The government o India has responded swiftly to the initiative of the Indian business community by identifying south Africa

as a thrust market for realizing larger exports from the country

The bilateral relations between the Republic of India and the Republic of South Africa have grown strong since the end of apartheid in South Africa in 1994. Both nations have since developed close strategic, cultural and economic ties. India and South Africa also share an extensive energy partnership. In 2010, India imported 1.4 million tonnes of South African coal in February, making it the largest purchaser of coal from the country. Ties with further solidified with South Africa's 2011 acceptance into the BRICS group. Economic ties Bilateral trade grew exponentially from USD 3 million in 1992-93 to USD 4 billion in 2005-06, and the two governments have targeted increasing bilateral trade to USD 12 billion by 2010. Gold bullion constitute one-third of India's imports from South Africa, while India polishes and processes diamonds from South African mines. South Africa has promoted signing a free trade agreement with India and the Southern Africa Customs Union (SACU), which includes Botswana, Lesotho, Namibia and Swaziland along with South Africa. Bharti Airtel was scheduled to acquire MTN to make one of the world's largest telecommunications companies, and also touted as step in South-South cooperation. The deal was, however, rejected by the South African government of Jacob Zuma on the grounds that MTN would not be as South African anymore amid concerns of dual-listing on the Indian and South African stock exchanges. Military ties India and South Africa have also developed military cooperation, trading arms and joint exercises and programs to train forces. IBSA On June 6, 2003 India and South Africa signed an agreement with Brazil, known as the Braslia Declaration, establishing "South-South" cooperation, based on the premise of the three nations being regional powers of South Asia, Southern Africa and South America. The declaration called for extensive tripartite cooperation on strategic, commercial and cultural affairs, development of a tripartite free trade agreement and a united front in negotiating with Western nations in the World Trade Organization (WTO), calling for reform of the U.N. Security Council and supporting each other's bid for permanent membership with veto rights. The IBSA Dialogue Forum was created to promote cooperation and consensus on issues of trade, poverty alleviation, intellectual property rights, social development, agriculture, climate change, culture, defence, education, energy, health-care, information

society, science and technology, peaceful nuclear energy, tourism and transport. The fourth summit was held in Braslia. The three nations pledged to boost trilateral trade to USD 15 billion by 2010. The three nations have also expanded military cooperation and conducted joint naval exercises in 2008. President Pratibha Patil said she is confident that trade between India and South Africa will reach USD 15 billion by 2015 as the two have become important trading partners. Patil and South African President Jacob Zuma appreciated businesses in both the countries for having reached the earlier target of USD 10 billion by 2012, a year ahead of the schedule. Meanwhile, the two sides also called for various steps to facilitate business including easier visa regime for Indian ICT companies and greater transparency for South African businesses in the Indian market. Minister of State for Communications and IT Sachin Pilot, called for a change in the South African visa regime to allow easier entry. He said Indian ICT companies consider Africa as an important market. On the other hand, Business Unity South Africa President Futhi Mtoba said that among the challenges, amid increasing investment in India, was a need for greater transparency in India's tariff schedules, especially in the agricultural sector. "We want India to be an open market for South African foreign direct investment," Mtoba said. Addressing business forum from both countries as part of her week-long state visit to South Africa, Patil said South Africa had become one of India's most important trading partner. "The economic and commercial exchange between our two countries is at the core of our bilateral ties," she said. "I am happy that Indian companies work closely with the priorities of the South African government and they are also seeking to add value to raw materials through beneficiation locally," Patil added. Indian companies have not only entered into partnerships with their South African counterparts, but also view it as a gateway to the Southern African region. Patil said, "Our confidence in the South African economy is reflected in the fact that several major Indian banks are present in South Africa. We are also happy that many companies form South Africa have established their presence in India." She said that on average at least one South African business delegation visited India every month. Calling on business to find complementarities in various fields such as energy and gasification of coal for partnerships, the president also highlighted the co-operation between the two countries in space exploration so that they were not left out in this area. Zuma in turn called on Indian business to take advantage of the huge opportunities on the Africa continent with its priorities that infrastructure and communication.

