EMERGING OPPORTUNITIES IN AGRI BUSINESS

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WELCOME
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Scope and Importance of Agripreneurship
Development
Dr. N.R. PADMANABAN Professor Head
Department of Social Sciences Anbil
Dharmalingam Agricultural College and Research
Institute, Tamil Nadu Agricultural University
Trichy - 9
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• John H. Davis Harvard University first person
  Agri business 1955
• In 1980s, three connotations
• Synonymous with agriculture
• Synonymous with agricultural economics
• Modified agriculture excluding farming or off
  farm Agri.
• AB means all business enterprises that buy from
  or sells to farmers / traders / consumers
• Three components of AB
• Productive resources seed, fertilizer,
  equipment, machine.
• Agricultural commodities raw and processed
  commodities.
• Facilitative services credit, insu., mark.,
  stor., proc., trans., etc.,

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EMERGING OPPORTUNITIES IN AGRI BUSINESS

• Varied agro climate offers enormous scope for
  production of temperate, sub tropical and
  tropical agro produces
• Enormous demand for Agri. inputs like seed,
  fertilizer, bio fertilizer, pesticides, feed
  and fodder, so on.
• Seed Hybrid, GM, improved seeds
• Bio technology in Agri. seed, fertilizer, bio
  control agency, microbes for bakery products
• Export of Agricultural produces cereals,
  pulses, oilseeds and oils, spices and condiments,
  fruits and vegetables, flowers, medicinal plants
  and essential oils, agricultural advisory
  services, agricultural tools and implements,
  meat, milk and milk products, fish and fish
  products, ornamental fish, forest by products
  etc.

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EMERGING OPPORTUNITIES IN AGRI BUSINESS

• Horti. fruits, vegetables, flowers (cut
  flowers), ornamentals,
• Organic farming - vast scope
• Processing Increased popul., urbani.,
  indust., working women,
• civilization and less
  timing for cooking
• Fishery gt 8000 km (costal), inland,
  rivers, ponds, tanks,
• ornamental fish
• Livestock - Meat- mutton, chicken, pork,
  beef, milk and
• milk products, egg -
  increased dd
• Forestry - Timber, fuel, lac, resin, gum,
  medicinal plants
• and other forest by
  products ( paper and pulp)
• Sericulture - Silk industry
• Mushroom - Button, oyster, paddy straw
  delicious food

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INEFFICIENCIES OF INDIAN AGRICULTURE
 
Indian wastes more fruits vegetables than are
consumed in UK Cumulative waste is about 6.7
billion which is equivalent to 40 of the total
horticulture produce Poor infrastructure and
logistics support Rough and unorganized handling
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Indias Annual Average Growth Rate
Five Year Plan Overall GDP growth rate Agriculture and Allied source
Seventh Plan (1986-1990) 9.0 3.2
Eighth Plan (1992-1997) 6.7 4.7
Ninth Plan (1997-2002) 5.5 2.1
Tenth Plan (2002-2007) 7.6 2.3
Eleventh Plan(2007-2012) 8.16 3.6
Twelfth Plan (20122017) (target) 8 4
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Capital Formation in Agriculture

• Investment in agriculture as a percentage of GDP
  at constant prices 1990-91 1.92
• 90-91 - Rs.14836 crores (10441 Pvt., 4395
  Public)
• 05-06 - Rs. 54539 crores (41320 Pvt.,
  13219 Public)
• 2010-11 - Rs.1,42,254 crore
• The  Gross capital formation (GCF) in the
  agriculture and allied sectors in the country
  rose by 87 per cent to Rs 1,42,254
  crore in the 2010-11 as compared to 2004-05. 

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Agricultural Marketing

• 7566 regulated markets.
• 21780 rural primary agricultural markets
• Public- Private -Partnership (PPP)- emerging
  focus
• Marketing reforms - MOA - New model law
  enables establishment of Private markets, direct
  purchase centres, consumers markets, farmers
  markets, PPP, etc.
• Provision for State Agricultural Produce
  standards bureau for grading and
  standardization quality certification.
• MNCs, Big corporate are entering agrl. marketing.
  

