State Induced Capital Penetration of Agriculture Sector in India

It is notable that most of these major players in the market are of Indian origin starting as family group, others are either cooperatives, government undertaking, or are compa[r]

State Induced Capital

Penetration of Agriculture Sector in India

Anirudh Kumar Ph.D Research Scholar

Abstract

Introduction

Section I- Corporate sector and Government policies

Indian Economy has historically been an agrarian economy, with agriculture being the mainstay occupation of its population and largest contributor to GDP at the time of the country’s independence from British rule According to previously used methodology to calculate GDP in 1950-51 contribution of Agriculture & allied, Industry, and Services sector was 51.81 per cent, 14.16 per cent, and 33.25 per cent, respectively at current prices In 2013-14 share of Industry sector has increased to 24.77 per cent, services sector to 57.03 per cent while that of agriculture and allied sector has declined to 18.20 per cent There is a structural imbalance in the Indian Economy where agriculture still employs half the population of India while contributing less than 20 per cent to the country’s GDP

The following are some of the channels through which corporates penetrates into agriculture: - • Contract farming: A package of input supply, price security, sharing of monsoons risk,

sharing of technical knowledge by the firm etc under a forward contract between producer and processor Food Processing companies by such arrangement get assured input supply, they are dependent on farmer for their raw material supply, the structure of Contract farming is such that the success of farmers in cultivating a good crop translates into a success for the processor

• FPI- Food processing Industry: an industry still at nascent stage as the sector contributes less than 2% to Indian GDP, and only 10% of India food is processed

• MCX-Multi-Commodity exchange in different agricultural commodities also options and other spot and derivatives being introduced by SEBI

• Annual reports of private Corporates like ITC, HUL etc hints toward other channel like: Integrated watershed programs, diversifying farming activities through introducing Livestock Development program to diversify farmers income, R&D facilities of corporates working in coordination with ICAR and support by other government research institutes • Integrated Consumer Goods Manufacturing and Logistics facility with the aim of making

a demand driven value and supply chains in agriculture, replacing the traditional supply chains

• Supplying Agri-inputs like seeds, pesticides, fertilizers etc to the Farmer, engaging in innovation and research of the aforementioned products

Some of the facilitative and regulatory function that the government has done until now to facilitate corporate penetration in agriculture (as per Press Information bureau (PIB), Government of India):

• Agricultural producing and marketing committee- APMC law 2003, and its amendment in 2013 and in 2017: includes de-notification of perishables from AMPC act and stresses on direct selling of farmers to agribusiness corporates

• APLCFS-2018 ( Agriculture produce and Livestock Contract Farming and services Act),: a separate law for contract farming earlier contract act (1872) used to apply to this sector, but a need for separate law keeping in mind the specific provision of contract farming was felt

• Government has launched a Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters formally- KISAN SAMPADA YOJANA with a budgeted expenditure of Rs 6,000 crore rupees for the period 2016-20 to promote food processing industries in India Private sector is supposed to take a lead role in its implementation the SAMPADA scheme is flexible enough to let the entrepreneur choose the appropriate location for their projects based on availability of raw material, viability of the project and techno-economic feasibility

• Ministry of Food Processing Industries (MoFPI) :- establishing mega food parks and signing MoUs with Italy and France and other countries with departments like NIFTEM- National Institute of Food Technology Entrepreneurship and Management and IIFPT -Indian Institute of Food Processing Technology for developing Food processing technologies so as to stimulate investment for developing infrastructure of FPI sector, developing capability for institutional cooperation, and to ensure farmer’s participation in conferences, workshops, food fairs etc

• Notification by SEBI for using stock markets for MCX in agriculture commodities

Privatization is glorified as the one-shot panacea to cure all the maladies affecting our country – and the same is true with regard to the approach towards agriculture In the discourse surrounding it, the emphasis always tends to be on the ‘efficiency’ aspects of heightened corporate presence What is neglected in the process is the dimension of concentration of economic power that is also associated with the corporate sector

Ploeg (2008) regards big corporates as food empire who are present in every arena of Agri-market; from input supplying, developing chemicals, carrying out R&D in agriculture, food processing, selling, distribution, marketing of the agriculture product etc The control by few corporates over the amount of fertilizers, pesticides, seeds, tractors, the sale of farmer’s produce, to the consumption by the consumer etc and the political-support garnered by them prompts Ploeg to regard them as an empire

At the time of independence, planning was recognized as a potent tool to transform the Indian economy and bring it out of the stagnancy and decadence; the legacy inherited from two centuries of British rule The expectations were to emulate the success story of the centrally-planned Russian model of development Several plans were chalked-out even before an independent Indian state came into being

Post-independence, a planning commission (1950) was set up, national development council was established, elaborate plans were made, where state was designated to play a significant central role Gradual policy changes continued thereafter till the 1990s when, Indian economy witnessed the balance of payment crisis that initiated widespread liberalization of the economy, and a change in the role of state from omnipotent manager, owner, regulator of the economy etc., to imparting some of these function to the private sector while retaining the regulatory function with itself

depressing agriculture income, minimal surplus to invest and naturally no market for industrial good, as the mass just didn’t have the monetary income to buy goods Land reforms was the necessary corrective to this particular problem of economic concentration and to eliminate its dragging effects on the economy Land Reforms, however, met political resistance from the rich and powerful land holding class in India and achieved limited success Only some parts of the country- West Bengal, Kerala etc could execute the policy A similar thing happened in the process of increasing agriculture productivity as green revolution-1965 onwards was limited to Punjab, Haryana and Western Uttar Pradesh etc Green revolution marked a shift in policy towards increasing productivity of the agricultural land through use of HYV seeds, and greater use of fertilizers, pesticides etc., and thereby increasing the return in farming rather than distribute the land equally through land reforms

Limited success of land reforms could never be fully compensated by other policies to promote agricultural development An agriculture policy geared towards increasing agricultural productivity, equal distribution of land, achieving food security for the millions only remained on paper and could never come into effect It not only meant an agricultural sector prone to crisis but also impeded the development of the industrial sector Lerche (2013) remarks that this is the main cause due to which the larger agrarian question could never be resolved, even in 21st century

majority of Indian population is employed in agriculture, with rampant farmer suicide, lower yields than other countries, reeling under crisis as the primitive and unbalanced nature of agriculture is still intact

whenever agricultural faced severe distress and resources had to be diverted there, this led to a very slow growth in the size of the market Agriculture worked as a constrained to the growth of industrial sector in two ways, first as the resources earmarked for development of industrial sector had to be diverted to agriculture and second in the absence of market for industrial product

The monopoly element by the post-independence industrial development process was documented by Mahalanobis committee, Monopoly Inquiry Commission (MIC), Industrial licensing policy inquiry committee (ILPIC), Hazari committee etc There was unanimous agreement on the formation of monopoly in the economy via licensing requirement, amending Industrial development regulation act (IDRA) (1948 & 1956) to make special provision for some business houses S.K Goyal (1979) contends that state took measures to protect, promote and support incumbent industrialist at the neglect of other potential enterprising individuals

