Introduction.

The Indian agricultural implements market was worth US$ 8.5 Billion in 2017. The market value
is further projected to reach US$ 12.8 Billion by 2023, exhibiting a CAGR of 7.03% during
2018-2023.In India, the growing incomes of the farmers have boosted the demand for farm
implements. In addition, acute shortage of skilled labor for agricultural activities has further led
to the growing demand for agricultural equipment. Moreover, the attractive subsidies provided
by the Central and State governments have also encouraged farmers to purchase modern
agricultural implements.

Market Drivers

Substitute for Manual Labor: One of the biggest advantages of agriculture implements is that
they can replace manual labour. Although, India represents amongst the largest countries for man
power in the world, all sectors of the economy have been affected by the scarcity of labour. This
impact is currently being felt more in the agricultural sector compared to other sectors. Labour
constitute a vital input in agricultural production, however, with rising urbanisation and better
opportunities, they are migrating from rural to urban parts of the country. This is creating a major
imbalance between labour demand and supply. The migration from villages to cities is also
leading to a lot of proxy farmers taking care of multiple plots of land. As a result, implements are
expected to play a major role in agriculture productivity in the coming years.

High Productivity and Efficiency: Use of agricultural implements increase production,

efficiency and per man productivity. Mechanization increases the yield of land per unit of area
and also resulting in lower cost of work, resulting in better use of land and hence increasing farm
income. Agricultural implements are expected to increase yields by 25-30% in states with a low
level of mechanisation, and by up to 10% in states that are already highly mechanised.

Long Terms Cost Savings: Although buying agricultural implements involve a high initial
capital expenditure. Over a longer period of time, they prove to be more cost effective compared
to manual labour and work animals. For instance, in actual operation, there are negligible costs
when machines remain idle, on the other hand, the cost of maintenance of draught animals
remains the same irrespective if they are working or are idle. This is because animals need to be
fed whether they are doing work or not.

Improvements in Agriculture Techniques: The use of agricultural implements also provides

benefits during irrigation, land reclamation and the prevention of soil erosion. For example,
ploughing by a tractor reclaims more land and therefore extends the cultivated area as it smooths
hillocks, fills in depressions and gullies and eradicate deeps-rooted weeds. It also prevents soil
erosion.

Government Support: Another major driver of the agriculture implements industry is the fact
that it represents a major focus area for the government. Agriculture remains a primary means of
livelihood for more than 50% of the country's total population and, as a result, it represents an
important vote bank for any government that wants to retain power. The government of India is
also providing subsidies to local farmers on water, electricity, agricultural machinery,
agrochemicals, hybrid seeds, etc. It has also exempted agriculture income under the Indian
Income Tax Act, meaning income earned from agricultural operations is not taxed. In addition,
both state and central government often waive off loans given to the farmers.

Large Agricultural Economy: India is the second-largest populated country accounting for
around 18% of the total world population. Catalysed by a rising population, the requirement for
various agricultural products has also increased significantly. This rise has stimulated the farmers
to adopt enhanced technologies and increase the level of mechanization in their agricultural
practices resulting in an increasing demand of agricultural implements and methods in sectors
such as farming, dairy, fisheries, livestock, etc. Moreover, more than 50% of India's population
is dependent on agricultural products which is further promoting the growth of the market.

Increase in Custom Hiring of Implements: The high capital cost of agriculture implements
may often restrain many small-scale farmers to buy them. Moreover, farmers with small land
holdings do not find it cost effective to invest into their own agricultural implements. This has
resulted into a large market for the custom hiring of implements where implements can be rented
out to farmers for a specific time and cost. The Indian agricultural implements market
was worth US$ 8.5 Billion in 2017. The market value is further projected to reach US$ 12.8
Billion by 2023, exhibiting a CAGR of 7.03% during 2018-2023. Agricultural implements
consist of a wide range of manual and mechanical tools such as threshers, cultivators, over
plows, seed drills, chaff cutter machines, axes, etc. They help in reducing labor and improving
the efficiency of agricultural activities. India has achieved considerable progress in the field of
agricultural implements over the past decades. At the time of Independence, Indian farmers
mostly used animal operated implements (such as bullock-drawn plows and wooden planks) and
hand tools (including spades, pick axes, crowbars, sickles and choppers) for pulverization,
compaction and smoothening of the soil. Later, the Green Revolution brought about large-scale
farm mechanization which encouraged a significant number of farmers to opt for modern
agricultural implements including combine harvesters, rice trans-planters, power tillers,
threshers, tractors, pumping sets, etc.

