WHAT DOES IT LOOK LIKE AND WHERE DO WE GO

Transcription

1 WHAT DOES IT LOOK LIKE AND WHERE DO WE GO

2 Popula ation Growth 52 Years Ago (1960) world population reached 3 billion increasing from 2 to 3 billion in just 33 years. The second billion had taken 102 years ( ) And the first billion took from the origins of humans. Virtually all of the increased food production needed to feed the first 2 billion came from expanded area under production. Evans, Feeding the Ten Billion (1998),

3 World Population Projections to 2100

4 FAO Report -How to Feed the World in 2050? By 2050 the world s population will reach 9.1 billion, 34 percent higher h than today. Nearly all of this population increase will occur in developing countries. Urbanization will continue at an accelerated pace, and about 70 percent of the world s population will be urban (compared to 49 percent today). Income levels will be many multiples of what they are now. to feed this larger, more urban and richer population, p food production (net of food used for biofuels) must increase by 70 percent. Annual cereal production will need to rise to about 3 billion tonnes from 2.1 billion today; Annual meat production will need to rise by over 200 million tonnes to reach 470 million tonnes.

5 The Challenges in Summary To feed yet another 2 Billion people In a world that is richer and more urban; On basically the land area we now have, and with less water; Increase food productio n 70%;--grain production by 43%, and meat production by 75%; Made more difficult by: With competing demands for bio energy; The negative impacts of climate change;

6 Slowdown in Public Ag R&D Spending Growth For every $100 production spent on R&D India $0.40, sub-sahara $0.61, Caribbean $1.14, China $0.5, Brazil $1.40

7 Milk Largest Producer 91 Mn T F & V #2 in the world 151 Mn T Cattle / buffaloes Largest in the world 283 million Food Grains #2 in the world (220 Mn T) Tea Largest Producer (0.85 Mn T) Fisheries Marine: 2.7 Mn T Inland : 3.1 Mn T Sugarcane # 2 in the world (245 Mn T) Goat & Sheep 182 million 7

8 Current Proce essing Comparison of value added in agriculture and food processing* Agriculture Food processing India Brazil Thailand New Zealand USA

9 Irony of Sorts!!! Top few producers of many agricultural commodities in the world Yet Y t our share in world food trade is post-harvest losses of fruits and vegetables are estimated to be 25 to 40 %, amounting to mo ore than Rs. 30, crores Yet less than 2 % is processed! only 1.6 % We have a middle class of million people with adequate purchasing power to buy manufactured goods Yet value addition to agricultural pro oducts is less than 7% More than 220 million tonnes of food grains production Yet more than 130 million people go to bed hungry every day!

10 Value Cha ain Story Total mark-up in the chain Consumer Total margin - 60 to 75 % Margin from farmers to wholesaler % Wastage % Transportation - 10% approx. Retailer < 25% Sub-Wholesaler < 6% Wholesaler < 10% Market level commission agent < 8% Consolidator/village level trader < 10% Small / marginal farmer

11 Gla ance Fruit & Vegetables Processing Units Fish Processing Units Meat Processing Units Milk Products Processing Units Flour Mills (+482 Cold Storage cum icing Units) The industry is estimated to grow at 9-12 per cent, on the strength of 8% GDP growth during last 5 years

12 Food Processing Sector in India Huge wastage across the supply chain leads to lower level of processing and hence low value addition Produ ucer Field Losses (Pest, Diseases, Rodents etc)) Pre-Processing (e.g. inefficient harvesting, drying, milling) Developing Countries Relatively high losses in the initial parts of the value chain Transport (e.g. spillage, leakage) Storage (e.g. technical deficiencies) Consu mer Processing & Packagingg (e.g. excessive peeling, washing) Marketing (e.g. spoilage, rotting in stores) Wastage by Consumer (e.g. overeating, food wastage) Rich Countries High losses at a later stage in the food chain 12 Field Fork

13 Emerging areas Frozen foods Frozen vegetables Poultry Meat and Fish products RTC & RTE food prod ducts Convenience foods segment Breakfast cereals & Health foods Organic

14 Battle Lines

15 HONEY I SHRUNK!! NE EW AVTAAR!!!! An nd

16 Wheat Situation from Segment % Population area production yield movement 17% 11% 23% 13% Area under Irrigation Increase PX Daily Vol PX Monthly Vol 4% 13% 19%

17 Industry Growth Drivers - Demand Urbanisation, rise in disposable incomes and changing g lifestyle and aspirations are leading to significant demand for processed food Increasing spends on health foods Increasing Urbanisation Lifestyle and Aspirations Food Processing Demand Drivers Increasing Nuclear Families and Working Women Changing demographics Rise in disposable incomes Demand for Functional Foods Organised Retail and Private Label Penetration 17

18 Opportunities High domestic demand and supportive policy provides significant opportunities across the Food Processing value chain Policy Support Farm Inputs Farming Marketing/ Aggregator Process sing Logistics (Food) Retail/ Food Services Consumer Product Design Distribution ib i Financial & Business Services Transport Services/ Infrastructure Quality Control M arket Intelligence Marketing Mega Food Parks Food Safety Management Systems Quality Control Labs Key Opportunities Integrated Cold Chain Training Facilities Joint Research Facilities Backward and Forward Integration B2B Sales Customised Farm Equipment 18

19 Food Security Bill Legal entitlement to subsidized foodgrains country s population - 90% in Rural areas 50% in urban areas to be extended to at least 75% of the The priority households (46% in rural areas and 28% in urban areas) to have a monthly entitlement t of 35 Kgs (equivalent to 7 Kgs per person) at a subsidized d price of Rs. 1 per Kg for millets, Rs. 2 per Kg for wheat and Rs. 3 per Kg for rice The general households (39% rural and 12% urban in phase 1 and 44% rural and 22% urban in final phase) to have a monthly entitlement of 20Kgs (equivalent to 4 Kgs per person) at a price not exceeding 50% of the current Minimum Support Price for millets, wheat and rice The minimum coverage, entitlement and price to remain unchanged until the end of the XII five year plan In the first phase, food entitlement to be extended to 72 per cent of the population. In the final phase, to be completed beforee March 31, 2014, full coverage of food entitlement (to 75 per cent of the population) to be ensured

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