chapter 1: introduction - govt of bihar · 26 chapter 1: introduction 1.1 background and context...

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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.

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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

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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.

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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.

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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.

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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

79%

10%

4% 4% 3%

Starch Protein Oil Fibre Minerals

Source: ICAR Annual Report

Maize is high yielding, easy to process, readily digested, and costs less than other

cereals. It is also a versatile crop, allowing it to grow across a range of agroecological

zones. Every part of the maize plant has economic value: the grain, leaves, stalk, tassel,

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and cob can all be used to produce a large variety of food and nonfood products etc.

Generally following three types of corn is grown

Grain or field corn,

Sweet corn used mainly as food

Popcorn.

Maize in India is an important cereal. Its area and production have steadily increased

during the past two decades. Maize has varied usages from food preparation to poultry

feed. In India, it is mainly used in poultry feed manufacturing.

2.1. Trend in Global Production, Consumption and Trade in Maize

2.1.1. Status of Maize Production in the World

The area under cultivation and as well as the production of maize have been increasing

continuously over last decades. Though the acreage has increased consistently,

production pattern has been erratic owing to the variations in the yield. There are many

factors that have contributed towards changes in yield like weather during crop growth,

pest and disease attack, technological advances and development of new hybrids and

varieties etc.

Figure 2.2: World Area, Production and Yield (In Kgs/Ha) of Maize (2005)

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0

100000

200000

300000

400000

500000

600000

700000

800000

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90

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arv

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00

hec

tare

s)

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Source: Estimated from data downloaded from www.fao.org/es/esa/en/pubs_sofa.htm

According to USDA report, acreage under corn increased to 157.1 million hectares in

2007-08 from 148.11 million hectares during 2006-07. Accordingly the production

figure has also increased to 770.17 million tones from 704.28 million tonnes. This

increase has been mainly due to increased acreage coupled with favorable weather

conditions and use of high yielding hybrids. Major rise in production contributed from

Brazil due to congenial climatic conditions like adequate rain fall and low heat stress

during the growth period1.

Table 2.1: Area, Production and Yield of Major Maize Producing Countries in 2005

Country

Production (Quantity in 000

tonnes)

Area Harvested (in

000 Ha)

Yield per Hectare

(kg/Ha)

United States of America 282311 30399 9287

China 139498 26380 5288

Brazil 35113 11549 3040

Argentina 20483 2783 7359

Mexico 18012 6606 2727

India 14172 7430 1907

France 13850 1655 8371

Indonesia 12014 3504 3428

South Africa 11716 3223 3635

Italy 10428 1113 9368

1 Karvy Comtrade Limited (2008) Seasonal Report on Maize

http://www.fao.org/es/esa/en/pubs_sofa.htm

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Romania 10389 2609 3982

Others 135270 45438 3902 (Average)

World 703255 142690 4016 (Average)

Source: Estimated from data downloaded from www.fao.org/es/esa/en/pubs_sofa.htm

The US has the largest harvested area of corn and contributes one fifth of the world

corn harvested area. China, Brazil, Mexico, India and Indonesia are the other countries,

which contribute significantly to the world harvested area. These six countries have

around 60% of the world corn harvested area. USA is the largest producer of maize in

the world accounting for about 40% of the global production. Other major maize

producers are China (20%), EU (14%), Brazil (5%) and India

The global average productivity of maize is around 4000 Kgs / hectare. Italy recorded

the highest yield of 9368 Kgs / ha followed by USA (9287 Kgs / ha), France (8371

Kgs / ha) and Argentina (7359 Kgs / ha). India at around 2000 Kgs /ha has the lowest

yield among major maize growing countries in the world.

2.1.2. Global Consumption Scenario

Globally, there has been continuous increase in the consumption demand of corn

mainly owing to increase in the demand from meat and starch sector. There is growing

requirement of maize from poultry sector, which use corn as feed. Consumption of corn

for both the purpose feed purpose as well human consumption purpose is increasing.

Major consuming of corn countries are USA and China with respective shares of 35%

and 19%. Other important consuming countries are EU-27 (8%), and Brazil (5.5%).

India‘s share in total global consumption is accounted to only around 2%2.

2.1.3. International Trade in Maize

The global export market for corn presently stands at about 95 million tones. United

States with a share of 65% in total global exports is the largest exporter of corn in the

world followed by Argentina and Brazil with individual respective shares of 15% and

2 ibid.


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11%. Other exporting countries are Paraguay, South Africa (each contributing 2%) and

India (1%)3 though their shares remain low.

As far as imports are concerned, Japan (17%), EU- 27 (11%) and Mexico (10%), Korea

(9%) and Egypt (6%) are the major importing countries of corn in the world.

respectively4.

Fig 2.3: Share in Global Exports (2007-08) Fig 2.4: Share in Global Imports (2007-08)

Source: Karvy Comtrade Limited (2008) Seasonal Report on Maize

2.2. Trend in Production, Consumption and Trade in Maize in India

2.1. Maize Seasonality in India

It is a seasonal crop and can be harvested thrice in a year. In India, maize is grown in

all the seasons i.e., kharif (Monsoon), rabi (winter) and summer but it is essentially a

3 ibid.

4 ibid.

S. Africa

2%

Argentina

15% USA

65%

Brazil

11%

Paraguay

2% Others

4%

India

1%J a pa n

17%

EU (27)

11%

Me xic o

10%Kore a

9%Egypt

6%

Ot he rs

47%

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warm weather (kharif) crop as nearly 90% of the production is from kharif season and

is rain dependent. It is cultivated during winter (rabi) in Peninsular India and Bihar.

About 7-8% of the production is during rabi season, and the rest is from spring season

(summer maize) grown mainly in Northern India. It is usually grown as a pure crop but

is also grown as inter-crop with different crop combinations like sugarcane, cotton,

legumes, vegetables etc. Higher yields have been recorded in the rabi and spring crops.

The higher yields are primarily due to long crop duration, better water management and

lower incidence of disease and pests.

In most parts of India, maize during kharif is sown with the break of monsoon, the

actual dates varying from region to region. It is sown in early March in north-eastern

hills, in April to early May in north-western hills, in May-June in Peninsular India, in

the end of June to mid-July in the Indo-Gangetic Plains. The late sowing of maize may

extend up to late August in certain irrigated tracts of Punjab. Spring maize is sown in

late January to the end. Rabi maize is generally sown in Bihar, Andhra Pradesh, Tamil

Nadu and Karnataka in the end of October to mid-November. Both the spring and the

rabi crops are raised, more or less, under irrigation.

Fig 2.5: Seasonality Chart for Maize Arrivals in India

May June July Aug Sep Oct Nov Dec Jan Feb March April

Andhra Pradesh (K)

Andhra Pradesh (R)

Karnataka (K)

Karnataka (R)

Bihar (K)

Bihar (R)

Maharashtra (K)

Madhya Pradesh (K)

Uttar Pradesh (K)

Lean

Peak Source: Discussions with traders

37

Maize can grow from sea level to 3000 metre altitudes under diverse conditions. Maize

does however, require considerable moisture and warmth from germination to

flowering. The ideal temperature for germination is 21° C and for growth 32°C. 50-75

cms of well-distributed rainfall is conducive to growth. It can be successfully grown

where the night temperature does not go below 15.6oC (60

oF). It cannot withstand frost

at any stage of its growth. In India, its cultivation extends from the hot arid plains of

Rajasthan and Gujarat to the wet hill of Assam and Bengal (receiving over 400 cm of

rainfall)5.

2.2.2. Maize in India – Acreage, Production and Yield

India is the fifth largest producer of maize in the world contributing 2% of the global

production. Maize area, production and yield in India have seen a phenomenal growth

over the last five decades. The total area under maize in India expanded from 3 mn ha

in 1951 to 7.8 m ha in 2006, growing annually at an average rate of around 3%. In the

early 1970s, expansion in area under maize cultivation slowed dramatically but after

that for three decades the maize area remained virtually unchanged till 2000. The

acreage started to increase after 2001. The yield has also increased over the years but

continues to be very low as compared to other maize producing countries. Figure 2.6: Maize Area, Production and Yield in India

0

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4000

6000

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10000

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14000

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2500

Yie

ld

Area (in 000 Hectares) Production (in 000 Tonnes)

Yield (Kg per Hectare)

Source: Estimated from data downloaded from http://dacnet.nic.in/eands/

5 http://www.pnbkrishi.com/maize.htm

http://dacnet.nic.in/eands/

http://www.pnbkrishi.com/maize.htm

38

Rising yields, coupled with a steady expansion in area, led to growth in maize

production of 5.9% and 5.2% per annum in the 1950s and 1960s, respectively. After

slowing down in the 1970s as the area under cultivation stabilized, growth in maize

production, fueled by continuing improvements in yield, averaged about 2.6% per

annum in the 1980s and 3.2% per annum during 1990s. A significant shift occurred in

the 1990s when irrigated winter (rabi) maize cultivation expanded rapidly, particularly

in the states of Bihar, Andhra Pradesh and Karnataka. Total maize production exceeded

10 million tons in 1997-98. Production of corn in India has shown an increasing trend

consistently except the year 2002 when production showed a little decline due to

drought conditions in some of the states in India.

Though kharif maize dominates the acreage and thus the production, productivity is

highest for Rabi maize. The average yield of kharif maize is about 2 tonnes/hectare

while that of rabi maize is more than 3 tonnes /hectare. The average yield for spring

season is also around 3 tonnes per hectare. The higher yield during rabi and spring are

primarily due to (a) relatively mild climatic conditions rabi and spring seasons during

which the duration of the crop is longer resulting in sustained harvesting of solar energy

leading to higher recovery of grain and biomass; (b) larger coverage of hybrid seeds

having higher productivity. The states with favourable ecosystem specially Bihar (rabi)

are witnessing expansion of winter maize area. Almost 90% of the total hybrid seed

production of the country is confined to Andhra Pradesh and Karnataka in rabi season

due to seasonal and productivity advantages6.

Fig 2.7: Season Wise Area Under Cultivation Fig 2.8: Season Wise Production

R a b i

(8%)

S u m m e r

(2%)

( Kh a r i f )

90%

R a b i

(11%)

S u m m e r

(3%)

Kh a r i f

(86%)

6 ICAR (2007) Vision - 2025

39

Fig 2.9: Season Wise Productivity (Kgs per Hectare)

0

500

1000

1500

2000

2500

3000

Kharif Rabi Summer

Source: ICAR (2007) Vision – 2025

2.2.3. State Wise Production of Maize

Maize, like any other cereal is grown across all the states in India and in many states it

is one of the important staple foods. Indian maize production has traditionally been

concentrated in the southern ―Corn Belt‖ states of Karnataka and Andhra Pradesh,

where it is grown during the kharif season. In recent years, introduction of cold-tolerant

varieties has led to the emergence of an irrigated rabi maize crop in the northern states

of Bihar and Uttar Pradesh. Table 2.2: State-Wise Maize Area, Production and Yield during 2005-06

State

Area (in 000

Hectares)

% of Total

Area

Production (in ooo

tonnes)

% of Total

Production

Yield (Kgs per

Hectare)

Andhra Pradesh 760 10.01 3090 21.01 4073

Karnataka 940 12.38 2730 18.56 2915

Bihar 650 8.56 1360 9.25 2098

Madhya Pradesh 860 11.33 1250 8.50 1450

Rajasthan 1000 13.18 1100 7.48 1098

Uttar Pradesh 810 10.67 1050 7.14 1295

Maharashtra 470 6.19 1000 6.80 2106

Gujarat 500 6.59 560 3.81 1124

Himachal Pradesh 300 3.95 540 3.67 1839

Jammu & Kashmir 320 4.22 450 3.06 1413

Punjab 150 1.98 400 2.72 2723

Jharkhand 180 2.37 240 1.63 1315

Tamil Nadu 200 2.64 240 1.63 1189

West Bengal 50 0.66 130 0.88 2533

Others 400 5.27 570 3.87 @

All India 7590 100.00 14710 100.00 1938

Source: Estimated from data downloaded from http://dacnet.nic.in/eands/


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Among the major producing states, Andhra Pradesh tops the list with the contribution

of over 20% to the total Indian maize production. Other producers are Karnataka

(18.6%), Bihar (9.2%), Madhya Pradesh (8.5%), Rajasthan (7.5%), Uttar Pradesh (7%),

and Maharashtra (6.8%).

The maize growing states can be divided into two groups

1. High Productivity States: Karnataka, Andhra Pradesh, Bihar (Rabi) Maharashtra,

Punjab and West Bengal account for about 30 percent

of the national maize acreage and their productivity

levels range from 2 – 4 tonnes per hectare.

2. Low Productivity States : Rajasthan, Madhya Pradesh, Gujarat, Uttar Pradesh,

Bihar (Kharif) which together cover about 50 percent of

the area have yields ranging 1 – 2 tonnes / hectare (i.e.

< 2 tonnes/hectare) which is lower than the national

average

2.2.4. Utilisation / Consumption Pattern of Maize in India

Diversified uses of maize have prompted higher production in India. Presently,

maize is mainly used for preparation of poultry feed and extraction of starch in the

country. In India both white and yellow both types of maize are grown. While white

maize in grown mostly for human food purpose, yellow maize is consumed primarily in

the manufacturing of poultry and animal feed. The maize consumption pattern in given

in the following graph.

Direct human consumption of maize has declined over time, while feed and

industrial uses have increased. A recent study by NCAP has shown that the per capita

human maize consumption which stands at around 3 kg per annum (average rural –

3.89 kg per annum; and urban average – 0.61 kg per annum) is declining at 2% per

annum due to greater availability of maize and rice at subsidized rates through Public

Distribution System (PDS). Rising household incomes have also shifted consumption

from maize to other cereals like rice and wheat. This has also led to an increased

consumption of meat, particularly of poultry, which has in turn increased the demand

for maize as feed. Increased industrial demand for maize comes primarily from the

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starch and milling industry which in turn caters to textiles, paper, glue, alcohol,

confectionery, food processing, pharmaceutical industry etc7.

The utilization pattern indicated that about 28% of the maize produced in India

is consumed directly as food, 59% goes for poultry, fishery, piggery and livestock feed,

about 12% to milling and brewery industry (like starch, oil, and dry milling) and the

balance 1% for the seed. The utilization pattern of maize varies from state to state an

according to the size of the farm.

