Opportunities in Agriculture and Agro- based industries in Bihar Dr.K.M.SinghDirector, State Agricultural Management and Extension Training Institute, Bihar Global Meet for a Resurgent Bihar, February 2007, Hotel Maurya, Patna

Background  Bihar is India’s third most populated state with a total population of 83 million.  It accounts for one-seventh of India’s population below the poverty line.  The state’s performance lags seriously behind national trends.  It has a strong political clout in the national affairs with 40 members in the lower house and a large presence in the council of ministers.

N Uttar Pradesh East Champaran Sitamarhi Madhubani SupaulAraria Darbhanga Saharsa Samastipur Madhepura Purnia Kishanganj Katihar Bhagalpur Munger Khagaria Begusarai Banka Jamui Nawada Gaya Aurangabad Patna Bhojpur Buxar Bhabhua Rohtas Jahanabad Nalanda Sheikhpura Lakhisarai Vaishali Saran MuzaffarpurSiwan Gopalganj West Champaran Jharkhand West Bengal Nepal Present day Bihar

Challenges  Nearly 40% of Bihar’s population lies below the poverty line, the highest in India.  Modest progress was made during the 1990s ( to ), reducing poverty by nearly 7 percentage points, but the rate of poverty reduction was well below the national average.  By current trends Bihar is projected to fall well behind on most of the MDG targets for  Bihar’s rank for HDI among the Indian states has remained unchanged at 15 since 1981 while its score has increased marginally from in 1981 to in 1991 to in 2001.

 Bihar has a low rate of urbanization and poverty is predominantly rural.  Rural poverty is associated with limited access to land and livestock, poor education and health care, as also low-paid occupations and social status.  The rural poor tend to depend on agricultural wages or casual non-farm jobs for income.  Social or caste characteristics are also strongly associated with a lack of opportunities. Characteristics of Poverty

Key Ingredients Poverty and Social IndicatorsBiharIndia Population (in thousands, 2003) GSDP per capita (in Rupees, 2003) Poverty (% below national poverty line,2000) Urban Population (% of total population,2001) Life expectancy at birth (years, ) Infant Mortality (per 1000 live births, ) Under Five Mortality (per 1000 live births, ) Immunization against measles (% 1 yr olds,98-99) Child Malnutrition/Underweight Children (% children under 5, ) Maternal Mortality Rate (per live births, 1999) Proportion of births attended by a health professional Incidence of TB (per 100,000 population, ) Contraceptive Prevalence Rate (%, ) Access to an improved water source (% of population, ) Access to improved sanitation (households with toilet facility) Literacy (% of population, 2001) Male Female Gross primary enrollment (% of school age population, ) Male Female

 Challenges  Poverty  Improving growth performance  Social service delivery  Public administration and governance  Development Strategy  Improving economic growth through strengthening agriculture and investment climate  Strengthening social service delivery and public administration  Supporting Development Strategy  Fiscal reform strategy  The administrative reform agenda Bihar’s Development

 Bihar is a predominantly agrarian economy with a small manufacturing base.  While the share of agriculture has declined, it is still very large.  The share of industry is very small and has remained nearly the same.  The share of services has increased from 41% to nearly 50% of GSDP, and remains roughly on track with the all India average.  Overall Bihar’s economy has experienced little structural change and is not well diversified. Structure of the Economy

 Agriculture  Education  Health  Physical Infrastructure  Improving Investment Climate  Improving Service Delivery Priority Areas for Development

 Agriculture is the bedrock of Bihar’s economy, employing 80% of the workforce and hence is key to reducing poverty.  Agriculture output is volatile.  Crop productivity has been below the Indian average for most cereals.  The causes for the large yield gap include:  low investment rates,  lack of water management with annual flooding of the Gangetic plain,  weak transport and marketing infrastructure.  Severe fragmentation of land holdings. Role of Agriculture

Bihar is well endowed with:  Fertile land  Plenty of water  Varied agro-climatic conditions  Abundance of raw material for agro based industries Some success stories and opportunities to build in Bihar’s agriculture include:  Diversification from cereals to Aromatic crops (Mentha, Lemongrass etc.)  Makhana value addition by private entrepreneur  Export of organic Basmati rice  Export of Litchi & Snow peas  Honey production and marketing  Kishanganj tea Role of Agriculture

 Recent trends in Bihar include:  Specialized & localized production  Market - led Production  Use of hybrid seeds  Uniform quality  Contract farming  Diversification based on market demand  Repeal of APMC Act opens new opportunities for:  Establishment of Market Yards by private sector.  Establishment of specialty and Terminal markets under P-P-P mode.  Value addition, and Contract farming and  Export of fresh and processed fruits and vegetables from the state. Trends and New Initiatives in Agriculture

Quality Land Resources  Type – Alluvial Plain *Texture – Loam  pH – 6.5 – 7.5 *Medium to rich in NPK Quality Water Resources  Annual Rainfall – mm.  Irrigation Potential:  Surface water – 6.33 million Ha  Ground water – 4.85 million Ha  Total – million Ha  Irrigated Area – 4.88 million Ha Quality Human Resources  1145 Agriculture graduates trained in agri clinic /agri-business management  Hard working farmers Agriculture: The Core Competence of Bihar We can take three crops (Kharif, Rabi & Summer ) a year !!!

