agribusiness tanveer
TRANSCRIPT
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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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Need For InfrastructureNeed For Infrastructure(Contd.)(Contd.)
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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Need For InfrastructureNeed For Infrastructure(Contd.)(Contd.)
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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