Fig 2.10: Mize Consumption Pattern in India

Food

28%

Animal Feed

11%Poultry Feed

48%

Starch

11%

Brewery

1%

Seed

1%

Source: ICAR (2007) Vision – 2025

Dry, shelled cobs are used as fuel. Green leaves and stems, from thinning the maize

crop, are used as animal fodder. Maize grain is often fed to dairy cattle, whose milk

yield is reported to increase by 20-25% if fed maize grain. Maize gives higher

conversion of dry substance to milk, meat, and eggs as compared to other cereals.

Maize grain is either fed directly to animals or is dried, milled, and mixed with other

ingredients. Other Industries (mainly starch, dextrose, corn syrup, corn oil, ethanol, etc)

also uses maize as their raw-material/input8.

7 Multi Commodity Exchange of India Ltd (2007) Maize Futures: Feasibility Study and ICAR

Vision – 2025 Document 8 http://www.pnbkrishi.com/maize.htm

http://www.pnbkrishi.com/maize.htm

42

2.2.5. India’s International trade in Maize

The production in 2007 was estimated at around 138 lakh tonnes. India was exporting

maize to the world and the exports also increased during 2000-2005. It declined in 2003

due to fall in production. Exports increased again in subsequent years of 2004 and 2005

but declined again in 2006. This time the decline was due to imposition of certain

restrictions on maize exports from India.

Imports of maize into India has significantly declined since 2000 and according to

CMIE, India imported 1.6 million MT of maize valued at Rs 30.7 million in 2006.

However, imports have been witnessing a rising trend in since 2003 onwards.

Graph 2.11: India’s Exports and Imports of Maize

During 2000 –2006

289

2

4163

7276

1770

11612743

3993

688975296

0

1000

2000

3000

4000

5000

6000

7000

8000

2000 2001 2002 2003 2004 2005 2006

Year

Imp

ort

& E

xp

ort

(In

Lak

h M

T)

Imports Export

Source: CMIE database

Maize is an important crop in India. Besides being used for human consumption, it is a

key ingredient of poultry and livestock feeds. The poultry industry in India is rapidly

increasing. The country‘s requirement for poultry feed is increasing at over 10 % per

annum. Its demand for industrial uses is expected to increase. The maize sector has lot

of potential for growth.

43

Chapter 3: Policy and Institutional Framework for

Maize Sector in Bihar

This chapter will map the institutional framework and the policies/programmes relating

to maize sector in Bihar. The presence and role of major institutions and associations

that are associated directly or indirectly with maize have been discussed.

3.1. Institutions in Maize Sector in Bihar

Following institutions are working in Bihar on maize sector.

1. Bihar Veterinary College, Patna - This College helps the farmers & the

industries, related to poultry & dairy sector. It also does technology transfer

(Lab to Land program) through its respective Krishi Vigyan Kendra‘s (KVKs).

Poultry in Bihar is not a great success story due to socio-economic constrains,

but dairy is a success.

2. College of Agricultural Engineering, Samastipur, Rajendra Agricultural

University, Pusa, Samastipur - This institute is primarily responsible for the

irrigation aspects of maize in Bihar. Good work is being done on spring maize.

The exponential increment in the quality & quantity of spring maize yields in

the last half a decade is the proof of it.

3. College of Fisheries, Dholi & College of Fisheries, Tirhut , College of

Agriculture (TCA) campus, Muzaffarpur – Pusa Road, Doli, Muzaffarpur

– Though traditionally a fish eating state, these two colleges has not been

exploited by the fishermen & government to make fisheries an industry. This is

evident from the fact quoted by Deputy Director Fisheries, Department of

Fisheries, GoB, who had an interview with World Bank & IL&FS-CDI that

presently 25% of the water bodies are being utilized with a ―capture fishing

process‖ not the ―culture fishing process‖. The state imports 20% of its

requirement from West Bengal & Andhra Pradesh. At present, the total fish

requirement in Bihar is 2 lakh tons per year with an average yield of 3-5 t per ha

per year. There are no fish feed unit in Bihar. According to a recent research

http://www.webindia123.com/career/agriculture/details.asp?uname=Bihar+Veterinary+College%2C+Patna

http://www.webindia123.com/career/agriculture/details.asp?uname=College+Of+Agricultural+Engineering%2C+Samastipur

http://www.webindia123.com/career/agriculture/details.asp?uname=College+of+Fisheries%2C+Dholi

http://www.webindia123.com/career/agriculture/list_all.asp?action=Bihar

44

carried out in the Institute, fish feed should contain about 45% of maize for

better fish production per year. Presently the fishermen are using cow-dung &

organic manures to grow phytons for the fish while they use mustard cake with

rice bran cake, mixed in molasses to directly feed the fish. This feed is works

out to be cheaper than maize as in the fish producing districts of Bihar, maize is

not adequately produced/available. These flood prone fish producing districts

mostly grow paddy in kharif followed by mustard in Rabi. GoB is planning to

double its fish volume by 2013, by bringing in additional 20000 ha under fish

culture to make it a total of 50000 ha of area under fish culture. The output will

also be increased from 3 tons to 5 tons fish per ha per year. To make this happen

by 2013, about 2.58 lakh tons of fish feed is required which would have over

one lakh tons of maize in it.

These two colleges are now consulting Central Institute of Fresh Water

Aquaculture (CIFWA), Bhubneshwar to make fish feed units in Bihar. A

proposal is with GoB submitted by the department that 25% subsidy with a cap

of Rs.12 lakh will be given to fisheries graduate for setting up a new fish feed

unit. To make these feed units viable Rs.20000/- per acre of pond will be given

to energize it. This one acre can hold 1 lakh fingerlings which can be sold @5

paise per fingerlings. Feeding the fish from these feed units can produce 1kg of

Katla (local freshwater fish variety), @ Rs.50 per kg, in a year from the

fingerlings. The proposal looks to be viable but requires initiatives from

fishermen & fisheries graduate.

4. Rajendra Agricultural University, Faculty Of Agriculture, P O Pusa,

Samastipur - Established on 3rd

December 1974, it has a mandate for overall

development of the maize sector. This institute has done good work in the initial

stages till 1979 for white corn. Presently it has a full-fledged maize research

team with the Maize Coordinator as head. It produces small quantity of seed for

Bihar Beej Nigam, but the volumes are decreasing as the seed sector is

dominated by the private players. The university is helping GoB in drafting the

―Bihar Road Map for Agriculture‖ with the following highlights on maize:

http://www.webindia123.com/career/agriculture/details.asp?uname=Rajendra+Agricultural+University%2C+Samastipur

http://www.webindia123.com/career/agriculture/list_all.asp?action=Bihar

45

DoA will soon bring out a MAIZE MISSION for Bihar. The highlights of it will

be as follows

1) Growing maize in flood prone areas.

2) Setting up 12 godowns in all the maize growing districts

3) Setting up of rural godowns in 216 blocks of each 250 MT.

4) Target production by 2012 to be 3 million MT per annum from 1 million

hectare with yield of 3t/ha

Seed production will be private companies' domain

Immediate investment in farm mechanization and rural warehousing.

Warehousing will cost Rs.2.5 million for 1000 MT.

With the joint effort of this university and Directorate of Maize Research (DMR),

Begusarai some good Quality Protein Maize (QPM) has been released. GoB is

promoting QPM as mid-day meal in all government schools. To make this happen,

the university is helping the processors like Katyani Makka Udayog, to set up a unit

in Khagaria. The World Bank & IL&FS-CDI, has visited this processing unit at

Chautham in Khagaria district. This unit is temporarily closed due to financial

issues. One of the best cases of technology transfer by the university can be

observed as given below:

46

Source: www.rwc.cgiar.org/RSCRTCC/2005/Sessions

5. Sanjay Gandhi Institute of Dairy Science and Tech., Pusa, Samastipur &

Sanjay Gandhi Institute of Dairy Technology, Patna, Rajendra

Agricultural University, P O Dhelwan, Lohiyanagar, Patna – These two

institutes have done a commendable job creating an oldest (25 years old) single

most success story of Bihar, i.e., Bihar State. Cooperative Milk Producers‘

Federations Limited (COMPFED). As per interview conducted by World Bank

and IL&FS-CDI with the General Manager, Operations, COMPFED, will be

doubling its capacity to 200t/day of cattle feed in the next four years with 16%

growth per annum. COMPFED procures 60-70% of its maize requirement from

Bihar. COMPFED prepares the following animal feeds with different maize

compositions:

http://www.rwc.cgiar.org/RSCRTCC/2005/Sessions

http://www.webindia123.com/career/agriculture/details.asp?uname=Sanjay+Gandhi+Institute+Of+Dairy+Science+And+Tech%2E%2C+Pusa

http://www.webindia123.com/career/agriculture/details.asp?uname=Sanjay+Gandhi+Institute+Of+Dairy+Technology%2C+Patna

47

Type of Animal feed Maize content

Adult cattle feed 08-12%

Milking cow feed 15%

Poultry feed 50-60%

Pig feed 25-30%

Source: COMPFED, Patna

The irony here is that cattle & cow feed is picking up but not poultry & piggery.

COMPFED has more than 99% business in cattle & cow feed. It does some

poultry & pig feed production for the government like military farms, Central

dairy farms etc.

The two institutes have done some good research work on maize as cattle feed.

In collaboration with National Dairy Research Institute (NDRI), Karnal.

6. Directorate of Maize Research (DMR) Regional Research and Seed

Production Centre, Kushmahout, Bishnupuri, Begusarai - Consultative

Group on International Agricultural Research (CGIAR) (www.cgiar.org),

Begusarai, was established on 4th

May, 1997 exclusively for maize as a

Regional Research & Seed Production Centre, has no mandate for industrial

research. This institute is one of the best resources for all the private seed

companies. Exchange of parent seed & endorsement of hybrids, do happen un-

officially, boosting the private seed companies to produce the best performing

hybrids for Bihar Rabi.

7. Krishi Vigyan Kendras (KVK) – All the 16 KVKs in Bihar are governed by

different organizations like Indian Council of Agricultural Research (ICAR),

State Agriculture University (SAU), Non-Government Organizations (NGO)

and state Govt., Central/State Public undertaking, Educational Institutions

including Central Universities. KVK at Begusarai is the only one which has the

main mandate for maize. Remaining KVKs indirectly help the maize farmers &

processors like distribution of mid-day meals in primary schools, health

awareness among the fishermen cooperatives, increasing the milk production &

for a particular down trodden community, to increase the piggery sector.

http://www.cgiar.org/

48

Table 3.1: Details of KVKs Operating in Bihar

S.N. Name & Address of KVK Host Organization Est. Year &

governed by

1. Training Organizer,

Krishi Vigyan Kendra,

P.O. Sankarpur, Munger - 811201

(Bihar)

Vice- Chancellor,

Rajendra Agriculture University,

Samastipur-848125 (Bihar)

1979

S


Krishi Vigyan Kendra, Darbhanga

(Bihar)

-do- 1996

S



Hajipur Farm, Vaisali (Bihar)

-do- 1996

S


Krishi Vigyan Kendra, P.O.

Meghaul, Khodawanpur, Begusarai

(Bihar)

-do- 1992

S



Agwanpur, Saharsa (Bihar)

-do- 1979

S



P.O. Harnaut, Nalanda (Bihar)

-do- 1992

S


Krishi Vigyan Kendra, P.O. Vijay

nagar,

Banka -813101 (Bihar)

-do- 1983

S

8. Chief Training Organizer,


Barh, Patna (Bihar)

-do- 1992

S



Sekhupura (Bihar)

-do- 1996

S



Saraiah Farm, Muzaffarpur (Bihar)

-do- 1997

S



SCADA P.O. Arra,

Bhojpur -802301 (Bihar)

Chairman,

Sone Command Area

Deve.Agency,

Sone Bhavan, Patna (Bihar)

1993

O



Jahanabad (Bihar)

-do- 1997

O

49



P.O. Sokhodeora, Nawada -805106

(Bihar)

General Secretary,

Gram Nirman Mandal Ashram,

Sokhodera, Nawada -805106

(Bihar)

1979

N



Vanavasi Seva Kendra,

P.O. Adhaura, Bhabua 821116

President,

Banavasi Seva Kendra, Adhaura,

Bhabhua - 821116 (Bihar)

1992

N


Krishi Vigyan Kendra, Sharma

Bharti Khadigram,

Khadigram, P.O.Jamui - 811313

Chairman,

Khadi Gramydog Sangh,

Khadigram, Jamui -811313

1994

N


Krishi Vigyan Kendra, VPO

Basaith,Chandpura, Madhubani-

847102 (Bihar)

Chairman,

S.K.Choudhary Edn. Trust, New

Delhi

1994

N

Notes: I – ICAR; S – SAUs; N – NGOs; O -Others, includes state Govt., Central/State Public

undertaking, Educational Institutions including Central Universities

Source: http://dare.nic.in/KVKList.htm

3.2. Policy Incentives for Maize Sector in Bihar

On the policy front, DoA is providing lot of policy support for the development of

maize sector in the state. The Institutional Reforms (2006-07) are

Establishment of Soil Testing Laboratories in every district (16 new

laboratories added during 2006-07). All the maize producing districts have

now a laboratory.

Establishment of State Pesticide Testing Laboratory at Patna for Sanitary

and Phyto Sanitary certification

Mechanization: 25% additional subsidy from State plan for 2007-08.

DoA has allowed Leading commodity bourse NCDEX to launch the

country's first spot exchange in Bihar in September-end 2007 with trading in

maize contracts. The NCDEX-promoted spot exchange, initially trading in

maize -- a major crop in Bihar. Since agriculture is a state subject, an

electronic spot exchange cannot be launched at the national level. For any

spot exchange to get a presence in all states, it has to ask permission from

50

each state separately. The sellers would be from Bihar but buyers could be

from anywhere in the country. Traders functioning in futures market can

also buy from the spot market. (Source: Fifth Column in KOILAKH NEWS

on August 27, 2007 3:39:00 PM & DoA)

On seed, DoA is still following the National Seeds Policy, 2002 9. The

present government under the initiative for development of agriculture in

state of Bihar has formulated a ‘Bihar Seed Plan’, mainly comprising of –

1. Revival of ‗Bihar State Seed Corporation‘

2. Revival of State Seed Farms

3. Establishment of Seed Testing Laboratory at district, subdivision, and

block levels subsequently.

4. To promote the use of hybrid maize seeds during kharif up to 50 percent.

5. Development of very short duration seed banks in flood prone areas.

Bihar Government has started working on ‘Bihar Seed Plan’, but substantial progress

is yet to be made in this direction.

In addition to above, DoA is also planning for

Implementation of Vaidyanathan Committee Report on Cooperative Credit.