In India, the growing incomes of the farmers have boosted the demand for farm implements. In
addition, acute shortage of skilled labor for agricultural activities has further led to the growing
demand for agricultural equipment. Moreover, the attractive subsidies provided by the Central
and State governments have also encouraged farmers to purchase modern agricultural
implements.

Indian Agricultural Implements Market Drivers:

Substitute for manual labor: One of the biggest advantages of agriculture implements is that they
can replace manual labour. Although, India represents amongst the largest countries for man
power in the world, all sectors of the economy have been affected by the scarcity of labour. This
impact is currently being felt more in the agricultural sector compared to other sectors. Labour
constitute a vital input in agricultural production, however, with rising urbanisation and better
oppurtunities, they are migrating from rural to urban parts of the country. This is creating a major
imbalance between labour demand and supply. The migration from villages to cities is also
leading to a lot of proxy farmers taking care of multiple plots of land. As a result, implements are
expected to play a major role in agriculture productivity in the coming years.
High Productivity and efficiency: Use of agricultural implements increase production, efficiency
and per man productivity. Mechanization increases the yield of land per unit of area and also
resulting in lower cost of work, resulting in better use of land and hence increasing farm income.
Agricultural implements are expected to increase yields by 25-30% in states with a low level of
mechanisation, and by up to 10% in states that are already highly mechanised.

Long Terms Cost Savings: Although buying agricultural implements involve a high initial capital
expenditure. Over a longer period of time, they prove to be more cost effective compared to
manual labour and work animals. For instance, in actual operation, there are negligible costs
when machines remain idle, on the other hand, the cost of maintenance of draught animals
remains the same irrespective if they are working or are idle. This is because animals need to be
fed whether they are doing work or not.

Improvements in Agriculture Techniques: The use of agricultural implements also provides

benefits during irrigation, land reclamation and the prevention of soil erosion. For example,
ploughing by a tractor reclaims more land and therefore extends the cultivated area as it
smoothens hillocks, fills in depressions and gullies and eradicate deeps-rooted weeds. It also
prevents soil erosion.

Government Support: Another major driver of the agriculture implements industry is the fact that
it represents a major focus area for the government. Agriculture remains a primary means of
livelihood for more than 50% of the country’s total population and, as a result, it represents an
important vote bank for any government that wants to retain power. The government of India is
also providing subsidies to local farmers on water, electricity, agricultural machinery,
agrochemicals, hybrid seeds, etc. It has also exempted agriculture income under the Indian
Income Tax Act, meaning income earned from agricultural operations is not taxed. In addition,
both state and central government often waive off loans given to the farmers.

Large Agricultural Economy: India is the second-largest populated country accounting for
around 18% of the total world population. Catalysed by a rising population, the requirement for
various agricultural products has also increased significantly. This rise has stimulated the farmers
to adopt enhanced technologies and increase the level of mechanization in their agricultural
practices resulting in an increasing demand of agricultural implements and methods in sectors
such as farming, dairy, fisheries, livestock, etc. Moreover, more than 50% of India’s population
is dependent on agricultural products which is further promoting the growth of the market.