Apart from oil and natural resources, India engages with Africa in agriculture, health, information and communication technology (ICT), education and skills transfer, to name a few. Going forward, the sectors to focus on would be Agriculture, Small and Medium Enterprises, Finance and Tourism. Cooperation in Social Development and capacity building would be another area of cooperation given that both the countries are young societies keen to translate the demographic dividend into effective growth. To further increase the engagement, the Minister spoke of negotiations with South Africa Customs Union (SACU) for a PTA, and the setting up of the India Africa Business Council to develop a road map for business partnership. He concluded his address by saying that engaging with the LAC and African regions will give further impetus to the growth and synergetic opportunity for all. Challenges such as a widening current accounts deficit made it move away from the earlier-held view of exports as a phenomenon of surplus. It recognized that exports were an essential economic activity with a wider and greater impact on the countrys economy. This, coupled with the recognition that the conventional approach and traditional markets would not work anymore, the Department of Commerce formulated a strategy keeping in mind issues such as market diversification and product diversification. Giving the industrys perspective, stressed on the need to move beyond conventional markets. He said that today, South-South Trade has become a beacon of hope in these trying times. There is tremendous potential as can be seen in the way IndiaAfrica trade has grown over the years: from US$ 967 million in 1991 to US$ 50 billion in the first quarter of 2011. Indias economic engagement has been growing beyond gold and oil, which India imports, and a host of manufactured goods that it exports to Africa. Several Indian companies such as the Godrej Group, Bharti Airtel, Vedanta have acquired companies or have other business interests in Africa and several other companies such as L&T, NIIT are looking to follow in their footsteps.

The strategy for export of Marine products from India pre supposes strengthening of the production base on the one hand & adopting an effective marketing arrangement on other.

Asia Economy Watch June 2008 Indias seafood exports, which stagnated few years back, are likely to touch over $3.5 billion from current level of $2.2 billion by 2009, provided a key thrust area include value-addition, expansion of aquaculture, technological upgradation and tapping unexplored resources. In a paper brought out by Associated chambers of commerce & industry of India (ASSOCHAM) on Market of Seafoods in India, it has been projected that Indias Seafood exports, which remained at $1.6 billion in 2005-06 and is anticipated to reach around $2.2 billion in 2007-08, have potential to accelerate faster in view of their growing demand in trading blocks like the EU, Middle East, China, Canada, Russia. The Marine Industry Some Facts Exported to more than 90 countries. India has one of longest Coastline of 8118 Km. Global Share of India is 4.2% at second Position, while China has 69% share. Has one of largest area under Estuaries, backwaters and Lagoons, which are highly conductive for developing capture as well as culture fishes. Employees 30 Lac people, contributes 1% to Indian GDP and 4.5 % to Agriculture and Allied products. Indian Fishing Industry got a major boost after the declaration of EEZ (Exclusive Economic Zone) in 1977. Major Exporting States are AP, Kerala, Tamil Nadu, West Bengal. Potentially Unexplored states are Gujarat, Orissa, Maharashtra. Major products are Shrimps, frozen fish, cuttlefish, squid and dried items. Trends in Exports Marine product exports has steadily grown over the years; from a mere Rs.3.92 crore in 1961-62 to Rs.8363.53 crore in 2006-07 , 1.4% of the total exports from India. Until 1960 Products were Dried Shrimps and Dried Fish Market was neighboring countries. From 1960 1977 Products were Frozen Shrimps

Major market beside neighboring countries were USA, Japan. USA emerged as single largest buyer. 1977 2001 Japan Emerged as single largest buyer followed by Western European Countries. 2001 2004 USA again topped the charts as Single largest importer of Indian Marine Products. 2005 till date European union became largest importer importing 33% of Products Japan 16.18% USA 16.12 % China 13.83% South East Asia 7% Middle East Asia is New emerging Market. The product preference is shifting from Frozen Shrimps to Processed Products and other marine products. Meager utilization of natural gift. Total production Potential 15 Million Tonnes Production 2.5 Million Tonnes Fresh waters and Ponds Total Available 2.4 Million Hectares. Utilized 1.5 Million Hectares. Production Per Hectare (Pond Culture) Potential 5 Tonnes per Hec. Production 2 Tonnes per Hec. Production Per Hectare (Reservoirs and Tanks) Potential 600 Kg per Hec. Production 100 Kg per Hec.