Krishak Salahkar (Agri-consultants) as para extension service providers to

farmers in all Panchayats

Department of Industries has not yet taken any concrete steps exclusively for

development of maize processing sector in Bihar. The policy remains the same which is

in general for all the industries.

9 Source: www. indian seed act 2002_files

http://myaccount.ibibo.com/MyIbibo.aspx?uId=5b2d4e0e-2fdc-473d-b457-3873980288da

http://blogs.ibibo.com/fifthcolumn

51

Chapter 4: Status of Maize Production in Bihar

Bihar is the 8th

populous state in India and depends primarily on agriculture. It produces

a variety of crops like maize, sugarcane, potato, jute and many other vegetables and

fruits due to its soil fertility and climatic conditions. The geographical location and

climatic condition of eastern part of Bihar namely Purnea, Katihar, Samsatipur,

Saharasa districts are favourable for cultivation of maize. Maize is thus an important

crop in Bihar which is third largest producer of maize in the country after Andhra

Pradesh and Karnataka and accounts for about 10% of national maize output.

Cultivation of maize provides livelihood to about 1.3 million farmers in Bihar, majority

of whom are marginal and small farmers. According to the figures of 2005 – 06, Bihar

produced 1.7 million tonnes of maize valued at Rs. 10.6 billion (at MSP of Rs.

620/qntl).

Table 4.1: Number of Farmers Involved in Maize Cultivation in 2005-06 in Bihar

Season Bihar maize area (lakh ha) Number of farmers attached

Kharif 1.623 312115

Rabi 3.598 691923

Summer 1.613 310192

4.1. Production, Acreage and Yield of Maize in Bihar

Bihar is a traditional 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 feed 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

engaged in maize cultivation.

52

Figure 4.1: Maize in Bihar – Acreage, Production and Yield

0

500

1000

1500

2000

2500

3000

1999-

2000

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Area (in 000 Hectares) Production (in 000 MT)

Yield (Kg per Hectare)

Source: Department of Agriculture, Government of Bihar

During 2005-06, the state produced about 1.4 million MT, which is about 5 per

cent of the total crop production. Though yield in Bihar is higher than the national

average, it has come down between 2000-01 and 2005-06 indicating a decline in the

productivity levels in maize cultivation in Bihar. The total production of maize for the

last seven years in Bihar is presented in Appendix table.

Table 4.2: Cropwise Cultivation of Maize in Bihar

Year

Crop

2004-05 2005-06 2006-07 (Estimates)

Area Prodn. Yield Area Prodn. Yield Area Prodn. Yield

Autumn

Maize

0.270 0.443 1638 0.276 0.456 1647 0.259 0.397 1532

Rabi Maize 0.195 0.592 3039 0.208 0.551 2641 0.382 1.31 3444

Summer

(Spring)

Maize

0.160 0.454 2827 0.163 0.389 2386 - - -

Total 0.626 1.49 2379 0.649 1.39 2153 0.641 1.71 2671

Area in Million Hectares; Production in Million Tonnes ; Yield in Kgs/Hectare

Source: Department of Agriculture, Government of Bihar

53

Fig 4.2: Agricultural Map of Bihar

4.2. Status of Maize Cultivation in Bihar

4.2.1. Size of Farm Land Holdings

Maize is mainly grown by small and marginal farmers in Bihar. The

fragmentation of land holdings is much more pronounced in Bihar than other states as

the average per capita operational holding in the state was 0.75 hectares in 1995-96

much below the national average and nearly one quarter of the size of Punjab. About

one-third of the operational holdings are marginal (less than one hectare) in which the

average size is merely 0.34 hectare. This explains the largely unorganised nature of

maize cultivation in the state where about 91% of the cropped area is dissected into

54

plots less than 2 hectares each. It also leads to the inference that due to the small land

size the farmers find it unviable to invest in better harvesting technologies, seeds etc.,

thereby leading to a comparatively lower yield per hectare. The low yield limits their

incomes and this again in turn leads to poor investment capacities. This vicious cycle of

limited capacity to invest and thus the ensuing low returns has largely hampered the

growth of the sector in the state. The category wise farmers and their operated area are

indicated in the following table.

Table 4.3: Size Class-wise Number and Area of Operational Holdings in Bihar

(1995-1996)

Size Class (In

Hectare)

Total Holdings

Number

('000) Percentage

Area ('000

Hectares) Percentage

Average Area per

Holding (Hectares)

Below 0.5 8422 59.51 1752 16.4 0.21

0.5 - 1.0 2922 20.64 2119 19.84 0.73

Marginal 11344 80.15 3871 36.25 0.34

1.0 - 2.0 1526 10.78 2018 18.89 1.32

Small 1526 10.78 2018 18.89 1.32

2.0 - 3.0 640 4.52 1534 14.36 2.4

3.0 - 4.0 301 2.13 1031 9.66 3.43

Semi- Medium 941 6.65 2565 24.01 2.73

4.0 - 5.0 170 1.2 750 7.01 4.42

5.00 - 7.50 99 0.7 597 5.59 6

7.50 - 10.0 45 0.32 402 3.76 9

Medium 314 2.22 1749 16.37 5.57

10.0 - 20.0 24 0.17 336 3.15 13.84

20.0 and Above 5 0.03 143 1.34 29.49

Large 29 0.2 479 4.48 16.45

All Sizes 14155 100 10682 100 0.75

Source: Directorate of Statistics and Evaluation, Govt. of Bihar.

Although the state has a very low amount of land per capita, in some parts of the state

there are still significant numbers of landholders having large amount of land leased in

their possession, in violation of the ceiling law. Most of such landholders are absentees

and consequently the state reports one of the largest land area under tenancy in the

country, although a significant amount of land leased out is also by small and petty

landholders engaged in a variety of occupations outside the village. According to the

NSS survey in 1980-81 the proportion of cultivated land under tenancy was about 10

55

percent. Thus farmers have limited interest and capacity to invest in farm land fertility

etc.

Maize is grown throughout the year in Bihar all three seasonal crops of maize are

cultivated; however, main crop is Rabi maize. Winter (Rabi) maize is the USP of the

state that dominates total maize production in the state with a 40 percent share.

Monsoon (Kharif) maize and Summer maize each contributes about 23 percent to the

total maize area.

Maize is grown in almost all the districts of Bihar. The leading district is Khagaria,

which accounts for about 12 per cent of maize production in the state. Other important

maize producing districts include Begusarai, Madhepura, Saharsa, Purnea, Katihar,

Muzaffarpur, Vaishali, and Samstipur. As maize is grown in most of the districts of the

state, there is not much movement of the grains within the state. Entire stretch form

Begusarai to Khagaria on the north side of national highway, having highly fertile land

of Gangetic plains provides very favourable soil for maize cultivation. The acreage,

production and yield of major maize (Rabi, Kharif and Summer) growing districts in

Bihar during 2006-07 is indicated in the following table

Table 4.4: Area and Production of Summer Maize (Gamma) in Major Districts in Bihar

During 2006-07

S. No Name of Districts Area (ha.) % Share Prod. (M.T.) % Share

1 Purnea 17774 10.12 86824 14.14

2 Katihar 14890 8.48 71515 11.65

3 Madhepura 19483 11.09 57051 9.29

4 Saharsa 15999 9.11 53394 8.69

5 Sapaul 9634 5.49 45808 7.46

6 Araria 8099 4.61 38893 6.33

7 Bhagalpur 7788 4.43 26655 4.34

8 Khagaria 7509 4.28 25139 4.09

9 Vaishali 10902 6.21 23682 3.86

10 Muzaffarpur 10963 6.24 22255 3.62

11 Samastipur 5147 2.93 22237 3.62

12 Others 47449 27.02 140631 22.90

Total 175637 100.00 614084 100.00

Source: Directorate of Statistics and Evaluation, Government of Bihar

Around one-fourth of land under maize cultivation in Bihar is for summer maize which

contributes about 28% of total maize produced in the state. The yield is also very high.

56

It is mainly grown in the districts pf Purnea, Katihar, Madhepura, Saharsa, and Supaul.

These together account for 45% of acreage and 50% of production of summer maize in

the state.

Table 4.5: Area and Production of Kharif in Major Districts in Bihar During 2006-07

Sl. No. Name of Districts Area (ha.) % Share Prod. (M.T.) % Share

1 Begusarai 42678 16.45 51721 13.01

2 Purnea 13795 5.32 38097 9.58

3 Bhagalpur 25812 9.95 35553 8.94

4 Saran 17974 6.93 26446 6.65

5 Vaishali 15801 6.09 23768 5.98

6 Araria 8602 3.31 21676 5.45

7 Katihar 10681 4.12 21259 5.35

8 Samastipur 14158 5.46 20932 5.26

9 Khagaria 14828 5.71 17810 4.48

10 Siwan 12011 4.63 17300 4.35

11 Patna 7569 2.92 14350 3.61

12 Others 75585 29.13 108679 27.33

Total 259494 100 397591 100


Kharif is mailnly grown in the districts of Begusarai, Purnea. Bhagalpur, Saran and

Vaishali. These five districts together account for about 45% of acreage and production

of kharif maize in the state.

Table 4.6: Area and Production of Rabi Maize in Major Districts in Bihar During 2006-07

Sl. No. Name of Districts Area (ha.) % Share Prod. (M.T.) % Share

1 Khagaria 32400 15.71 181926 24.44

2 Samastipur 25263 12.25 118660 15.94

3 Begusarai 17164 8.32 68175 9.16

4 Katihar 15519 7.53 48931 6.57

5 Madhepura 16579 8.04 47946 6.44

6 Saharsa 10485 5.09 45390 6.10

7 Bhagalpur 10838 5.26 42691 5.74

8 Purnia 11399 5.53 25750 3.46

9 Muzaffarpur 8549 4.15 22484 3.02

10 Darbhanga 7871 3.82 22424 3.01

11 Vaishali 7459 3.62 22347 3.00

12 Others 42658 20.69 97550 13.11

Total 206184 100.00 744274 100.00


57

As far as Rabi maize is concerned Khagaria alone accounts for about one-fourth

of total production in the state. Samastipur, Begusarai and Katihar are other important

districts for maize production. These 4 districts together contribute 44% to acreage and

56% of total rabi maize produced in the state.

4.2.2. Cropping Pattern

There are two distinct maize cropping patterns in Bihar. In the flood prone areas

of Khagaria, Saharsa (Kosi) and parts of Samastipur maize is being cultivated during

rabi. In these districts sowing starts in October (after flood water recedes) and continues

up to early January. The majority of the sowing is done during December. Maize

harvest starts towards the end of February and continues till the end of June. Majority

of the crop is harvested during the months of May and June. In these parts of Bihar

maize is the major and in some cases the only crop.

In Begusarai and Samastipur, maize is cultivated during both seasons Rabi and

Khariff. The sowing, during the khariff season, starts during the month of June and

continues up to July. The harvesting starts around the month of September and last up

to October. The sowing and harvesting during rabi follow the similar pattern as

observed in other places. The seasonality chart is given below:

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Khariff

Rabi

Since most of the maize cultivation is concentrated in the districts of Khagaria, Saharsa,

Katihar and Purnea where it is grown only in Rabi, it can be concluded that the

proportion of Rabi maize (including both winter and spring) in the total maize

production of Bihar can be up to 80%. This was also corroborated during discussions

with farmer groups.

58

Figure 4.2 : Major Maize Growing Districts in Bihar

Note: In kharif maize is scattered through-out Bihar as it is a rainfed crop. Map for

kharif is not being captured by the satellite as the cropping density is below

100ha, hence no data is available.

Source: CGIAR

4.2.3. Practices in Maize cultivation in Bihar

Following maize cultivation practices were observed in Bihar.

Land Preparation — The first step in maize cultivation is ploughing. Farmers

use tractors to deep plough the land. Normally ploughing is done thrice to break

down the soil. During ploughing, 50 Kg of DAP, 50 Kg of Urea and 25 Kg of

Potash is used alongwith some organic manure.

At field level, there is very limited use of bio-techniques to protect the fertility

of land for future crops. Chemical fertilizer is used to enhance the productivity,

but in long-run, it affects the fertility of land.

Sowing — Farmers on an average use around 11 Kg of seeds per acre, which is

about 20% higher than the average seed requirement. The seed requirement is

59

higher because of lower germination rate and high incidence of plant mortality.

Line sowing was observed in most of the places.

Weeding — Normally weeding is done only once by the farmers when the

plant is 3-4 weeks old. Approximately 10 labours are used per acre to carry out

the process of weeding.

Irrigation — Normally the crop is irrigated 3 times but the number of

irrigations can vary between 2-6 times depending upon the climate. Normally

flood irrigation is applied to the crop. Use of sprinklers and/or drift irrigation

was not observed in the study area.

Diesel motors attached to bore-wells are used to irrigate the crop. The cost of

one time irrigation per acre is between Rs.400-Rs500.

The cultivation practices in Bihar when compared to that of Andhra Pradesh suffers

from following deficiencies.

Parameter Practices in Andhra Practices in Bihar Effect

Seed Use 7 kg/acre 11 kg/acre Higher cost of

cultivation

Thinning Within 10 days Thinning is done at

the time of weeding

only

Lesser growth of

plants resulting in

lower productivity

Spacing 75 cm (3-1/2‘) between

rows and 20cm (8")

between plants or 60cm

(2‘) between rows and

25cm (10") between

plants

No standard spacing

was observed

Lower

productivity

Fertilizer 120 Kg of Nitrogen

50 kg of Zinc sulphate

250 Kg of Urea

100 Kg of DAP

2 kg of Zinc

Higher cost of

production

Absence of

balance nutrients

for plant

Source: Field study by IL&FS CDI

However, the negative effects are getting neutralized due to higher soil fertility. But

with better cultivation practices this yield can be improved further.