Goyal (1979) contends that there were two kinds of concentration that came to characterize the Indian economy One was a concentration over business and economic assets and the second and more dangerous was the aggregate concentration; the corporate-state nexus with which they could change the thrust of government policy, customizing the economic policies as deemed fit by them The corporate-state nexus hindered the growth of the economy Though the Monopolies & Restrictive Trade Practices Act (MRTP act-1969) came into effect to curb growth of monopoly power in the Indian economy, it achieved little of that objective Corporates always found a way around government regulations For e.g intercorporate investment, opaqueness in accounting practices Production capacity was undertaken by them under licensing agreement which were never utilized, at other times they produced more than their licensing capacity to tap the profit etc Little was done by corporates to develop technological base so as to fare the economy through the changing course of global growth trajectory shaped by the third industrial revolution

reducing their dependence on usurious moneylender Government financed a lot of business operation where private capital was not forthcoming Public Private Partnership (PPP), providing loan, acquiring equity share etc., became some of the way to finance business operation during that time

MRTP and Competition Act 2002 (CA02) have led to hampering the growth of monopoly power of business houses Mazumdar (2008) documents that none of these expectations and policy efforts bore fruits, as government though owned a substantial share through debt or equity actively choose to not exercise its decision-making power and interfere in management The narrow private sector could make decisions, foray into new ventures, could carry on its opaque accounting practices, and kept other out, only this time by the legitimacy provided by the state Though MRTP was on paper a good act it couldn’t bring out the required change in industrial sector The MRTP Act was abolished and replaced eventually by the Competition act of 2002 Mehta (2005) states that the competition act shifted attention away from monopolization of the economy and towards enhancing competition Checking monopoly power was not the regulating-government priority agenda

Other measures like abolition of managing agency, the foreign exchange regulation act (FERA) led to the exit of some MNC’s like IBM, coke in the 1980’s, and some of this vacated space was occupied by indigenous industries though they lacked technology to fill those roles

Section II: Concentration of Corporate sector in Agri-input and Agri-output market

We analyze the corporate sector by first focusing on Agri-input market and then on Agri-output market

Concentration in Corporates, providing input to the Agriculture Sector

in 2017, when there are three (3) big scale mergers taking place in the global front among the big six firms And Indian agriculture is more mechanized than ever, with wheat being the most mechanized crop Due to limitation imposed by data, we extrapolate our findings based on the secondary data and studies of different authors

Sharma (2009) notes that the yield of food grains has increased from 522 kg per hectare in 1950-51 to more than three times to 1854 kg per hectare in 2007-08, and food grains production increased from 51 million tonnes (approx.) in 1950-51 to about 231 million tonnes in 2007-08 Production of sugarcane, oilseeds and cotton all increased more than four-fold reaching approximately 348 million tonnes, 29.75 million tonnes, and 25.88 million bales, respectively in 2007-08 The period 2002 to 2007 saw an unprecedented increasein imports of fertilizers, the reason being that there has not been any addition in domestic capacity of fertilizer research and productionowing to uncertain policy environment regarding the same Imports of fertilizers namely nitrogen, potassium and phosphorous and their variant has increased from about 1.9 million tonnes in 2002-03 to nearly 7.8 million tonnes in 2007-08

Rao (2015) notes that the total Production of food grains in India catapulted to 260 million tonnes in theyear-2013-14 from 81 million tonnesin the year 1965, when seed-fertilizer technologies first arrived in the form of green revolution into the country’s agriculture Food grain productivity per unit of land has also increased from 591 kilograms per hectare to 2,100 kilograms per hectare in the aforementioned Period, Rao states that there is a need of a second green revolution as the productivity of cereals-wheat and rice along with other crop as Indian agricultural productivity is far behind that of the agricultural productivity of the world

Nagarajan (2014) et al noted that the consumption, production and import of fertilizer all experienced an upward trend from 1971 to 2011 The sale of seeds, pesticides, tractor and fertilizer all experienced an upward trend The competition in the market actually increased post liberalization between the Public & Private companies of India and foreign MNC’s In tractor manufacturing Indian firms leads the market share (89%) in 2011, in seeds market the market is evenly distributed between the three, while in the other market the market is less skewed towards the foreign players

Especially noticeable is the Cotton production and the corporate players engaged in it Murgukar(2007) et al noted that Private sector has grown rapidly in the period 1997-2007 The area, volume and value under proprietary hybrid cotton seeds have increased over the years while the corresponding under public hybrids have come down With Bt-cotton, the cotton-seed industry holds within itself a seed and a technology market The technology market- i.e the upstream activities in cotton is characterized by the monopoly of MMB- Monsanto Mahyco Biotech which licenses its Bt genes product to almost all cotton seed companies MMB sets Bt seed prices as high as four times the price of non-Bt hybrids There is competition in the seed market among limited bunch of major firms namely- Monsanto Mahyco of US, Rasi seeds & Nuziveedu Seeds Limited(NSL) seed companies of Indian origin Though private firms engaged in downstream activites of distribution, marketing etc has increased over the years, and concentration measured by HHI- Herfindahl Hirschman Index and Mobility index is lower than that in global market, the price of proprietary seeds has increased over the years

Subhash (2017) et al studies the Pesticides industry in India, he recognizes that the data of production, consumption of chemical pesticides is difficult to reconcile, and hence only a vague picture of corporate involvement in Indian market can be formed Pesticides use has increased in India especially since 2009-10, in the year pesticide consumption increased to 0.29 kg/ha which is 50 per cent more than that in the year 2009-10 The per-hectare pesticides use in India stands at 0.29 kg/ha (of gross cropped area) which is much lower than countries like China at 13.06 kh/ha, Japan- 11.85 kg/ha etc The category Pesticides include Insecticides, Fungicides and Herbicides Insecticides form the highest share out of total pesticides used in India, though their total share has come down over the years as use of fungicides has increased The firms engaged in Pesticides relies on heavy import from the industry giants of Germany’s Bayers and China’s Chemchina The author notes that though 6000 companies are engaged in this industry in India, and the concentration by the top-4 is 19% in 2014-15, while that of top-8 is 28 per cent, still there is a need to promote competition in pesticide industry so as to reduce pesticides prices

most of the country and are in the process of being merged, despite widespread agitation from farmer groups, NGOs, parliamentarian etc These big corporates bend rules, find loopholes in the regulation law and use it to their advantage

Concentration in Corporates, sourcing output from the Agriculture Sector

In this section, we go into the details of the corporate sector; the companies comprising it, the range of products they deal in, the nature of their organization- foreign, private & public The objective of this section is to gauge the concentration in corporates, sourcing their input requirements from agricultural sector to produce their output such as processed food products, beverages etc To fulfil this objective, we use the Prowess Database of CMIE- Centre for Monitoring Indian Economy for the time period 2007-16, so as to trace out the growth in concentration in this short span of last decade