Increase in custom hiring of implements: The high capital cost of agriculture implements may
often restrain many small-scale farmers to buy them. Moreover, farmers with small land holdings
do not find it cost effective to invest into their own agricultural implements. This has resulted
into a large market for the custom hiring of implements where implements can be rented out to
farmers for a specific time and cost. In India, agricultural
marketing has witnessed tremendous changes since the last six decades. It plays a crucial role not
only in stimulating production and consumption, but also in accelerating the economic
development. It assumes importance as the multiplier of agricultural development. The important
thing to be noted here is that increasing demand for those goods whose prices are relatively high
induces the farmer to cultivate crops where returns are higher. In olden days, before the
introduction of the money, the barter system was in vogue, and with the introduction of money, it
became a medium of exchange and in addition to this there were changes in the farming pattern.
The self-sufficient village economy transformed itself into market economy where the
production was carried on for market. Trade in olden days was a trade in surplus. Hence, it did
not affect the basic self-sufficiency of the village. In India, an effective marketing system
becomes the essential key to the entire nation (National Planning Committee, 1947). According
to Thomson (1951), agricultural marketing involves the movement of produce from the farmers
to the consumers and the effect of such operation on farmers, middlemen and consumers cannot
be avoided. There are two kinds of marketing namely, product-marketing and factor-marketing.
In the product marketing, farmers, village traders, wholesalers, processors, importers and
exporters-marketing co-operatives which regulate the market committees and retailers are
involved. The factor-marketing includes manufacturers, distributors, importers and exporters and
others who make available various farm production inputs to the farmers. An efficient marketing
system will increase the income level of the farmers and satisfaction of the consumers. The
movement of agricultural produce from the farmers to the consumers at the lowest cost is
decided by the farmers/producers. A consumer derives maximum satisfaction when goods are
available at the lowest cost. The modernization of agricultural market is essential for the
development of the farmers and consumers in India. There has been a need for intensive policy
measures for the agricultural marketing in the recent days. The livelihoods of farmers as well as
local traders are threatened due to the growth of the modern organized market. Globalization and
liberalization of the market economy are reducing the role of the State in the globalized
economic system. Alternatively, the role of the private sector and the corporate sector has
increased due to the high competitiveness in the market economy. The modernization of the
market system is offering useful economic opportunities to the farmers, the small scale producers
and the consumers in the food chain process. A new buyer in the rural area is competing for the
farmer’s produce. Therefore, we need modernization of procurement system and there is also a
need for integrated approach for modernization of supply chain to the small scale producers.
They are ready to participate in the growth process of the Indian economic development (World
Development Report, 2008). A good marketing system is very useful for the development of
agricultural sector. This system is one of the factors that determine the economic development of
the nation. The determining factors are proper marketing system, and the active role that are
profitable to the farmers. In addition to these, a well-organized agricultural marketing is very
helpful to the farmers for the promotion of their well-being. The marketing system and the
government help the farmers and the consumers attain the maximum benefits. In recent years,
some of the horticultural crops have played a very crucial role in the progress of the farmers. In
India, the farmers are changing their cropping pattern from food grains to horticultural crops due
to huge profits that they are able to enjoy. Horticultural crops are one of the driving forces of the
Indian economy in the recent days and also there is the demand for those crops in the country as
well as in the foreign countries. The food habits of the common man are changing from food to
fruits and vegetables in India. These items are sought daily by the rural and the urban Indian
people. There are various challenges involved in marketing of the agricultural produce.

