subsidy” to “fixed subsidy- floating price” - Improved pricing flexibility for the industry, reduced Government’s fertilizer subsidy bill - Shall address the issue of gas availability and it’s pricing - Encourage investments in Green-field projects which may become viable and attractive - Incentivize plans to enhance indigenous urea capacities by about 8 million tonnes/year, including

self sufficiency in coming years

Objective of extending NBS to Urea

Current Policy

Potential Impact


MobileFMS (mFMS) - initiative moving towards direct subsidization to farmers

Stages Modalities Likely Impact

Phase-I Subsidy released to manufacturers on confirmation of receipts by retailers

- Ensuring timely confirmation of receipts - Ensuring coverage of all the

retailers/wholesalers i - Shift in subsidy dispersal from receipts in

district basis to sales basis

Phase- II Subsidy to be routed through retailers

- Working capital requirement of dealers will increase by over 3 times.

- Industry exposure to retailers/dealers will increase by 3 times

- Significant impact on cash cycle completion

Phase- III Direct subsidy to farmers

- Purchase capacity of small and marginal farmers

- Avoid delay in subsidy re-imbursement to farmers

- The growth momentum in fertilizer’s usage is likely to be affected


SEEDS


Table of Contents











Overview • Increased demand for high-yielding varieties to ensure food security has led to growth in

Indian seed industry over years

0.87 1.00

1.25 1.50

1.75 1.83

2.25

0.00

0.50

1.00

1.50

2.00

2.50

2008 2009 2010 2011 2012 2013 2014

USD Billion


Indian Seed Market

Cotton 34%

Paddy 18%

Wheat 12%

Maize 12%

Sorghum& Millets

3%

Sunflower 2%

other 1%

Vegetables 18%

Total Indian Seed market (6th position in world) – 1.83 USD Bn as of FY’2013.

India cotton seed sales in 2012 - $658 Mn (66.4% of Asia & 34.8 % of global consumption) Source-Industry & Primary Source, Ken Research


Major Seed Producing States


Growth Drivers

Growth in Agriculture

•Growth in demand of agricultural products

Improvement in Seed Replacement Rates (SRR)

SRR in hybrids crops like Cotton, Sunflower, Bajra, and Jowar is 100%


Innovation in seed

•Increase in investments in R&D by both public and private sector

Increase in vegetable seed market size

•Increase in income led to more consumption of fruits and vegetables. Current vegetable seed market size of 0.015 USD Billion is likely to double in 3-4 years

Effect of PPV&FR Act

•Due to PPV & FR Act, the private sector’s participation has increased in R & D of Open Pollinated varieties, particularly in Rice and wheat

Attractive for Investment

•Govt. FDI allowance in selected agri- sectors including seed production attracts investment

Improved agronomy in cotton

Growth Drivers…Cont’d


Production/availability of Seed


Contribution of the private sector in hybrid seed market


Evolution of the Indian Seed Industry 19

60-1

980’

s - Minimal Private sector participation - R&D in public domain - Restrictions on germplasm exchange, foreign ownership etc

Post

NSP

198

8 - Seed industry boomed as a result of Govt. initiatives - FDI allowed and encouraged - Imports of improved varieties and breeding lines liberalized - Trade regulations liberalized

Curr

ent S

tatu

s - Private sector accounts for 80% turnover in seed - Almost 1/3 companies have a global technology/financial partner - Private seed companies are spending 10-12% of their turnover in R&D -R&D budget of medium sized companies is growing @ 20% p.a.


Current status

• Indian seed sector has grown @ 12% compared to <5% growth of global seed market

• Private sector investing in self pollinated crops to develop and promote new varieties

• Seed replacement ratio continues to be low

– Large acres of self pollinated crops – rice, wheat, legumes, etc.

– Low hybrid adoption rates in most crops due to marginal growing conditions and/or

subsistence farming

• Medium and small sized companies are making investments in research and seed processing infrastructure


Cotton

Corn

Millet

Vegetables

Sunflower

Sorghum

(Kh)

Paddy

Wheat

Sugarcane

Potato

Groundnut

Soyabean

Gram

Mustar

d

Tur Sorghum (Rabi)

Others

Total Area is 196.90 Million Hectares.

Total Cropped Area

Hybrid crops

Crop Area (M Ha) Cotton 9

Corn 7

Millet 9

Vegetables 7 Sunflower 1.4

Sorghum (Kh) 4

Paddy 43

Sorghum (Rabi) 5

Wheat 26.4

Tur 3.4 Mustard 5.3 Gram 6.4 Soyabean 8.1 Groundnut 6.6 Potato 1.3 Sugarcane 4.3 Others 49.7


Field crops: Hybrid seed market


Growth trend of key field crops’ hybrid seed market

Est. sale in ‘000MT (corn, rice) and million packets (cotton)

Crop 2005 2008 % inc. in 3 years

2013

Cotton 14 23 65% 30

Corn 45 65 45% 80

Rice 9 19 110% 40


Vegetable crops: Hybrid seed market


Growth trend of vegetable hybrid seed market Crop Sales Volume- 1998 Sales Volume- 2008 Sales Volume - 2013

