While our cities and industries have been growing at an unprecedented rate, our agriculture is stagnant. In India 70% of the people are employed by agriculture but they contribute just 20% of GDP. Several reasons like small land holdings, poor knowledge about soil requirements, unavailability of credit, poor logistics are some of the reasons. Even if agriculture grew by 2% higher than what it currently does, sustaining double digit GDP growth will be possible. When companies like Reliance, Wal Mart enter food retail there will be several changes. These companies will provide cold chain facilities (currently more than 50% of produce is wasted in the supply chain), by eliminating the middle trader they will give better price to the farmers and yet offer lower prices to their customers, also they will export a certain fraction which will only give higher returns to farmers. These companies will also make available better technologies to the farmers hence increasing their farm yields, pushing their sourcing costs down and offering even lower prices to the consumers. Everyone is benefited by this improved farm to plate efficiency. Read my previous post on Mukesh Ambani for more information about this retail strategy. Here is a link which gives M.S.Swaminathans views on a second Green Revolution!
I am pretty optimistic about this.
I am pretty optimistic about this.
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