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Advanta Seeds

Title : Opportunities & Challenges in pulses for the Asian seed

industry

Bhupen Dubey

Global CEO, Advanta Seeds

APSA Conference November 2016

Contents

Global Scenario

• Introduction to Pulses

• Nutritional Facts

• Major Pulse Producers Globally

• Snapshot-Asia

Indian Pulse Sector

• Indian Pulse Sector updates

• Production, Consumption and Import Trends

• Opportunities and Challenges

• Enhancing Pulse Production

Agricultural area per capita worldwide (Ha) 3

0.44

0.270.21 0.17

1960 1990 2003 2025

2.33.3

4.55.6

1960 1980 2000 2020

Number of people fed per hectare of planted land from 1960 to 2020

Agricultural area per capita worldwide reduced to 0.17 hectares from 1960 to 2025

Number of people fed by one hectare of Land will increase to almost 6 in 2020

Source: World Bank, The Statistics Portal- World

• Globally pulses are grown in >171 countries

• Pulses Area-80 mio ha, Production-72 mio tons & productivity- 890 Kg/ha

• Pulses have potential to improve Human health, environment and contribute to global food security

• Stagnant productivity with declining availability created substantial demand supply gap

• Pulses have been in focus in recent times due to the continuous upswing in their prices

• Heavy imports affecting nutritional security where pulses are one of the cheapest source of protein

• India, largest shares -25% production, 33% acreage and 27% consumption of total pulses of world

4Introduction

The United Nations, declared 2016 as “International Year of Pulses” (IYP) To heighten public awareness for nutritional benefits of pulses as part of sustainable food production

aimed at food security and nutrition

1892

1431 13231027

641

0

500

1000

1500

2000

Canada China Myanmar Brazil India

Major Pulse Producing CountriesProductivity in (Kg/ha)

Source: India Pulses and Grain Association(IPGA), FAO and Research Paper on Status of Pulses, 2015

5Nutritional Facts about Pulses

Source: Food and Agriculture Organization (FAO)

Pulses offer Exceptional Nutritional ValueFood Reference Protein Fat Starch & Sugars Fiber

Beef 77.5 8.6 0 0

Whole Soy Flour - Raw 35 20 25.6 9.6

Dry Peas 23.7 1.3 45.5 16.6

Lentils 26.3 1.1 45 13.6

Chickpeas 24.4 5.9 41.1 8.7

Whole Wheat 13.2 2.5 61.3 10

Whole Rice Flour 5.6 1.4 77.7 2.4

Tapioca Flour 0.2 0 87.8 0.9

FAO Agricultural Outlook- 2024 indicates stagnant growth in food consumption in developed countries, but increased in developing countries

55%

38%

20% 20% 18% 18% 16% 16% 15% 15% 15% 13% 13% 12% 12%

0%

10%

20%

30%

40%

50%

60%

Developing countries where pulses contribute more than 10% of per capita total protein

intake

6Major Pulses and Pulse Producing Countries Globally

Source: Food and Agriculture Organization ( FAO)

0.00

5.00

10.008.83

0.81 0.75 0.51 0.49 0.25 0.30 0.21 0.17 0.16

Major Chickpea producing countries(Production in million metric tones)

0.00

5.003.29

0.58 0.30 0.27 0.25 0.09 0.02 0.02 0.01 0.01

Major Pigeon pea producing countries(Production in million metric tones)

India ( 70%), Australia ( 6.4%), Pakistan ( 6%), Turkey (0.51%)Myanmar (3.92%) contributes to Total World’s ChickpeasProduction which is around 13 million metric tons

India (65%), Myanmar(11.6%), Malawi( 6%), Kenya( 5.4%)and Tanzania ( 5%) contributes to Total World’s Pigeon peaProduction which is around 4.9 million metric tons

Dry Beans, 32%

Chickpeas, 17%

Dry Peas, 15%

Cow Peas, 9%

Lentils, 7%

Pigeon Peas, 6%

Broad Beans, 6%

Others, 9%

Production of Pulses by Type- Global

0.00

1.00

2.001.54 1.06

0.46 0.44 0.24 0.21 0.15 0.13 0.08 0.09

Major Lentil producing countries(Production in million metric tons)

Canada (30.8%) India (21.2%) Australia (9.2%) Turkey (8.8%)USA (4.8%) contributes to Total World’s Lentil Productionwhich is around 5 million metric tons