There is limited access to the market information; literacy level among the farmers is very low,
multiple-channel distribution affects pockets of the farmers and the consumers. The Government
funding to the farmers is inadequate. A majority of the small farmers depend upon the money
lenders/private agencies. There is no effective organized and regulated marketing system for
marketing the agricultural produce. The farmers have to face so many constraints in the market
for receiving fair price. There are several complexities involved in agricultural marketing as
agricultural produce involves risks like perishability. The agricultural produce is seasonal in
nature. The pricing of the produce depends on factors like seasonability and perishability. In
addition it depends on the demand and supply also. All these factors have their impact on
agricultural marketing. In India, agricultural marketing is crowded with small traders who
operate on a small scale in a limited market segment. There are many agents in-between the
producers and the consumers such as wholesalers, retailers, labour contractors and brokers in
each market system. Size of their business is very small. They seek large margins on small
volume of business. Thus, the channels for marketing of agri-producer remain long and
fragmented and lack economic scale. Generally, an average of four to six transactions take place
before the produce reaches the consumers, for each transaction involves cost and some margin
for intermediaries. The price spread between the consumers and the producers become large,
without any real value addition. Some of the middlemen are found to render no real services and
they simply earn rent. Even the APMC Act and the Model Act have failed to deal with that
matter in Tamil Nadu and in the other parts o India. So the producers feel that they do not get
value for their produce and the consumers feel that they have to pay higher price. Agricultural
marketing in India suffers from inefficiency. There is also the problem between the price
received by the producers and price paid by the consumers. Thus marketing has fragmented the
long marketing channels; infrastructure is poor and added to it are policy distortions. The
markets are not vertically integrated (Chand, 2006). In the total value added in production and
marketing, the share added in the post-harvest phase is rising. There are various challenges
involved in marketing of the agricultural produce. There is limited access to the market
information; literacy level among the farmers is very low, multiple-channel distribution affects
pockets of the farmers and the consumers. The Government funding to the farmers is inadequate.
A majority of the small farmers depend upon the money lenders/private agencies. There is no
effective organized and regulated marketing system for marketing the agricultural produce. The
farmers have to face so many constraints in the market for receiving fair price. There are several
complexities involved in agricultural marketing as agricultural produce involves risks like
perishability. The agricultural produce is seasonal in nature. The pricing of the produce depends
on factors like seasonability and perishability.In addition, it depends on the demand and supply
also. All these factors have their impact on agricultural marketing. In India, agricultural
marketing is crowded with small traders who operate on a small scale in a limited market
segment. There are many agents in-between the producers and the consumers such as
wholesalers, retailers, labour contractors and brokers in each market system. Size of their
business is very small. They seek large margins on small volume of business. Thus, the channels
for marketing of agri-producer remain long and fragmented and lack economic scale. Generally,
an average of four to six transactions take place before the produce reaches the consumers, for
each transaction involves cost and some margin for intermediaries. The price spread between the
consumers and the producers become large, without any real value addition. Some of the
middlemen are found to render no real services and they simply earn rent. Even the APMC Act
and the Model Act have failed to deal with that matter in Tamil Nadu and in the other parts o
India. So the producers feel that they do not get value for their produce and the consumers feel
that they have to pay higher price. Agricultural marketing in India suffers from inefficiency.
There is also the problem between the price received by the producers and price paid by the
consumers. Thus marketing has fragmented the long marketing channels; infrastructure is poor
and added to it are policy distortions. The markets are not vertically integrated (Chand, 2006). In
the total value added in production and marketing, the share added in the post-harvest phase is
rising.
Review of literature
Agriculture and farm machinery comprise machinery and tools required by farmers to increase
agricultural productivity and can be used in agricultural farmlands. Agriculture and farm
machinery products include harvesting machinery, tractors, cultivators and ploughers which are
deployed for several purposes such as tilling, plowing, disking and harvesting among others. The
increased mechanization of technologies in agriculture has resolved a lot of problems regarding
farming such as wastage of energy and time as well as scarcity of labor. Increasing technological
advancements in the design of agricultural machinery has improved the overall output efficiency
of farmers and is a key aspect fuelling the demand for farm machinery. Various advancements in
the manufacturing of tractors such as incorporation of telemetry and GPS devices for tracking the
location of tractors is another key trend being followed in the global agricultural and farm
machinery market. Increase in demand for harvesting machinery and farm tractors is projected to
fuel the overall market to grow since the aforementioned machinery are used for several
purposes such as plowing, harrowing, planting and tilling. Rising awareness towards the use of
high-end technology in agriculture to maximize the output is helping in increasing profit margins
for farmers. Moreover, increasing population across the globe is, in turn, increasing the
consumption of food which is posing heightened pressure to increase the food production. Since
agriculture and farm machinery boosts the efficacy of food production. Increasing depreciation
in agricultural land and modernization are some other factors accelerating the growth of global
agriculture and farm machinery market. In addition, the incorporation of self-driven mechanisms,
GPS systems, and monitoring systems aids in allowing the efficient and precise use of material
and enhance the fuel economy. Various multinational players are showing interests in investing
huge funds especially in the emerging economies to expand their facilities worldwide. The
governments of developing countries like India, China, Indonesia, Germany and Brazil are
focusing on escalating the introduction of subsidies on farm machinery to promote
mechanization in farming and agriculture. Furthermore, other companies are manufacturing low
power tractors at affordable prices for small-scale consumers. In 2013, a tractor multinational
company, John Deere launched the 5E and 4M tractors series to facilitate the needs of the small-
scale farmers. Some major factors driving the growth of global agriculture and farm machinery
market include innovations in technology, growing demand for advanced agricultural and farm
machinery, mechanization in farming techniques, etc. Rise in per capita disposable income is
another major element projected to propel the growth of global agriculture and farm machinery
market.