TABLE 1.) Market share of 21 large cos dominating food manufacturing sector

S no Co Name Market share= sales/total sales( in percentage) (in percentage) Mar 2007 Mar -2008 Mar -2009 Mar -2010 Mar -2011 Mar -2012 Mar -2013 Mar -2014 Mar -2015 Mar -2016 Adani Wilmar Ltd

1.61 1.66 2.45 2.13 2.70 3.29 3.13 2.37 2.26 2.72

2 Allanasons Pvt Ltd

1.50 1.43 1.47 1.29 1.51 1.62 1.69 1.67 1.61 1.68

3

Bajaj Hindusthan Sugar Ltd

1.12 0.92 0.70 1.03 1.60 1.21 1.50 1.10 0.71 0.75

4

Cotton Corporatio n Of India Ltd

1.08 0.80 2.09 2.92 0.88 0.47 0.43 0.78 0.74 2.16

5

Godfrey Phillips India Ltd

0.97 0.89 0.96 0.91 0.97 0.92 0.80 0.67 0.68 0.66

6

Gokul Refoils & Solvent Ltd

0.95 1.00 1.15 0.98 1.43 1.78 1.26 1.01 0.89 0.25

7

Gujarat Co -Op Milk Mktg Fedn Ltd

2.59 0.00 0.00 2.78 3.09 0.00 0.00 0.00 0.00 0.00

8

Hindustan Coca Cola Beverages Pvt Ltd

9 I T C Ltd 11.86 10.5

9.79 9.17 9.74 9.62 9.21 7.52 7.65 7.98

10 Nestle India Ltd

1.79 1.78 1.88 1.82 2.02 2.10 1.88 1.50 1.54 1.30

11

Parle Biscuits Pvt Ltd

0.85 0.76 0.89 0.00 0.00 0.00 0.00 0.96 1.02 1.09

12

Pepsico India Holdings Pvt Ltd

1.47 1.37 0.00 0.00 0.00 0.00 0.00 1.29 1.38 1.01

13 Ruchi Soya Inds Ltd

5.22 5.39 5.12 4.69 5.26 7.11 5.72 3.89 4.25 4.22

14

Triveni Engineerin g & Inds Ltd

1.25 0.83 0.83 0.81 0.56 0.52 0.71 0.52 0.32 0.31

15

United Breweries Ltd

0.90 0.97 1.04 1.03 1.45 1.58 1.43 1.16 1.25 1.48

16 United Spirits Ltd

2.84 2.70 3.15 3.20 4.06 4.39 4.13 3.33 3.13 3.60

17

Britannia Industries Ltd

1.45 1.28 1.36 1.21 1.36 1.37 1.25 1.02 1.11 1.22

18

Cargill India Pvt Ltd

0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.21 1.02 1.09

19 Karnataka State Beverages Corpn Ltd

20

Mother Dairy Fruit &

Vegetables Pvt Ltd

0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.02 1.05 1.10

21

Pernod Ricard India Pvt Ltd

0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.39 1.56 1.89

TOTAL 37.46 32.2

9 32.8 33.9 36.6 36.0 36.5 36.5 36.6 39.4 Source: Prowess Database

Table 2) Profit share of 21 large cos dominating food manufacturing sector

S no Co Name Profit share= Profit/total Profit (in percentage) Mar 2007 Mar -2008 Mar -2009 Mar -2010 Mar -2011 Mar -2012 Mar -2013 Mar -2014 Mar -2015 Mar -2016 Adani

Wilmar Ltd

0.08 0.51 0.60 0.15 0.05 0.06 0.44 0.03 0.42 0.31

2 Allanasons Pvt Ltd

0.23 0.15 0.33 0.29 0.32 0.37 0.48 1.07 1.09 0.79

3 Bajaj Hindusthan Sugar Ltd

0.49 -0.99 1.46 0.34 0.12 -1.41 -5.45 -6.71 -5.41 -0.44

4 Cotton Corporatio n Of India Ltd

0.25 0.32 0.77 0.08 -0.01 -0.80 0.14 0.18 0.13 0.07

5 Godfrey Phillips India Ltd

6 Gokul Refoils & Solvent Ltd

0.39 0.74 0.25 0.39 0.49 -0.61 0.03 0.03 0.06 0.01

7 Gujarat Co -Op Milk Mktg Fedn Ltd

0.23 0.00 0.00 0.21 0.20 0.00 0.00 0.00 0.00 0.00

8 Hindustan Coca Cola Beverages Pvt Ltd

0.00 0.00 0.00 0.00 1.07 1.64 1.00 0.86 1.19 0.62

9 I T C Ltd 41.32 41.2

34.48 36.9 39.1 38.8 38.3 56.3 69.2 51.3 10 Nestle India

Ltd

5.01 5.63 5.51 5.62 6.17 6.05 5.66 7.53 8.93 3.00

11 Parle Biscuits Pvt Ltd

1.16 1.73 1.01 0.00 0.00 0.00 0.00 1.44 1.62 1.32

12 Pepsico India Holdings Pvt Ltd

-0.02 0.25 0.00 0.00 0.00 0.00 0.00 -1.15 -0.74 -0.28

13 Ruchi Soya Inds Ltd

1.61 2.20 1.04 1.64 1.63 0.97 1.06 0.13 0.23 -4.49

14 Triveni Engineerin g & Inds Ltd

0.87 1.31 1.73 0.72 0.04 -0.38 -0.59 -0.73 -0.90 -0.03

15 United Breweries Ltd

16 United Spirits Ltd

6.48 4.34 3.28 3.33 3.13 2.20 1.73 -21.9

-9.50 0.92

17 Britannia Industries Ltd

1.22 2.08 1.65 0.74 1.00 1.10 1.19 2.39 4.35 4.09

18 Cargill India Pvt Ltd

0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.69 -0.05 0.20

19 Karnataka State Beverages Corpn Ltd

0.00 0.00 0.00 0.00 0.00 0.00 0.17 0.23 0.24 0.15

20 Mother Dairy Fruit &

Vegetables Pvt Ltd

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.32 0.83

21 Pernod Ricard India Pvt Ltd

0.00 0.00 0.00 0.00 0.00 3.84 3.61 5.47 6.61 5.91

61.82 61.8

54.01 52.4 55.9 53.9 49.6 47.0 81.0 66.8 Source: Prowess Database

Corpn Ltd., Mother Dairy Fruit & Vegetables Pvt Ltd., Pernod Ricard India Pvt Ltd having a market share of 0% in 2007 but have a market share greater than 1% each in 2016 revealing the dynamic environment in which this sector and economy works Though the data is not up to date Even on the available data an idea of the size of market and changes in it, can be formed through these exercises It is important to understand that acquiring a market share of 1% or greater is a big achievement as we are here talking about the whole Agri-manufacturing sector comprising of diverse industries within it We will look at the industry wise break-up in the exercises following this one Some of them like Cargill are foreign MNC’s and some other cos like Hindustan coca cola simply used to operate with a different name or didn’t had its data updated on prowess database Table furthers the point of concentration in profit accounted by these companies which command a disproportional market share as shown in Table

