India’s main agriculture products and the sector’s future

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India’s produce and exports

India is one of the world’s top producers of rice, wheat, milk, fruits, and vegetables. According to an economic survey of India in 2013–2014, India ranks first for producing grapes, bananas, cassava, peas, and papaya. However, the irony is that India still houses 23.7% of all the undernourished people in the world, according to data from the Food and Agriculture Organization for 2012–2014.

Productivity levels of a few crops and commodities

In recent years, items like rice, maize, cotton, meat, and guar gum—used in baked products, meat, and dairy became India’s main agriculture exports. Agriculture exports, including marine exports, grew 5.1% in fiscal year 2014 to $37.3 billion—compared to the same period last year. Marine product exports alone increased by 44.8%.

Indias Chief Agri Imports and Exports

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Better future in store?

However, agriculture’s future in India is improving. The government also changed this year. In the Union Budget for 2014–2015, the finance minister, Arun Jaitley, proposed to set up the “Long-Term Rural Credit Fund” with an initial amount of 5,000 rupees, or $833 million, to boost long-term investment in the sector.

Arun Jaitley said “to make farming competitive and profitable, there is an urgent need to step up investment, both public and private, in agro-technology development and creation and modernization of existing agri-business infrastructure.” He provided 100 rupees, or $16.6 million, to setup the “Agri-Tech Infrastructure Fund.”

These measures bode well for the agriculture sector. The measures will help give it the momentum that has been missing for several decades. Once profitability increases, it may also open up investment opportunities for domestic and foreign companies.

US companies in the agriculture sector include the Dow Chemical Company (DOW). Currently, it’s Dow AgroSciences India. It’s a wholly-owned subsidiary of Dow AgroSciences LLC. Monsanto Company (MON) has operations in India through Monsanto India Limited. The chemical manufacturing company FMC Corp. (FMC) has been operating in India for four decades as FMC India. The Mosaic Company (MOS) produces concentrated phosphate and potash crop nutrients. It’s also present in India.

An exchange-traded fund (or ETF) that gives you diversified exposure to India, including the agriculture sector, is the WisdomTree India Earnings Fund (EPI).

In the next part of this series, we’ll discuss the sector that has an increasing share in India’s gross domestic product (or GDP)—the services sector.

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