The global agriculture and farm machinery market is anticipated to witness highest growth in the
Asia-Pacific region due to increasing investments by governments of various economies in the
region followed by North America. Europe is anticipated to register the third highest growth due
to rising advancements in new technologies in the agriculture and farm machinery products.
Middle East & Africa and Latin America are also anticipated to witness significant growth in the
global agriculture and farm machinery market over the forecast period.

The increasing use of marketing contracts within many agricultural commodity and food
distribution channels has led to a growing interest in empirical and theoretical studies of
agricultural marketing channels, The escalating use of sales contracts has been attributed to more
complex consumer tastes which are increasing the demand for specialized qualities and
quantities of food, and changing risk environments, Recent developments have been made which
may enhance the theoretical understanding of contracts and vertical co-ordination and provide
new opportunities for explaining and empirically testing key relationships in agricultural
marketing channels, However, there has been little formal analysis of the nature of vertical
contractual arrangements and relationships between various stages of the food chain (Sheldon,
1994), and the forces that lead to alternative exchange mechanisms developing in different
commodity markets are not clearly understood, agricultural production marketed through
contracts or vertical integration has increased significantly in many agricultural industries. Their
figures also indicate that the use of contracts and extent of vertical integration varies widely
between industries. Over 90% of production in the egg, broiler, processed vegetable and turkey
industries is marketed using contracts or other forms of vertical integrated channels, while in the
feed grain and hog industries, figures fall to below 20% of production. A market or cash sale
occurs where farmers sell produce after harvest or at some time later, directly to the marketing
agent or firm. An alternative marketing channel for which data was collected is a forward
contract which specifies a stable price or pricing formula, in order to provide security to the
producer concerned. It is apparent that these alternative contracts represent different levels of
integration in the marketing channel, and although they are simple in structure they provide
individual firms with alternative marketing opportunities. The data presented in Table 1 shows
the range of market arrangements used for the different products. While some producers use
both types of channel, there appears to be a large number of producers who consistently use only
one form of marketing arrangement for a particular crop.

The objective of this paper is to investigate in more detail why these different marketing
channels may exist in an industry and to explain the factors that might influence an individual
producer’s choice of contractual arrangement. Two related models are developed to give both a
theoretical and empirical perspective on these issues. The first part develops a simple theoretical
model that is used to examine the expected returns and variations in returns, from using
alternative marketing contracts. The results of this model show the complexity of the decisions
involved, help explain why multiple marketing channels may exist in an industry, and suggest
variables that might influence an individual producer’s choice. In the second part, an empirical
model is developed to demonstrate how internal marketing competencies, firm characteristics
and external structural industry characteristics influence an individual firm’s selection decisions.
The two models are complementary in that the empirical model makes it possible to account for
differences between individual participants, while the theoretical model identifies more
fundamental variables that influence the decisions.