Marine Export Items Traditional Items: Shrimps Squids Cuttlefish

- Oyster - Lobster - Shark

- Tuna Fish - Frozen Fish - Squids

Value Added Items. Cultured Shrimp Battered Shrimp Cook Shrimp Fish Fillet.

Year 2002-03 Q V $ 2003-04 Q V $ 2004-05 Q V $ 2005-06 Q V $ 2006-07 Q V $ ITEMS % Share to Total 22 53.88 53.84 44 17.37 17.38 9 9.53 9.49 Q V $ UV$ Q V $ UV$ Q V $

Export 467297 6881.3 1424.9 412017 6092 1330.8 461329 6646.7 1478.5 512164 7245.3 1644.2 612641 8363.5 1852.9 APRMAR 200607 137397 4506.08 997.64 7.26 270751 1452.88 321.95 1.19 55701 797.37 175.75

-5

-7

-9

Frozen Shrimp

Frozen Fin Fish Frozen Cuttle Fish

AP MA 200 06 145 427 970 6.6 182 998 225 1.2 496 549 124

Frozen Squid

8 6.8 6.81 4 2.19 2.2

Dried items

UV$ Q V $ UV$ Q V $ UV$ Q V $ UV$ Q V $ UV$ Q V $ UV$ Q V $ UV$

3.16 47252 568.32 126.25 2.67 24293 183.16 40.75 1.68 2478 64.06 14.22 5.74 7200 117.3 26.63 3.7 67571 674.35 149.72 2.22 612641 8363.53 1852.93 3.02

2.5 523 575 130 2.4 141 132 30. 2.1

Live items

0 0.77 0.77 1 1.4 1.44 11 8.06 8.08 100 100 100

Chilled items

Others

TOTAL

256 61. 13. 5.4 506 81. 18. 3.6 608 574 130 2.1 512 724 164 3.2

What to Export - Tradition so far Shrimp 20% of worlds imports. Mainstay in Indias Exports 65.88% (2004), 53% (2008) 200 world class Seafood processing factories. Kerala has 40 percent of the total processing Industries, followed by AP, Tamil Nadu and Gujarat.

Changing Trend The Indias exports of Shrimps and frozen Squid are declining year on year. One major reason of decline is Export of Cheaper Vannamei Shrimps from neighboring countries. The trend is shifting towards Value Added Products and Processed Shrimps. New Potential Species are Mud Crabs, Tuna Fish,

 Sea brass, Mullets, and Pearl Spot fishes.

India - A Seafood Processing Hub

The government has allowed import of raw materials required for processing plants. More Thrust is given on Ready to Eat and Ready to Cook kind of processed items. First seafood processing zone was developed in Kolkata, with investment of Rs 480 million. The processing zone started with 10 large scale private sector processing units.

New Products - Tuna Fish New Fish to Fry

Tuna fish is third most traded Fish internationally. Tuna fish exports are targeted to reach 400 million dollar by 2010. Andaman and Nicobar Island holds 25-30 per cent of tuna potential. New products Mud Crabs Technology for hatchery seed production of Mud Crabs and Sea Bass fish has recently been developed by CIBA (Central Institute of Brackish Water Aquaculture) and MPEDA . Potential sites spotted for this are Tamil Nadu and Andhra Pradesh. Mud Crab is identified as best substitute of Shrimps. By using the technology 1 lakh tonnes of Mud Crabs can be produced giving revenue of Rs. 2000 Crores. New products Sea Bass Fish High valued Sea Bass Fishes can tolerate wide variation in environmental conditions. It can be produced in vast coastal region example Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra. The technology has been perfected in Southeast Asia, and is in nascent stage in India. One kilogram of Sea Bass fish can give a revenue of Rs 100. Ornamental Fish New Fish in Town Most popular among Hobbyist. Used in Aquariums around the World. Major Exporters Singapore, Hong Kong, Malaysia, Thailand, Philippines, Sri Lanka, Taiwan, Indonesia and India.