60

4.2.4. Cost of Cultivation

The average cost of maize cultivation in Bihar is around Rs 900 per acre. Inputs like

seeds, fertilizers and constitute about 25% of the total cost. The rabi crop on an

average is irrigated 6 times during a season. The irrigation cost contributes another 25%

to the total cost of cultivation. The hiring charges of machinery (tractors, threshers etc)

and labour for ploughing, planking, sowing, weeding and harvesting comes out to

around Rs 4000 per acre. Details of the cost of cultivation and revenue per acre of land

is given in the annexure table given at the end of the chapter

Table 4.7: Cost of Maize Cultivation

S.No Cost Components and Returns (Details)

Cost (In Rs per

Acre)

1 Land Preparation (Planking, sowing, fertilizer application etc) 810

2 Seeds (10 Kgs per acre @ Rs 120 per Kg) 1200

3

Fertilizers 1486

(a ) Basal – NPK (66 kgs @ Rs 10) 660

(b) Basal – MOP (22 Kgs @ Rs 5.5 121

© Basal – AS (22 Kgs @ Rs 7.75) 170.5

(d) 2nd

Dose – Urea (55 Kgs @ Rs 5.4) 297

(e) 3rd

Dose – Urea (44 Kgs @ Rs 5.4) 237.6

4 Pesticides (lumpsum) 500

5 Labour / machinery 3955

6 Irrigation 2700

7 Transportation (2 Trolleys @ Rs. 200/trolly) 400

Total Cost 11051.1

Return

1 Harvest of Grains (for 28 quintals / acre @ Rs 500* 14000

2 Harvest of Cobs (lumpsum) 500

3 Harvest of biomass (used as fodder & fuel) (lumpsum) 2000

Total Return 16500

Net Profit (not including the lease rent of 1 acre of land)

Only from harvest of Grains (Rs / Acre) 2948.9

If included cobs and biomass (Rs/Acre) 5448.9

Notes : * Farm gate prices during peak season

Source : IL&FS CDI Field Survey

4.3. Post Harvesting Practices and Infrastructure

The harvesting is generally done manually in the open field. Seeds are being extracted

using threshers. However, in some cases farmers are not extracting seeds immediately

after the harvest. Here they are simply storing the cobs. The important post-

production/post-harvest operations for maize are drying, grain (and seed) storage,

61

shelling, and milling. After extraction seeds are being sun-dried (on house roofs, flat

cement floors or roads, drying baskets, or plastic sheets because mechanical dryers are

not available in the villages) to reduce the moisture contents10

. Normally the seeds are

being dried for about 15 days before packing is done. After drying seeds are packed in

gunny bags and stored in sheds, storage barns, or plastic sacks at home which suffer

risk of damage due to pests and aflatoxin which makes it unsuitable to be used as raw

material for starch production. Only few farmers use fumigants like celphos to protect

the corn from grain-pest.

It is estimated that about 20-25% of the maize production is lost due to use of old and

obsolete post harvest machines and processes, open drying on floors inadequate

warehousing and grain store/bins, poor packing practices, and lack of collective

transportation facilities etc. The production loss due to poor post harvesting practices

and infrastructure affects the marketable surplus and thus the price and availability of

grain thus affecting the entire value chain in the state.

4.4. Storage and Warehousing

Most of the maize cultivators are small and medium farmers, so their grain retention

capacity is low (these farmers can‘t wait for higher prices of maize to sell their grains).

They sell most of their grains soon after harvesting to meet their essential expenses. In

maize belt of Khagaria and adjoining districts, which are flood prone, farmers sell their

grains otherwise it would be spoiled by flood water. Farmers have very limited in-

house capacity (2-10 quintals) to store their maize grains. These grains are stored in

gunny bags or wooden & earthen drum sort of pot having limited storage capacity.

Some pesticides are used to protect these grains during storage. No mass scale storage

facility is available, either in private sector or public sector. Only Gulab Bag mandi has

storage capacity of 12000-15000 MT. It has about 15 godowns each having a capacity

to store 750-1000 MT of maize. Existence of facilities of ‗Central Ware Housing

10

Shelling of maize is mostly done through mechanical shellers. Normally, big farmers own these

machines and smaller ones use it on hire basis. However, there is a provision for subsidy on purchase of

shelling machines, but only a limited number of farmers can avail benefit of this scheme due to various

factors like higher price of machine, non-transparent procedure of getting these subsidies, scheme

available for a fixed pre-determined number of machines, etc.

62

Corporation‘ or ‗Bihar State Ware Housing Corporation‘ is practically negligible in

maize producing areas. Lack of storage facility, prevent farmers from exploiting the

opportunity of good prices for their maize. It also leads to mass-transshipments of

maize grain by the traders .

4.5 Prices and Procurement

Basic staples in India including maize continue to be subjected to Minimum Support

Price (MSP) guarantees with the objective of ensuring remunerative prices to the

farmers, even out effects of seasonality, and promote agricultural diversification

although the guaranteed prices can be at times below prices prevailing in markets.

Though there is provision for MSP for maize grains, but at present there is no

procurement by the State agencies. Corn procurement by the government agency is

very rare (like once in five years) and that too in scanty volumes (707 MT in 2003-04)

which was just 0.2% of the total maize procurement in the country. It clearly indicates

poor procurement structure in the state (Refer to Annexure table).

In absence of any procurement by the state agencies, maize is sold in the open market

at the market prices (determined by the demand and supply forces). Prices of maize in

different grain markets of Bihar varies between Rs.500-Rs.700 per quintal, depending

upon the quality of grain (yellow flint grain is most preferred) and season from point of

view of grain trading (peak season – April to June; and lean season – December to

March). Minimum support prices act as a benchmark for open-market prices.

Table 4.8: Minimum Support Price for Maize (Rs./quintal)

2003-04 2004-05 2005-06 2006-07 2007-08

505 525 540 540 620

Source: Commission for Agricultural Costs and Pricing, Govt. of India

The prices in Gulab bag mandi during this year are as follows

63

Figure 4.3: Trend in Maize Prices and Arrivals at Gulabagh Mandi, Purnea

During 2007-08 (Prices in Rs. per Quintal and Arrivals in 000 MT))

0

100

200

300

400

500

600

700

800

900

Ap

ril

May

Jun

e

July

Au

g

Sep

t

Oct

No

v

Dec Jan

Feb

Months

Pri

ces

(in

Rs/

Qu

inta

l)

Market Price MSP Arrivals (Qnty in 000 MT)

Source: IL&FS CDI Field Survey

At present level of production and marketable surplus, absence of procurement by the

government agencies is not creating problems in terms of lack of demand for maize

grain, but it certainly slow down the upward movement of prices and hence lower

returns to farmers.

4.6. Credit Delivery Mechanism

Informal credit delivery system plays a very important role in meeting the credit needs

of the maize cultivators and even processors. Local wholesaler/trader gives credit

support to maize farmers for meeting their consumption and production needs and

hence farmers are obliged to sell maize to them. It was observed during field survey

that maize farmers in the district of Khagaria on an average take loan of Rs 6000-8000

per acre from the traders/moneylenders to meet their working capital requirement i.e.

input cost (seeds, fertilizer and pesticide etc), labour etc. Besides this, traders also

support farmers to meet their incidental expenses like medical treatment, marriage,

death etc. The prevalent monthly interest rate for informal credit in the selected districts

if found to be approximately 5 – 10% per month.

64

After harvesting, farmers sell maize to the moneylenders (wholesalers/traders) and loan

is settled against the value of the produce. Because of high interest rate and credit

linked product transactions, maize farmers are trapped in vicious cycle of debt and

poverty.

4.7. Marketing Channel and Infrastructure

Agricultural marketing includes the movement of agricultural produce from farms

where it is produced to consumers or processors. There is free market for maize in the

state but marketing network and infrastructure remains a weak link. Maize sector is

highly unorganized with many intermediaries and farmers depend on the local village

aggregator/trader who plays an important role in procurement and marketing of the

produce. There are also some rural primary markets. Broadly two marketing channels

in maize were observed:

1. Farmer Wholesaler

2. Farmer Village Aggregator / trader Wholesaler

Feed/Starch industry Retailer Consumer

Typically, after harvest maize grains are brought to mandis (like Gulab Bag mandi in

Purnea, Khagaria etc.) by village aggregator (adhatiyas) for selling. Trade process at all

other places comprises of village level aggregation at multiple locations and then its

direct transportation to rake loading points like Khagaria etc. or is even directly sent to

customer‘s destination.

These mandis lack basic infrastructural facilities like platform for drying grains, pest-

free storage godowns, machines for weighing/sorting, public utilities, etc. Only Gulab

bag mandi in Purnea has facility to store maize to the tune of 12000-15000 MT. It has

about 15 godowns each having an average storage capacity for 750-1000 tonnes of

maize. These mandis also do not have mechanized grading except for Gulab Bag mandi

but even there the machines are not caliberated and moisture meters are found to be

faulty. There are no price display boards like it is being done in Nizamabad Mandi in

Andhra Pradesh.

65

From Mandis, it goes directly to

1. Starch Units

2. Poultry Units

3. Dairy feed Units

4. Snacks etc

Some portion also finds its way to Bangladesh under the export license of players like

Bhengani/LMJ, But it is actually supplied by traders at Gulabbag/Khagaria etc to

Bangla Desh border like Hilly Border and Changra border

Table 4.9: Description of Maize Going to Different Markets from Major Mandis in Bihar

Sl.

No

Name of the

Mandi

Name and

%age Local

Markets

Name and %age of Outside

Markets

Name of the Major Corn

Processors Sourcing Maize

From Mandi

1 Begusarai

Patna (3%) &

Hajipur (5%) Kolkata (30%) & Siliguri (25%)

Amrit feeds (Bihar) & Suguna

Poultries (Kolkata)

2

Khagaria, Gogri

block (Big) Negligible

Punjab (8%), Haryana (15%),

Chandigar (7%), Delhi (10%),

Kolkata (30%), Jaipur (8%),

Ahmedabad (8%), Jabalpur (7%),

Rajnandgaon (7%)

Anil Starch (Ahmedabad); Surjit

Starch (Phagwara, Punjab); Bharat

Starch (Delhi)

3

Khagaria Gogri

(Small)

Patna (0.5%),

Gulabag (0.5%) &

Hajipur (0.5%) Siliguri (30%) & Kolkata (20%) NA

4

Khagaria

Alauliblock

Khagaria (95%) &

Bakhsi (2-3%) Negligible NA

5

Bhagalpur

Kharik Bazar Kurrela (15%)

Kolkata (30%), Siliguri (25%) and

Haryana (20%) Amrit feeds (Kolkata)

6

Khagaria,

Parbatta Deoghar (5%)

Punjab (20%), Gurgaon (10%),

Delhi (20%), Siliguri (10%),

Kolkata (5%)

Surjit starch (Phagwara, Punjab),

Bharat starch (Yamunanagar,

Haryana)

7

Bhagalpur,

Jhandapur Haripur (5%)

Kolkata (25%), Silliguri (20%),

Lucknow (12%), Karnal (15%)

Sugna Poultries (Kolkata); Amrit

Feeds (Hajipur), Venkey's India

Limited (Kolkata)

8

Bhagalpur,

Narayanpur NA

Punjab (20%),Varanashi (14%),

Kolkata (30%)

Surjit starch (Phagwara, Punjab), Ultra

Food & Feeds (Varanasi, UP). Amrit

feeds (Kolkata)

9 Khagaria Negligible

Ahmadabad (8%), Indore (5%),

Ratlam (4%), Ajmer (10%),

Dehradun (6%). A significant

portion goes out to Bangladesh

Anil Starch (Ahmadabad), Maize

Products (Ahmadabad), Tirupati

Starch Industry (Indore, MP), Kashyap

Sweetners (Ratlam, MP), Universal

Starch (Dondaincha, Maharastra) etc

10

Bhagalpur,

Naugachhia

Patna &

Muzaffarpur (0.5

to 1%)

Uttar Pradesh (8%), Uttaranchal

(15%), West Bengal (20%),

Haryana (18%), Delhi (5%)

Amrit Feeds (Hajipur & Kolkata),

Venkey's India limited (Dehardoon),

Bharat Starch industry (Yamunanagar,

Haryana).

11

Purnea, Gulab

bag

Hajipur &

Muzaffarpur

(0.5% each)

West Bengal (50%), Bangladesh

(20%), Punjab (5%), Haryana

(5%), Delhi (3%), Assam (8%)

Hitech Feed (Kolkatta), Sugna

Poultries (Kolkata), AaramBag

hatcheries (Il am Bazar)

Source: IL&FS CDI Field Survey on Traders in different mandis

66

Many of the maize growing areas trade through commodity exchanges like MCX and

NCDEX (in Mumbai) and NMC in Ahmedabad. There have been no delivery centers of

these bodies in Bihar. Recently Department of Agriculture (DoA) has allowed NCDEX

to launch the country's first spot exchange in Bihar in September-end 2007 with trading

in maize contracts.

Trade Channel and Value Chain

The following trade channel was observed in maize marketing in Bihar.

Village level aggregator — The village level aggregator operates in two ways

(depending upon his financial capability):

Trader

Commission Agent

As a trader, the aggregator buys the produce from the farmers and sells them to the

bigger traders operating at block level. The cost of transportation, packing and labour

charge is met by the aggregator. The aggregator in this case keeps a margin of around

3-5% over and above the cost incurred by him.

Whereas, as a commission agent he simply executes the order taken from the traders.

The entire cost up to the traders point, in this case, is borne by the farmer. The

commission agent in this case charges a commission up to 3% of the value of the

produce.

Commission agents at block level - In major market places such as Khagaria,

Maheshkhut, Mansi, etc commission agents are working for traders of Delhi, West

Bengal, Maharashtra on a commission of around 1.5%. These commission agents are

procuring maize from the village level aggregators and in turn supplying to the traders

operating out of major cities.

The overall trade and marketing channel is depicted in the following figure. The

diagram of the value chain of maize in Bihar explains the way in which the maize

growers, processors and other stakeholders are linked to each other:

67

Figure 4.4: Supply / Marketing Linkages for Maize in Bihar

Plz see the attached file

68

Mode of transport - Both railway and road transport is used for transportation of

maize. Generally transport cost incurred in road transport is lesser than the cost

incurred in railway wagons. For example, the transport cost using railway wagon up to

Delhi is Rs.100/quintal while the transport cost using truck is Rs.80/quintal. There are

some indirect / hidden costs involved in transportation through trucks such as bribes

demanded at check posts.

Table 4.10: Maize Value Chain in Bihar

Details Cost (Rs.)/Quintal Farm gate price of maize 600

Packing 6

Labour charge for loading 2.50

Transportation up to CA level 20

Aggregator margin 20

Price at CA point 650

Commission of CA 9.75

Transportation up to Delhi 100

Trader price at Delhi 760


The transport cost of carrying maize differs with the distance. The transport cost of

carrying maize to major ultimate users is given in the following table. Tthe

transportation cost may also vary depending upon the season. For example, it varies in

the range of 8-10% during peak season due to higher demand of trucks.