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FOOD PROCESSING INDUSTRY IN INDIA
 India ranks first in the world in cereal and
milk production and second in fruits vegetables
and in five producers of groundnut, rice, wheat,
tea, coffee, sugar, spices oil seeds. Even
with an industry size of US 70 billion, process
less than 2. The industry has about 1.6 mn
direct employees and accounts for about 13 of
the countrys exports and 6of the industry
investment.
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SUPPLY CHAIN MANAGEMENT
Data integration, Financial flow management,
Supply-demand matching, Collaborative
forecasting, Information sharing, Goods
movement synchronization through efficient
transport scheduling
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PRODUCTION AGRL. PRODUCE (MILLION TONNES)
Crops 1951 2001-02 2010-11
Rice 20.58 93.08 96.0
Wheat 6.46 71.81 86.9
Bajra 2.60 8.35 10.4
Maize 1.73 13.30 21.7
Jowar 5.50 7.79 7.0
Total cereals 42.41 198.83 226.3
Total Pulses 8.41 13.19 18.2
Total Food grains 50.82 212.02 244.5
Ground nut 3.48 7.21 8.3
Total oil seeds 5.16 20.80 32.5
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PRODUCTION AGRL. PRODUCE (MILLION TONNES)
Crops 1951 2001-02 2010-11
Sugarcane 57.05 300.10 342.4
Cotton (Million Bales) 3.04 10.09 33.0
Fruits NA 49.50 74.87
Vegetables NA 85.00 146.54
Total FV NA 134.50 221.42
Milk 17.0 84.60 121.8
Source S.S. Acharya and N.L. Agarwal, Agrl.
Marketing in India, ( New Delhi Oxford and
IBH, 2004) Economic Survey various issues
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INDIAS EXPORTS OF AGRO PRODUCTS
Qty in MT Value in Rs Lakhs
Cereals
  2010-11 2010-11 2011-12 2011-12 2012-13 2012-13
Cereals Qty Value Qty Value Qty Value
Non Basmati Rice 100685 23128.8 3997719 865912 6687990 1444880
Wheat 394.47 69.96 740746 102326 6514810 1052900
Maize 3010423.4 335946 3855721 515751 4788328 709634
Other Cereals 209647.62 28902.0 217962 33540 652975 108427
Total 5691810 1523511 11990324 3062491 22104004 5256781
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INDIAS EXPORTS OF AGRO PRODUCTS
Qty in MT Value in Rs Lakhs
Floriculture products
  2010-11 2010-11 2011-12 2011-12 2012-13 2012-13
PRODUCT Qty Value Qty Value Qty Value
Floriculture 28906.79 29604.04 30926.02 36532.15 27121.8 42344.6
Fruits Vegetables Seeds 11622.33 18491.77 15205.81 28776.35 17168 34772.39
Total 40529.12 48095.81 46131.83 65308.5 44289.8 77116.99
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INDIAS EXPORTS OF AGRO PRODUCTS
Qty in MT Value in Rs Lakhs
FRESH FRUITS VEGETABLES
Commodity 2010-11 2010-11 2011-12 2011-12 2012-13 2012-13
Commodity Qty Value Qty Value Qty Value
Fresh Onions 1182324.2 177928.62 1309924.8 172299.8 1666872.6 196662.66
Other Fresh Vegetables 499320.05 92138.76 734178.83 131048.2 768627.2 151633.56
Walnuts 5762.34 16629.25 5841.56 23108.4 5295.47 19983.57
Fresh Mangoes 58863.41 16483.6 63441.29 20974.3 55584.99 26471.78
Fresh Grapes 98005.12 42830.28 108584.57 60288.15 172744.42 125942.78
Other Fresh Fruits 255024.83 51175.27 270437.2 75541.11 263970.29 77975.78
Total 2099300 397185.8 2492408 483260 2933095 598670.1
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Contd..
INDIAS EXPORTS OF AGRO PRODUCTS
Qty in MT Value in Rs Lakhs
PROCESSED FRESH FRUITS VEGETABLES
Commodity 2010-11 2010-11 2011-12 2011-12 2012-13 2012-13
Commodity Qty Value Qty Value Qty Value
Cucumber and Gherkins( Prepd. Presvd) 209231.83 51525.79 258603 74503.45 238624.89 85659.18
Dried Preserved Vegetables 49009.12 37333.5 64794.09 52678.47 68520.25 63795.76
Mango Pulp 170219.72 81893.27 150499.06 62082.91 147815.69 60855.73
Other Processed Fruits Vegetables 199868.41 99704.05 274807.05 157759.82 269217.26 173305.54
Pulses 209010.49 87004.28 174625.18 106793.13 202751.36 128500.32
Total 837339.6 357460.9 923328.4 453817.8 926929.5 512116.5
