Agri Udaan is a HUGE OPPORTUNITY for INDIA to Prosper just like FLIGHT of Prosperity
- Identifying Startups which are able to help farmers in India to increase the yield by 2X.
- How does innovation lower the cost of farming in India?
- Interested in identifying processed innovation to increase agri and food productivity at grassroots level in India.
Use of Clean-tech and Renewable energy grassroots innovations to help farmers in India to increase the yield by 2X
Action Speaks louder than Words. Execute YOUR Business Model with Proper Strategy
India is geographically situated on the Indian subcontinent in south-central Asia, and is located in both the eastern and northern hemispheres. India bordered by the Arabian Sea, Bay of Bengal, Gulf of Mannar, Indian Ocean, and the countries of Pakistan, China, Nepal, Bhutan, Bangladesh and Burma (Myanmar).
India is an agricultural produce country.
In the current scenario in India’s economy agriculture plays a vital role. Moreover, in Bharat over 58 percent of the rural households depend on agriculture as their principal means of livelihood.
Agriculture, along with fisheries and forestry, is one of the largest contributors to the Gross Domestic Product (GDP).
According to Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) is expected to be 17.3 percent of the Gross Value Added (GVA) during 2016-17 at 2011-12 prices.
Need of the HOUR: Grass Root level Innovation
On the eve of India’s independence in the year 1947, Indian agriculture was characterized by feudal land relations and primitive technology, and the resultant low productivity per hectare.
Convert innovative ideas from India’s rural youth into viable businesses.
The first task of the government in the immediate post-independence period was to initiate a growth process in the modernization of agriculture, both in terms of technological and institutional changes.
Subramani, a biotech researcher and entrepreneur runs a successful startup that creates artificial flowers
India’s Mid-term Appraisal of the Tenth Five Year Plan (2002-07) drew attention to the loss of dynamism in agriculture and allied sectors after the mid-1990s.
India is the largest producer, consumer and exporter of spices and spice products. India’s fruit production has grown faster than vegetables, making it the second largest fruit producer in the world.
India’s horticulture output, is estimated to be 287.3 million tonnes (MT) in 2016-17 after the first advance estimate.
It ranks third in farm and agriculture outputs. Agricultural export constitutes 10 per cent of the country’s exports and is the fourth-largest exported principal commodity. The agro industry in India is divided into several sub segments such as
- processed food,
- frozen food to fisheries, meat, poultry, and
- food grains.
The Department of Agriculture and Cooperation under the Ministry of Agriculture is responsible for the development of the agriculture sector in India. It manages several other bodies, such as the National Dairy Development Board (NDDB), to develop other allied agricultural sectors.
Agricultural Market Size in India
India’s GDP is expected to grow at 7.1 per cent in FY 2016-17, led by growth in private consumption, while agriculture GDP is expected to grow above-trend at 4.1 per cent to Rs 1.11 trillion (US$ 1,640 billion). As per the 2nd Advance Estimates, India’s food grain production is expected to be 271.98 MT in 2016-17. Production of pulses is estimated at 22.14 MT.
India’s exports of basmati rice may rise to Rs 22,000-22,500 crore (US$ 3.42-3.49 billion), with volume to around 4.09 MT in 2017-18, backed by a rise in average realisations.
Wheat production in India is expected to touch an all-time high of 96.6 MT during 2016-17.
Groundnut exports from India are expected to cross 700,000 tonnes during FY 2016-17 as compared to 537,888 tonnes during FY 2015-16, owing to the expected 70 per cent increase in the crop size due to good monsoons.
India’s groundnut exports rose to 653,240 MT during April 2016-February 2017. India’s export of grapes to Europe and China are expected to increase by 10 to 20 percent this year on back of higher production on account of good monsoon and higher demand due to competitors such as Chile shifting focus to US market.
Spices exports from India grew by 9 per cent in volume and 5 per cent in value year-on-year to 660,975 tonnes and US$ 1.87 billion respectively, during April-December 2016.^
According to the Department of Industrial Policy and Promotion (DIPP), the Indian agricultural services and agricultural machinery sectors have cumulatively attracted Foreign Direct Investment (FDI) equity inflow of about US$ 2,315.33 million from April 2000 to December 2016.
Some major business investments and developments in agriculture are as follows:
- India and Brazil have signed a bilateral investment agreement, aimed at enhancing cooperation in areas of agriculture, cattle genomics, ship building, pharmaceuticals, defence production, ethanol production and oil and gas, between the countries.
- Zephyr Peacock, the India-focused private equity fund of US-based Zephyr Management, has invested an undisclosed amount in Bengaluru-based potato seeds firm Utkal Tubers India Pvt Ltd, which will be used to produce high-quality mini-tubers in a tissue culture laboratory and multiply them in its own development farms and through supervised contract farming in different regions of the country.
- Mahindra Agri Solutions Ltd (MASL), a unit of Mahindra & Mahindra Ltd, has agreed to purchase 60 per cent stake in OFD Holding BV, a Netherlands-based fruit distribution company, for Rs 36 crore (EUR 5 million), which will provide MASL access to European and Chinese markets for Indian grapes.
Given the importance of the agriculture sector, the Government of India, in its Budget 2017–18, planned several steps for the sustainable development of agriculture-
- Total allocation for rural, agricultural and allied sectors for FY 2017-18 has been increased by 24 per cent year-on-year to Rs 1,87,223 crore (US$ 28.1 billion). A dedicated micro-irrigation fund will be set up by National Bank for Agriculture and Rural Development (NABARD) with a corpus of Rs 5,000 crore (US$ 750 million). The government plans to set up a dairy processing fund of Rs 8,000 crore (US$ 1.2 billion) over three years with initial corpus of Rs 2,000 crore (US$ 300 million).