The nature of the firms and these firms and the product they deal in are shown in table 3)

Table 3) Foreign, Private, PSU etc.; nature of the dominant 21 firms and the product they deal in

S no Name of the Company

Nature- foreign, Private, PSU, Cooperative etc

Range of Products dealt in

1 Adani Wilmar Ltd

MNC an Indian Private co The Adani group was estd in 1988

Resources, logistics, energy, agriculture, real estate and financial service

2 Allanasons Pvt Ltd

MNC an Indian Private co The allana group was estd in 1865

Frozen Buffalo Meat, Chilled Vacuum Packed Buffalo Meat, Frozen Buffalo Offal, Chilled Lamb Carcasses, Spices Products, Coffee Beans, Fruits Pulps & Concentrates etc

3 Bajaj Hindusthan Sugar Ltd

MNC an Indian Private co Part of the Bajaj group was founded in 1931

4 Cotton Corporation Of India Ltd

CCI is a

Government of India agency, incoporated in 1970

Export, Trade and procurement of cotton

5 Godfrey Phillips India Ltd

MNC of Indian origin-founded in l930s - flagship company of Modi Group

Tobacco, agri-business, specialty chemicals, retail, lifestyle, education and FMCG; defining Group today

6 Gokul Refoils & Solvent Ltd

Indian company of Gokul groups 1992, MNC of Indian origin

Edible oils such as Soya bean oil, Cottonseed oil, Palm oil (Palmolein), Sunflower oil, Mustard oil, Groundnut oil, Vanaspati and Industrial oils such as Castor Oil

7 Gujarat Co-Op Milk Mktg Fedn Ltd

Indian Co-operative set-up by the NDDB in 1965

Milk Bread Spreads, Cheese, UHT Milk, Beverage Range, Amul PRO, Ice Cream, Paneer, Dahi, Ghee, Milk Powders, Mithai Range, Mithai Mate,

Chocolates, Lactose Free Milk, Fresh Cream, Amul Sour Cream, Pouch Butter Milk, Amul Cattle Feed etc

8 Hindustan Coca Cola Beverages Pvt Ltd Founded 1992, Wholly-Owned Subsidiary of the MNC, Coca-Cola Company, USA estd in 1886

Coca-Cola, Diet Coke, Thums Up, Sprite, Fanta, Limca, Kinley, Soda, Schweppes, Tonic Water Still Beverages – Maaza, Minute Maid, Pulpy Orange, Minute Maid, Nimbu Fresh, Minute Maid 100% Juices (Apple, Grapes, Orange, Mixed Fruit), Minute Maid range of fruit flavoured drinks Water - Kinley, Bonaqua etc

9 I T C Ltd Formed in 1910, an India based MNC

Fast-Moving Consumer Goods (FMCG), Hotels, Paperboards & Packaging, Agri Business & Information Technology

10 Nestle India Ltd Foreign MNC Founded in 1866, incorporated as Nestlé S.A (Société Anonyme)

11 Parle Biscuits Pvt Ltd Indian private limited company, founded in 1929 by Chauhan family

Deals in Biscuits under the brand Parle-G,

KrackJack, Monaco, Kreams, Golden Arcs, Parle Marie, Milk Shakti, Parle Hide & Seek Bourbon, Parle Hide & Seek Fab, Top, Parle Gold Star, Happy Happy, 20-20, simply good, Namkeen parle magix, coconut, cheeselings, Parle-G Gold Sweet confectionery under brands like Melody, Mango Bite, Poppins, in Eclairs, Mazelo, Kismi Toffee Bar, Londonderry, Kaccha Mango Bite Snacks under brands like Mexitos Nachos, Parle's Wafers, Fulltoss, Parle Namkeens, Parle rusk, Parle Cake 12 Pepsico

India Holdings Pvt Ltd U.S based MNC, founded in 1965

largest MNC food and beverage businesses in the country PepsiCo, Inc is an

American multinational food, snack, and beverage corporation it deals in the arena of manufacturing, marketing, and distribution of grain-based snack foods, beverages, and other products Its brand includes: Pepsi, Diet Pepsi, Mountain Dew, Lay's, Gatorade, Tropicana, Up, Doritos, Brisk, Quaker Foods, Cheetos, Mirinda, Ruffles, Aquafina, Naked, Kevita, Propel, Sobe, H2oh, Sabra, Starbucks (ready to Drink Beverages), Pepsi Max, Tostitos, Mist Twst, Fritos etc

13 Ruchi Soya Inds Ltd

Public limited co., an Indian Conglomerate part of Ruchi group

Manufacture and sale of edible oils, vanaspati, bakery fats, and soya food primarily in India It also offers soya chunks, granules, and soya flour

products Wide range of food products include cooking oils, soya foods, vanaspati and bakery fats The edible oil range holds a number of brands including Mahakosh, which is an umbrella brand containing Soyabean oil, Cottonseed oil, Groundnut oil; Ruchi Gold Palmolein and Ruchi Gold Mustard oil; Nutrela oils, namely Nutrela Soyabean oil, Nutrela Mustrad oil, Nutrela Sunflower oil, Nutrela Groundnut oil and Nutrela Rice Bran oil; and Sunrich sunflower oil Nutrela is the largest selling soya foods brand in the country, with more than 50% market share

14 Triveni Engineering & Inds Ltd

Indian based co part of Triveni group

15 United Breweries Ltd

Indian

conglomerate co estd in 1857 by scotsmen and is owned by UBHL and heineken international

Beverages, aviation and investments in various sectors The company markets beer under the Kingfisher brand and owns various other brands of alcoholic beverages

16 United Spirits Ltd Indian alcoholic beverage co subsidiary of Diageo(54.8%),

Alcohol,the world's second-largest spirits company by volume

17 Britannia Industries Ltd

Estd in 1892 and is a part of Wadia group, founded by Nusli wadia

Manufacture and sale of biscuits, bread, rusk, cakes and dairy products, sells its Britannia and Tiger brands of biscuit throughout India

18 Cargill India Pvt Ltd

foreign based MNC, Cargill-family in 1865

Processes, refines and markets a wide range of both indigenous and imported edible oils, fats and blends to the food industry including Sweekar, Nature Fresh, Gemini, Rath and sunflower and Shakti brands of Edible Oil, Chalki fresh atta in India by the brand name "Sampoorna” Cargill developed some of these brands like Naturefresh but acquired most of them like sunflower oil, rath, gemini, sweekar refined oil, Leonardo brand of olive oil 19 Karnataka