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Contd..
INDIAS EXPORTS OF AGRO PRODUCTS
Animal Products
Qty in MT Value in Rs Lakhs
Commodity 2010-11 2010-11 2011-12 2011-12 2012-13 2012-13
Commodity Qty Value Qty Value Qty Value
Buffalo Meat 726670.22 861324.17 986618.46 1374574 1107506.3 1741289.3
Sheep/Goat Meat 12298.38 25879.45 11181.04 25522.07 16046.91 42565.86
Other Meat 1021.79 967.42 318.33 364.34 194.13 233.33
Processed Meat 922.2 1395.53 575.94 949.53 796.92 937.41
Poultry Products 516754.71 31433.28 624181.11 45805.29 577864.27 49493.41
Dairy Products 37435.87 54797.37 25639.51 28935.68 87824.21 141209.83
Natural Honey 25979.21 30086.76 26089.03 32123.96 25780.7 35632.05
Albumin ( Eggs Milk ) 1235 3954.66 1454.31 5302.71 1663.83 9016.14
Total 1334705 1049954 1677820 1520002 1831931 2077840
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Existing Markets for Export of Major
agricultural commodities from India
Commodity Countries
Tea Russia, UK, Iran, Japan, Germany, Egypt, UAE, Saudi Arabia, Poland, Afghanistan, Australia, Czechoslovakia, USA and Yugoslavia
Coffee Russia, Yugoslavia, Italy, Japan, Germany, Romania, Australia, Belgium, Finland, France, Iraq, Kuwait, Norway, Spain, UAE, USA and UK
Basmati rice Saudi Arabia, Russia, Japan, Oman, Nepal and Kuwait
Wheat Vietnam socialist Republic
Tobacco (manufactured) Saudi Arabia, Russia, Japan, Oman, Nepal and Kuwait
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Commodity Countries
Spices USA, Russia, Saudi Arabia, UAE, UK, Japan, Canada, Czechoslovakia, Germany, Italy, Nepal, Netherlands, Pakistan and Yugoslavia.
Cashew Kernels Russia, Netherlands, Czechoslovakia, USA, Singapore, Japan, Australia, Canada, China, Germany and Hong Kong
Groundnut Russia, Czechoslovakia, Germany, Netherlands, Singapore, Yugoslavia and UK.
Oilcakes Russia, Romania, Saudi Arabia, Czechoslovakia, Germany and Poland
Raw Cotton Japan, Romania, Russia, Poland, China, Hong Kong, Bangladesh, Belgium, Germany, Italy, Korea, UK, Switzerland and Singapore.
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Commodity Countries
Fresh Fruits UAE, Saudi Arabia, Kuwait, Bahrain, Qatar, UK, Bangladesh and Russia
Fresh Vegetables Saudi Arabia, UAE, Oman and Singapore
Onion Malaysia, Sri Lanka and Middle East
Processed fruits and vegetables Russia, UK and Middle East
Source Vikas singhal, Indian Agriculture
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Types of Agribusinesses
Most of the small businesses can be classified as
following types Production Retailing Distributio
n Personal services Professional
services Financial Franchising
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Entrepreneurial opportunities in agriculture
Farming (on farm) Crop Dairy/Poultry/Goat Fish
Rabbit vegetables Flowers Ornamental plants
Palmyra Fodder Sericulture Agro-forestry
Beekeeping Mushroom
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Entrepreneurial opportunities in agriculture
Inputs marketing Fertilizer Agricultural
Chemicals Seeds Machineries Animal feed
Poultry hatchery Landscaping Vet medicines
Agricultural credit Custom service Bio-control
units Bio-tech units
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Entrepreneurial opportunities in agriculture
Product marketing Wholesale Retail Commission
Agent Transport Export Finance Storage
Consultancy
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Entrepreneurial opportunities in agriculture
Processing Milk Fruits Vegetables Paddy
Sugarcane Cashew Coir Poultry Cattle
Tannery Brewery
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Entrepreneurial opportunities in agriculture
Facilitative Research and Development Marketing
Information Quality control Insurance
Energy
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SEED INDUSTRY