- The participation of women in Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) has increased to 55 per cent and allocation to the scheme has been increased to a record Rs 48,000 crore (US$ 7.2 billion) for FY2017-18.
- Short-term crop loans up to Rs 300,000 (US$ 4,500) at subsidised interest rate of 7 per cent per annum would be provided to the farmers. An additional incentive of 3 per cent is provided to farmers for prompt repayment of loans within due date, making an effective interest rate for them at 4 per cent.
Some of the recent major government initiatives in the sector are as follows:
- The NITI Aayog has proposed various reforms in India’s agriculture sector, including liberal contract farming, direct purchase from farmers by private players, direct sale by farmers to consumers, and single trader license, among other measures, in order to double rural income in the next five years. The Ministry of Agriculture, Government of India, has been conducting various consultations and seeking suggestions from numerous stakeholders in the agriculture sector, in order to devise a strategy to double the income of farmers by 2022.
- The Maharashtra State Agriculture Marketing Board (MSAMB) has operationalised 31 farmer-to-consumer markets in the state, and plans to open 100 more such markets in the future, which would facilitate better financial remunerations for the farmers by allowing them to directly sell their produce in open markets.
- The Ministry of Labour and Employment plans to amend the Minimum Wage Act to raise the daily minimum wage of unskilled agricultural labour in C-class towns to Rs 350 (US$ 5.2) in the central sphere, from the current wage of Rs 160 (US$ 2.4) per day.
- The Central Government plans to open at least one Krishi Vigyan Kendra in all districts of the country, which will provide advanced agriculture technical assistance to the farmers near their farms itself.
- The Government of Karnataka plans to invest around Rs 1 trillion (US$ 15.1 billion) for developing irrigation projects across the state to mitigate the impact of deficient rainfall and resulting drought on agriculture in recent years.
- The Government of India and the Government of Israel have expressed their commitment to further strengthen bilateral relations in the field of agriculture and allied sectors, as well as enhance cooperation at the government-to-government and business-to-business levels between the two countries, in a bid to further enhance the relationship.
- According to the Agriculture Ministry, 50,000 hectares of area is available for coconut cultivation in Bihar, the Coconut Development Board plans to equip the farmers thus making India the world leader in production, productivity, processing for value addition and export of coconut.
The agriculture sector in India is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage. Factors such as reduced transaction costs and time, improved port gate management and better fiscal incentives would contribute to the sector’s growth. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers.
India is expected to be self-sufficient in pulses in the coming few years due to concerted efforts of scientists to get early-maturing varieties of pulses and the increase in minimum support price.
Success Agri Startup in India
Unique Artificial Flowers
Artificial flowers owned by Natures Own Company uses hygroscopic paper, or paper that retains moisture, to give the flowers a natural feel. According to Ramachandrappa who owns enzymes formulation company in Bangalore says that the choice of hygroscopic paper to make the flowers was quite by accident. He has earlier worked with biotech companies like Biocon and Novozymes.
Natures Own has applied for patenting the technology and the cost of the paper has been worked out at $4 a kg. It claims that making any variety of flower is a distinct possibility and the longevity of the flowers will be anything between six months and one year.
It has set its sights on the US market to begin with, and plans to tap it by tying up with prime-time American florists and then gradually reaching the shelves of premium supermarkets and mass supermarkets.
Kaushal Khakkar, Ramachandrappas colleague in the venture, feels that the product can be easily differentiated from artificial flowers We wish to position it as a premium product that will be retailed through supermarkets in the US, Khakkar says.
The flowers will have a shelf life of roughly six months after unpacking, claims Natures Own. Even after six months the moisture retention capability will still be there but due to the accumulation of dust and the normal wear and tear we are presuming that the appeal of the flowers will go down after six months, says Ramachandrappa.
According to the data pooled by the company, the world marketsize for flowers is $50 billion of which artificial flower market is pegged at $5 billion and the rest belongs to natural flowers. Natures Own sees competition emanating from natural flowers, artificial flowers and other gift items.
The company plans to market the flowers on the plank of low replacement cost and low opportunity cost for customers who will physically go and pick up the flowers for themselves. The company is eyeing institutional sales like hotel chains, corporate offices, airports and educational institutions to promote the flowers initially.
Another interesting trend that Natures Own is banking on is the mixing of natural flowers with artificial ones. This is a trend that is picking up, especially in hotels. Here too, the replacement cost is extremely low. With our flowers looking more natural we see artificial flowers constituting 60 per cent in a bouquet, says Ramachandrappa. The flowers can also be used as an aid in tissue culture because of their moisture retention capability. The flowers can be used as a substrate on which tissue culture propagation can be made as it is extremely sterile.
This property may come in handy for practising horticulture as saplings can be exported to countries like Australia, New Zealand and the US using the hygroscopic paper instead of soil. These countries prohibit the import of saplings bundled with soil to keep out foreign organisms.
EAST OR WEST INDIA IS THE BEST
Prity Khastgir is a techno-savvy patent attorney in India with 12 yrs++ of experience working with clients across the globe. Her areas of expertise are IP portfolio research, cross-border technology transactions, licensing agreements, product clearance, freedom-to-operate, patent infringement & invalidity analysis, research & opinions.
Currently, she helps startups to raise funds, assists foreign companies to find right business partners in India. She also assists enterprises to enter and find the right angels, and VCs in Malaysia, Singapore, US, UK, Japan and India. Here, she answers questions about IP career prospects in India, in her Face-to-face interaction with Reetu Mehta. Click Here
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.