State Beverages Corpn Ltd

public sector company owned by the Government of Kerala

has a monopoly over wholesale and retail vending of alcohol in Kerala

20 Mother Dairy Fruit &

Vegetables Pvt Ltd

Commissioned in 1974 as a wholly owned subsidiary of the NDDB

Dealing in Brands like Mother Dairy, Safal, Dhara, Dailycious etc

21 Pernod Ricard

Pernod Ricard is a French company

India Pvt Ltd

Founded in 1975, France

(including brands like Chivas Regal), along with many other holdings

Source: The official website of each company

It is notable that most of these major players in the market are of Indian origin starting as family group, others are either cooperatives, government undertaking, or are companies of foreign descent The Foreign companies too are a part of a particular family business group which established itself either in 19th or 20th century If we look at the nature of these firms in terms of product manufactured and the place of incorporation, we find that most of these are conglomerates i.e have simultaneous engagement in diverse set of often unrelated business, of foreign or Indian origin Column that shows the nature of these firms-foreign, private, public reveals that out of these 21 firms are of Foreign descent, are cooperatives or are under government control, 12 are companies of Indian origin Even from the firms from Indian descent only firms have established themselves after 1980s and are cooperatives and government companies The rest are Indian firms established as family houses before independence or are their foreign MNC counterparts

It is important to understand that Agri-manufacturing segment of the corporates is a big category, we can get an idea of product wise concentration of companies by the product wise sub-category of products given in the prowess database The Agri-Manufacturing category in the data set contain 2653 companies, the category Agri-Manufacturing contains further sub categories namely 1) Food products, 2) Tobacco products, 3) Floriculture, 4) Other agricultural products The category food products further contain sub-categories namely, (1.1) dairy companies -containing 140 companies, (1.2) Tea cos contain 233 companies, (1.3) Coffee cos contains 30 companies, (1.4) Sugar cos containing 227 cos, (1.5) Vegetable Oils and products containing 402 companies, (1.6) beer and alcohol containing 160 cos., (1.7) other food products containing 703 companies We undertake a closer inspection of these sub-categories of Agri-Manufacturing industries to check for concentration and the extent of the same

Table 4) Dominant food Product Companies

Dominant food Product Companies Mar-07 Mar-16

S.no Company Name market

share (%)

market share (%)

1 Adani Wilmar Ltd 2.14 3.49

2 Bajaj Hindusthan Sugar Ltd 1.49 0.96

3 Allanasons Pvt Ltd 2.00 2.15

4 Balaji Distilleries Ltd [Merged] 1.24 0.00

5 Balrampur Chini Mills Ltd 1.19 0.56

6 Britannia Industries Ltd 1.93 1.57

7 Cargill Foods India Ltd [Merged] 0.72 0.00 Glaxosmithkline Consumer Healthcare Ltd 1.00 0.90 Gokul Refoils & Solvent Ltd 1.27 0.32

10 Gujarat Ambuja Exports Ltd 1.14 0.55

11 Gujarat Co-Op Milk Mktg Fedn Ltd 3.44 0.00

12 Marico Ltd 1.11 0.96

13 Nestle India Ltd 2.38 1.67

14 Parle Biscuits Pvt Ltd 1.14 1.39

15 Pepsico India Holdings Pvt Ltd 1.95 1.29

17 Sabmiller India Ltd 1.11 0.77

18 Suguna Foods Pvt Ltd 1.18 1.14

19 Tata Global Beverages Ltd 0.85 0.59

20 Triveni Engineering & Inds Ltd 1.66 0.39

21 United Breweries Ltd 1.20 1.90

22 United Spirits Ltd 3.78 4.61

23 Cargill India Pvt Ltd 0.00 1.39

24 Hindustan Coca Cola Beverages Pvt Ltd 0.00 2.10 25 Karnataka State Beverages Corpn Ltd 0.00 4.29

26 Kwality Ltd 0.12 1.11

27 Mother Dairy Fruit & Vegetables Pvt Ltd 0.00 1.41

28 Pernod Ricard India Pvt Ltd 0.00 2.42

Total 40.99 43.34

Source: Prowess Database

We start by looking at the sub-category of food products by looking at 1.1) Dairy companies The prowess database records 140 companies engaged in manufacturing dairy products Table shows that out of these 140 companies we find that only companies command a market share of 68% (approx.) with a corresponding share in profit of 69%(approx.) and asset share of 58%(approx.)

Table 5) Dominant Dairy cos

Dominant Dairy cos Mar-07 Mar-16 S no Company Name sales/total

sales (%)

sales/total sales (%) Sterling Agro Inds Ltd 5.42 2.64 Gujarat Co-Op Milk Mktg

Fedn Ltd

40.88 0.00

3 Hatsun Agro Products Ltd 5.65 7.78

4 Heritage Foods Ltd 3.33 5.38

5 Kwality Ltd 1.44 12.76

6 Mother Dairy Fruit & Vegetables Pvt Ltd

0.00 16.17

7 Glaxosmithkline Consumer Healthcare Ltd

11.89 10.32

Total 68.60 55.05

Source: Prowess Database

(the NOVA brand) in 2016 The research again is constrained by the limitations imposed by the

absence of database in 2016 and other intermittent period for Amul and other brands

1.2) Tea companies: Comprises of 233 companies As shown in Table 6, this sector is dominated by just seven (7) companies namely A V Thomas & Co Ltd., Amalgamated Plantations Pvt Ltd., Goodricke Group Ltd., Gujarat Tea Processors & Packers Ltd., Jay Shree Tea & Inds Ltd., Mcleod Russel India Ltd., Tata Global Beverages Ltd Tata group is dominating throughout the last decade with a sales share of more than 25% and profit share of 62.5%(approx.) in 2016 Mcleod russel is the second dominant player in the market share with market share of 12.5%(approx.) exactly half than that of Tata’s

Table 6) Tea cos and its giants

Tea cos and its giants Mar-07 Mar-16

S no Company Name Sales/total sales (%) Sales/total sales (%)

1 A V Thomas & Co Ltd 4.91 5.60

2 Amalgamated Plantations Pvt Ltd

0.00 4.79

3 Goodricke Group Ltd 4.47 6.27

4 Gujarat Tea Processors & Packers Ltd

5.00 8.38

6 Mcleod Russel India Ltd 12.42 12.70

7 Tata Global Beverages Ltd 21.19 25.17

Total 52.89 68.87

Source: Prowess database

It is clear from Table 6, that Tata tea is the dominant player in this segment We can note that all of these players were well established in 20th and 19th century and are dominating not only in India but the world as well With tata’s owning AGM as well as Tata brand, and as a house Tata’s & Birla’s are some of the dominated family group whereas in the MNC’s from foreign patron’s front Williamson Magor Group and Goodricke Group are dominating this industry

Table 7) Dominant Coffee cos

Dominant Coffee cos

Mar-07 Mar-16

S No Company name Sales/ Total Sales (%)

Sales/ Total Sales (%) C C L Products

(India) Ltd 35.01 41.88

2 Nedcommodities

India Pvt Ltd

15.71 12.66

3 Tata Coffee Ltd 42.94 43.41

Total 93.65 97.95

Source: Prowess Database

We can note from table 7, that Tata group dominates not just in tea segment but also in Coffees We already know that it produces product ranging from Salt to Jaguar Car, and it started its operation in Steel company It just substantiates our point of concentration of conglomerates of incumbent firms diversifying their operations