 Major Importers USA, Japan and Europe. China and South Africa are Emerging Markets. Global Trade of $5 Billion annually, growing by 6%. India Exports worth Rs 1.58 Crores, growing at 20% annually. The tropical ornamental fishes from North eastern and Southern provinces of India are in great demand in the hobbyists market . Loaches, Eels, Barbs, Catfish, Goby

How to Export?
Chennai Port handles 24% in terms of Value, but the carriage is declining over the years, the emerging high capacity ports are Haldia Tuticorin Kochi

MPEDA Marine Products Exports Development Authority

Head Quatered Kochi (Kerela) 6 Regional/ 4 Sub- Regional Offices 2 International Offices New York and Tokyo.

Our vision is to achieve the export of 5 Billion US $ worth marine products by 2014-15 that too with the 75% contribution of value added items. Schemes Logo Scheme to gain wide market acceptance. Active participation in 15 International Trade Fairs. A delegation consisting of Indian Exporters were send to Japan to address the quality issue. The exporters made series of presentations in major cities of Japan. Challenges Impose of Anti-dumping duty by US in 2004. Japan and EU imposed strict quality control standards on Indian Marine Products. Indian Exports are Single Product (Shrimp) and Single Market (USA and Japan) oriented Industry. Diesel accounts for 75% of Input cost, escalating diesel prices i.e. from Rs 5 in 1991 to Rs. 40 present is major challenge to overcome. The Global imports of Shrimp are declining and demand towards processed food is increasing. Low scale Indian Exporters lack Risk Taking capacity to jump into technology Sophisticated Processed food Industry. As a result of Above, the financial institutions have lost confidence in Small and Medium Players dominated Indian Fisheries Industry.

Export Strategy It is necessary to treat marine products as technology Intensive sector. Value addition has been considered as the thrust area. Indian seafood processing units will be encouraged to go in for value addition and export through setting up new units, expanding their capacity and diversifying their current activities. Foreign collaboration, investments, tie ups in marketing of value added products and fish import for further processing and export in value added forms will be encouraged. G. Mohan Kumar Chairman, MPEDA Indian Logo MPEDA logo scheme Products Mud Crabs Tuna Fish Sea Brass Ornamental Fish Markets Vietnam Belgium Canada Germany Hong Kong China

The services sector is critical to the future growth of our country

India stands out for the size and dynamism of its services sector. The contribution of the services sector to the Indian economy has been manifold: a 55.2 per cent share in gross domestic product (GDP), growing by 10 per cent annually, contributing to about a quarter of total employment, accounting for a high share in foreign direct investment (FDI) inflows and over one-third of total exports, and recording very fast (27.4 per cent) export growth through the first half of 2010-11. i) The importance of the services sector can be gauged by looking at its contributions to different aspects of the economy.

Services GDP The share of services in Indias GDP at factor cost (at current prices) increased rapidly: from 30.5 per cent in 1950-51 to 55.2 per cent in 2009-10. If construction is also included, then the share increases to 63.4 per cent in 2009-10. The ratcheting up of the overall growth rate (compound annual growth rate [CAGR]) of the Indian economy from 5.7 per cent in the 1990s to 8.6 per cent during the period 2004-05 to 2009-10 was to a large measure due to the acceleration of the growth rate (CAGR) in the services sector from 7.5 per cent in the 1990s to 10.3 per cent in 2004-05 to 2009-10. The services sector growth was significantly faster than the 6.6 per cent for the combined agriculture and industry sectors annualoutput growth during the same period. In 2009-10, services growth was 10.1 per cent and in 2010-11 advance estimatesAE) it was 9.6 per cent. Indias services GDP growth has been continuously above overall GDP growth, pulling up the latter since 1997-98. It has also been more stable.