7Snapshot- Pulse Producing Countries and their % growth in Area,

Yield and Production

Source: Food and Agriculture Organization ( FAO)

Asia, 49.1%

Oceania, 2.9%

Europe, 20.4%

Africa, 26.8%America, 0.8%

Production share of Pulses by Region Average-1994-2014

3.65

-1.5

0

-1.7

1.5

-1.2

0.3

-6

-3.1

2.3

11.1

2.4

-1.3-0.2

3.21.5 2.2

-4.3-2.1

-1.2

5.8

4

-1.3

1.6 1.7

2.7

1.9 1.71

-2

-1

0

1

2

3

4

5

6

7

-10

-5

0

5

10

15

India Myanmar Iran Pakistan China Vietnam Indonesia Nepal Bangladesh Thailand

Top 10 Asian CountriesGrowth Trend of Area, Yield and Production (%)

Area (2000-11) Production (2000-11) Yield (2000-11)

Although Asia is contributing 50% Pulse acreages but the production ,area and yield are showing negative growth trends

Indian Pulse Sector

9Change in Dietary Patterns: Shift to Proteins

0

50

100

150

2004-05 2009-10 2011-12

All Cereals (kg)

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2

4

6

8

10

2004-05 2009-10 2011-12

Pulses (kg)

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20

30

40

50

2004-05 2009-10 2011-12

Vegetables (Kg)

10

30

50

70

2004-05 2009-10 2011-12

Milk (l)

0

2

4

6

8

2004-05 2009-10 2011-12

Eggs, Chicken, Meat & Fish

Rural Urban

Per capita annual consumption

0

4

8

12

2004-05 2009-10 2011-12

Edible Oils (l)

There is demand side pressure on pulses as there is shift to High Value Proteins

Source: National Collateral Management Services

• Average yearly growth in pulses production is less than 1% during last 40 years

• Over the years, selective strong procurement of cereals has shifted farmers focus to cereals

• Poor Return on Investments (ROI) as compared to competitive crops

10PULSES : Production Scenario

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40

60

80

100

120

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-61

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65

-66

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70

-71

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75

-76

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-81

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85

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90

-91

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95

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-17

(F)

Production of Rice, Wheat and Pulses in India(In Million MT)

Rice Wheat Pulses

Chickpea 47%

Pigeon pea 16%

Lentil 6%

Black gram 10%

Green gram 8%

Peas 4%

Others 9%

Source: India Agristat

Growth in Agriculture

• GDP of agriculture and allied sectors in India was recorded at US$ 259.23 billion in FY15

• GDP of agriculture and allied sectors in India has been growing at a compound annual growth rate (CAGR) of 3.3 %

Indian Pulse Sector

• Pulses account for around 20 per cent of the area under food grains and contribute 7-10 % of the total food grainsproduction in the country

Pulses Balance sheet - India

11Feeling the Pulse: Indian Pulse Sector

Year Unit 2012-13 2013-14 2014-15 2015-16 CAGR 2016-17(F)Growth

OLY

Area (‘000 ha) 23257 25218 23553 24436 2% 27100 11%

Average Yield (Kg/ha) 789 764 728 694 -4% 764 10%

Opening Stock (Mn MT) 3.2 3.0 2.5 0.12 -66% 0.07 -42%

Production (Mn MT) 18 19 17 16 -4% 21 26%

Imports (Mn MT) 4 4 5 6 16% 5 -16%

Exports (Mn MT) 0.2 0.35 0.22 0.25 8% 0.3 0%

Domestic use (Mn MT) 22 23 24 22 0% 25 10%

Closing Stock (Mn MT) 3.0 2.5 0.12 0.07 -71% 1 1357%

Source: National Collateral Management Services (NCML)

12Pulses: Production, Consumption & Imports

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*

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*

Pulses: Imports Production & Consumption (Million MT)

Imports Production Consumption (mn MT)

Deficit in domestic supply over demand is likely to continue in pulses leading to its continued dependency onimports in the coming years

Source: India Agristat

Area has stagnated and Genetic gain improvement have not happened as in cereals

13PULSES : Area & Yield

10

20

30

40

50

19

60

-61

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65

-66

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70

-71

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75

-76

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80

-81

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-86

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90

-91

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-01

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201

2-1

320

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-14

201

4-1

520

15

-16

201

6-1

7(F

)