1.4) Next, we take up the sugar companies, according to prowess there are 227 companies in sugar industry and in these as table 8, shows only companies had 28% of the market share in 2007 ,whose market share increased to 36%(approx.) in 2016

Table 8) Dominant Sugar companies

Dominant Sugar companies Mar-07 Mar-16

S no

Company Name sales/total sales (%)

sales/total sales (%)

1 Bajaj Hindusthan Sugar Ltd 7.79 9.78 Balrampur Chini Mills Ltd 6.23 5.71

3 E I D-Parry (India) Ltd 2.46 5.40

4 Shree Renuka Sugars Ltd 3.21 11.95

5 Triveni Engineering & Inds Ltd

8.63 4.01

Total 28.31 36.86

Source: Prowess Database

Note about the companies engaged in Sugar industry: -

1) Bajaj Hindusthan Sugar Ltd.: BHL of Bajaj group company and is a sugar producer in India founded in 1931 by Jamnalal Bajaj and is one of the largest sugar producers in the country and the world The company is headquartered in Mumbai, India

3) E I D-Parry (India) Ltd.: Founded in 1788, ‘Parry’ has been a household name for over 225 years The Company holds the distinction of setting up India’s first sugar plant at Nellikuppam in 1842 and even today continues to pioneer new paths in each of its businesses founded in 1900, the Murugappa Group is an Indian business conglomerate, founded, managed, and largely owned by the Murugappa family They have presence in several segments including abrasives, auto components, bicycles, sugar, farm inputs, fertilizers, plantations, bioproducts and nutraceuticals

4) Shree Renuka Sugars Ltd.: Shree Renuka Sugars is a global agribusiness and bio-energy corporation The Company is one of the largest sugar producers in the world, the leading manufacturer of sugar in India, and one of the largest sugar refiners in the world engaged in sugar, ethanol and power generation Founded in 1998

5) Triveni Engineering & Inds Ltd.: Indian based co part of Triveni group Engaged in Sugar production, water treatment, steam turbines, gears manufacturer, sugar exporter, gears supplier, sugar producer India, gearboxes manufacturer, waste water treatment from India One of the three leading producers of sugar in India

From the above we can see the diverse nature of companies engaged in sugar processing, their conglomerate nature, family-business organization and dominance in the respective products

2016 Other than Ruchi Group, Adani Group and Gokul Group also has a substantial market share in this sector

Table 9) Dominant companies in vegetables oils and products segment

Dominant companies in vegetables oils and products segment

Mar-07 Mar-16

Company Name sales/total sales (%) sales/total sales (%)

1 Adani Wilmar Ltd 7.32 14.26

2 Cargill India Pvt Ltd 0.00 5.75

3 Gokul Refoils & Solvent Ltd 4.32 1.32

4 J V L Agro Inds Ltd 1.91 3.30

5 Marico Ltd 3.80 3.92

6 Ruchi Soya Inds Ltd 23.72 22.05

Total 41.08 50.60

Source: Prowess Database

Shantilal Adani in 1988 as a commodity trading business with the flagship company Adani Enterprises Limited, earlier known as Adani Exports Limited Its diverse businesses include energy, resources, logistics, agribusiness, real estate, financial services, and defence, aerospace etc AWL as a company sells its products under the brand Fortune, various products are sold by AWL like oil, rice, vanspati oil, soya chunk, besan etc

JVL agro inds Ltd founded in 1989 : JVL Agro Industries Limited is an India-based vegetable oil solution company elling under the Jhoola brand The Company is engaged in the production of vanaspati, refined oil, mustard oil, DOC and trading of good JVL Agro Industries Limited, formally known as Jhunjhunwala Vanaspati Limited, incorporated in the year 1989, manufactures hydrogenated vegetable oil (Vanaspati Ghee) and refined oils, at its manufacturing facility in Varanasi, Uttar Pradesh

Marico: family business of Harsh maliwal by the name Bombay oil inds Maliawal later founded his own co in 1991, which launched a number of brand like parachute, saffola, livon, set wel, zatak, Hercules etc Marico is an Indian consumer goods company providing consumer products and services in the areas of Health and Beauty based in Mumbai

1.6) Beer and alcohol: there are 160 companies in this industry segment Table 10, shows that out of 160 companies only dominate

Table 10) Beer and alcohol cos

Source: Prowess Database

The degree of concentration in this segment can be gauged by the Mergers and Acquisitions (M&A) activities within these companies As Balaji distillers has been acquired by United spirits in 2008 United spirit used to hold a substantial stake in united breweries which it sold to Heineken in 2015, Heineken international is itself world’s largest brewer in terms of volume and is a majority shareholder in United spirits

Beer and alcohol cos Mar-07 Mar-16

S no Company Name Sales/total Sales

(%)

Sales/Total Sales (%) Balaji Distilleries Ltd [Merged] 9.16 0.00 Karnataka State Beverages Corpn Ltd 0.00 23.45 Pernod Ricard India Pvt Ltd 0.00 13.24

4 Radico Khaitan Ltd 5.82 4.59

5 Sabmiller India Ltd 8.21 4.12

6 United Breweries Ltd 8.83 10.37

7 United Spirits Ltd 27.87 25.22

SABMiller an MNC dealing in brewing and beverage company based in England, until October 10th 2016 when it was acquired by Anheuser-Busch InBev Earlier, it was the world's second-largest brewer measured in terms of revenues It used to sell its product under brands such as Fosters, Miller, and Pilsner Urquell

Radico Khaitan Ltd (RKL), formerly Rampur Distillery & Chemical Company Ltd., is an Indian company that manufactures industrial alcohol, Indian Made Foreign Liquor (IMFL), country liquor and fertilizers It is the fourth largest Indian liquor company Selling its product under brand name like Magic moments, PM, after dark whisky, black cat etc The M&A activities, and the sheer number of dominant companies in this segment is itself evidence of increasing concentration in this industry

1.7) Other food products: this category includes 704 companies, out of which there are 26 dominant companies sharing 70%(approx.) of the market share among themselves in 2007 which reduced to 64%(approx.) in 2016 Out of these 26 companies, companies were found to be galloping 50% of the market share in 2007 which reduced to 40%(approx.) in 2016 So, we find that only few firms dominate this segment too, as shown in table 11 Although the concentration has somewhat reduced among the dominant companies, the lost share is more or less is distributed among the other 17 companies who have been dominating this segment from past decade

Table 11) Dominant food products cos

Dominant food products cos Mar-07 Mar-16

S no Company Name Sales/ Total

Sales (%)

Sales/ Total Sales (%)