Table 4.11: Fare to various destination market from Gulabbag Mandi (Purnea)

(Fares are for one quintal) (In Rs per Quintal)

Ahmedabad

(Gujarat)

Jaipur

(Rajasthan)

Yamuna Nagar

(Haryana)

Guwahati

(Assam)

Indore

(Madhya

Pradesh)

Kolkata

(West

Bengal)

Gulab Bag

(Purnea) 220 140 150 110 180 70


The value chain is depicted in the diagram below:

69

Figure 4.5: Value Chain in Maize


4.9. Utilisation Pattern and Marketable Surplus of Maize in Bihar

The utilization pattern of maize in Bihar indicates that rabi maize is mainly grown for

market, whereas a substantial part of kharif maize is used as food and feed. In Bihar, as

far as Rabi maize is concerned, about 10-15% of the produce is retained at the

household level for self consumption / storage etc. About 85% of grower respondents

have reported that they sell more than 75% of their produce. Around 5% is being used

by local processing industry and the rest 80-85% goes out to other states like AP,

Punjab, Rajasthan and even Bangladesh where it is being used mainly in starch and

animal feed industries. However, in the districts of Begusarai and Samastipur, where

dairying is an important economic activity, boiled maize is being used as cattle feed. It

was also observed that human consumption of maize is very limited as the local food

preference is skewed towards wheat and rice.

Farm gate price

Packing

Handling

Transportation up

to CA level

Transportation-

Delhi

Wholesale Price-

Delhi

600

6

2.50

20

100

760

Rs/Quintal

70

It was estimated that almost 90% of the total maize produced in Khagaria, Katihar,

Purnea and Bhagalpur are being marketed outside the state. Whereas in Samastipur and

Begusarai this marketed surplus is around 75% as some portion (to the tune of 20% of

the total production) is used as cattle feed. However, marginal farmers in these districts

(with landholding up to 2 acres) are cultivating maize exclusively for cattle feed.

4.10. SWOT Analysis of Value Chain of Maize Pre-production Production Post-harvest (storage/

processing)

Marketing

Strength Favourable Agro-climate

Well established network of agri-input suppliers

Higher yield than national

average

Farmers aware of latest

seed/fertilizer/pesticide

options

--

Availability of

middlemen

traders at

different levels

Weakness Limited access to land by

poor

Lack of agri-extension support

High transportation cost of agri-inputs for most areas

Difficulty in accessing credit and demand of

upfront payment by input

suppliers

Higher irrigation cost

Lack of proper guidance on micro-nutrient use and right

agronomic practices towards

effective production

Lesser requirement of manual

labour, thus less scope to augment employment

opportunity for agriculture

labour in the production process

Lack of storage facility

forces farmers to sell at

lower prices

Lack of credit availability

to withhold stock

High seasonal

price fluctuation

Deferred/delayed payment

Opportunity Collective input

procurement

Provision of crop loan

through revolving fund for small and marginal

farmers

Area expansion under QPM

(QUALITY Protein Maize)

Pooled irrigation with

effective methods/provision of electricity for irrigation

Better crop-rotation and

inter-cropping practices

Use of bio-fertilizers, bio-

pesticides and micro-nutrients for sustainable

maize farming

Proposed ethanol plant at

Begusarai

Growing poultry industry

and feed requirement

Expanding industrial

demand of maize

Pooled collection and holding at village/GP

level with storage facility

25% subsidy available on

de-shelling machine

Availability of improved

low cost drying tools

(dried maize with standard moisture %

commands higher prices)

Small-scale intermediate

maize processing like

flour mills etc.

Provision of storage

structure at GP level

Increasing

railway raking

facility (one

more station

getting added to existing 2 with

such facility)

Collective marketing

through rural business hubs

and producer

groups

Threat Degrading soil quality with over-application of fertilizer

may affect maize yield in long run

71

Annex Table 4A: Cost and Return from Cultivation of Rabi Maize

Cost

Materials Unit Quantity/Acre Price Amount Total

1 Seed Kg 10 120 1200.00 1200.00

2 Fertilizer (three times)

a Basal - NPK Kg 66 10 660.00 1486.10

b Basal - MOP Kg 22 5.5 121.00

c Basal - AS Kg 22 7.75 170.50

d 2nd

Dose - Urea Kg 55 5.4 297.00

e 3rd

Dose - Urea Kg 44 5.4 237.60

3 Pesticides lumpsum 500 500

Subtotal (Materials) 3186.10

Labour/Machine

1 Ploughing by tractor 2530.00

2 times by 3 furrow

tyne

2 440 880.00

5 times by 9 furrow

tyne

5 330 1650.00

2 Sowing MD 13 30 390.00 390.00

3 Planking MD 3 70 210.00 210.00

4 Fertilizer application MD 3 70 210.00 210.00

5 Irrigation by diesel

pump (9 hrs. per acre

@ Rs. 75/hr.)

Times 4 675 2700.00 2700.00

6 Harvesting (1/16th

of

produce)

Kg 175 5 875.00 875.00

7 Transportation (Rs.

200/trolly)

Trolley 2 200 400.00 400.00

8 De-shelling (cob-

grain) – (1/40th

share)

Kg 70 5 350.00 350.00

9 Drying & packing of

maize grains

Per acre 1 200 200.00 200.00

Subtotal

(labour/machine)

7865.00

Total 11051.10

Return

Harvest of Grains Qtl./acre 28 500 14000.00 14000.00

Harvest of Cobs Lumpsum 500.00

Harvest of biomass

(used as fodder &

fuel)

lumpsum 2000.00

Total Return 16500.00

Net Profit (not including the lease rent of 1 acre of land)

Only from harvest of Grains Rs./acre 2948.90

If included cobs and biomass Rs./acre 5448.90

* Prices and Amounts are in RS.

72

Annex Table 4B: Area and Production of Kharif Maize Between 2002-03 and 2006-07

Sl.

No.

Name of Districts 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

Yield

(Kg/Ha

1 Patna 6905 11013 7598 10168 7689 11400 9072 14022 7569 14350 1570

2 Nalanda 2010 2463 2205 2936 2257 857 2462 934 2858 936 689

3 Bhojpur 2549 2722 2538 2016 3543 5878 2910 4924 2870 4497 1390

4 Buxar 1216 1897 1300 1599 3908 5026 3436 4287 4117 4408 1232

5 Rohtas 611 960 554 668 511 664 578 968 574 953 1490

6 Bhabhua (Kaimur) 383 601 332 408 338 436 498 701 356 470 1372

7 Gaya 3071 3775 4855 8302 6506 9265 4915 6267 4940 6723 1413

8 Jahanabad 705 813 604 1033 985 1310 705 863 690 959 1349

9 Nawada 1500 1651 1836 3138 1099 1326 1007 1274 1509 2116 1367

10 Aurangabad 505 548 418 714 431 501 787 1112 572 935 1404

11 Saran 18851 35764 17975 22654 16583 31709 18368 35224 17974 26446 1691

12 Siwan 11212 24101 11335 17991 11579 15204 10434 13584 12011 17300 1559

13 Gopalganj 8686 10853 11069 13453 8631 13984 8009 13036 7592 11414 1426

14 Muzaffarpur 7335 13113 6853 11179 9077 16664 3506 5482 3031 4059 1694

15 E.Champaran 7140 18234 5548 15742 6100 14145 6119 14145 6143 6175 2200

16 W.Champaran 2917 13195 2919 3756 4085 2283 3956 2187 4116 6821 1570

17 Sitamarhi 483 1044 484 813 210 374 212 372 210 288 1808

18 Sheohar 126 336 124 153 0 0 21 44 29 31 1868

19 Vaishali 16539 30809 17352 20587 17206 31763 15569 29187 15801 23768 1651

20 Darbhanga 1049 1606 727 854 1885 2464 2212 2885 2198 3424 1392

21 Madhubani 1038 1840 2371 3181 1769 2318 1871 2449 650 1011 1403

22 Samastipur 14628 19305 7196 9743 14939 19246 14933 19240 14158 20932 1343

23 Begusarai 40819 54458 40362 76611 40164 60514 40910 61138 42678 51721 1486

24 Munger 6135 7907 10374 12105 8676 13003 8378 12545 4200 5863 1362

25 Sheikhpura 865 1049 845 1369 580 830 2131 3010 1361 1632 1365

26 Lakhisarai 4444 8921 5205 8495 7075 8288 9473 11624 7601 9496 1385

27 Jamui 5949 6331 6101 8309 5633 2980 5300 2896 4725 4495 902

28 Khagaria 14099 11386 15298 21589 15003 23592 15202 23911 14828 17810 1321

29 Bhagalpur 27812 51263 29353 51402 25109 37755 26201 38811 25812 35553 1599

30 Banka 9526 11735 8371 19547 8011 7782 7008 6833 6652 8940 1386

31 Saharsa 6371 11449 5093 12338 5397 18828 3567 12891 3995 11317 2736

32 Sapaul 1408 3388 1216 3564 1549 4711 258 781 407 924 2763

33 Madhepura 7303 19313 6350 17027 4076 10953 4120 11466 3748 9840 2680

34 Purnia 10609 19894 11319 24395 10013 20488 15584 31267 13795 38097 2188

35 Kishanganj 885 1753 173 434 161 296 151 283 441 952 2053

36 Araria 3040 5521 3077 6389 7001 19755 8066 22393 8602 21676 2543

37 Katihar 7311 15676 9700 23350 13194 27227 18941 43069 10681 21259 2183

Total 256035 426687 259030 438012 270973 443819 276870 456105 259494 397591


73

Annex Table 4C: Area and Production of Rabi Maize Between 2004-05 and 2006-07

Sl.

No.

Name of Districts 2004-2005 2005-2006 2006-2007

Area

(ha.)

Prod.

(M.T.)

Yield

(kg/ha.)

Area

(ha.)

Prod.

(M.T.)

Yield

(kg/ha.)

Area

(ha.)

Prod.

(M.T.)

Yield

(kg/ha.)

1 Patna 657 3220 4901 678 1599 2358 582 1072 1842

2 Nalanda 666 3264 4901 924 2180 2359 751 1912 2546

3 Bhojpur 57 279 4895 23 54 2348 53 119 2245

4 Buxar 0 0 0 14 33 2357 81 182 2247

5 Rohtas 0 0 0 5 12 2400 2 4 2000

6 Bhabhua (Kaimur) 5 25 5000 0 0 0 0 0 0

7 Gaya 151 458 3033 98 259 2643 90 325 3611

8 Jahanabad 218 662 3037 411 1086 2642 195 705 3615

9 Nawada 136 413 3037 112 296 2643 148 535 3615

10 Aurangabad 7 21 3000 10 26 2600 7 25 3571

11 Saran 5210 14083 2703 4876 10864 2228 4850 10942 2256

12 Siwan 4072 8335 2047 4514 13271 2940 4095 15987 3904

13 Gopalganj 6206 14112 2274 8291 17320 2089 5626 11134 1979

14 Muzaffarpur 12218 32353 2648 10146 29941 2951 8549 22484 2630

15 E.Champaran 6644 26131 3933 6656 20840 3131 6235 3520 565

16 W.Champaran 5906 18675 3162 5984 13171 2201 6045 4256 704

17 Sitamarhi 1057 1640 1552 1148 1106 963 1737 3333 1919

18 Sheohar 855 1913 2237 768 1995 2598 668 2940 4401

19 Vaishali 6439 22672 3521 7865 17563 2233 7459 22347 2996

20 Darbhanga 7220 16454 2279 7437 8121 1092 7871 22424 2849

21 Madhubani 50 126 2520 200 218 1090 302 1286 4258

22 Samastipur 23964 62019 2588 24938 27232 1092 25263 118660 4697

23 Begusarai 16849 38702 2297 16733 54750 3272 17164 68175 3972

24 Munger 2009 3626 1805 756 1630 2156 1820 3802 2089

25 Sheikhpura 0 0 0 16 62 3875 13 64 4923

26 Lakhisarai 841 2641 3140 541 2089 3861 541 2673 4941

27 Jamui 216 678 3139 56 216 3857 92 455 4946

28 Khagaria 25792 97881 3795 29868 126521 4236 32400 181926 5615

29 Bhagalpur 10300 20242 2812 10516 20327 1033 10838 42691 3000

30 Banka 2242 5527 2465 2126 9461 4450 1936 7726 4208

31 Saharsa 9411 33908 3603 12100 98539 3185 10485 45390 4329

32 Sapaul 3447 13788 4000 2707 7553 2790 1861 7941 4267

33 Madhepura 13536 67274 4970 14976 36991 2470 16579 47946 2892

34 Purnia 10774 24037 2231 11859 26742 2250 11399 25750 2259

35 Kishanganj 271 681 2512 922 2384 2586 864 2477 2867

36 Araria 4090 8552 2091 4897 15964 3260 4064 14135 3478

37 Katihar 13496 38680 2866 15753 41352 2625 15519 48931 3153

Total 195012 583072 3035 208924 611768 2641 206184 744274 3612


74

Annex Table 4D: Area and Production of Summer Maize Between 2002-03 and 2006-07

Sl.

No.

Name of Districts 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

Area

(ha.)

Prod.

(M.T.)