II) Ministry of Commerce and Industry, Government of India, with a view to give proper direction, guidance and encouragement to the Services Sector, has set up an exclusive Export Promotion Council for Services in the name of Services Export Promotion Council (SEPC). SEPC was registered under the Societies Registration Act in November, 2006. DGFT, vide Gazette Notification dated 5/3/2007, included SEPC in the list of the recognised Export Promotion Councils. SEPC has been mandated to promote export of services in the following sectors:-

1 2 3 4

5 6 7

Healthcare services including services by nurses, physiotherapist 8 Environmental Services and paramedical personnel 9 Educational Services Maritime Transport Services Entertainment services including 10 Advertising Services Audio-visual services Marketing Research and Public 11 Opinion Polling Services/Management Consultancy Services Services Architectural Services and related 12 Printing & Publishing Services services 13 Legal Services Distribution Services Accounting/Auditing and Book 14 Hotel and Tourism related services Keeping Services

Ministry of Commerce & Industry administers a scheme known as Market Development Assistance (MDA) Scheme for the promotion of exports including services exports. Service Exporters, who are members of SEPC, are eligible for financial assistance under MDA scheme for participating overseas Buyer Seller Meet or in any international conference to showcase their service capability.

With the new Foreign Trade Policy (2009-14), the Government of India has aimed to accelerate growth in export of services so as to create a powerful and unique Served from India brand. Services providers who have a total foreign exchange earnings or earning in Indian rupees which are otherwise considered as having been paid for in free foreign exchange by RBI, of at least Indian rupee 10 lakhs in the current financial year shall be eligible to qualify for duty credit scrip. They shall be entitled to duty credit equivalent to 10 percent of the foreign exchange earned by them in the current

financial year. Duty credit entitlement may be used for import of any capital goods including spares, office equipment and professional equipment, office furniture and consumables, provided it is part of their main line of business.

III) FDI in Services in India The measurement of the share of services in FDI inflows encounters problems as it is difficult to clearly differentiate activities between services and goods in sectors such as computer hardware and software, telecommunications, and construction. Nevertheless, the share of the four sectors combined (services [financial and nonfinancial], computer hardware and software, telecommunications, and housing and real estate), predominantly consisting of services, in FDI equityinflows in April 2000December 2010 is around 44 per cent. If construction is included then the share rises to 51 per cent. The financial and non-financial services sector which falls purely in the services category is the largest recipient of FDI equity inflows with a 21 per cent share. This is followed by the other two sectors, namely computer software and hardware, and telecommunications each with 8 percent share. Housing and real estate, and construction with 7 per cent share each were next in importance. The year 2009-10 has seen a drying up of FDI inflows to India due to the global crisis with a fall of 5.5 per cent. Mirroring this trend, FDI inflowsin the services sector also fell by 29.1 per cent (in US dollar terms). The first nine months of 2010-11 have also not shown any improvement on the FDI front, overall and in services sectors. in the services sector also fell by 29.1 per cent (in US dollar terms). The first nine months of 2010-11 have also not shown any improvement on the FDI front, overall and in services sectors.

Agriculture sector in INDIA.

Agriculture Overview: Agriculture is the backbone of Indian Economy. About 65% of Indian population depends directly on agriculture and it accounts for around 22% of GDP. Agriculture derives its importance from the fact that it has vital supply and demand links with the manufacturing sector. During the past five years agriculture sector has witnessed spectacular advances in the production and productivity of food grains, oilseeds, commercial crops, fruits, vegetables, food grains, poultry and dairy. India has emerged as the second largest producer of fruits and vegetables in the world in addition to being the largest overseas exporter of cashews and spices. Further, India is the highest producer of milk in the world. Climate: India has Monsoon climate in which a year has been divided into two distinct seasons of summer and winter. Rainfall occurs mainly in summer. Weather Forecasting System: India has a strong weather forecasting system developed and maintained by Indian Meteorological Department (IMD). Apart from weather forecasting and severe weather warning, it also gives agro meteorological services to farmers in India. Agro Climatic Zones: India has diverse agro-climatic zones from north to south and from east to west. It has been divided into fifteen different agro-climatic zones, which signifies its diversified agricultural production from tropical to temperate crops. Major Crops: Rice, Wheat, Sugarcane, Oilseeds, Pulses, Cotton, Jowar, Bajra, Ragi, Tea, Coffee, Coconut, Cashew, Rubber, Spices, Cauliflower, Onion, Cabbage, Mango, Banana, Sapota, Acid lime. Farm Size: Indian Agriculture is characterized by small and marginal operational holdings. About 85% of total cultivated land has been fragmented into less than 10-hectare land. About 60% of farmland is less than 4 hectare in size. Production Trend:

All the production figures are in million tones. Mechanization in Indian agriculture is still at rudimentary stage showing regional variation. But it is increasing over the years. Power availability for carrying out various agricultural operations, which is one of the indicators of mechanization, has been increased from 0.3 kilowatt per hectare in 1971-72 to 1.4 kilowatt per hectare in 2003-04. Plantation: Tea, Coffee, and Natural rubber are the main plantation crops in India that contribute in Indian export to a considerable extent. India is the largest producer and consumer of tea in the world. It contributes 4% to global coffee production and enjoys a niche market byproducing both arabica and robusta coffee. In rubber also, it ranks third in production and fourth in consumption of natural rubber in the world. Horticulture: India has a great potential in the production of horticultural crops, which includes fruits, vegetables, spices, floriculture, and plantations. Acreage under horticulture is around 20 million hectares. India is the second largest producer of both fruits and vegetables in the world. It occupies first position in the production of cauliflower, second in onion, and third in cabbage. Dairy: India ranks first in the world in milk production, which was around 100 million tones in 2006-07.Strong networks of Milk Cooperatives, have been instrumental in this phenomenal performance of dairy sector in India. Presently, 1.13 lakh village level cooperative societies spread over 265 districts in the country form part of the national Milk Grid. This Grid links milk producers throughout India and consumers in 700 towns and cities. De-licensing of dairy sector in 1991 has directed considerable amount of private funds both from inside and outside country in this sector especially in manufacturing facilities while investment in cooperative sector are concentrated largely in procurement and processing of milk. Livestock: Livestock sector contributes about 27% of the G.D.P. from agriculture and allied activities. This sector has excellent forward and backward linkages, which p-promote many industries and increase the incomes of vulnerable groups of the society such as agricultural labourers and small and marginal farmers. India possesses the second largest livestock population in the world. Production and export of poultry products have shown considerable growth in the recent decades. Export of such products to countries including Bangladesh, Srilanka, Middle East, Japan, Denmark, USA, and Angola augers well for this industry. Fishery: Fishing, aquaculture and a host of allied activities are a source of livelihood to over 14 million people and a major source of foreign exchange earner. In 2005-06, this sector contributed about 1% of G.D.P. and 5.3% of G.D.P from agricultural

sector.8,118 k.m. of coastline gives geographical basis for the development of marine fishery sector and cultural factor boosts the inland fishery sector in India. Agricultural Finance Credit: Availability of adequate credit is vital for every sector and agriculture is not an exception. In India, Commercial Banks, Cooperative Banks, and Regional Rural Banks ( RRBs) are responsible for smooth flow of credit to agricultural sector. But a huge unorganized market exists for credit to agricultural sector in India, which provide timely fund to this sector but at the exorbitant rate of interest. Among organized credit disbursement to agriculture commercial banks play a vital role with a share of about 70% where as cooperative sector and RRBs contribute 20% and 10 % respectively.Kisan Credit Card (KCC) scheme was introduced to provide adequate and timely support from the banking system to the farmers for their cultivation needs. This scheme has made rapid progress and more than645 lakh cards issued up to October 2006. The 'Farm Credit Package' announced by the Government of India in June 2004 stipulated doubling the flow of institutional credit for agriculture in ensuing three years. Annual targets for this package are being surpassed in the two consecutive years from its introduction and it is likely to surpass in the third year also. Insurance: Insurance is a prime necessity to mitigate uncertainty that persists in agriculture. In India, agriculture is still affected by such factors, which are beyond control of human being. So, there is a great need for agricultural insurance in India. Keeping this in mind, Government of India in coordination with the General Insurance Corporation of India (GIC), had introduced National Agricultural Insurance Scheme (NAIS) from rabi 1999-2000 season. The main objective of this scheme is to protect the farmers against losses suffered by them due to crop failure on account of natural calamities. Agricultural Insurance Company of India (AICIL) which was incorporated in December 2002 took over the implementation of NAIS. AICIL introduced Rainfall Insurance Scheme called 'Varsha Bima' during 2004 southwest monsoon period. Varsha Bima provided for five different options suiting varied requirements of farming community: 1. Seasonal rainfall insurance based on aggregate rainfall from June to September. 2. Sowing failure insurance based on rainfall between June 15 and August 15. 3. Rainfall distribution insurance with the weight assigned to different weeks June and September. 4. Agronomic index constructed on the basis of water requirements of crops. 5. A catastrophe option covering extremely adverse deviation of 50% and above in rainfall during the season.

