agribusiness tanveer

8/14/2019 Agribusiness Tanveer

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AGRIBUSINESAGRIBUSINESSS

AN INDIAN PERSPECTIVEAN INDIAN PERSPECTIVE

PRESENTED BY:

SANCHITA BANERJEE (87)

SUDIPTA SWAIN (105)

TANVEER UL HAQ (108)

VIKAS NIGAM (115)


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ContentsContentsGround Reality

Major Players

Agri ,business An Introduction

FDI

Infrastructure

Key Drivers

SWOT Analysis

Recommendations

Success Mantra

References


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Agribusiness: GroundAgribusiness: GroundRealityReality

The total size of Indian agribusiness is Rs.11.5 trillion.

58% of Indian population depends uponagriculture for livelihood.

The largest grower of fruits 15% of world

output

Low share of global Exports at 0.5%

The second largest grower of vegetables 11 % of world output

Low share of global exports at 1.7% Cold storage facility available for

only 10% of produce.


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Agribusiness: GroundAgribusiness: GroundRealityReality

Lowest cost producer of fruits & vegetables Low farmer income farmer suicide

Second highest producer of milk

Organized dairy accounts for only 13% ofmilk produced

Only 70,000 Ton cold storage capacity for90 million Tones produced

Poor yield per cow

Second largest cattle population

5500 registered & 25770 unregisteredslaughter house with no chilling,freezing & cold storage facility as hotmeat market prevails


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Ground Reality (Contd)Ground Reality (Contd)

Fifth largest producer of eggs Poultry meat sold as hot in retail market

Sixth largest producer of fish 20 30% damage and no cold storage facility

in WB, AP, Goa

Low processing 2.20 % in fruits

35 % in milk 6 % in poultry

Value addition 20% Indias current share in world trade of processed

foods 1.60 % Poor lab to land transfer of technology and

adoption of new varieties. example ofpineapple


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Ground Reality (Contd)Ground Reality (Contd) Market surplus of fruits & vegetables 88%

Farmer sells immediately due to perishability & absence ofproper infrastructure to keep it for longer period

Post Harvest wastage of fruits & vegetables 25 to 35% valued atover Rs 45,000 crore

Losses as above in India is more than consumption of samein UK

Market surplus of food grains 60%

Farmer keeps some for own consumption, seed purpose andto give to labour as wages

Loss in above equal to annual food grain production inAustralia

Cost of wastage 6 times amount spent on food subsidy

Farm gate price 25% of domestic consumer retail price against 50%in developed countries


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Agribusiness: A definitionAgribusiness: A definition

In developed countries agribusiness is defined as thetotal output arising from the farm production and

product processing at both pre- and post- farmgate levels.

In developing countries like India it encompasses 4subsectors. Agricultural inputs, Agricultural

production, agro-processing, marketing and trade.


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Major Players in IndianMajor Players in IndianAgribusinessAgribusiness

Hindustan Unilever Ltd. I.T.C.

Cadbury India

Pepsico.

Godrej Agro

Bharti Agro

Dabur India

Coffee Day

Tata Tea

Duncans Industries

Bayer India

Rallis India

Dupont India


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FDI In AgribusinessFDI In Agribusiness

51% of FDI is allowed in retailing of foods in areas likedairy, marine, poultry, fruits and vegetables.

100% FDI is already allowed in food processing. Investment is restricted in selected plantation crops and

alcoholic beverages. Negligibly small proportion of FDI is allowed in

infrastructure, cold storage and supply chain. 100% foreign direct investment (FDI) allowed through

the automatic route covering horticulture,floriculture, development of seeds, animal husbandry,pisciculture, cultivation of vegetables, mushroom andservices related to agro and allied sectors


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Impacts of FDI in AgribusinessImpacts of FDI in AgribusinessFDI in Indian agriculture sector and the

developments are as follows: Farm credit target of Rs.225,000 crore for 2007-08

has been set with an addition of 50 lakh newfarmers to the banking system

35 projects have been completed in 2006-07 andadditional irrigation potential of 900,000 hectaresto be created and training of farmers arranged

Loan facilitation through Agricultural Insurance andNABARD has also been facilitated

Corpus of Rural Infrastructure Development Fund tobe raised


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Impact of FDI (Contd)Impact of FDI (Contd)

FDI Inflows to Agriculture Services has effecteddevelopment of rural infrastructure, like -

To connect 66,800 habitations with population over1000 with all weather roads

To construct 1,46,000Km of new rural roads To upgrade and modernize 1,94,000Km of existing rural

roads Total investment of Rs. 1,74,000 crore envisaged under

"Bharat Nirman", investment on rural roads estimated

to be at Rs. 48,000 crore To provide corpus of Rs. 8000 crore to Rural

Infrastructure Development Fund (RIDF)


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Need For InfrastructureNeed For Infrastructure The market size is already large and is continuously

expanding but the market system has not kept pace,which led to presence of the middlemen andintermediaries (un-organized sector)

An estimated Rs. 50000 crores are lost annually in the

marketing chain, due to poor marketing infrastructureand poor cold storage facilities and inefficient SupplyChain Management.

30% of the perishable goods are lost before reaching themarket itself.

Due to improper handling (cleaning, sorting, gradingand packaging) at the farm-gates 7% of the grains,10% of spices are lost before reaching market.


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Need For InfrastructureNeed For Infrastructure(Contd.)(Contd.)