• 1950s Few hundred quintals of seed
• 21 state seed corporation
• 101 notified STL / 7 in Tamil Nadu
• NSC estd., in 1963
• Around 100 major private sector seed companies
• 75-80 percent of the hybrid maize, sorghum,
  millets, sunflower, cotton and vegetables
  marketed by private firms.
• Hybrid rice 95, Hybrid maize 98 and 100
  sunflower by private
• AP seed capital of India (59 of cotton, 86
  maize, 93 sorghum etc.,)

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• The major private players are
• MAHYCO,
• Indo American hybrid Seeds,
• Proagro Seeds,
• Mahindra Hybrid Seeds,
• Krishi Dhan,
• Nath Seeds,
• Nizuveedu Seeds,
• Cargill Seeds,
• Kanchan Seeds,
• ankur Seeds, Advanta (India),
• Syngenta,
• Spic PHI-Biogene,
• Ajeet Seeds,
• Paras Extra Growth,
• Ganga Agri. Seeds,
• shriram Bioseeds,
• Raasi Seeds,
• Sun Seeds and J.K. Agri-gemetics, etc.

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Year wise requirement and Availability of quality
SEED
Lakh qtl
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SEED Production in India
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TRANSGENIC SEEDS

• GM seeds as shown rapid growth in USA in recent
  times
• BT (Bascillus Thuringiensis soil Bacterium)
  cotton introduced in India October, 2002.
  resistance to American boll worm.
• Recorded 35 higher yield
• Monsanto MAHYCOs Bt Cotton
• Raasi Bt cotton

Source Vikas singhal, Indian Agriculture
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BIO TECHNOLOGY

• Altering or introduction of a character or
  evolving a new organism using invitro techniques
• Bio Technology

Plant Tissue culture
Animal Cell Culture
Transgenic crops/ Animals / Microbes
commercial
drugs/ medicines
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PLANT TISSUE
CULTURE
Commercial
Micro propagation
Secondary metabolite production
Alkaloids (medicines)-using cell culture
Mass multiplication of plantlets Under invitro
with small space initial plant materials
With small fermenting industry
Initial cost 50.00 lakh for small lab
Variable medicines
Production 1 crore seedlings
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BIO TECHNOLOGY COMMERCIAL FIRMS

• TERI New Delhi
• Harrison Malayalam Kerala
• SPIC Bio Tech Chennai
• Grow more Dharmapuri
• Indo American, Rallis India Bangalore
• Tissue Culture Plants Banana (Grant
  , Robusta)
• Pomegranate
• Cardamom
• Archids / cut flowers
• Tree plants / Tea

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FLOW OF INSTITUTIONAL CREDIT TO AGRICULTURE
(CRORES)
Year Cooperative Banks Commercial Banks RRB Grand Total
1980-81 2126 1263 - 3389
1990-91 3973 5010 - 8983
2002-03 35111 41217 5745 82073
2010-11 78121 345877 44293 468291
Source Govt. of India, Economic Survey various
years
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PRODUCTION AND CONSUMPTION OF CHEMICAL
FERTILIZERS
(lakh tonnes)
Year Domestic Production Imports Consumption
1951-52 0.39 0.52 0.70
1990-91 90.44 27.58 127.00
2001-02 146.28 20.91 167.02
2011-12 163.61 123.68 277.40
Source Fertilizer Statistics
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FERTILIZER CONSUMPTION PER HECTARE OF GROSS
CROPPED AREA
Year Consumption per ha of GCA (Kg)
1960-61 1.90
1970-71 13.60
1990-91 72.57
2001-2002 90.12
20011-12 144.33
Source Fertilizer Statistics
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BIO FERTILIZERS  
Rhizobium - Earlier Now Azotobactor ,
Azolla , Azoapirillum, Cyanobacteria (BGA) PSM
(Phosphate Solubilizing Micro organism)   Potentia
l demand for bio fertilizer 3.4 lakh
tonnes (Biotech consortium, Delhi) Azolla
application N by 25-30
 
