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Status of Maize Cultivation in Bihar

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Status of Maize Cultivation in Bihar Chapter 1: Introduction 1.1 Background and Context Bihar is one of the largest maize growing state and the crop was grown primarily as a subsistence crop to meet food needs for a long time till recently. But now like in non- traditional areas (Karnataka and Andhra Pradesh), it is also grown for commercial purposes (i.e., mainly to meet the raw material requirements of the animal feed sector). It is third largest maize producing state contributing around 10 percent to national production. Around 0.65 million hectare is presently under maize cultivation, which is about 7 per cent of Gross Cropped Area (GCA) in the state and over 13 lakh farmers are engaged in maize cultivation. During 2005-06, the state produced about 1.4 million MT, which is about 5 per cent of the total crop production. Maize can be utilized in many different forms by converting it into a variety of products, through grinding, alkali processing, boiling, cooking and fermenting, such as corn starch, corn flakes and cereals, ethanol etc. It also has many industrial applications, which can make it a profitable crop in the state. Maize processing and utilization pattern shows that in India, around 60 per cent of the total produce is for animal feed, 28 per cent for human consumption and 12 per cent is used by the industry (starch, brewery etc). In Bihar only 8-10% of maize (5% directly by the processors and another 3-5% is being used by road side snack joints etc.) is processed within the state despite the fact that the state has huge and rising marketable surplus. While the area under cultivation, maize production & yield have increased during 1977 to 2007, there are only 8-10 maize processing units in Bihar. They are mainly into milling of flour and production poultry feed. In absence of adequate processing facility, the huge marketable surplus of Bihar, especially in rabi season depends completely on other states for its consumption. Any obstruction in this trading chain in future may lead into spoilage of that surplus, affecting the entire value chain. 26 Also due to inadequate processing facilities in the state, result more than 80% of Bihar maize goes outside the state and gets processed there depriving it of value addition and higher income for the people in the state. The processed maize in the form of poultry feed and seeds then comes back to the state. There is potential for processing of both high & low value added products in maize sector in the state itself. There are factors contributing to increase in the demand of processed maize. Some of them are (1) growing demand for eggs and chicken leading to increased demand for poultry feed in the state; (2) the state has 8 lakh hectare land under water which is suitable for fish farming; (3) increased demand for ethanol as a fuel additive; (4) growing urbanization leading to increased demand for processed food like corn flakes etc; (5) dairy sector is on growth path and this sector can provide a good market for cattle feed products. Thus there is growing demand for processed maize in the state and there is also adequate supply of good quality maize in the state. Yet the processing industry in Bihar is almost non-existent as there are only 10 processing units in the state engaged mainly in manufacturing of traditional food products (flour, besan, suji etc) and poultry feed. It is therefore important to study the reasons and factors restricting the growth of processing industry in the state. It is in this context the study was commissioned by World Bank to study the maize sector in Bihar with the following objectives 1.2 Objectives The broad objective of the study is to assess the investment climate for processing of maize (corn) into value added products in Bihar. 1. To assess and analyse the status of maize cultivation with respect to inputs, harvesting and post harvesting practices and infrastructure (including storage, warehousing etc) 2. To map major mandis and analyse price movements 3. To study the trade channels (marketing network) and value chain in maize cultivation 27 4. Study the status of maize processing in the state 5. To find potential of maize processing industry in the state, 6. To out line the regulatory/Policy guidelines of the government, 7. To identify the constraints with farmers, traders and processors. 8. Suggest measures for improving investment climate for maize processing in the state. 