1 Patna 3012 7385 2755 7869 2730 7385 3816 9328 3814 13123

2 Nalanda 1557 4375 1581 4225 1628 4767 1378 3275 1364 4999

3 Bhojpur 244 695 755 2163 791 2125 756 1895 728 2386

4 Buxar 16 37 142 413 116 301 87 206 88 265

5 Rohtas 12 34 156 451 15 39 16 38 15 53

6 Bhabhua (Kaimur) 25 71 25 67 26 76 26 62 0 0

7 Gaya 1702 5492 2004 5572 1489 4150 1216 2997 1226 4177

8 Jahanabad 249 684 297 838 274 752 261 630 395 1403

9 Nawada 391 1071 574 1618 2427 6322 948 2370 1021 3334

10 Aurangabad 3 9 20 55 12 35 0 0 12 39

11 Saran 5815 15276 7183 29034 6639 13896 4931 7429 4953 16447

12 Siwan 3279 8749 3083 12466 2504 5222 3572 5747 3304 10925

13 Gopalganj 2001 5216 1957 7595 1437 3140 1906 3174 1707 5611

14 Muzaffarpur 13544 31630 11633 25960 11081 30191 13138 26196 10963 22255

15 E.Champaran 4700 14418 4994 11242 4725 11784 4851 12025 4806 10163

16 W.Champaran 5953 17072 6039 12684 5996 17524 6101 19200 6459 13734

17 Sitamarhi 1657 5142 1085 2432 1384 3520 4202 10418 4202 8939

18 Sheohar 480 1502 494 1115 370 962 279 693 275 626

19 Vaishali 12105 48981 9394 22231 9679 29249 9762 26486 10902 23682

20 Darbhanga 1835 4243 2050 3928 3473 8774 3421 8687 3349 10519

21 Madhubani 468 1080 1017 1842 236 502 271 630 265 981

22 Samastipur 5141 11890 5129 8857 5172 9438 5054 10500 5147 22237

23 Begusarai 3641 9901 3875 11057 3451 7113 3251 6974 3445 11863

24 Munger 1065 2624 1171 3681 1182 2868 1825 3190 1768 5796

25 Sheikhpura 82 162 194 712 31 48 53 120 57 210

26 Lakhisarai 112 221 48 174 46 139 0 0 10 34

27 Jamui 311 613 323 1077 349 863 164 342 216 661

28 Khagaria 8948 21179 9543 30586 10267 23699 7104 14281 7509 25139

29 Bhagalpur 9522 24636 9383 25896 7716 21687 10328 28602 7788 26655

30 Banka 2449 6383 3281 8938 3306 9214 3310 9123 3726 13113

31 Saharsa 14029 35470 13419 39285 13572 39857 16024 51460 15999 53394

32 Sapaul 6392 13970 6875 17779 5726 23605 6998 23036 9634 45808

33 Madhepura 15783 63342 17366 60828 18225 89774 18530 52644 19483 57051

34 Purnia 18214 39762 17616 40942 16242 40034 18603 30936 17774 86824

35 Kishanganj 198 418 209 465 192 421 213 427 244 1230

36 Araria 6878 13040 5190 11754 6343 9245 7117 21252 8099 38893

37 Katihar 9050 15890 10402 24990 11917 25771 15706 32161 14890 71515

Total 160863 432663 161262 440821 160769 454492 175218 426534 175637 614084


75

Annex Table 4E: Procurement of Coarse-Grains (Figures in Tonnes)

State/Year JOWAR BAJRA MAIZE RAGI TOTAL

2001-2002

Andhra Pradesh - - 14961 - 14961

Gujarat - 45867 8164 - 54031

Karnataka - - 17783 77598 95381

Madhya Pradesh 2867 10339 43055 - 56261

Maharashtra 28301 6075 23254 - 57630

Rajasthan - 33982 2181 - 36163

Total 31168 96263 109716 77598 314745

2002-2003

Andhra Pradesh - - 4035 - 4035

Karnataka - - 990 9 999

Madhya Pradesh 3012 - 27 - 3039

Maharashtra 50382 4 1354 - 51740

Total 53394 4 6406 9 59813

2003-2004

Andhra Pradesh 4274 2174 270473 - 276921

Bihar - - 707 - 707

Chhatisgarh - - 2863 - 2863

Gujarat - 1 705 - 706

Haryana - 199121 - - 199121

Karnataka - - 15591 - 15591

Madhya Pradesh 863 87 20310 - 21260

Maharashtra 42980 192 16838 - 60010

Rajasthan - 44297 29277 - 73574

Total 48117 200,000 356764 - 650753

2004-2005

Andhra Pradesh - - 223223 - 223223

Chhatisgarh - - 10891 - 10891

Haryana - 130122 - - 130122

Karnataka - - 380341 48730 429071

Madhya Pradesh - 259 1782 - 2041

Maharashtra 11928 4810 14757 - 31495

Punjab - - 227 - 227

Total 11928 100000 631221 48730 827070

2005-2006 (Position As On 01.05.2006)

Andhra Pradesh - - 448861 - 448861

Chhatisgarh - - 8737 - 8737

Haryana - 4900 - - 4900

Karnataka - - 379650 63273 442923

Madhya Pradesh 220 - 2788 - 3008

Maharashtra 67258 58 29649 - 96965

Total 67478 4958 869685 63273 1005394

76

Annex Table 4F: Value Chain Analysis of Maize

Pre-production Production

process &

harvesting

Post-harvest

(storage/

processing)

Marketing

Stakeholders Revenue officials

involved in land

settlements and

consolidation,

lessee/landlords,

agri-input

suppliers, Govt.

Extension Agents,

credit institutions,

fellow

farmers/knowledge

and input

providers

Farm machinery

suppliers, agri-

input suppliers,

agriculture labour

(mostly women),

bore-well owners,

Extension Agents,

Govt. Irrigation

Deptt. Staff

Village /cluster

level petty

trader/storage, de-

shelling operator,

agriculture labour

(mostly women)

Village/cluster

level petty traders;

raking agents at

Railway yards,

market yards,

District

Procurement

Committee

Activities/

Processes

Land leasing or

share cropping ,

procurement of

agricultural inputs

like seeds and

fertilizers

Ploughing by

tractor, sowing,

planking, fertilizer

and pesticide

application,

weeding/hoeing,

harvesting,

drying, de-

shelling by human

labour

Transportation by

tractor and storage

at home by human

labour

Negotiation with

village traders/

transportation to

railway or market

yards

Tools/ Materials Tractors, pick-up

vehicles, boats for

transportation of

inputs

Tractors for

ploughing,

levelling and

making furrows

and diesel pumps

for irrigation,

weeding and

harvesting tools

De-sheller Tractor & mini-

trucks for

transportation

Institutions Seed companies,

State agriculture

department,

farmers‘ clubs

Informal farmers‘

interaction,

Agriculture

Department,

Govt. Irrigation

Department

Informal traders/

adhayatias

network

Traders

Associations,

networks, agents

of maize-based

industries

* Agri-input supplier includes traders and petty traders at district/block/village level market

supplying fertilizers, seeds, and pesticides to farmers.

77

Chapter 5: Status of Maize Processing in Bihar

Introduction

Maize can be utilized in many different forms by converting it into a variety of

products, through grinding, alkali processing, boiling, cooking and fermenting (like

animal feed, flour, corn flakes, corn meal, corn oil, starch and its derivatives like

glucose etc). The utilization spectrum of maize is large and diversifies covering about

3500 industrial products, specially textiles, pare, glue, pharmaceuticals, confectionery,

cosmetics and more recently fuel. All these industrial applications are adding to the

global demand and thus offering opportunities to make it a profitable crop in the state.

Maize processing and utilization pattern shows that in India, 10-15 per cent of

the total produce is used for industrial purposes. In Bihar, However, only 5% of the

maize is being used by local processing industry and over 80% goes out of state. Bihar

has no starch-producing unit. There are some units (around 10) dealing in poultry feed

& flour making in Khagaria, Bhagalpur and Purnea districts.

Earlier maize was the staple food in the state. But now, different varieties of paddy &

wheat are entering the grain market replacing maize from its staple food status. Hence

its consumption is falling. On the other hand its supply is increasing due to various

factors like growing production and productivity among others. The state is not being

able to make use of the availability of maize in the state due to lack of maize processing

units in Bihar. As a result more than 80% of Bihar maize goes outside the state to the

processors in Andhra Pradesh, Gujarat, Rajasthan, Haryana, Karnataka through road

and rail transport and gets processed there. Therefore from value chain perspective,

more profitable processing/activities relating to this sector like – production of hybrid

maize seeds, and by-product of maize i.e. starch, maize syrup, ethanol, corn flakes, etc.

are carried out side the state.

78

Thus 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.

5.1. Status of Maize Processing in Bihar

The processing industry plays a vital role in growth of a sector. The maize sector in

Bihar is too small in relation to the production of maize in the state. The maize

processing industry in Bihar is represented by about 10 small and micro units

manufacturing traditional food and animal feed products. The processing in maize

sector that exists in Bihar is basically limited to hybrid seeds, raw grains, and

production of some low value added products like – cracks, grinded corn, maize besan,

poultry feed, cattle feed, etc. This sector is dominated by private players.

Shiv Shakti Agro India with annual production of 50000 MT of cattle and poultry feed

and Amrit Feed with annual production of about 50000 MT of poultry feed are the

largest maize processors in the state. Surya Pashu Aahar is another, though insignificant

manufacturer (60 MT / year) of cattle feed in the state. Rest of them are engaged in the

manufacture of traditional food items.

K.M Udyog with annual production of about 2000 tonnes is the largest producer of

traditional maize (food) products. They are engaged in production of Besan, flour,

Dalia, Seviyan, Suji and cracks. Sudhir Cracks is also into production of cracks and

grinded corn and produces about 400 quintals annually. Other processors are very small

producing insignificant quantities (<35 tonnes / annum)

The data on the units engaged in maize processing in Bihar has been given in the

following table.

Table 5.1 : Details of Maize Processing Units in Bihar

79

Sl.

No.

Name &

Address 0f

the

Processing

Unit

Location

of the Unit

Year of

Estab-

lishment

Production Details Primary Raw

Material

Procurement of

Maize

Source of

Procurement

Maize

Storage

Capacity in

Plant

Quantity Price

1 Shivshakti Agro India

Ltd.,

Khagaria 1991 1. Cattle Feed (5000 T/Y)

Maize 23000-24000 MT

Rs.500-850/Qn.

Sourcing Agent 5000-7000 T in plant

godown 2. Poultry Feed (45000

T/Y)

2 K.M.Udyog Khagaria 2005 1. Besan (312T) Maize (Q.P.M)

2328 T - Organised supply source

200-250 T

2. Atta (351T)

3. Dalia (784T)

4. Seriyan (176T)

5. Suji (265T)

6. Cracks (155T)

3 Sudhir Cracks

Industry

Khagaria 1998 1. Cracks (300 Q) Maize 305 Qntls - Grain Mandi,

Khagaria

100 Q

2. Grinded Corn (80Q)

4 Anil Cracks

Factory

Khagaria 2003 1. Cracks (25 T) Maize 32 T Grain Mandi,

Khagaria

60 Q

2. Grinded Corn (10 T)

5 Girdhari Corn

Chips

Bhagalpur 2002 - Maize 2.6 T - Grain Mandi,

Nathnagar (Bhagalpur)

Gunny bags

6 Surya Pashu Aahar

Bhagalpur 2004 Cattle feed (60 T) Maize 130 T - Grain Mandi, (Bhagalpur)

No storage facility

7 Sri Ramprasad

Jaiswal

Purnea 2006 1. Chips (12 Q) Maize - - - -

2. Grinded Corn (5 Q)

8 Alok Flour

Mill

Purnea 1992 Grinded Corn (96.5 T) Maize 130 T - Grain Mandi,

Gulab Bagh, Purnea

55-60 Q

9 Yogendra

Saha

Purnea 2003 Grinded Corn (6.10 T) Maize 6.40 T - Grain Mandi,

Gulab Bagh, Purnea

25 Q

10 Amrit Feeds Limited

Patna 1994 Poultry Feed (69067.19 T)

Maize 41176.25 T - - -

Note: NA=Not Available; Darra - Semi Grinded corn for non-human consumption; Besan- Roasted corn Flour;

Dalia- Semi Grinded corn for human consumption; Sewai- Corn porridge

Suji-Finely grinded corn for human consumption.

Source: IL&FS CDI Field Research

Some of the Bihar maize is also being used by some food processing units

to make extruders & cracks. These companies are

S# Name of the

companies Location

Maize

consumed

(MT)

Brand

1 Fritolays Kolkata 5000 Kurkure

80

2 Haldiram Kolkata 4000 Murmure

3 Kuber Kolkata 500 Bindaass

4 others Bihar 500 Cracks

Total 10000

Source: Fritolay raw material vendors

5.2. Maize availability and quality

In Bihar, overall supply of maize does not lag behind the demand, and the state

attracts lot of buyers from outside the state due to superior quality of its rabi maize.

The processing units in Bihar procure raw maize either from the agents or directly

from the mandis. The interactions with processors revealed that the procurement price

of raw maize is quite reasonable and quality quite acceptable. The availability

however (particularly during off season) has been reported as one of the constraints

for growth of the sector.

5.3. Production and Production Costs

Maize as the raw material is the single largest component of production cost of

poultry / cattle feed. Any change its price and/or quantity will directly affect the

prices and realization of the final product.

Table 5.2: Cost of Production for Cattle Feed (Apr-2007 to Jan-2008)

(Cost is in Rs per Kg of Cattle Feed)

Cost Component April May June July Aug Sept Oct Nov Dec Jan Average

Raw Material 5.8 5.78 5.76 5.75 5.6 5.91 5.87 5.85 6.01 6.32 5.87

Processing 0.39 0.38 0.4 0.35 0.39 0.41 0.31 0.39 0.36 0.34 0.37

Lab 0 0 0.01 0.01 0 0 0.01 0.01 0.01 0 0.01

Packing 0.33 0.39 0.34 0.34 0.36 0.35 0.33 0.35 0.36 0.3 0.35

Salary and Wages 0.37 0.39 0.43 0.5 0.39 0.39 0.34 0.38 0.34 0.32 0.39

Admin. OH 0.32 0.3 0.31 0.35 0.31 0.26 0.22 0.28 0.23 0.26 0.28

Total Cost of Prodn 7.21 7.24 7.25 7.3 7.1 7.32 7.1 7.26 7.31 7.5 7.26

Source: COMFED

Figure 5.1: Break-Up of Production Cost for Cattle Feed

81

Lab

(0% )

Packing

(5% )

Salary and

Wages

(5% ) Admin.

(4% )

Raw Material

(81% )

Processing

(5% )

Source: COMFED, Patna

Comparing production costs of two poultry feed units of Amrit Feeds (the largest

maize processor in the state, producing 70000 MT of poultry feed per annum) in two

different locations one in Bihar and other in Andhra Pradesh, it has been observed

that the cost of raw material is 20% cheaper in Bihar during April to August as

compared to Andhra Pradesh. However, the cost of raw material is 15% expensive in

Bihar as compared to Andhra Pradesh during September to March. The cost of

production can be brought down if stored maize locally available during September –

March.

Non availability of power is a major issue of concern for the industry. The average

power cut in Hyderabad suburb in Andhra Pradesh is 4-6 hours per day whereas there

is 8-10 hours of power cut in Hajipur, Bihar. To add to the production costs in Bihar

the diesel cost is also 5% higher in Bihar.

5.4. Market for Processed Maize

A close look at the maize sector in general reveals that the states, which are developed

in dairy and poultry industry have a larger maize processing sector also. This is due to

the availability of assured market for the product. For example, Andhra Pradesh, which

tops in the poultry industry, has a number of feed units spread in the state apart from a

few starch units. Due to this large market base, the processing industry can produce the

quantities without much fear of lack of marketability.

82

At present the poultry and fishery industry in Bihar is not yet developed and starch

industry is virtually non-existent. However the recent trends show increase in chicken

consumption in the state. This would automatically lead to higher demand for poultry

feed.