Area under Rice, Wheat and Pulses in India (In Millon Hectares)

Rice Wheat

0

500

1000

1500

2000

2500

3000

3500

1960

-61

1970

-71

1980

-81

1990

-91

2000

-01

2006

-07

2008

-09

2010

-11

2012

-13

2014

-15

2016

-17

(F)

Yield of Rice, Wheat and Pulses in India(In Kg/Hectare)

Rice Wheat

Source: India Agristat

14Pulses Opportunity

CropAcreages (000 Ha)

Seed Potential

(K MT)

Current Seed Replacement

Rate (SRR)

Seed Requirement (K MT)

Value of Seed Market

(Mio USD)

Seed Requirement @ 50% SRR (K MT)

Value of Seed Market @ 50% SRR (Mio USD)

Pigeon Pea 3854 58 22% 13 19 29 45

Green Gram 3019 75 30% 23 22 38 40

Chick Pea 9000 540 19% 103 184 270 500

Black Gram 3246 81 34% 28 40 41 60

• Out of total requirement of seeds for important pulse crops 65-70% requirement is fulfilled by Government institutions viz; NSC, State Seed agencies, SAUs etc.

• Most of the important private players in pulse seed production are from unorganized sector

650 Mio USD

Lack of High Yielding Varieties

• Absence of any technological breakthrough due to which productivity of pulses is very low

Environmental Stress

• Grown mainly in marginal and poor environments under rain fed conditions

• Sharp fluctuations due to high vulnerability to environmental stresses, insects and pests

Lack of Research

• Public and private sector research should be encouraged for breakthroughs in pulse technology

Varietal Development

• High priority needs to be accorded to research in pulses with emphasis on varietal development

• Research to suit the local specific conditions, also lack of drought- and disease-resistant varieties

Lack of Policy Initiatives

• lack of policy attention by the government

• Investments attracted by pulses are much fewer than those in cereals and other crops

Improving Price Mechanism

• Incentivising pulse production through the price mechanism

• Farmer to be assured that the government will procure pulses vis-à-vis rice and wheat throughGovernment agencies (Food Corporation of India , other State agencies )and Private organisationslike NCDEX

15Challenges

• Productivity Enhancement

– Improving Seed Replacement Rate (SRR)

– Availability of quality seed

• Mechanization: Farm machinery for essential agricultural operations like tillage, planting, harvesting, inter-cultivation, threshing, processing etc. through cooperatives or custom hiring

• Post-harvest processing, storage and market interventions

• Providing life saving irrigation in pulse districts– Micro-irrigation through sprinklers/ drip and rainwater harvesting

16Enhancing Pulses Production

19 34 30 22 23

10%9%

11% 11%10%

0%

5%

10%

15%

0

10

20

30

40

Gram Urad Moong Arhar Groundnut

SRR CAGR (5 Yrs)

Source: Seednet.gov.in

Role of Various International and Indian Research Institutes (ICRISAT, IIPR etc.)

• Productivity improvement:

– Global genetic pool can be utilized to develop high yielding and climate resilient varieties/hybrids

– Short-duration varieties

• Government Policy Changes : Govt of India support Pulse Mission by allocating an amount of 165 Mio USD(65%) for pulses out of total allocation of 253 Mio USD for NFSM during 2016-17.

– Subsidy on production of quality seeds-crop specific need analysis

– Substantive increase in MSP

-- Price stabilization fund

• Though consumer centric, farmers too get benefit

• Procurement at market rate (2015-16 : 50, 000 tons, 2016-17 : 1,50,000 tons)

Role of Industry

• Private seed companies engaged in production, processing and marketing of seeds of other crops can beencouraged to include pulses in their business

– Partnering International/National Institutes by accessing global genetic pool to develop bettervarieties/ Hybrids

– Value addition through use of technology( Insect/Disease/ Drought Tolerance)

– Value addition through various seed treatments (ZEBA)

17Enhancing Pulses Production

Kharif Crops 2015-16 2016-17 % Change

Pigeon Pea 4625 5050 9.2

Black Gram 4625 5000 8.1

Green Gram 4850 5225 7.7

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650 Mio USD

R&D Institutes

Policy Makers

Seed Associations

Seed Companies

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