A Model of Expected Risks and Returns for Alternative Marketing Channels

In this section we develop a simple supply and demand model which identifies the incentives for
producers, and processors or marketing agents, to select specific marketing channel
arrangements. In models of market channel arrangements it is commonly assumed that the
principal alternatives facing firms are: to exchange products in a market, to develop a contract to
provide the product in the future, or to form an integrated firm. These forms of contractual
arrangement have become accepted as standard despite the fact that the literature suggests that
optimal contractual arrangements could be flexible,

The tendency towards standardised contracts is perhaps stronger in agricultural marketing

channels where there are normally considerably more producers than there are marketing outlets
and there are obvious transaction cost savings from using standardised contracts. It should also
be noted that alternatives such as futures contracts are not considered as a form of contractual
arrangement in this study. Although they are a common feature of many dominant agricultural
industries in some countries, they are viewed as a specialised form of risk management that is an
additional element in the marketing channel. In the industries under study there are no futures
markets in existence.

The objective of this model is to identify the impacts of the different marketing channels on the
expected level and variability of returns for the producers and marketing firms. These are
equivalent to the outcomes that would be expected in a competitive market environment where
there are a large number of both producers and marketing agents. The analysis is based upon a
simple linear stochastic supply and demand model of the following general form:

D = a - bPc +  (2) S = Q + 

where: D is the quantity demanded. S is the quantity supplied. P c is the consumer

price.  ~ (0,Var ) is the stochastic element in the demand curve.  ~ (0, Var ) is
the stochastic element associated with supply. E(,) = 0. Q is the expected level
of supply. a and b are relevant demand parameters. The model is essentially a short run
representation of conditions in an agricultural industry within a given season. It is further
assumed that marketing contracts are arranged between the producer of the product and a
marketing agent who has a fixed average cost of handling or processing the product (M). These
costs reflect the physical costs associated with marketing the product such as distribution and
handling. It would also include some expected level of normal profits for the marketing agent’s
activities. At this stage of the analysis it is assumed that this cost is the same for all contract
forms.

Expected Revenue and Risk

Using the simple model and considering each form of contract in isolation, it is possible to
derive expressions for the expected level and variability of aggregate returns. Costs of
production are not included and are assumed to be fixed in the short run. It is further assumed
that both the agent firms and the principal firms (producers) are homogeneous and have equal
market shares of their respective industries. Thus, aggregate revenues can be used to reflect the
profitability of individual firms at either level. The alternative contractual arrangements
considered are assumed to reflect the most commonly used alternatives in agricultural marketing
channels; commission sales, forward selling, and market sales. The detailed derivation of the
expressions for the expected returns and variability are reported in appendix one. Table 2
presents a summary of the analytical results and shows the expected level of returns, and the
variance of those returns for both a producer and a marketing agent, under three types of
marketing contract. These are described in more detail below.

Commission Sales

This contract assumes that the producer assigns the product to the agent for sale in the market.
The agent is assumed to deduct marketing costs M (which would reflect the minimum
commission that a competitive agent might expect), and return the residual revenue to the
principal. This arrangement is widely used in a variety of situations in both developed and
developing countries. It corresponds to commission selling which is also used in a wide variety
of non-agricultural markets, and is an approximation of co-operative selling where producers
received a pooled return after actual marketing costs have been deducted. The common
characteristic of these arrangements is that the uncertainty in the market place is assumed to be
fully understood by both producers and agents before a price is established for the product.

Forward Selling
At the other extreme are forward selling agreements where it is assumed that a producer price is
agreed upon before either supply or demand conditions are known. The producer in this case
receives a fixed price, which reflects the producer’s and agent’s expectations before the product
is produced, but revenue is still influenced by variability in production. The return to the agent is
determined by the difference between the producer contract price and the realized consumer
price. A contract of this nature would normally be established before the final level of
production for the season is known, and before the demand conditions are known.

Market Sale
Under this arrangement the product is sold to the agent after the total level of production is
known, but before the demand conditions are known. This situation might be found where a
producer sells the product to the agent at harvest, and it is assumed that neither the agent nor the
producer are aware of actual demand conditions at that time. This probably reflects the most
common situation where the product is sold to the agent after it is produced and where the agent
takes ownership of the product and bears some of the total risks. Under the conditions assumed
for the market contract, the producer price would be determined by the intersection of the known
supply curve and the expected demand curve after allowing for the marketing cost. The agent
would be prepared to purchase the product at this price for resale in the consumer market.

