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Agri-Versity = Agri-Business

India is becoming a strategic partner for many countries in the field of startup ecosystem. Businesses in agriculture and supply chain are making a mark by using technologies like IOT and AI, creating a simpler and sustainable solutions.

Agri-Versity = Agri-Business

Agricultural exports increased from $24.7 Bn in 2011-12 to $32.08 Bn in 2015-16; a CAGR of more than 6.75%

Digital technologies such as Remote Sensing, Geographic Information System (GIS), Internet of Things (IoT), coupled with data-driven decision making and analytics, hold the key to improved farm productivity, minimized farm wastage and increased farmers income.

A report by Accenture estimates the digital agriculture services market will hit $4.55 Billion by 2020 globally, thus, pointing out to the fact that agri-tech startups in the world, as well as India, are bound to grow.

Agri – Industry Size

The agricultural products value marketed during 2004-05 was ` 5053 billion, which included ` 3323 billion of crop products, ` 1387 billion of livestock products and ` 343 billion of fisheries products. Similarly, agro-processed products were
` 4169 billion. The compound annual growth rate of expenditure has been 4.2% over the years.


A report by Accenture estimates the digital agriculture services market will hit $4.55 Billion by 2020


Agriculture, forestry, logging and fishing accounted for 16.6% of the GDP in 2007.

Gross Value Added (GVA) in Years:

Agri-Versity = Agri-Business1

Additionally, India is the biggest generator, customer and exporter of spices items. Export of spice from India has touched to US$ 3.1 billion of every 2017-18. Tea exports have crossed a record high of 240.68 million kgs in CY 2017 while coffee traded 395,000 tons in 2017-18.

Market Infrastructure

Market Infrastructure

Agri-business is a constantly growing market and expanding from the Stone Age to the era of big data.

Many reports suggest that the market valuation can be increased through higher investment in supply and marketing chain. Experts from all sectors of the agriculture industry suggest that millions and tonnes of food products can be added to the food chain if we invest highly in post-harvest losses due to insects, rodents and weather damage.

Due to lack of proper handling (cleaning, sorting, grading and packaging) at the farm gate or village level, about 7 per cent of grains, 30 per cent of fruits and vegetables, and 10 per cent of seed spices are lost before reaching the market. An estimated ` 50,000 crore is lost annually in the marketing chain due to poorly developed marketing infrastructure and inefficient system of marketing activities.

FM announced increases in customs duties on certain items to incentivize domestic value addition and the “Make in India” campaign for key sectors. Consequently, the import duty on vegetable oils, various juices and other processed food products were raised. The exception to import tariff increases was for raw cashews, which received an import tariff reduction to support the cashew processing industry.

A country which was self-sufficient in food had to import nearly 7.5 million tonnes of wheat during 2006 and 2007. Changes can be brought down by putting more stress in the value chain, finance, policy, training, and market linkage methodologies to improve availability and affordability of inputs, agriculture production, post-harvest handling, output markets and price discovery information, and exports, with improvements to farmer and other stakeholder capabilities to generate higher volumes and efficiencies that increase household incomes.

Investments

India is becoming an example of ease of doing business for many countries. Government of India has introduced its first ever Agricultural Export Policy to boost the exports of agricultural products to USD 60 billion by 2022 as per press release by Department for Promotion of Industry and Internal Trade (DPIIT).

Some major investments and developments in agriculture are as follows:

  • China will begin importing 50,000 tonnes of raw sugar from India in 2019
  • Metals and Minerals Trading Corporation (MMTC) has registered a growth of 26% over the last year with a net profit of ` 41.62 crore as compared to Rs. 29.76 crore in last year.
  • Purchasing Managers Index (PMI) is an indicator of business activity in both the manufacturing and services sectors. PMI in October 2018 stood at 53.1 as against 50.3 in October 2017.
  • Investments of ` 8,500 crore (US$ 1.19 billion) have been announced in India for ethanol production.
  • The first mega food park in Rajasthan was inaugurated in March 2018.
  • Agrifood start-ups in India received funding of US$ 1.66 billion between 2013-17 in 558 deals.
  • In 2017, the agriculture sector in India witnessed 18 M&A deals worth US$ 251 million.
  • A total of 325 products from India has GI indication. The first product to get a GI tag in India was the Darjeeling tea in 2004 and the recent ones are Bangla Rasgulla, Alphonso, and Mahabaleshwar Strawberry.
  • In FY18, Ministry of Food Processing Industries granted fund of ` 268.8 crore for the Mega Food Parks scheme.
  • A programme named as ‘SAMPADA’ for the food processing sector, with investments worth US$ 892.46 million with an aim to reduce waste and double farmer’s income

Agriculture Spending

Source: Economic Survey 2017-18

Pestle Analysis of Agriculture Industry

Political Analysis

Political policies affect directly to the agriculture industry where 70 % of the population demand on it.