In north Bihar, there are several rivers and ponds in which fishing is being done. This

fishing business can provide a good market for fish feed, which uses maize as their

basic ingredient. But this can be achieved only if the fishing industry itself is in the first

place made more organized. Government of Bihar is taking lot of steps to encourage

the sector. (see chapter 03 for details)

5.5. Problems Relating to Maize Processing in Bihar

There is a lot of scope for processing industry in the maize sector. Both, high & low

value added products can be processed in maize sector. At present, despite sufficient

availability of raw material, maize processing industry in Bihar is very underdeveloped

Some of he factors constraining maize processing industry in Bihar as follows:

1. Poultry sector which uses poultry feed is not so much developed in Bihar,

hence low demand and low production within home state.

2. Most of the farmers use by-products of their crop as cattle feedback, so no

sufficient domestic demand for cattle feed (lack of purchasing power is also

an important factor).

3. Dearth of industries in Bihar, using high value by-products of maize i.e.

starch, maize syrup, corn oil, ethanol, etc, as their input.

4. Low rate of urbanisation in Bihar does not provide good market for maize

processed items like breakfast cereals (corn flakes,etc.)

5. And most important of all these are lack of power which is very essential for

running of any machine based industry.

5.6. Government Initiatives

83

These constraints has certainly hampered the growth of maize processing sector, but

now with the changed scenario in Bihar, there are certain impetus for the growth of

maize processing sector –

1. New government is very consciously and sincerely trying to negate the

negative image of the state which had made the state non-preferred

investment destination for entrepreneurs.

2. Due to governmental efforts to reduce air pollution (ethanol blending of

petroleum & diesel), the demand for fuel ethanol has to increase. This

increased demand for ethanol as a fuel additive would result in dramatic

growth in ethanol production. Ethanol is produced from maize by either wet

milling or dry-grind processing.

3. Brand building of ‘Bihar’ is going to change the urban character (both in

qualitative and quantitative terms) of the state, and this change would

provide impetus for growth of beverage and snacks sector. This would

increase the demand for by-products of maize like maize syrup.

4. Dairy sector is on growth path and this sector can provide a good market for

cattle feed products. COMFED has a good network of milk collection

centres, this network can be used for marketing of cattle feed products.

COMFED can have its own cattle feed producing plant.

From investment perspective, there are positive developments for maize processing

sector in the state. Investors from other states have put forward their proposals for

investment in the maize processing sector in Bihar. One such proposal was approved by

the State Investment Promotion Board (C.M/Cabinet approval date – 22.09.2006) for

establishment of four maize processing units and Silicon Project one in each district –

Begusarai, Muzaffarpur, Khagaria, and Vaishali. Product mix of this proposal is

ethanol, extra neutral alcohol, pharmaceutical/perfumery alcohol, maize oil, ferphural

alcohol, poultry feed, and cattle feed. Total investment is of Rs. 2500 crore and

promoter of this project is M/S Indian Gasohol Ltd., Tamilnadu.

84

5.7. SWOT Analysis for Maize Industry in Bihar

Strengths

Favorable Government policies for

cultivation and production of

maize

Strong raw material base with

huge surplus for high value

products

Stable and consistent demand for

maize which has no close

substitutes

Winter crop gives the state a

significant strength

Weaknesses

Stagnating corn production in the

state

Weak marketing linkages affecting

prices and procurement.

Poor availability of basic

infrastructure

Opportunities

Increasing and diversified product

uses

Growing demand for starch from

sector like food, textiles, paper,

pharmaceuticals etc.

Increasing demand for corn gluten

as a poultry feed in South East

Asian countries.

Growing demand for ethanol used

as fuel

Threats

Inconsistent supply due to

dependence on rain

Stiff competition from other states

Chapter 6: Constraints / Priority Issues in Maize Cultivation

and Processing

85

From the field study and discussions with the stakeholders, some issues have been

identified which are constraining the growth of maize sector in Bihar. Since quality and

supply of maize production would determine the price, quality and supple of raw

material for the processing units, problems relating to maize cultivation have also been

included. On the basis of the findings the constraints can be broadly covered under

following heads:

1. Quality and Availability of farm inputs

2. Poor extension services

3. Poor Post Harvesting Practices and Infrastructure

4. Low Procurement

5. Lack of Proper marketing linkages and Infrastructure

6. Limited / No Processing Industry within state

Farm Inputs

Seed is one of the most important inputs of maize production on which the efficacy of

other agriculture inputs is dependent. Maize farmers of Bihar are mainly using

hybrid seeds manufactured by private companies. They are procuring these seeds from

local retailers. The quality of these seeds, sometimes, is questionable. There are some

instances of low germination, high mortality of plants along with lesser seeds in the

cob. Farmers are attributing this mainly to the quality of seeds, as even with similar

kind of farming practices and soil type they are getting different results.

The availability of inputs such as seeds, fertilizers and pesticides is not adequate. This is sometimes resulting in higher

prices being paid by the farmers. Similarly the quality of fertilizers is also questionable at the end of the farmers. They

are finding lots of adulteration especially in urea.

2. Research, Extension Services And Institutions

There is very less support to maize farmers in Bihar in terms of extension services and

institutions. Whatever extension service support is there in the state, it is mainly from

the private seed companies. These companies, to promote sales of their brand, provide

86

different types of support services to farmers. State has an agriculture university, a

regional centre of Indian Council of Agricultural Research, and there is also Centre of

the Directorate of Maize Research at Begusarai, working in the field of research on

maize. Out of all these three, only the Directorate of Maize Research is primarily doing

research related to maize. Krishi Vigyan Kendra (KVK) in Khudamanpur (Begusarai)

is doing good work for maize cultivators. Maize farmers are hardly aware of existence

of extension services for this sector. However, this sector could immensely benefit from

extension services. Through demonstration cropping of high value added maize crops,

farmers could be made aware of these crops and high returns on their cultivation.

The feedback from farmers revealed that they are unaware of suitable

technologies for preventing losses/damages to the crop. Since technological

options for controlling these biotic constraints are already available, non-

adoption appears to be the main constraint. Lack of appropriate input markets,

inadequate information about improved technologies, and failure of collective

action constrains the adoption of available rat- and termite-control technologies.

Rabi maize which is the main crop of Bihar needs 4-6 times irrigation, and these

are done by flooding process. Since, major maize producing areas are not under canal

irrigation and electric supply is highly deficient and unreliable, these irrigations for

maize crops are through diesel pumpsets, which makes irrigation cost high for maize

farmers. If farmers could be made aware of low cost irrigation techniques, like drip

irrigation, irrigation through sprinklers, etc., their irrigation cost could be reduced

substantially. Subsidy for these irrigation implements and others like de-shelling

machines can also play an important role in farm mechanization of this sector.

At industry level, on one side there are no restrictive types of regulations for

this sector, but at the same time, on the other side there are no substantial promotional

schemes of government for this sector. In Bihar, potential of agriculture-industry

linkage in this sector has yet to be realised. Due to very limited development of high

value adding industry in this sector, institutions supporting maize based industry are yet

to be developed in this State.

3. Post Harvesting Facilities And Infrastructure

87

There is low level of mechanization at farm level and most of the activities are carried

out manually. Since farmers are generally small and marginal, they store maize in

gunny gas etc at home. Their capacity to retain grain, therefore is limited to 2-10

quintals. As the maize producing areas are flood prone areas, their storing capacity goes

down to a great extent during the rainy season. Even if they are able to store the quality

of the produce is affected by high moisture content in these grains which lowers their

prices.

There are no mass scale storage facility available, either in private sector or public

sector. Only Gulab Bag mandi has storage capacity of 12000-15000 MT. Lack of

storage facility, prevent farmers from exploiting the opportunity of good prices for their

maize. High transportation cost further reduces farmers‘ return on maize crop.

4. Prices And Procurement

There is provision for ‗Minimum Support Price‘ for maize grains, but at present there is

no procurement by the State agencies. Very high percentages of total produce are

available as marketable surplus. And this marketable surplus is easily sold in the

market. Prices of maize in different grain markets of Bihar varies from Rs.500 to

Rs.700/quintal, depending upon the quality of grain (yellow flint grain is most

preferred) and season from point of view of grain trading (peak season – April to June;

and lean season – December to March). Minimum support prices act as a benchmark

for open-market prices.

At present level of production and marketable surplus, absence of procurement

by the government agencies is not creating problems in terms of lack of demand

for maize grain, but it certainly slows down the upward movement of prices and

hence lower returns to farmers.

5. Marketing Facilities And Infrastructure

The maize marketing is unorganized and is dominated by commissioning agents and

traders. There is only one mandi for maize at Gulab bagh, Purnea. There are other

88

mandis like Dalkola, Mansi and Maheshkhunt (Khagaria) etc also which deal in maize

as well, besides other grains, though in small quantities.

These markets/mandis lack basic infrastructural facilities like platform for drying

grains, pest-free storage godowns, moisture metres, machines to ascertain quality,

grading and weighing, public utilities, etc. Only Gulab bag mandi in Purnea has storage

facility. It has 15 godowns having total storage capacity for 12000-15000 MT of

maize..

Lack of these facilities at mandis reduces the returns to both farmers and local maize

traders. Small players (farmers & small traders) are exploited by big players (wholesale

traders who supply grains to maize industry) on account of manipulation in weight and

assessment of quality of maize grains.

6. Limited Processing Activities in the State

Processing for maize sector in Bihar is basically limited to hybrid seeds, raw grains,

some low value added products like – cracks, grinded cron, maize besan, poultry feed,

cattle feed, etc. This market sector is almost dominated by private players. From value

chain perspective, more profitable processing/activities relating to this sector like –

production of hybrid maize seeds, and by-product of maize i.e. starch, maize syrup,

ethanol, corn flakes, etc. are out side the state of Bihar. Home state mainly deals in low

return activities like – production of grains, semi-processed products (cracks, grinded

maize, maize besan, etc.), and some poultry & cattle feed industries. Majority of maize

grains are exported to states like – West Bengal, Punjab, Haryana, Andhra Pradesh,

Maharashtra, Tamil Nadu and Nepal through road & railway transportation.

The overall poor investment climate in the state over last one and half decade poor

infrastructural facilities (including poor power supply) have been identified as the

major factors constraining the growth of processing industry in Bihar.

7. Power

The milling units require uninterrupted power supply. People from all sectors, farmers,

traders, industrialist, government officials expressed great concern about availability of

89

power in Bihar. Extremely poor power supply, in term of quantity and quality both, in

Bihar is the greatest limiting factor in setting up maize based industries in this state.

While larger processing plants can setup own captive power generation units, medium

and small size processors have to depend upon the power supply from the government.

90

Chapter 7: Recommendations

For proper integrated development of maize processing sector in Bihar, a multi-

dimensional approach is needed. Other related sectors, also have to be developed for

development of this sector. Government has to support private sector in terms of

research input, tax incentive, storage facilities, basic infrastructure like power, roads,

etc. This chapter summarises major recommendations for improving the

competitiveness of maize sector in Bihar. Major problems constraining the sector are

summarized below on the basis of response from the questionnaire survey.

Table 7.1: Major Problems of the Maize Sector in Bihar

Problems Weightage

Maize

Cultivation

Maize

Processing

1. Lack of demand

2. Lack of finance/ credit facility

3. Lack of linkages with service providers such as Agricultural universities, FCI, etc

4. Lack of skills / practices

5. Problems in raw material procurement

6. Problems in uninterrupted power supply

7. Lack of infrastructure such as storage and roads * * * * * *

8. Lack of marketing infrastructure * * * *

9. Natural calamities (Flood) * * *

Note: Very Severe Moderately Severe Not much Severe Source: Based on IL&FS CDI Primary Field Research

91

Recommendations

i) Overall environment, in terms of availability of inputs, extension services to

farmers at field level, post harvest support to farmers, good returns to farmers

by developing marketing network, etc. need to be improved.

ii) There is a need to document analytically-based reasons for low farmer

adoption of improved maize technologies.

iii) Government can play the role of facilitator in this sector. Use of seeds for high

value added maize crops like baby corn, sweet corn, etc. should be promoted

through input subsidy to farmers. These high value added crops would

enhance the economic return to farmers.

iv) Government can play the role of facilitator in boosting the poultry & fish

sectors. These two sectors can grow quickly if maize based feed are being

given.

v) Normally, crop diversification within the maize crop, in terms of use of

different mixed crops like turmeric, onion & coriander by individual farmer is

negligible. This increases the risk of farmers in case of crop failure on account

of seed factor, as it has occurred sometime back on account of some problem

with Monsanto brand of maize seed. To minimize these types of risks, State

government can introduce crop insurance for hybrid maize seed crop.

vi) There is a need to develop and popularize help line services on the lines of

one extended by Chandra Sekhar Azad University of Agriculture and

Technology, Kanpur, for farmers of Bihar, to disseminate first-hand

information.

vii) Farmers should be made aware of low cost irrigation techniques, like drip

irrigation, irrigation through sprinklers, etc., their irrigation cost could be

reduced substantially. Subsidy for these irrigation implements and others like

de-shelling machines can also play an important role in farm mechanization of

this sector.

92

viii) Bold initiatives in terms of research and institutional development are needed

from Bihar government, to reap benefits from new opportunities that are

arising in the maize sector.

ix) Creation of mass scale storage facility is urgently required, which will enable

the farmers to exploit the opportunity of good prices for their maize. In future,

this will ensure the constant flow of maize as raw material for the processors

in Bihar. Since constructions of warehouses are beyond the means of small

and marginal farmers, there is a need for strengthening the network of

warehouses owned and managed by ‗Central Warehousing Corporation‘ and

‗State Warehousing Corporation‘ in maize producing areas.

It has been recommended that possibility of building storage capacities in

Public Private Partnership (PPP) format should be considered.

x) At markets/mandis level development of common facilities such as platform

for drying grains, standardized weighing machine, etc. should be done either

through public initiative or cooperative organizations.

xi) Procurement of maize by the government agencies is must to prevent the

downslide of prices and enable the farmers to get better returns.

xii) For proper integrated development of maize processing sector, a multi-

dimensional approach is needed. Other related sectors, like poultry &

fisheries, also have to be developed for development of this sector.

Government has to support private sector in terms of research input, tax

incentive, basic infrastructure like power, roads, etc.

xiii) At present, power supply for industrial purpose is not regular in Bihar, and

this is not going to improve in near future. So, in short term, option of captive

power generation (maize bio-mass co-generation) should also be thought

about.

93

Viability of Setting up Storage Facility

There is lack of proper storage and warehousing facilities for maize in the state. It is

leading to distress selling by farmers and traders, reduced prices/realization due to

spoilage, wastages, flow of maize outside the state etc. The following section discusses

the viability of storing maize for securing higher prices at a later stage.