The global agriculture and farm machinery market can be segmented by product type and region.
By product type, the global market is segmented into harvesting machinery, farm tractors,
planting and fertilizing machinery, parts and attachments, plowing and cultivation machinery,
haying machinery and other agricultural machinery. On the basis of region, the global agriculture
and farm machinery market can be segmented into North America, Latin America, Europe,
Middle East & Africa and Asia-Pacific. Some of the major players in the global agriculture and
farm machinery market are Mahindra & Mahindra Limited, Deere and Company, CNH Global
NV, AGCO Corporation, Iseki & Co., Ltd., CLAAS KGaA mbH, Alamo Group, Inc., J.C.
Bamford Excavators Limited (JCB), Same Deutz-Fahr, and Yamabiko Corporation among
others.
Industry overview
India has the 10th-largest arable land resources in the world. With 20 agri-climatic regions, all 15
major climates in the world exist in India. The country also possesses 46 of the 60 soil types in
the world. India is the largest producer of spices, pulses, milk, tea, cashew and jute; and the
second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds.
Further, India is second in global production of fruits and vegetables and is the largest producer
of mango and banana. During 2018-19* crop year, food grain production is estimated at record
284.95 million tonnes. In 2019-20, Government of India is targeting food grain production of
291.10** million tonnes. Production of horticulture crops in India is estimated at record 310.7
million metric tonne (MMT) in 2018-19 as per final estimates. India has the largest livestock
population of around 535.78 million which translates to around 31 per cent of world population.
Gross irrigated area under food grains is estimated to have grown to 64.8 million hectares in
FY19.
Tractor sales in the country stood at 804,000 units in 2019 while 80,475 units were exported.
India is among the 15 leading exporters of agricultural products in the world. Agricultural
exports from India reached US$ 38.54 billion in FY19 and in FY20 (till November 2019) US$
22.69 billion. Exports of ready to eat items from India reached Rs 4,766.14 crore (US$ 681.95
million) in FY19 from Rs 4,821.71 crore (US$ 689.80 million) in FY18. India's exports of
processed food were Rs 31,111.90 crore (US$ 4.45 billion) in 2018-19. The Agriculture Export
Policy, 2018 was approved by Government of India in December 2018. The new policy aims to
increase India’s agricultural exports to Rs 4,19,340 crore (US$ 60 billion) by 2022. Government
aims to raise the fishery export from India to Rs 1 lakh crore (US$ 14.31 billion) by 2024-25.
Milk production in country stood at 187.7 million tonnes in 2018-19 registering a growth of 6.5
per cent. Milk processing capacity is expected to double from 53.5 million MT to 108 million
MT by 2025. The dairy sector witnessed a growth rate of 6.4 per cent annually in the last four
years against the global growth rate 1.7 per cent. Foreign direct investments (FDI) in India's food
processing sector is stood at US$ 628.24 million in 2018-19.
Growth in Gross Value Added (GVA) by agriculture and allied sectors grew at 2.1 per cent in Q2
2019-20.  Private final consumption expenditure (at constant prices) is estimated at Rs 40.01 lakh
crore (US$ 572.59 billion) in H1 2019-20 as against Rs 38.44 lakh crore (US$ 550 billion) in H1
2018-19.
The Electronic National Agriculture Market (eNAM) was launched in April 2016 to create a
unified national market for agricultural commodities by networking existing Agriculture Produce
Marketing Committees (APMCs). Up to June 2019, 16.4 million farmers, 124,000 traders were
registered on the e-NAM platform. 585 mandis in India have been linked while 22,000 additional
mandis will be linked in 2021-22.
The Government of India has introduced several projects to assist the agriculture sector. They are
Pradhan Mantri Gram Sinchai Yojana: The scheme aims to irrigate the field of every farmer and
improving water use efficiency to achieve the motto `Per Drop More Crop’. Overall the scheme
ensures improved access to irrigation. Around 285 new irrigation projects will be undertaken in
2018 to provide irrigation for 18.8 million hectares of land. As per Union Budget 2019-20 the
scheme has been allocated Rs 3,949.90 crore (US$ 565.16 million).