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Unit 14: Corporate Sector in Agri-Business

allied areas for live hood. Agribusiness is a generic term that refers to the various businesses Notes
involved in food production, including farming and contract farming, seed supply, agrochemicals,
farm machinery, wholesale and distribution, processing, marketing, and retail sales. Agribusiness
is widely used simply as a convenient portmanteau of agriculture and business, referring to the
range of activities and disciplines encompassed by modern food production. Agri-business can
be defined as commercialization of agriculture, which refers to market orientation of agricultural
production process.

14.1 Indian Agriculture

Agriculture in India is one of the most important sectors of its economy. It is the means of
livelihood of almost two thirds of the work force in the country and according to the economic
data for the financial year 2006-07, agriculture accounts for 18% of India’s GDP. About 43 % of
India’s geographical area is used for agricultural activity. Though the share of Indian agriculture
in the GDP has steadily declined, it is still the single largest contributor to the GDP and plays a
vital role in the overall socio-economic development of India. One of the biggest success stories
of independent India is the rapid strides made in the field of agriculture. From a nation dependent
on food imports to feed its population, India today is not only self-sufficient in grain production
but also has substantial reserves. Dependence of India on agricultural imports and the crises of
food shortage encountered in 1960s convinced planners that India’s growing population, as well
as concerns about national independence, security, and political stability, required self-sufficiency
in food production. This perception led to a program of agricultural improvement called the
Green Revolution. It involved bringing additional area under cultivation, extension of irrigation
facilities, the use of improved high-yielding variety of seeds, better techniques evolved through
agricultural research, water management, and plant protection through judicious use of fertilizers,
pesticides and cropping practices. All these measures had a salutary effect and the production of
wheat and rice witnessed quantum leap.
The Indian government also set up Ministry of Food Processing Industries to stimulate the
agricultural sector of Indian economy and make it more lucrative. India’s agricultural sector
highly depends upon the monsoon season as heavy rainfall during the time leads to a rich
harvest. But the entire year’s agriculture cannot possibly depend upon only one season. Taking
into account this fact, a second Green Revolution is likely to be formed to overcome such
restrictions. An increase in the growth rate and irrigation area, improved water management,
improving the soil quality, and diversifying into high value outputs, fruits, vegetables, herbs,
flowers, medicinal plants, and bio-diesel are also on the list of the services to be taken by the
Green Revolution to improve the agriculture in India.

India has a geographical area of 328.73 million hectares; of which reported area for land use is
306.04 million hectares. The net area cultivated is about 142.60 million hectares i.e. about 46.6
per cent of the total reported area. Since nearly 50 million hectares of area is sown more than
once, the cropping intensity works out to 135.1. Forests account for about 68.97 million hectares
i.e. 22.5 percent of the total reported land area. Also nearly 13.97 million hectares are cultivable
wastelands and 9.91 million hectares are fallow lands. Only about 30 percent of the total
cropped area is irrigated and the remaining area is rain fed. The available statistics further
shows that only about 66 percent of the gross cropped area is under food crops and nearly 34
percent area under nonfood crops. Cereals and pulses account for nearly 52.93 per cent and
12.64 percent of the total area respectively. Fruits and vegetables occupy nearly 4.24 percent of
area.

To carry improved technologies to farmers and to replicate the success achieved in the production
of wheat and rice a National Pulse Development Programme, covering 13 states, was launched
in 1986. Similarly, a Technology Mission on Oilseeds was launched in 1986 to increase production

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