1.3. Approach, Database and Methodology The assignment involved collection and scanning of secondary data available about the maize sector with a focus on status of maize processing industry in the state. It was felt that benchmarking the sector in Bihar with other states would enable us identify the constraints and draw best practice cases. Therefore information has also been collected from Andhra Pradesh and Karnataka. Primary data collection Data was collected from both primary and secondary sources. The Primary data was collected through a diagnostic survey of the farmers/growers, traders and maize processors in the state in order to study existing cultivation and post harvesting practices, storage systems, maize arrivals and price movements, marketing channels, value chains etc and identifying the factors constraining the growth of the sector at different levels of production and marketing. A structured questionnaire was developed for data collection and collate the critical information. The quantitative data was mainly collected by interviewing over 60 growers, 20 traders and all 10 processors operating in the state. The data on physical infrastructure in mandis, monthly prices and corresponding arrivals, name and share of the markets (local as well as outside state), etc has been collected directly from mandis. All major mandis trading in maize i.e Gulabagh, Katihar, Mansi etc have been covered by the survey for studying the trade channels and value chain mapping in maize cultivation. 28 The diagnostic survey itself was carried out in two phases: qualitative and quantitative surveys. The survey was carried out in the identified 4 districts of Bihar, namely Begusarai, Khagaria, Purnea and Bhagalpur. Secondary data was used as the basis for short-listing the target group for obtaining trade feedback and critical inputs from various stakeholders including government agencies. The short listing was done on the basis of following parametres: Current area, production, productivity of all districts for maize production Marketable surplus of maize in these districts Linkages of production hubs to different consumption sources. The ultimate objective of the survey was to come out with credible inputs and database for the formulation of recommendations to improve the competitiveness of the sector. Secondary Data Collection The secondary database sources included published books, Reports of multi-lateral bodies like World Bank, articles published in national and international journals, magazines, newspapers, Reports of the various Government departments, consultancy firms, research projects etc. It was used to study the status of maize production in world with a focus on India and Bihar. This included data related to production, productivity and area of the crop in India and Bihar, existence, role and relevance of concerned institutions, policy framework etc. The data have been sourced from various sources including government agencies including Department of Agriculture (DoA), and Rajendra Agricultural University (RAU), Department of Industry, CGIAR (Maize Regional Research Centre and Seed Production), Begusarai and Confederation of Indian Industry (CII), Patna. In addition to the above structured interviews, 4 Focussed Group Discussions (FGDs) were held among farmers, commission agents, traders, processors, industry associations, and research institutions to get the first hand information on the sector with a primary focus on maize trading and processing. 29 The data and information have also been collected through interactions and in-depth interviews with various stakeholders including Government departments like Department of Agriculture (DoA), Industrial Development Commissioner (IDC), Department of Fisheries, Research Institutions, bankers, trade and industry associations etc. Study Tools As stated, separate structured questionnaires were developed for farmers/growers, traders and processors in accordance with the objectives of the study. They were pre-tested and later administered in the field. Similarly, guides for FGDs and in- depth interviews were developed and finalized to get optimum results. Field Operations and Data Management In all, 4 field investigators and 2 supervisors were deployed for conducting the field study. All of them have had prior experience in conducting such surveys. These field officials administered the quantitative questionnaire among the target group. The gaps and inconsistencies found in the filled - in questionnaires were rectified in the field itself. The information collected through field survey was tabulated and analysed. The issues that emerged during FGDs and discussion with various stakeholders, including state government officials, have also been captured in the Report. 30 Chapter 2 : Maize Production – Global and National Scenario Maize (Zea mays) is the third most important crop after rice and wheat and is an important staple food in many countries of the world. It is also known as the Miracle Crop or Queen of Cereals due to its high productivity potential as compared to other crops of Graminacea family. Besides, being extensively used as human food and animal feed it is a source of a large number of diversified industrial products. Maize can be processed to utilize any or all components to manufacture large number of end products including corn starch, corn oil, baby corns, popcorns, alcoholic beverages, food sweeteners and more recently, fuel have added to its demand thereby increasingly making it a high value product. Figure 2.1: Components of Maize 4% 4% 3% 10% 79% Starch Protein Oil Fibre Minerals Source: ICAR Annual Report Maize is high yielding, easy to process, readily digested, and costs less than other cereals.
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