India accounts for only 2.5 per cent of the global agriculture exports, and there is an opportunity to double it in the medium term and improve the economics of the sector, ITC Chairman Sanjiv Puri on said on Thursday.
There is an urgent need to deal with the agriculture value chain, which would help in improving the quality of income in rural areas and ushering in socio-economic transformation in the country, Puri said while virtually addressing an event organised by industry body PHDCCI.
The sector also needs "immediate and substantive transformation" because it is also the most threatened by global climate change, he added.
"I think the most important sector that we need to deal with is really the agriculture value chains. And to that I would also add the wood-based value chains as an opportunity," Puri said.
"Presently, because of our productivity and limitations on quality, sustainability and limitations of value addition, India merely accounts for only two and a half per cent of the global exports," the ITC chairman said.
"The opportunity is very clearly to be able to double it in the medium terms, and doubling this offers the opportunity to actually improve, and improve the economics of this sector," he said adding that it needs a lot of policy reforms.
Some has been already undertaken at the centre and states level on agri infrastructure, funds, regulations, the marketing linkages, etc, Puri noted.
"What we have to envision is to move away from a production centric agriculture system to the next generation agriculture, which is demand-responsive," he said.
The dependence of the workforce on the agri value chains in India is also immense. Nearly two-thirds of rural livelihoods come from the sector and about half of the workforce of India is engaged in the sector.
"Despite such a large workforce being engaged in agriculture, its share in the GDP is under 20 per cent, reflecting the endemic problems of productivity and low incomes. So, this is really a serious concern in terms of the quality of incomes here," he added.
The food processing industry which lies at the intersection of agriculture and active manufacturing is an "enormous economic multipliers" and has the best employment to capital ratios, Puri observed.
"It is an industry which creates an enormous amount of post-harvest management livelihood. It also brings efficiencies, and also positively impacts farm incomes," Puri said.
According to him, agriculture is a sector threatened by climate change, though it is a small contributor to it.
"We have witnessed the extreme weather events, year on year, and the devastation they have caused on many facets of economic activity, but certainly substantially to agriculture, and experts actually predict that by 2050, if climate change continues unabated in the trajectory that it is progressing today, extreme weather events will multiply 75 times," he added.
For example, wheat yields could drop by 50 per cent after climate change, he added.
Moreover, India is already a water stress country, with 54 per cent of the country falls in that.
According to Puri, agriculture is a sector, which has "immense opportunity".
By 2050, the world is going to be home to 9 billion people and by 2027, India is going to be the most populous country with 1.5 billion people."And by that time, people would have better incomes better consumption, and therefore the world would need an enormous amount of food to manage the requirements and India will be the largest arable land in the world and a leader in many commodities," he said adding it will have a "unique opportunity to partake in the growing requirements and service of the world".