Due to lack of infrastructure only 7% oftotal agricultural output is from food

processing industry. Only 7161 market yards / sub- yards have

been constructed which is inadequate. Lack of rural infrastructure has led to

shortening of marketing channel,which is not able to meet the demandfor value added services andgeographical expansion.

Contract farming has thus beenhampered.


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Shortage of power

High electricity tariff

Low area under Irrigation

High capital cost -Inadequateinstitutional finance at low rates

High insurance premium in riskcoverage

Farm connectivity by road yet to takeoff


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Quality and consistency at grass rootlevels

Inputs delivery not in time

Innumerable varieties Poor procurement and logistics

Lack of cheap and timely credit


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Supply Chain aSupply Chain aComparisonComparison

India

Deve loped

countr iesHigh

in v es tm e n t s

Low was ta ge -

be t te r m a rg ins

Hig h w as tag e a n d

low m a rgins

FarmerCommission

AgentConsolidator

Trader Wholesaler RetailerConsumer

Farmer

Wholesaler

Retailer

Consumer


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Goverment Policies Since 1991Goverment Policies Since 1991

National Agriculture Policy (2000)

National Seeds policy (2002)

Cooperative Policy

Agricultural Price policy Agricultural Extension Framework (2001)

WTO/GATT agreement (1994)


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Goverment PoliciesGoverment Policies(Contd)(Contd)

Government declared 2006-2007 as the Year OfAgricultural Renewal.

Bio- Technology

Proper use of natural resources. Bio-Mass and fertilizers.

Live stock.

Exportable suprplus.


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Goverment PoliciesGoverment Policies(Contd)(Contd)

Agro-climatic zones.

Research and Development.

Easy credit.

Package insurance policy. Technology mission.

Excise exemptions.


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Impact of the Socio- EconomicImpact of the Socio- EconomicEnvironmentEnvironment

High demand in processed food.

Increase in the number of supermarkets.


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Drivers to be Global Agri- PowerDrivers to be Global Agri- Power

1

2

3

45

Strong Demand

Role of Key DriversRole of Key Drivers


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Role of Key DriversRole of Key Drivers


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SWOT ANALYSISSWOT ANALYSIS


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Strengths And WeaknessesStrengths And Weaknesses

Weak&ineffective

Supplychain

Literateworkforce

InherentNaturaladvantage


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India A land ofIndia A land ofopportunitiesopportunities

52% cultivable land as against 11% world wide Unsurpassed Natural Advantages

All the 15 major climates of the world

46 out of the 60 soil types

17% animal, 12% plant and 10% fishgenetic resource of the world

Food processing sector ranks fifth in terms ofcontribution to GDP

Indian urban food market estimated at 350,000

crore Estimated investment in Food processing sector

during 11th plan 1 lakh crore


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India A land ofIndia A land ofopportunitiesopportunities

Large young earning population 50% of population under 25 years of age Ready to experiment and try out new products Increase in number of upper middle class &

middle class by 159 % & 63 % respectively Urban population projected at 40% by 2020 Middle class of 200 250 million spread across

the country to increase to 580 million by 2025

Dual income households Higher disposable incomes Ready to try out value added products


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ThreatsThreats

Excessive dependency on monsoon for irrigation.

Increasing soil erosion because of floods.

Utilisation of scarce resources MORE CROP PER

DROP, power etc. Varying taste preference within the country

Increasing International Competition

Non tariff barriers

Integrated Food law to remove multiplicity of foodlaws & regulatory agencies


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RecommendationsRecommendations Reduction of wastage /spoilage to be tackled on a war

footing Accelerated establishment of cold chain networks Irradiation facilities and pest free warehouses Encourage SSI units and corporate to set up food

processing units

Improvement of productivity both land and manpower Example the case of Rubber where India has the highest

land productivity in the world Change in cultivation practices such as irrigation for

paddy rather than method of flooding the fields Price stability Make farming remunerative to attract talent and retain

farmer interest


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Recommendations (Contd.)Recommendations (Contd.) Incentives to Corporate to enter core farming land

ceiling restrictions Increase Mechanization to tackle low availability oflabour and to remain a low cost producer

Liberalized credit norms for agricultural production , marketing and infrastructure

development Changes in market regulatory framework to allow

corporate to establish market yards At present 7521 regulated markets which lack critical

infrastructure, need to be tackled accordingly. Review of legal instruments to facilitate entry in

marketing activities Tax holidays and incentives


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HOW TO BE SUCCESSFUL ?HOW TO BE SUCCESSFUL ?

Th R i S ikiTh R i t St iki


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The Requirement: Striking aThe Requirement: Striking aBalanceBalance

Size

Solutions

Cost

Flexibility

Speed

Partnerships

Its not only about price, lead time and innovation it is also about striking a balance betweenall the requirements.


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BE CAUTIOUS !!!!!!!BE CAUTIOUS !!!!!!!

CASE STUDY OF A FAILURECASE STUDY OF A FAILURE


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INDIAINDIASONE KI CHIDIYASONE KI CHIDIYA


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ReferencesReferences

Reserve Bank Of India Centre For Trade And Development Performance Of Agro Industry In India By G.K.

Chadha Govt. Of India 11th Five Year Plan N.A.A.S. (National Academy Of Agricultural

Sciences)

www.markettradefair.com India Unbound by Gurcharan Das; Penguin BooksIndia
http://www.markettradefair.com/http://www.markettradefair.com/


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