During kharif 2006, this Varsha Bima scheme is being implemented in around 150 districts covering 16 states across the country. AICIL is also piloting another weather related insurance product for mango and coffee. Rural Infrastructure Development Fund (RIDF): RIDF was announced by the Government of India in 1995-96 to boost public sector investment in agriculture and rural infrastructure. The Fund is raised from the commercial banks to the extent of their short fall in agricultural lending as priority sector. The activities, which have been made eligible for loans from RIDF, include rural roads and bridges, irrigation, mini and small hydel projects, community irrigation wells, soil conservation, watershed development and reclamation of waterlogged areas, flood protection, drainage, forest development, market yard, godowns, apna mandi, rural haats and other marketing infrastructure, cold storages, seed/agriculture/horticulture farms, plantation and horticulture, grading and certifying mechanisms such as testing and certifying laboratories, fishing harbors/jetties, reverine fisheries, animal husbandry, modern abattoir, drinking water supply, infrastructure for rural educational institutions, public health institutions, construction of toilet blocks in existing schools and 'pay and use' toilets in rural areas, village knowledge centers, desalination plants in coastal areas, infrastructure for information technology in rural areas, and construction of anganwari centers. Micro Finance: Micro finance scheme has been introduced by National Bank for Agriculture and Rural Development (NABARD), the apex bank for agriculture and rural development in India, to improve the access of the rural poor to formal institutional credit and other financial products. In all 547 banks, which include 47 commercial banks, 158 RRBs, 342 cooperative banks are now actively involved in the operation of Self Help Group (SHG)- Bank Linkage Programme to spread the facility of micro finance to the needy small and marginal farmers and tiny entrepreneurs. The programme has enabled nearly 329 lakh poor families in the country to gain access to micro finance facilities from the formal banking system. Capital Formation in Agriculture: The share of the agriculture sector's capital formation in G.D.P. declined from 2.2% in the late 1990s to 1.9% in 2005-06. Stagnation or fall in the public investment in irrigation is partly responsible for this fall. However there is indication of a reversal of this trend with public sector investment in agriculture accelerating since 2002-03.The share of public investment in gross investment in agriculture increased by 6.5 percentage points from 19992000 to reach 24.2% in 2005-06. Marketing of Agricultural Products Form of Markets exists in India: Agricultural markets in India are dominated by the existence of unorganized and unregulated agricultural mandies with the presence of a large number of middlemen and widespread prevalence of malpractices. Absence of proper warehousing facilities in the villages, lack of proper transportation facilities and infrastructure such as rails and good quality all weather roads and ignorance about the market prices of their products are some of the important factors for exploitation of farmers from middle men. They are forced to sell their products to these middlemen at the farm gate at throwaway prices.

Agricultural Market Reforms in India: Ministry of Agriculture had formulated a model law on agricultural marketing in consultation with State/Union territory Governments to bring about marketing reforms in line with emerging trends. This model act enables establishment of private markets/yards, direct purchase centers, consumers/farmers markets for direct sale, and promotion of public-private partnership (PPP) in the management and development of agricultural markets in the country. It also provides for exclusive markets for onion, fruits, vegetables, and flowers. Regulation and promotion of contract farming arrangement has also been made a part of this legislation. A provision has also been made for constitution of State Agricultural Produce Standard Bureau for promotion of grading, standardization, and quality certification of agricultural produce.