AGRICULTURAL PROFILE & LAND USE Land Use classification of BiharArea in lakh hect. Total Geographical Area93.60 Forest6.16 Barren and non-cultivable land4.37 Land put to non-agricultural uses16.35 Culturable Waste land0.48 Permanent pasture grazing land0.18 Miscellaneous crops and groves2.30 Other fallow (2 to 5 years)1.41 Current fallow5.95 Net area sown56.38 Gross Cropped Area80.26 Area sown more than once23.58 Cropping Intensity143.00%

Agricultural Production Scenario in Bihar Crop/ Enterprises Annual Production (Million MT) Bihar’s Share in National Pool (%) Marketable Surplus (%) Vegetables Fruits Food Grains Sugarcane Fish Milk

Potential Areas for Diversification in Bihar

TRENDS Diversification towards: Horticultural Crops  Fruits  Vegetables  Medicinal & Aromatic Plants

Maize  Present Production:1.5 million MT (10% of country production)  Targeted Production(2015):4.5 million MT  Maize is grown round the year  Productivity is above the national average  Producers’ price is comparable to export parity price making maize internationally competitive. Opportunities for investment:  Contract Farming  Ethanol, Corn oil, Feed, Starch industry  Export of Baby corn

Sugarcane Present Production: million MT Targeted Production(2015): million MT Opportunities for investment: New green field Sugar mills Capacity expansion of existing mills Ethanol manufacturing Molasses based alcohol Cogeneration of power Bagasse based paper

Litchi  Present Production:0.28 million MT( 71% of national production)  Targeted Production(2015):0.5 million MT  Litchi’s whole sale price in Bihar is less than that of competing states, giving comparative advantage for domestic and export market Opportunities for investment:  Contract Farming  Export of fresh fruits  Processing & export  Litchi Honey

An Aquatic organic crop rich in Protein-10% and low in fat- 0.02% !!! Present Production million MT (85 % of national production) Targeted Production (2015): million MT. Opportunities for investment:  Contract farming  Processing & Export Makhana

Mango  Present Production: 1.4 million MT (13% of country production)  Targeted roduction(2015): 3.0 million MT  Varieties  Jardalu, Langra, Krishna bhog, Jarda, Dudhiya Maldah Opportunities for investment:  Contract Farming  Export of fresh fruits  Cool chain  Processing & export

Present Production: 0.05 million MT Targeted roduction(2015): 2.40 million MT Opportunities for investment:  Contract Farming  Cool chain  Plant propagation &Tissue culture  Processing Banana

Vegetables  Present Production:8.60 million MT (9% of country production)  Pointed Guard, Lady Finger, Brinjal, Cauliflower cucurbits of Diara (1.1 million ha.) with annual production of MT. Production can be substantially increased with market support  Targeted Production(2015): 12.4 million MT Opportunities for investment:  Organic Farming  Contract Farming  Processing & export  Cool chain

Honey Present Production: 1300 MT (13% of national production) Targeted Production (2015):3900 MT Opportunities for investment:  Processing  Contract Farming  Marketing  Export markets

Fisheries Present Production : 0.27 million lakh MT Targeted Production (2015): 0.43 million MT Opportunities for investment:  Feed manufacturing units  Cold chain  Marketing  Aqua tech and amusement parks

Aromatic Rice  Present Production: million MT  Targeted roduction(2015): 0.05 million MT  Opportunities for investment  Contract Farming  Modern rice mill  Export

Dairy  Milk Production (Present) : 4.06 million MT  Targeted Production (2015): 8.46 million MT  COMPFED:A Success Story  COMPFED has established 5023 DCS with 2.54 lakh members (highest in Eastern India)  Opportunities for investment  Dairy equipment  Fodder block making units  Processing infrastructure (Milk powder, Packaging material)  Marketing infrastructure

Medicinal Plants Suitable for Bihar  Gurmar (Gymnema sylvestris)  Sarpgandha (Rauvolfia serpentine)  Kalmegh (Andrographis paniculata)  Kalihari ( Gloriosa superba)  Brahmi (Centella asiatica)  Buch (Acorus calamus)  Pippli (Piper longum)  Shatawari (Asparagus racemosum) Aromatic Plants Suitable for Bihar  Lemon grass  Palma rosa  Java citronella  Jama Rosa, CN 5  Mentha  Tulsi  Vetiver  Patchouli

Some Aromatic crops being grown in Bihar* (Year ) CropNo. of farmers Area (ha.) Oil yield (kg./Ha.) Total oil (kg.) Lemon grass Java citronella Mentha Palma rosa Tulsi (Basil) Jama rosa/CN Total * Author’s estimates based on field survey

Areas for Private Investment in Agribusiness Sector Crop Processing Value addition /Cool Chain ExportContract Farming Ethanol/ Corn Oil /Starch Industry Modern Rice Mill Litchi Honey Makhana Banana Mango Maize Vegetables Aromatic rice Fish Aromatic Crops Organic Vegetables

Crop Capacity Expansion New Mill Ethanol Contract Farming Power Generation Cool Chain Equip ment Manufa cturing Milk Powder Plant Paper Industry Sugar cane Milk (Contd.) Areas for Private Investment in Agribusiness Sector

THANKS