  • Our country lacks national level policy and full responsibilities are with the state government. Industrial growth is always given a top priority than agri sectors
  • Although production has increased adding more to GDP still India is one of the poorest countries. To meet the growing demand, we need a structural change in pricing policies, technology, irrigation and research.
  • Direct support, encouragement and incentives to farmers should be provided.
  • More female specific technology and training should be encouraged
  • Cost of production is important to factor to work upon to elevate the pressure on farmers

Economic Analysis

•   Credit system helps farmers to get loans for the cultivation from organized sectors but many unorganized systems of getting a loan with high interest will suppress the growth.

•   GST impact on farmers

•   Increase in Budget can help the industry to grow in a more sequential manner.

•   More such national insurances like National Agricultural Insurance Scheme (NAIS) and Varsha Bima should be implemented.

•   Policy to fight against rising inflation will reduce the farmer rate of returns

Societal Analysis

  • High interest in the loan and massive debt
  • Law to restrict agriculture land from real state purposes
  • Society not accepting agriculture education as a medium of mainstream course
  • The entrepreneurial spirit in agri-based industry is not found in all areas of our country. Some societies encourage entrepreneurship while some don’t.
  • The two-thirds of its populace offers work to 57% of the workforce and is a raw material source to a huge number of enterprises. Regardless of the depiction of cultivating as a sound and glad lifestyle, agriculture division encounters one of the most elevated numbers of suicides than some other industry

Technical Analysis

  • Kisan Call Centre came up for farming advice
  • Agriculture machinery training and research centre are establishing across India
  • Many State Agricultural Universities (SAUs), Agricultural Engineering Colleges/ Polytechnics are organizing various campaign, workshop and seminar. For which ` 73 lakh during the year 2004-05 and ` 38.03 lakh during the year 2005-06 was released to different State Governments and ICAR
  • Encouragement of more public-private partnership for the overall development
  • E-Chaupal is an initiative by ITC which provides farm mechanization, weather info and credit facility targeting 10 million farmers by 2022.
  • National Commodity & Derivatives Exchange Limited (NCDEX) and Multi Commodity Exchange of India Limited (MCX) exchanges are introduced to trade in agriculture commodity

Legal Analysis

•   Destructive insect and pest act, 1914 to control the disease from other countries

•   Fertilizer movement control order, 1973 to restrict the interstate movement of fertilizer

•   India has been a member of the World Trade Organisation (WTO) since 1 January 1995 and other members of Food and Agriculture Organization of the United Nations (FAO), International Plant Protection Convention (IPPC)

•   Agricultural lands sales are restricted in many states. Also, the sale and purchase of agricultural land by a resident outside India are strictly prohibited.

•   Under Order 1983, no person is allowed to do the business of selling seeds at any place without obtaining a license

Environmental Analysis

  • Being the direct dependent of monsoon, insufficient rain will lead to a lack of production
  • Climate change making a way to immediate flood and drought
  • Shortage of sugar in India is a prime example of how the biggest producer is turning into the highest importer
  • Hybrid plants are required to resist such climate or any worldwide disease
  • Illiterate and superstitious outlook should be dumped to except more scientific methods for cultivation

Successful Incubators:

•   AGRI UDAAN–Food and Agribusiness Accelerator 2.0

•   Agri-Tech Startup Accelerator CIE, Hyderabad

•   Centre For Innovation, Incubation & Entrepreneurship (CIIE)

•   International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) Food Processing Business Incubator/ Agribusiness Incubator (ABIO)

Union Budget 2019-20 Overview of Agriculture

•   Under Pradhan Mantri Kisan Samman Nidhi (KISAN), the farmers, who own around 2 hectares of land, will get income support of ` 6000 per year

•   Allocation to the Rashtriya Gokul mission to ` 750 crore in the current year to boost fisheries sector

•   Two per cent interest subsidy will be given to farmers who are engaged in animal husbandry and fisheries when loans are taken through Kisan Credit Card.

•   Allocation of ` 1,40,764 crore in the interim budget

Source: Planning Commission, Economic Survey 2015-16, Central Statistics Office, Centre for Budget and Governance Accountability, ICAR, NITI AYOG, Media Survey

 

Agriculture

Tags: Agri-BusinessAgri-VersityAgriBusinessagriculture

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