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BIOFERTILIZERS PRODUCTION STATUS IN INDIA  
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Biofertilizer demand in Tamil Nadu for principal
crops
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CROP WISE AREA AND CONSUMPTION OF PESTICIDES
Crop of Total use of pesticides of total area under the crop
Cotton 52-55 5
Paddy 17-18 24
Hort. Crops 13-14 3
Plantation crops 7-8 2
Other cereals, millets and oil seeds 6-7 58
Sugarcane 2-3 2
Other crops 1-3 6
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PRECISION FARMING

• At Dharmapuri by TNAU Horti.
• Employs fertigation, bio control, bio fertilizer
  for quality and pesticide residue free Ag.
  Produces
• Flower and vegetable crops
• Bio fertilizers instead of chemical fertilizers
• Bio pesticides instead of chemical pesticides
• Solves environmental and pollution problems
• Drip irrigation for vegetable crops

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GODREJ AGROVET LTD.

• The plant with a capacity of 8000 tonnes per
  annum is producing chilled chickens for the
  market of Pune, Nasik and Mumbai.
• The chicken market in Mumbai also is valued at Rs
  400 crores.
• The company had a 4000 tonnes per annum capacity
  chicken processing plant at Bangalore- catering
  to the markets in Chennai, Bangalore, Kochi,
  Mangalore and Goa
• The raw chicken market in the country is growing
  at about 10 per cent per annum while the growth
  rate of processed chicken market is about 2 per
  cent.

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SUGUNA POULTRY FARMS LTD.

• It produces two lakh broilers per day.
• Sells 80 million birds annually out of 1200
  million
• Rearing arrangements in Karnataka, AP, Maharastra
  and Kerala besides in TN produces 2.5 lakh tonnes
  poultry feed annually.
• In 200, it bring down its chicken rearing cost by
  choosing its own grand parent breeding facility.

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MEDICINAL PLANTS

• In India about 9500 species of medicinal plants
  were well documented and a number of others not
  documented
• At present there are some 9000 units in the
  country producing ayurvedic medicines.
• About 50 units operate in the large scale, 200 in
  the medium scale and the rest in the small and
  cottage scale.
• In India exports medicinal plants, their extracts
  and ayurvedic medicines to the US, Germany,
  Russia, UK, Taiwan, the UAE, Hong Kong and
  Malaysia

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MEDICINAL PLANTS

• India continues to be ranked the world's second
  largest exporter of medicinal plants after China
  as the trade in herbals registered around 137
  percent growth in last five years.
• India has 5,662 varieties of medicinal plants and
  of these trading takes place in 460, while 178
  are exported in huge quantities (over 100 metric
  tonnes per year).
• The global trade of medicinal plants stands at
  7,592 million in 2011, and of these China and
  India's share was around 1,329 million and 790
  million respectively
• India has registered a growth of 137 percent in
  export of medicinal plants in global market from
  Rs.554 crore in 2005-06 to Rs.1,318 crore in
  2010-11.

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SILK

• India is world second largest producer of silk
  after Chine
• Share in world silk production - 17 against 75
  of China
• Mulberry silk - produced - Karnataka, West
  Bengal, Jammu Kashmir, Assam, Punjab. TN and
  AP.
• Tasar silk is produced from silkworms that eat
  leaves of oak, asan and arjan trees.
• Tasar silk is mainly produced in Bihar and West
  Bengal.
• Muga silk is produced from silk warms that eat
  leaves of som and soalu trees.
• It is produced only in Assam. The silk has a
  natural rich golden color.