Fig. 7.1: Trend of Maize Prices (in Rs per Quintal) and Maize Arrivals (in 000 MT) at

Gulab Bagh Mandi During 2007-08

550600

650

750

650600

650700

750

10045

800

650

235510101525550

100

200

300

400

500

600

700

800

900

Ap

ril

May

Jun

e

July

Au

g

Sep

t

Oct

No

v

Dec

Jan

Feb

Months

Pri

ces

an

d M

aiz

e A

rriv

als

Source: Trader‘s Feedback at Gulab bag Mandi

The monthly maize prices in Gulab Bag mandi for 2007-08 have been used for the

analysis. The maize arrivals in mandis begin in April at Rs 650 per quintal. Since

arrivals are small as compared to its demand, the prices are higher. Maize starts to

arrive in bulk in May. During May 2007, over one lakh MT of maize was traded in this

mandi. This excess supply causes glut in the market thus pushing down the prices to Rs

550 by end of May. The prices start recovering by end of June as the maize arrivals

start coming down and overall trading slows down. During July-August, there is

demand in the market but supply is small. This leads to rise in prices and the prices

94

continue to rise consistently and reaches peak at around Rs 750 per quintal in August.

Prices fall again during off season (September – October) due to fall in demand and

lack of supply. There is little trading done during September – February as there is no

maize available in the state. These small quantities consists of maize stored by farmers

in cobs etc and whatever little is there in storages in Gulab Bagh mandi.

During this off season, buyers of Bihar maize get diverted to other states (like Andhra

Pradesh, Karnataka, Maharashtra etc) as Kharif maize start to arrive in mandis of these

states from September onwards and is available till end of November. However, during

December to February, there is no maize available anywhere in the country. Therefore

the prices begin to rise in by end of November and continue to rise till February when

the price of maize ranges between Rs 800-850 per quintal.

Large traders and processors have confirmed the need for storage facilities for Rabi

maize in Bihar to the tune of 2-2.5 lakh MT at various places like Kursela, Seemapur

(Naughachia), Mansi, Khagaria and Gulab Bagh, Purnea. Riddhi Siddhi (Uttaranchal),

Sukhjit (Malda), and Gujarat Ambuja exports (Uttaranchal) together need around 1000-

1100 MT per day and are the major buyers of maize from Gulab Bagh mandi. Poultry

units in Assam also procure maize from this mandi. Some quantities also find their way

to Bangladesh to be used in poultry feed units.

Buyers of Bihar Rabi maize (mainly starch and poultry units in Assam, Gujarat,

Haryana, Rajasthan etc) divert their procurement from other distant maize producing

areas in AP, Maharshtra and Karnataka during off season in Bihar (September

onwards). If Bihar Rabi maize is available in stores and warehouses, it would be more

economical for these producers to buy it from Bihar than the distant markets (due to

high transport, logistics, other expenses). Also the quality of Bihar Rabi maize is much

superior as compared to Kharif maize available in mandis of AP, Karnataka etc.

Thus the maize can be stored during May and June (at prices around Rs 550 per

quintal) and sold during off season (during September to February) when prices go upto

95

Rs 750 –800 per quintal.11

However, enough care would need to be taken to ensure

quality as most of buyers of Bihar Rabi maize are poultry units which are quality

sensitive.

If the trader or the farmer is to take advantage of the price rise, he should be able to

store it for this period and there should be enough margin after deducting the cost of

storage.

Table 7.2: Cost of Storing Maize

S. No Cost Component Unit Cost

Cost for 3

months

Cost for 8

months

1 Rent charges for storage 3.5 10.5 28

2 Fumigation 1.5 4.5 12

3 Interest @10% 1.00 3 8

4 Gunny Bag cost (2nd

hand) 18 18 18

5 Transportation (lumpsum) By Truck upto 50 Kms 20 20 20

6 Loading / Unloading / Stacking 8 8 8

Total Cost of storage (1 to 6) 31 64 94

7 Procurement price in may / June (Rs per Quintal) 550 550

Total cost in February (1 to 7 ) (Rs per Quintal) 614 644

Expected Price in February (Rs per Quintal) 750 800

Net Profit (Rs per Quintal) 136 156


The total cost of storage (including procurement price) for 3 months work out to be

around Rs 614 per quintal for 3 months. If the prices go up to Rs 750 in August, then

the net profit per quintal is Rs 136. Now if it is stored during May-June (@Rs550) for 8

months and sold in February (@Rs 800), the net margin after deducting the storage

costs work out to be Rs 156 per quintal. Thus, there is a strong case for setting up

storage and warehousing facilities in the state. But since there is risk involved

(uncertainty in demand, unforeseen events etc) which could in fact affect demand and

prices in future prices. If there is some risk mitigation mechanism in the form of

insurance etc, it sure is a viable option

11

During October-November, kharif is available in markets of AP and Karnataka. Maize can also be procured from these states

for storage in Bihar

97

Table 7.3 : Constraints & Interventions Required for Maize Sector in Bihar

Supply Chain Major Constraints Intervention required

Maize Cultivation

Use of old techniques of cultivation

(for sowing, irrigation etc)

Limited mechanization at farm level

Lack of quality inputs

Lack of awareness/ limited ability of

farmers for upgradation/

modernisation of machinery as they

are small

Lack of access to institutional credit

Absence of modern infrastructure

High irrigation cost due to expensive

diesel

Strong linkage with relevant institutions for

providing effective extension services

Direct linkages with input suppliers such as

seed and fertilizer companies with farmer

groups

Creation of Cluster Parks with necessary

infrastructure and common facility centre

Boosting the co-generation of power units

from maize biomass

Post Harvesting

Practices and

Infrastructure

Poor harvesting practices and lack of

storage and warehousing facilities are

leading to wastages upto 25%

Inadequate storage facilities and

warehouses

Improvement in post harvesting operation

Providing proper storage facilities

Prices and

Marketing

Infrastructure

Inadequate infrastructure at the

mandis in terms of lack of testing /

grading/sorting facilities

Limited storage facilities

Implementation or activation of quality

control & testing system

Storage and warehousing facilities at the

mandis

Market

Declining demand of maize as

human food

No processing industry within the

state

Product diversification and its

commercialization

Contract farming done by the processors

Innovative market support schemes.

Development of poultry & fish sector

Source: Based on IL&FS CDI Primary Field Research

98

Table 7.4: Major Constraints & Interventions Required for Maize Processing Industry

in Bihar

Supply Chain Major Constraints Intervention required

Raw Material

Seasonal supply due to lack of

adequate storages and

warehousing

Unreliable supply, and high

prices

Setting up of Storages and warehouses will

facilitate uninterrupted supply of quality raw

materials at reasonable rate

Process

Scarcity of availability of skilled

craft persons

Lack of financial

resources/credit facilities

Lack of modern infrastructure

Improvement of existing equipment

implementation of advanced technology and

production technique

Linkages with lead banks, financial

institutions and MFIs

Creation of Cluster parks with necessary

infrastructure and common facility centre

Products

Highly dependent on traditional

products : Poultry feed and cattle

feed, flour etc.

Stiff competition from

processing industry in West

Bengal, AP and Karnataka

Lack of demand for other value

added products such corn-flakes

within the state

Market creation for food items

Development of related industries such as

poultry and fishery

Quality Assurance

Lack of testing/certification facilities Implementation or activation of quality

control & testing system

Market

Loss of substantial local and

national markets because of poor

investment climate in the state

Lack of demand for maize as

cereals due to slow rate of

urbanisation

No coordinated movement as yet

to promote the maize products

No institutional marketing

channel for maize

Improved physical infrastructure

Strengthening linkages with central agencies

like FCI, COMFED, SWC, CWC,

BISCOMAN

Setting up of urban haats and other market

systems in the state,

Source: Based on IL&FS CDI Primary Field Research

References

99

CIMMYT (2005) Maize in India: Production Systems, Constraints, and Research

Priorities

CIMMYT (2007) Tropical and Subtropical Maize in Asia: Production Systems,

Constraints, and Research Priorities

Department of Agriculture, Government of Bihar

ESCAP (2005) Identification of Pulling Factors for Enhancing the Sustainable

Development of Agriculture with Special Reference to Maize in India, Working Paper

No. 88


http://www.agriculture-industry-india.com/

Karvy‘s Special Report on Maize

Multi Commodity Exchange of India Ltd (2007) Maize Futures: Feasibility Study

World Bank (2007) Bihar Agriculture: Building on Emerging Models of “Success”

www.fao.org/es/esa/en/pubs_sofa.htm

www.ficci.com


http://www.agriculture-industry-india.com/


http://www.ficci.com/

100

CONTENTS

101

List of Abbreviations

AP : Andhra Pradesh

CGIAR : Consultative Group on International Agricultural Research

CIFWA : Central Institute of Fresh Water Aquaculture

CII : Confederation of India Economy

CMIE : Centre for Monitoring Indian Economy

COMPFED : Bihar State Cooperative Milk Producers‘ Federation Ltd.

DMR : Directorate of Maize Research

DoA : Department of Agriculture

EU : European Union

FCI : Food Corporation of India

FGDs : Focussed Group Discussion

FHP : Farm Harvest Price

GCA : Gross Cropped Area

GDP : Gross Domestic Product

GIA : Gross Irrigated Area

GoB : Government of Bihar

GoI : Government of India

GSDP : Gross State Domestic Product

Ha : Hectare

HYV : High Yielding Varieties

ICAR : Indian Council for Agricultural research

IDC : Industrial Development Commissioner

IFPRI : International Food Policy Research Institute

KVKs : Krishi Vigyan Kendra

M. Ha : Million Hectares

MSP : Minimum Support Price

MT : Metric Tons

NABARD : National Bank for Agricultural and Rural Development

NCAP : National Centre for Agricultural Policy

102

NDRI ; National Dairy Research Institute

NGO : Non-Government Organization

NIA : Net Irrigated Area

NSA : Net Sown Area

NSDP : Net State Domestic Product

NSSO : National Sample Survey Organization

PDS : Public Distribution System

PPP : Public Private Partnership

QPM : Quality Protein Maize

RAU : Rajendra Agricultural University

SHG : Self-Help Groups

T/Ha : Tons/Hectare

USA : United States of India

WB : World Bank

WHP : Wholesale Price

WTO : World Trade Organization

103

List of Tables

Table 2.1: Area, Production and Yield of Major Maize Producing Countries in

2005

Table 2.2: State-Wise Maize Area, Production and Yield during 2005-06

Table 3.1: Details of KVKs Operating in Bihar

Table 4.1: Number of Farmers Involved in Maize Cultivation in 2005-06 in Bihar

Table 4.2: Cropwise Cultivation of Maize in Bihar

Table 4.3: Size Class-wise Number and Area of Operational Holdings in Bihar

(1995-1996)

Table 4.4: Area and Production of Summer Maize (Gamma) in Major Districts in

Bihar During 2006-07

Table 4.5: Area and Production of Kharif in Major Districts in Bihar During 2006-

07

Table 4.6: Area and Production of Rabi Maize in Major Districts in Bihar During

2006-07

Table 4.7: Cost of Maize Cultivation

Table 4.8: Minimum Support Price for Maize (Rs./quintal)

Table 4.9: Description of Maize Going to Different Markets from Major Mandis in

Bihar

Table 4.10: Maize Value Chain in Bihar

Table 4.11: Fare to various destination market from Gulabbag Mandi (Purnea)

Annex Table 4A: Cost and Return from Cultivation of Rabi Maize

Annex Table 4B: Area and Production of Kharif Maize Between 2002-03 and 2006-07

Annex Table 4C: Area and Production of Rabi Maize Between 2004-05 and 2006-07

Annex Table 4D: Area and Production of Summer Maize Between 2002-03 and 2006-

07

Annex Table 4E: Procurement of Coarse-Grains (Figures in Tonnes)

Annex Table 4F: Value Chain Analysis of Maize

Table 5.1 : Details of Maize Processing Units in Bihar

Table 5.2: Cost of Production for Cattle Feed During April 2007 to Jan 2008) (Cost is

in Rs per Kg of Cattle Feed)

104

Table 7.1: Major Problems of the Maize Sector in Bihar

Table 7.2: Cost of Storing Maize

Table 7.3 : Constraints & Interventions Required for Maize Sector in Bihar

Table 7.4: Major Constraints & Interventions Required for Maize Processing Industry

in Bihar

105

List of Figures

Figure 2.1: Components of Maize

Figure 2.2: World Area, Production and Yield (In Kgs/Ha) of Maize (2005)

Figure 2.3: Share in Global Exports (2007-08)

Figure 2.4: Share in Global Imports (2007-08)

Figure 2.5: Seasonality Chart for Maize Arrivals in India

Figure 2.6: Maize Area, Production and Yield in India

Figure 2.7: Season Wise Area Under Cultivation

Figure 2.8: Season Wise Production

Figure 2.9: Season Wise Productivity (Kgs per Hectare)

Figure 2.10: Maize Consumption Pattern in India

Figure 2.11: India‘s Exports and Imports of Maize During 2000 –2006

Figure 4.1: Maize in Bihar – Acreage, Production and Yield

Figure 4.2: Agricultural Map of Bihar

Figure 4.3: Major Maize Growing Districts in Bihar

Figure 4.4: Trend in Maize Prices and Arrivals at Gulabagh Mandi, Purnea During

2007-08 (Prices in Rs. per Quintal and Arrivals in 000 MT))


Figure 4.6: Value Chain in Maize

Figure 5.1: Break-Up of Production Cost for Cattle Feed

Figure 7.1: Trend of Maize Prices (in Rs per Quintal) and Maize Arrivals (in 000

MT) at Gulab Bagh Mandi During 2007-08

106


Maize Growers

Seeds

Private dealers & NSC

Fertilizers

Private dealers

Extensions

services

(Stockist

/Traders Kachchha Adhatiya

(Village Aggregators)

Mandis

Poultry feed

processors

Snack / Breakfast

companies

Dairy feed

companies

Storage (CWC /

SWC)

Market (National and International)

MSP or Below MSP for

that year

550-650/Qt.

Rs 575-800/Quintal

Ma

ize

Pro

ces

sin

g/ P

rod

uc

t m

an

ufa

ctu

rin

g

(ma

inly

ou

t o

f B

iha

r)

Maiz

e C

ultiv

atio

n (B

iha

r)

Maiz

e M

ark

etin

g (B

iha

r)

500 - 600/Qt.

550 - 650/Qt.

Prices depends on Month of sale

Starch Units

like Ridhi

Sidhi,

Sukhjeet

Starch etc

(Stockist

/Traders)

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