1 Allanasons Pvt Ltd 7.93 6.63

2 Britannia Industries Ltd 7.66 4.83

3 Gujarat Ambuja Exports Ltd 4.53 1.69

4 Mondelez India Foods Pvt Ltd 3.70 3.52

5 Nestle India Ltd 9.46 5.15

6 Parle Biscuits Pvt Ltd 4.52 4.29

7 Pepsico India Holdings Pvt Ltd 7.76 3.99

8 Suguna Foods Pvt Ltd 4.68 3.51

9 Hindustan Coca Cola Beverages Pvt Ltd 0.00 6.47

Total 50.23 40.07

Source: Prowess Database

Table 12) Dominant Tobacco cos

Dominant Tobacco cos Mar-07 Mar-16

S no Company Name Sales/ Total Sales

(%)

Sales/ Total Sales (%)

1 Dharampal Satyapal Ltd 3.97 7.50

2 Godfrey Phillips India

Ltd

6.59 6.34

3 I T C Ltd 80.46 77.25

4 V S T Industries Ltd 2.99 3.07

Total 94.01 94.16

Source: Prowess Database

3) Floriculture segment: There are 60 companies in this segment As shown in Table 13, out of 60 companies only companies used to command a market share of 85.20% in 2007, which increased to 96.95% in 2016 Further, one company namely Ramesh flowers Pvt Ltd commanded almost 90% of the market share in 2016 The fact that only one firm dominated almost this entire segment, highlights the monopolistic and concentrated nature of this segment

Table 13.) Dominant floriculture cos

Source: Prowess Database

We find that almost in all the cases, barring a few the same companies which used to dominate in 2007 are dominating in 2016 Concentration has been increasing in all the product segments, with clear monopolist tendencies in some product segments like Tobacco by ITC, Tea by Tata, coffee by Tata coffees’ and CCL product ltd, Beer and Alcohol segment by United spirits etc

S no Company Name Sales/

Total Sales (%)

Sales/ Total Sales (%)

1 C C L Flowers Ltd 3.42 0.00

2 Deccan Florabase Ltd 10.56 0.00

3 Pochiraju Industries Ltd 52.78 5.01

4 Flowers Valley Pvt Ltd 0.00 2.83

5 Ramesh Flowers Pvt Ltd 0.00 89.11

6 Suvarna Florex Ltd 3.45 0.00

7 Tanflora Infrastructure Park Ltd 3.49 0.00 Vikram Greentech (India) Ltd 3.15 0.00

9 Zygo Flowers Ltd 8.35 0.00

Table 14.) Dominant cos in the category other Agricultural products

Mar-07 Mar-16

S no Company Name Sales/ Total

Sales (%)

Sales/ Total Sales (%) A D M Agro Inds Kota & Akola Pvt Ltd 3.64 0.32

2 Rei Agro Ltd 6.58 0.72

3 Amira Pure Foods Pvt Ltd 2.24 3.22

4 Best Foods Ltd 1.46 3.47

5 K R B L Ltd 5.56 4.60

6 Sanwaria Consumer Ltd 2.26 3.70

7 Cotton Corporation Of India Ltd 10.78 19.28

Total 32.53 35.31

Source: Prowess Database

The same conclusion is reached in all the exercises that the concentration in Indian agricultural-Manufacturing market and in its sub-categories is very high and the level of concentration has only been increasing in the last decade with which this section is concerned We can also note that most of these dominant players are behemoths, who have sustained oil shocks, economic depressions, regulations and are there in business since 19th & 20th century With the advent of 21st century and new opportunities arising in the food manufacturing segment in the economy as

Section III – Fragmentation of Agriculture sector and its interlinkages with the corporate sector

Source: Agriculture Census

The agriculture census-2011 gives us a concrete picture of the size-pattern of operational-landholding in India The census divides the operational-land holdings in categories of marginal, small, semi-medium, medium, large landowner The figure available clearly points towards the division of the size of operational-landholding that has taken place in India from the time of first agriculture-census 1971 to 2011 Figure illustrates this point The large farmers owning more than 10 (hectare) accounted for only 0.7% of the total agricultural-landholding in India, compared to 4%(approx.) in 1971 There has been a phenomenal rise of Marginal farmers in India, there share in total agricultural landholding being 50%(approx.) in 1971, which has increased to 67%(approx.) in 2011 As the above figure makes it clear there has been growth of small and marginal farmers in India and the large and medium farmers have decreased in numbers, implying that the size of landholding in India has followed a secularly downwards trend This exercise demonstrates that the agricultural-sector is scattered, unorganized and has undergone drastic fragmentation throughout the studied period-1970-71 to 2010-11 for which data is available

0 10 20 30 40 50 60 70 80

1970-71 1976-77 1980-81 1985-86 1900-91 1995-96 2000-01 2005-06 2010-11

Figure Rise of the Marginal Holding Farmers

Sharma (1994) notes that at the time of independence semi-feudal relations-Zamindari, Mahalwari, Ryotwari etc in the agriculture sector were prevalent as a consequence of which the rural masses were impoverished and agricultural production stagnated He notes that the extent of concentration in land owned by households remained almost unchanged throughout the period 1953-54 to 1982, though regional inequalities in concentration of ownership of land were prevalent If the data is looked at from the point of view of different hierarchies of landownership a decline in the landownership of top per cent,5 per cent and 10 per cent is observed across states, which in turn came to be owned by the middle 40-80 percent and 50-80 per cent of the household The area owned by bottom 40 per cent remained the same in majority of the states During 1970’s a fairly noticeable increase in the proportion of landless households was visible in the economy in majority of the states There was a simultaneous decline in the large holdings farmers and rise in the operational holding of the marginal holding (0.01 -0.99 acre), but the area owned by sub-marginal farmers remained low Sharma (1994) brings an important relation to the fore in our understanding of landholding operated and landholding owned, though the sub-marginal farmers operated area increased their area owned didn’t witnessed a similar increase, the area owned and operated by the middle farmer increased while that owned and operated by large farmer witnessed a declined, the extent of landlessness in the period 1953-54 to 1982 also increased All these changes in the structure of land operated and owned had widespread implications in the growth of agriculture which witnessed a decline both in relation to its previous year performance and with respect to industrial and service sector of the economy

Rawal(2008) in the paper “Ownership Holdings of Land in Rural India: Putting the Record Straight” conjectures that the 48th (1992) and 59th (2003-04) round of NSSO underestimates the

The NSS 70th round on “Household Ownership and Operational Holdings in India”, in its report