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WOOL

• Production of wool in India - 45 million kg.
• 15-16 million kg is suitable for carpets.
• The rest is coarse, inferior, black wools
  unsuitable for use in carpet market
• India does not produce apparel wool at all.
• India imports 50-60 million kg wool from New
  Zealand, Australia
• The annual imports of raw wool amount to Rs. 700
  crores and the exports of woolen goods Rs. 2000
  crores.

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EXPORT OF ORGANIC PRODUCTS

• India ranks 10th among the top ten countries in
  terms of cultivable land under organic
  certification.
• The certified area includes 10 cultivable area
  with 0.50 million Hectare and rest 90 (4.71
  million Hectare) is forest and wild area for
  collection of minor forest produces.
• Total area under organic certification is 5.21
  million Hectare (2012-13).
• India produced around 1.34 million MT of
  certified organic products which includes all
  varieties of food products namely Sugarcane,
  Cotton, Basmati rice, Pulses, Tea, Spices,
  Coffee, Oil Seeds, Fruits and their value added
  products.
• Among all the states, Madhya Pradesh has covered
  largest area under organic certification followed
  by Rajasthan and Uttar Pradesh.

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EXPORT OF ORGANIC PRODUCTS

• India exported 135 products last
  year (2012-13) with the total volume of 165262 MT
  including 4985 MT organic textiles.
• The organic agri export realization was
  around 374 million US including 160 US  organic
  textiles registering a 4.38growth over the
  previous year.
• Organic products are exported to EU, US,
  Switzerland, Canada, South East Asian countries
  and South Africa.
• Oil seeds - Soybean (41) lead among the products
  exported followed by Cane Sugar (26), Processed
  food products (14), Basmati Rice (5), Other
  cereals millets (4), Tea (2), Spices (1),
  Dry fruits (1) and others.

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ORGANIC PRODUCTS EXPORTED

• Basmathi Rice
• Cotton
• Mango
• Cashewnut
• Sesame
• Pine apple
• Wheat
• Wall nut
• Tea
• Coffee
• Spices
• Herbal products
• Pulses

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EXPORT DESTINATION

• USA
• Canada
• Nether lands
• UK
• Germany
• Belgium
• Swiss
• France, Italy and Spain
• Saudi Arabia and UAE
• Japan and Singapore
• Australia
• South Africa

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STEPS BY GOVERNMENT FOR PROMOTING ORGANIC PRODUCTS

• National Steering Committee set up by ministry of
  commerce.
• They developed natural standards based on
  international regulations
• Accreditation and Certification agencies
• For exports of organic products certification is
  mandatory
• Accreditation agencies are
• Agricultural and Processed food products Export
  Development Authority (APEDA)
• Coffee Board
• Tea Board
• Spices Board
• Coconut Devt. Board
• Directorate of Cashew and Cocoa Devt.

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PRIVATE CERTIFICATION AGENCIES

• Recognized by accreditation agencies
• ECOCERT International (Based in France and
  Germany, Branch at Aurangabad)
• IMO Pvt. Ltd. (Institute of Marketecology)
  (Based in Swiss, branch at Bangalore )
• INDOCERT (Based in India, office at Aluva,
  Kerala)
• LACON. GmbH (Based in Germany, office in Aluva,
  Kerala)
• SKAL International (Based in the Nether lands,
  branch office in Mumbai)
• SGS India Pvt. Ltd (Based in Swiss, office in
  Delhi and other cities)

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PROCESSED FOOD MARKETS

• Processed food industry 175000 crores in 2005
• Less than 2 of fruits and vegetable processed
• 80 in Malaysia, 78 in Philippines
• If 10 processing needs 140000 crores
  investment
• It will generate employment to 77 lakh persons
• It reduce wastages by 80000 crores

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Conclusion

• Agri business in India offers greatest /
  unlimited scope in the years to come
• Especially in the following areas
• Organic farming products
• Processing of fruits and vegetables
• Processed food and food products
• Bio technology and its applications
• Corporate farming / contract farming
• Floriculture
• Dairy, poultry and fisheries

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THANK YOU