Boston, MA -- (SBWIRE) -- 07/17/2012 -- BMI View: While 2011/12 and 2012/13 are expected to be promising years for the Indian agriculture sector, given better prospects for crops, we are less optimistic about the policy landscape for the industry. We view India's Food Security Bill as little more than a politically expedient proposal which does not benefit farmers as much as it does politicians. In our view, the bill not only skirts the underlying problems of corruption, ill-equipped distribution systems and poor agricultural productivity, it also will be detrimental to the country's already-precarious fiscal position. We highlight that if the bill is enacted in 2012, domestic procurement of food grains could be kept high, and export momentum could be prevented into 2013.

Key Forecasts

- Sugar production growth to 2015/16: 42.5% to 34.8mn tonnes. Strong growth will be driven by rising domestic demand, in turn providing production incentives.
- Milk production growth to 2015/16: 22.7% to 143.6mn tonnes. Growth will largely come from increasing domestic consumption of milk, as well as demand for value-added goods such as cheese and butter.
- Palm oil production to 2015/16: 4.0% to 52,000 tonnes. We are sceptical about the government's goal of increasing palm oil production seven-fold by 2015/16.
- 2012 real GDP growth: 7.3% (up from 6.8% in 2011; predicted to average 7.6% from 2012 until 2016).
- 2012 consumer price inflation: 6.6% average (down from 8.7% average in 2011; forecast to average 5.5% from 2011 to 2016).
- 2012 central bank policy rate: 7.75% average (down from 8.5% in 2011)

View Full Report Details and Table of Contents

Industry Developments

To date, only 15% of the milk produced in India is processed and packed, with 46% of milk produced in liquid form. Considering the small percentage of milk processed in the country, this leaves a lot of room for adulteration and unhygienic handling and distribution of milk (see 'Almost 70% Of Milk Samples Tainted'). In a bid to boost the packaged dairy products sector, the Indian Dairy Association (IDA) has promoted a tax exemption on dairy equipment and machinery to encourage investments in processing. The IDA has also suggested a 4% VAT for all dairy products, which could help boost consumption.

About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. Representing the world's top research publishers and analysts, we provide quick and easy access to the best competitive intelligence available. Our unbiased, expert staff will help you find the right research to fit your requirements and your budget. For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

Browse all Food research reports at Fast Market Research

You may also be interested in these related reports:

- France Agribusiness Report Q3 2012
- South Africa Agribusiness Report Q3 2012
- Ukraine Agribusiness Report Q3 2012
- Russia Agribusiness Report Q3 2012
- Pakistan Agribusiness Report Q3 2012
- Algeria Agribusiness Report Q3 2012
- Egypt Agribusiness Report Q3 2012
- Saudi Arabia Agribusiness Report Q3 2012
- Indonesia Agribusiness Report Q3 2012
- Thailand Agribusiness Report Q3 2012