Monday, 9 January 2017

Agricultural Products

Exports of Agricultural Products

India has now entered a new era of globalisation and economic liberalization. The possibilities of increased trade in the global markets demand that the country becomes efficient, competitive and innovative both in production and marketing. It is time that we stopped being preoccupied only with increasing production: attention to marketing is equally important. In fact, it is worth remembering that marketing is as critical an input for production as are seeds, irrigation, fertilizer, etc.
The agricultural marketing scenario in the country is fast changing and will need to be restructured and reoriented to fully meet the need arising from the globalization process. The areas where new initiatives and measures are required need to be identified and attended to. Much smaller countries, by adopting strong and effective marketing strategies, have been able to export to competitive areas and thus have not only strengthened their economic position but have also contributed to the general welfare of the farming community of these countries. India needs to emulate such countries and adopt effective and aggressive marketing policies so lt has its export of agricultural commodities is enhanced.
The importance of an efficient agricultural marketing system has been recognized in India since long. The setting up of a central organization, known as the “Office of the agricultural marketing Adviser to the Government of India” in 1935, was the first step taken by the government to bring about an integrated development of marketing of agricultural produce with a view to safeguarding the economic interests of producer-sellers as well as consumers. Over the years, a number of organizations and institutions have come to be established with a mandate for one or more areas of marketing such as procurement, storage, and warehousing, credit, cooperative marketing, exports, food processing, agricultural prices, agricultural produce markets, research and agricultural statistics. As a result, agricultural marketing responsibilities Today are diffused among several departments and agencies, which often tend to work in isolation without coordinating their activities and programmes.
In the farm sector, marketing has been receiving a lower priority than production, there was a tendency to be preoccupied with increasing production without a matching concern to improve and strengthen marketing. The governments investment in agricultural marketing has been an insignificant proportion of the total investment in agriculture and allied sectors at the central and state levels, even though the potential contribution which an efficient marketing can make to the overall development of the farm sector has been realized.
The basic purpose of this paper is to develop a micro perspective of the export performance of agro-food products from developing countries in order to understand the dynamics of international marketing by agribusiness firms. It is emphasized that the micro issues bear greater influence on the export performance because new developments in international food and agri-business markets are responsible for making defunct the macro generalizations about consumer behavior towards food and food products.


Agriculture is the mainstay of the Indian economy and represents one- third of the country GDP. During the last four decades, it received a very high priority. There are 35 agro-climatic regions in the country with wide variations in agricultural production patterns and practices. The application of scientific techniques, coupled with government policies and programmes in the agricultural sector, has helped in increasing the production of several commodities including foodgrains and the resultant marketable surplus has touched new heights, transforming Indian agriculture from subsistence to a near commercial enterprise. The production of foodgrains during 1994-95 is expected to touch an all-time high of 185 million tonnes, which are 3 million tonnes more than the production during the previous year. Foodgrains production during 1965-66 was a mere 72 million tonnes. Sugarcane production is likely to it is to 245 million tonnes in 1994-95 against 233 million tonnes in 1993-94 compared to 120 million tonnes in 1965-66. Production of oilseeds almost tripled from 6.35 million tonnes in 1965-66 to 19.2 million tonnes in 1992-93. Production of kharif oilseeds alone was estimated at 12 million tonnes during 1993-94. Production increase in the case of fibres such as cotton, jute and Mesta was also witnessed. So also in the case of fruits and vegetables.
Agricultural marketing is broadly concerned with developing new products to satisfy emerging needs of the consumers and to capitalize on newly identified market opportunities. It also includes reappraising and modifying existing products in the perspective of changing requirements of the modern society.
In India, much of the agricultural produce freely moves through private trade operating in the organized markets as well as through shanty markets and village fairs where the head loaders and peddlers sell their produce. Apart from modern marketing, the country scene is also marked by traditional barter system. Realizing its limited but vital role, the Government has been endeavoring to promote organized marketing of agricultural commodities in the country. To achieve these objectives, most of the states and union territories have enacted necessary legislation governing agricultural produce markets. The number of regulated markets in the country has increased from 2,481 in December 1978 to 6,772 in March 1993. During the last two decades, marketing of farm produce is also encouraged through a network of cooperative society.
World trade in agricultural products I estimated to be about US $ 300 billion in value. Within this overall trade, it is estimated that about 22 percent consists of bulk commodities ( creals, soybeans, unmanufactured tobacco, cotton, plant seeds and pulses), while 24 per cent consists of principally semi-processed products ( Wheat flour, feeds and fodders, hops, oil meals vegetable oils, refined sugar, live animals, etc.). The remaining products which dominate world trade in agricultural commodities and account for about 53 per cent of the total are consumer- oriented products, i.e., products that require little or no additional processing for consumption. These include fresh and processed horticultural products, fresh and processed meat and dairy products, table eggs and bakery products. The fastest growth in world trade is in consumer products.
India’s share in the global trade has declined in the recent decades. The share of agricultural exports in the total exports of India has also come down India’s share in world trade in agricultural commodities is less than one per cent. The agricultural sector contributes amount 30 per cent of the GDP, but the contribution to exports which at one time accounted for nearly 31 per cent of all exports (1980-81) has come down to 11 per cent (1991-92). The decline of agricultural exports as percentage of India’s total exports reflects partly a diversification in the Indian economy.