India’s food retail market to touch Rs 62 lakh crore by 2023: SBI Ecowrap

Torri Donley

© India Today Group India’s food retail market to touch Rs 62 lakh crore by 2023: SBI Ecowrap India’s food retail market is expected to touch Rs 62 lakh crore by 2023, driven by a shift in consumption away from low value staples to high value proteins (fish, meat, eggs, […]



a man sitting on top of a grass covered field: India's food retail market to touch Rs 62 lakh crore by 2023: SBI Ecowrap


© India Today Group
India’s food retail market to touch Rs 62 lakh crore by 2023: SBI Ecowrap

India’s food retail market is expected to touch Rs 62 lakh crore by 2023, driven by a shift in consumption away from low value staples to high value proteins (fish, meat, eggs, pulses, dairy products, fruits and vegetables), as incomes rise, said SBI Ecowrap in a report on Monday, October 12.

The report said the Indian agriculture sector must take advantage of such shift adding that “India is no more just a cereal granary and states are producing diversified crops and it is time that we go for white revolution.”

Mentioning the country’s export share of agri products, the report enunciated, “As per WTO data, India exported $37 billion worth of agriculture products in 2019 and had 2.1% share in world agri exports.” Although agricultural exports comprise around 10 per cent of India’s exports, most of these exports are “low value, raw or semi-processed and marketed in bulk”, the report highlighted.

Also Read: Agricultural exports rise 43.4% to Rs 53,626.6 crore in Apr-Sept

Comparing India’s share of high value and value added agri product in its agri export basket, the report pointed out that it is “less than 15 per cent compared to 25 per cent in US and 49 per cent in China.”

Making a case for another white revolution, the report underscores, “India is no more just a cereal granary and states are producing diversified crops and it is time that we go for white revolution.”

“India is also the largest milk producer in the world, with a study undertaken by a private agency has estimating that out of the total surplus 20% is processed in the cooperative sector, 30% by branded private dairy companies and the rest 50% gets processed in the unorganised sector (milk for sweet shops, loose milk etc). Thus, it would not be incorrect to say that India now badly needs another white revolution,” it added.

Lauding the three bills on agriculture reforms — The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020; The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 and The Essential Commodities (Amendment) Bill, 2020 – the report stated that these (bills) aim to “increase the availability of buyers for farmers’ produce, by allowing them to trade freely without any license or stock limit, so that an increase in competition among them results in better prices for farmers.”

It also pointed out that although the bills aim to liberalise trade and increase the number of buyers, de-regulation alone may not be sufficient to attract more buyers. They (the bills) have to be supported with building infrastructure and educating farmers about the potential income they can generate by moving to other-agri products, including dairy farming.

Talking about the contribution of cereals in the value added of crops, the report stated that it has significantly come down over the years “from a high of 49 per cent in 1968-69 to 28% in 2018-19, in current prices and that of fruits and vegetables has grown rapidly to 30% of the share in crop output, vis-a-vis 14% in 1968-69.” It further mentioned that shunning fruits and vegetables and concentrating only on cereal production is “lazy farming and parochial thinking.”

Also Read: Rebooting Economy XXIX: Exposing farmers to unregulated market is more likely to harm them 

Mentioning state-wise data published by the National Achievement Survey (NAS) from 211 to 2017, the SBI report said that only eight states had a higher percentage of output coming from cereals rather than fruits and vegetables in 2016-17. “Among these, Punjab and Haryana derive more than 50% of their crop output from cereal,” it added.

Pointing out India’s legacy and lopsided system of procurement of primarily cereals to benefit from cereal granary states in North India, mainly Punjab and Haryana, the report stated that “a large part of edifice of food grain procurement infrastructure is built around such states.”

Giving examples of Uttar Pradesh and West Bengal, the SBI report remarked that while these states are number one and two in rice production, “food grain procurement is only 18% by FCI from such states”, But in Punjab and Haryana (number 10th), which are lower in rice production, “the average procurement is still a staggering 90% by FCI.” UP, which is the largest producer of wheat, is also laggard in its (wheat’s) procurement.

Such lopsided procurement, according to the report, has resulted in:-

(a) Significantly skewed income of agricultural households with average income in Punjab at Rs 2.8 lakh being 3-3.5 times higher than states like Uttar Pradesh and West Bengal 

(b) Disproportionately higher number of farmers on e-NAM from states like Uttar Pradesh and minimal from Punjab thus distorting market pricing 

(c) Uneven procurement across select states resulting in significant burden on exchequer with FCI total outstanding loans from NSSF estimated at Rs 3.22 lakh crore by end-March 2021 and states like Uttar Pradesh and West Bengal, which are top producers of Rice and wheat being able to use 61% of the godown capacity

(d) Production of food grains benefitting select states. 

“It is an irony that the value of cereals per hectare is 12 times less than fruits and vegetables, but we keep on eulogising cereal production,” the report highlighted, adding that India should quickly “move up the agri value chain to ensure farmer income gets broad-based.”

“Fruits and vegetables have the highest value of output per hectare followed by condiments and spices,” it stated.

Also Read: India receives 7% higher rainfall; sowing up 5.7% annually: CRISIL

Source Article

Next Post

Catering Services Market will Showcase Negative Impact during 2020-2024 | Increasing Popularity of Online Catering to Boost the Market Growth | Technavio

LONDON–(BUSINESS WIRE)–Technavio has been monitoring the catering services market and it is poised to grow by USD 187.56 bn during 2020-2024, progressing at a CAGR of about 6% during the forecast period. The report offers an up-to-date analysis regarding the current market scenario, latest trends and drivers, and the overall […]
Catering Services Market will Showcase Negative Impact during 2020-2024 | Increasing Popularity of Online Catering to Boost the Market Growth | Technavio