Tomato

Regular 22 26 35

TLCV Rest Oval 2 5 20

TLCV Rest Acidic 0 17 7

BWR Rest 0.50 2 3

Watermelon 40 70 85

Melon 7 12 15

Chilli Pepper 20 35 55

Okra 250 900 1300

Cabbage 30 50 60

Cauliflower 20 40 50

Brinjal 15 25 35

Ridgegourd 7 27 42

Bittergourd 15 50 70

Bottlegourd 25 50 70

Bell Pepper 0.50 1.50 2

Carrot 12 25

Cucumber 25 50

Impact of new technology on Cotton

• Bt cotton is the only GM technology approved in India

• First three hybrids of Bt cotton were approved in 2002

• A total of 4 events have been approved

– Bollgard (Cry1Ac) from Monsanto – Event 1 (Cry1Ac) from JK Agrigenetics – Fusion Bt (Cry1Ac+Cry1Ab) from Nath Biogene – Bollgard II (Cry1Ac + Cry2Ab) from Monsanto

• More than 150 Bt cotton hybrids are now available for the farmer to choose from

• More than 80% of the country’s cotton growing area is under Bt cotton • Cotton production has increased from 12.5 million bales in 2002-03 to 31 million bales in 2007-08

• India has become the second largest producer and second largest exporter of cotton in the world


Regulatory framework

– Seed Act, 1966 and Seed Control Order, 1983 - (Seeds Bill 2002 is pending Parliamentary Approval)

– Protection of Plant Varieties and Farmers’ Rights Act, 2001

– Environment Protection Act, 1986 – Biological Diversity Act, 2002

– Destructive Insects and Pests Act, 1914 – Plants, Fruits and Seeds (Regulation of import in India) Order 1989

– Cotton Seed Acts in some states

– Export/Import policies and Regulations


Regulatory Challenges

New Seed Bill • Intends to improve the regulatory framework to encourage the growth of the seed industry

• Self certification through registration of seed producers and accreditation of seed testing labs

- Registration after 2 years of VCU testing - No provisional registration of transgenic hybrids/varieties

- Duplication of agronomic testing of transgenic hybrids/varieties under EPA and New Seed Bill

- Performance label and compensation

- Price Control

- Complete exemption of farmers form the operation of the Seed Bill


PPV & FR Act, 2001 - Good beginning to protect the rights of the breeders

- Does not conform to UPOV, 1991

- Gives farmers the right to sell unbranded seed of protected variety

- Allows “innocent infringement” by farmers - Compulsory licensing and compensation

- Security of the material during field testing for DUS still to be established

- Efficacy of enforcement still needs to be established

- Specific issues still need to be resolved to address the concerns of the industry (e.g. extant hyrbids/varieties)

Regulatory Challenges..Cont’d


Biodiversity Act, 2002

– Restricting exchange of germplasm even of those crops which are covered in the ITPGR

Price Control (through State Acts)

– Arbitrary price controls based on political motivations – Disincentive to invest in research and infrastructure

– Lead to cost cutting even in critical processes – could affect seed quality adversely

Export/Import regulations

– Inconsistent and politically motivated for commercial seed

– NBPGR retains a sample of seed incase of germplasm imports

– Export of germplasm/research material not allowed in many crops

Regulatory Challenges..Cont’d


Productivity challenges

• Small marginal farmers with lack of awareness about new technology

• Poorly managed or non-functional Govt. extension systems

• Availability of institutional credit and crop insurance

• Last mile gap (in remote areas) in the delivery / distribution channels

• Abiotic stresses – Drought

• Low or erratic rainfall in rainfed situations • Light soils with poor water holding capacity • Inability to irrigate enough or on time

– Water logging • Poor drainage • Excessive rainfall

– Sub optimal temperatures – Saline soils – Nutrient deficiencies


Productivity challenges..Cont’d

• Biotic stresses

– Fungal, Bacterial and Viral diseases

– Sucking and chewing insect pests

• Sub optimal agronomy

• No or improper use of fertilizer

• Sub optimal cropping systems

• Poor weed management

• Restricted seed supplies due to negative impact of policy


Biotechnology and its effects

• Use of Molecular markers

– Stacking of traits

– Increasing breeding gains – Accelerating product development cycles – Quality assurance

– Protection of IP

• Functional genomics • Other tools viz. Doubled haploid, etc

• Success achieved

– Bollworm resistance in cotton

• Other traits of importance

– Weed management

– Insect resistance in other crops

– Nutritional enhancement

– Disease resistance

– Drought tolerance

– Nutrient stress tolerance

– Yield enhancement

GM applications of biotechnology

Non-GM applications of biotechnology


Technologies under development in India


Way Forward

• Continued focus on customer requirements

– Product fit – Economic benefit – Freedom to choose

• Conducive regulatory environment

– Minimal regulation and compliance

– Freedom to price based on ‘value to customers’

– Harmonization of various laws and Uniform enactment of central laws across all states

– Encouragement, through financial incentives, for investment in infrastructure


Public private partnership


Summary • Indian seed industry is poised to grow at a rate faster than the global rate (huge opportunity to increase

SRR) • It has made tremendous contribution to increase productivity through development of superior

hybrids • It is investing in research and infrastructure • It has spearheaded the introduction of new technology (Bt cotton)

• Indian seed industry needs policy support to make even bigger contributions in the future:

– Encouragement for investment in research and infrastructure – Minimal regulation and compliance – Freedom to operate based on free market principles – Streamlining of regulatory processes to accelerate the development and introduction of new GM

technology

• Robust PPP models are needed to better serve the farmers by removing the various productivity constraints

through technological interventions


Thank You

Office No 339, Regus Business Centre 3rd Floor Neo Vikram New Link Road, Andheri (W) Mumbai 400 053 Email: [email protected]


Documents

The Difference Between Information & Knowledge · Key Statistics At 196.90 million hectares, India holds the 2 nd largest agricultural land in the world Accounts for 12 % of the nation’s