This document provides an overview of opportunities in agriculture and agro-based industries in Bihar, India. It notes that Bihar has a large population, high poverty rates, and its economic performance lags behind national trends. Agriculture is the main industry, employing 80% of the workforce. The document identifies challenges like low crop productivity and fragmentation of land holdings. It also outlines opportunities for diversification into high-value crops like fruits, vegetables, spices and fisheries. Private investment opportunities exist in contract farming, processing, exports, dairy equipment and sugar mills. Overall, the document argues that strengthening agriculture and related industries can help reduce poverty and drive economic growth in Bihar.
1. Opportunities in
Agriculture and Agro-
based industries in Bihar
Dr.K.M.Singh
Director,
State Agricultural Management and
Extension Training Institute, Bihar
Global Meet for a Resurgent Bihar,
19-21 February 2007,
Hotel Maurya, Patna
2. 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.
4. Challenges
Nearly 40% of Bihar’s population lies below the
poverty line, the highest in India.
Modest progress was made during the 1990s
(1993-94 to 1999-00), 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 2015.
Bihar’s rank for HDI among the Indian states
has remained unchanged at 15 since 1981
while its score has increased marginally from
0.237 in 1981 to 0.308 in 1991 to 0.267 in 2001.
5. 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
6. Key Ingredients
Poverty and Social Indicators Bihar India
Population (in thousands, 2003) 86774 1068214
GSDP per capita (in Rupees, 2003) 6501 24535
Poverty (% below national poverty line,2000) 39.00 22.70
Urban Population (% of total population,2001) 10.47 27.78
Life expectancy at birth (years, 1998-2002) 60.8 62.5
Infant Mortality (per 1000 live births, 1998-99) 72.9 67.6
Under Five Mortality (per 1000 live births, 1998-99) 105.1 94.9
Immunization against measles (% 1 yr olds,98-99) 11.0 42.0
Child Malnutrition/Underweight Children (% children under 5,1998-99) 54.4 47.0
Maternal Mortality Rate (per100000 live births, 1999) 451.0 408.0
Proportion of births attended by a health professional 23.4 42.3
Incidence of TB (per 100,000 population, 1998-99) 989.0 544.0
Contraceptive Prevalence Rate (%, 1998-99) 24.5 48.2
Access to an improved water source (% of population, 1998-99) 75.4 77.9
Access to improved sanitation (households with toilet facility) 16.8 36.0
Literacy (% of population, 2001) 47.5 65.4
Male 60.3 75.9
Female 33.6 54.2
Gross primary enrollment (% of school age population, 1998-99)
Male 58.0 81.0
Female 44.0 73.0
7. 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
8. 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.
Sectoral Distribution of GSDP, 1993
and 2003
0%
20%
40%
60%
80%
100%
Bihar 1993 Bihar 2003 AI1993 AI2003
Agriculture Industry Services
Structure of the Economy
9. Agriculture
Education
Health
Physical Infrastructure
Improving Investment Climate
Improving Service Delivery
Priority Areas for Development
10. 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
11. 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
12. 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
13. Quality Land
Resources
Type – Alluvial Plain *Texture – Loam
pH – 6.5 – 7.5 *Medium to rich in NPK
Quality Water
Resources
Annual Rainfall – 1297.2 mm.
Irrigation Potential:
Surface water – 6.33 million Ha
Ground water – 4.85 million Ha
Total – 11.19 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 !!!
14. AGRICULTURAL PROFILE & LAND USE
Land Use classification of Bihar Area in lakh hect.
Total Geographical Area 93.60
Forest 6.16
Barren and non-cultivable land 4.37
Land put to non-agricultural uses 16.35
Culturable Waste land 0.48
Permanent pasture grazing land 0.18
Miscellaneous crops and groves 2.30
Other fallow (2 to 5 years) 1.41
Current fallow 5.95
Net area sown 56.38
Gross Cropped Area 80.26
Area sown more than once 23.58
Cropping Intensity 143.00%
15. Agricultural Production Scenario in Bihar
Crop/
Enterprises
Annual
Production
(Million MT)
Bihar’s
Share in
National
Pool (%)
Marketable
Surplus (%)
Vegetables 8.59 9.0 100
Fruits 3.35 8.0 80
Food Grains 11.90 5.6 75
Sugarcane 13.00 5.5 100
Fish 0.27 8.3 100
Milk 4.06 4.4 100
18. 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
19. Sugarcane
• Present Production: 13.00
million MT
• Targeted Production(2015):
46.72 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
20. 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
21. An Aquatic organic crop rich
in Protein-10% and
low in fat- 0.02% !!!
Present Production- 0.003
million MT
(85 % of national production)
Targeted Production (2015):
0.050 million MT.
Opportunities for investment:
Contract farming
Processing & Export
Makhana
22. 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
23. 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
24. 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 48000 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
25. Honey
Present Production: 1300
MT
(13% of national production)
Targeted Production
(2015):3900 MT
Opportunities for
investment:
Processing
Contract Farming
Marketing
Export markets
26. 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
27. Aromatic Rice
Present Production: 0.015
million MT
Targeted roduction(2015):
0.05 million MT
Opportunities for investment
Contract Farming
Modern rice mill
Export
28. 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