571(70/18.1/1) states that the total area owned has fallen from 119.6 mha(million hectares) in 1971-72 to around 92.4 mha in 2013, a fall of approximately 23 per cent, a decline of 14 per cent was observed in the period 2003 to 2013, the average area owned per household plunked by more than half since 1971-72 from 1.53 in 1971-72 to 0.59 in 2013 (figures including landless households), surprisingly the percentage of landless household also came down from 9.60 in 1971-72 to 7.41 ha, implying that either the household left the agricultural occupation or they came to possess smaller pieces of land due to land reforms, hence the foreseen decline in average area owned per household The NSS Land holding surveys (LHS) clarify this point, as the highest percent of households are reported as marginal households showing an increase in percentage distribution of households from 53(approx.) percent in 1971-72 to 75.41 percent in 2013 In the percentage distribution of area owned it is the semi-medium and medium category of household that maintain its record of moderate growth with substantial share, 22 per cent and 19 percent (approx.) respectively in area owned, in 2013, in sync with Sharma’s (1994) observation since 1952 It is the marginal category which accounted for maximum growth and maximum share of 29.75 percent in 2013, in the percentage area owned, highlighting the sub-division of land in smaller plots The percentage of large and medium holding farmers in the period 1971-72 to 2013 in area owned came down from 54 per cent to 25 per cent respectively The inequality in land ownership is reflected in the fact that in 2013, 75 per cent of marginal category household owned 30 per cent (approx.) of land, while 2.17 per cent of medium and large category households owned 24.64 percent of total agriculture land

resolved in India, the state supported agriculture and industry with increasing and decreasing degree of focus in successive five year plans due to its scarce resource base as mentioned earlier

Interlinkages between corporate and Agriculture sector

Source: WIOD database, November 2016 release

On the other side, industries providing inputs and capital goods for agriculture increased in importance even as Indian agriculture also changed and used industrial products more intensively Thus, the inter-linkages between agriculture and manufacturing – the importance of manufacturing as a user of inputs produced by the agricultural sector and the use of manufactured inputs in agriculture – have also remained strong

The periodic publication of NAS input-output tables by the CSO and the WIOD- world input output data – help in constructing a limited picture of trends over time in the linkages between agriculture and industry The NAS input-output data reveals that 13.54% of agricultural output was used as input in the manufacturing sector in 1993-94, which increased to 19.43% by 2007-08 The WIOD data shows that in 2000, 18.95 per cent of crop production, 26.71 per cent of forestry and logging and 15.21 per cent of fishing output were absorbed as inputs in the manufacturing sector By 2014, the corresponding figures were 21.67, 29.88 and 18.63 per cent respectively

0.00 5.00 10.00 15.00 20.00 25.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Figure Agricultural Output used as Input in Manufacturing of Food & Textiles/ Total Agricultural

Output

Agriculture o/p used as i/p in manuf of food, beverages and tobacco products /Total agriculture crop-o/p -showing importance of agri o/p for manuf in total crop agri o/p

The input-output table available from the study of Krishna Singh and M.R Saluja in the NCAER working paper-WP111 “Input-output table for India-2013-14”, based on the supply and use table (SUT) of the new GDP series, suggests that the inter-linkages between agriculture and manufacturing may be even greater than what is indicated above According to their estimates, agricultural output used by manufacturing as input stood at 36.55%, of total agricultural output in 2013-14

The wide variation in the levels between NCAER data and NAS/WIOD is due to a part of agricultural output treated as going into private final consumption expenditure (PFCE) in the latter is, in the NCAER data, counted as intermediate input into manufacturing which then produces the items going into PFCE This is made clear by table 15 As we can note from it, the distribution of agricultural output between the part going to final consumption and that towards intermediate consumption is more biased towards the latter in the NCAER calculations Thus, the NCAER data takes into account that many agricultural products go through at least some manufacturing process before they are actually consumed

Table 15

Share in Agricultural Output Of:

WIOD NCAER

2014 2013-14

PFCE 55.58 46.67%

Intermediate Consumption 40.11 54.18%

Source: NAS and NCAER IO table data & concordance sheets

manufacturing output was used as input in Agricultural sector, this figure increases to 15%(approx.) in 2014, reflecting the gradual modernization of agricultural sector The WIOD table also reveals that use of chemicals products as an input in agriculture has increased from approximately 7% in 2000 to 7.5% in 2014 Highlighting greater dependence of agriculture on manufactured products from the industrial sector

Differences in calculation and methodology notwithstanding, the fact is that the production interlinkages between the agriculture and industrial sector have remained strong

Conclusion

A lack of affirmative action, rigid and unchanging laws in the face of loopholes in Laws relating to Agriculture leading to creation of newer avenues for corporates investment and profits without a change or perhaps worsening of the fortunes of farmer is leading to agriculture sector being detrimental to the health of farmer

intermediaries and control in the market and on farmers produce Debt burden gets worse down the scale, its heaviest among small and marginal farmers, with 86% of farmer and 80% of agricultural labor household in debt

Corporate influence in the economy has grown not only in terms of control over business assets, market and profit share but also in terms of growing influence over the state’s economic policies In other word business concentration and economic concentration both increased, growth of the former can be noted from our analysis in Section II, where we highlight the increasing concentration in the market-share of Agri-manufacturing industries The business concentration can be noted by the increasing dominance in Agri-output and Agri-input market by only few large players The economic concentration can be noted by corporate lobbying for state’s support to facilitate their expansion in the economy - agricultural has figured in that process, as highlighted in Section I, both because of the deepening linkages between manufacturing and agriculture as shown in section III Thus, in several ways, the value generation process in the agricultural sector and corporate profits have got linked in a way and in a context that tends to make for greater capital penetration of the agricultural sector

Corporate penetration in Indian agriculture has increased as is evident by growth of food processing industries and increasing dependence of agriculture on inputs like chemicals, fertilizer & pesticides However, both Agri-input and Agri-output market is characterized by oligopolistic and oligpsonistic tendencies, in concurrence with the international market trend of concentration and consolidation In a globalized world, where trade boundaries are obliterating geographical boundaries, greater competition, lower prices of commodities, food security are expected What we note is that centrifugal forces are in operation in the headwinds of globalized world The rise in concentration in the Agri-input market hasn’t meant that more and more R&D is happening to provide efficient and affordable inputs to the farmers Corporate penetration in the Agri-output market has not translated into increasing the wealth of farmer The rise in concentration has just spelled profit for the corporates

other legislation by pointing that under liberalization the private corporate sector and the different industries present in India have been dominated by firm’s with a “past” i.e incumbent firms both domestic and foreign from pre-liberalization era have consolidated their position and other segments of society are excluded that too with the aid of the state ,in short, “cronyism” with reference to concentration of economic power manifested itself In our analysis of Food manufacturing sector, the aforesaid is vindicated Mazumdar points out the firms that established themselves in the British era like ITC, Unilever etc., continued their dominance from the 19th

century till his studied period (2008), our study points out that such firms not only have a large share in the food manufacturing segment but their share is actually growing in the last decade (2007-16), with other MNC’s too capturing a sizeable share post liberalization P Mehta (2009) highlights how the issue of enhancing competition has been emphasized in CA02 rather than checking monopoly power– the MRTP Act too in its enthusiasm to check monopoly had placed a restriction on dominance rather than its abuse thus throwing away the baby, in the form of competition, with the bathwater The CA02 neglects the issue of existing monopoly of private corporates in market by focusing on competition in the market

structural imbalance of the agriculture market consisting of pseudo-monopolist corporate sector on one side and a weak fragmented farmer on the other

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