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  1. 1. Sowing Prosperity: Boosting agricultural productivity Team Members Ankita Dey, Bhawana Goel, Suhani Gupta, Pankhuri Jain, Debasis Rath An Agri-Business Model to boost agricultural productivity and to secure future of farming in India
  2. 2. 1. India accounts for only 2.4% of world’s geographical area and 4% of its water resources but has to support about 17% of the world’s population and 15% of the livestock. 2. Agriculture is an important sector of Indian economy, accounting for 14% of nation’s GDP, about 11% of its exports. 3. About half of our population still relies on agriculture as its principal source of income and it is a source of raw material for large number of industries. 4. As per Agriculture Census 2010-11, small and marginal holdings of less than 2 hectare account for 85 percent of the total operational holdings and 44 percent of the total operated area
  3. 3. Boosting Agriculture Productivity by acquiring small lands on rent by investors for particular crop season Farmers lease their land to investors, in return they share profit • Corporate houses invest in 1000 acres of land of farmers owing small landholdings • Provide farmers with agricultural benefits Management is subdivided into four sections- bank, research, FRO, negotiation • Increase productivity by using bio-fertilizers, drip irrigation method, agricultural machines like cane harvester, fanning, grain cleaner Plan design, financial support , R&D support integral part of the model • Negotiating for a good deal with the buyer Influential with economic prices(1 crore per year) • Pooling of small land holdings to increase productivity per unit area • Farmers get assured returns from their land
  4. 4. FRO FINANCE MANAGERS RESEARCH & DEVELOPMENT NEGOTIATORS Requirements • Farmers willing to lease their lands • Long work experience with banks in agri-business • PhD scholars in agriculture, biotechnology • Industrial Experience • Sound knowledge about Supply & Demand Functions • assimilation of land records • Put forward demands of farmers to managemen t • Assist farmers in getting bank loans • Help in deciding right allocation of funds • Provide data on soil properties and suggest farming techniques as per the requirement • To get the best deal of a product
  5. 5. Farmers FPO Training camps Logistics R&D Finance Sales department Control Unit
  6. 6. 5 allotted in Finance sector 5 shall interact with FPO 5 for Research and Development 5 shall interact with dealers 5 will handle training camps 5 for food storage 5 for procurement of raw materials and machinery Farmers processing organization(FPO) It is a group of farmers interested in leasing their small lands to investors. It increases their bargaining capacity, uniformity in produce and decrease in transaction cost. Farmers choose a leader among themselves, who represents FPO to investor company.
  7. 7. • Choosing that part of country i.e. village where we find small fragmented lands which can be collectively used as a large land • Villagers prefer “share of produce” over money • As irrigation is a problem in large land holding, drip irrigation is used • In Drip irrigation, each and every drop of water is provided to plants so that there is no chance of wastage and thus optimum utilization of water • Watershed development Technique is also commonly used where rain water is stored in a large reservoir for future consumption • During adverse conditions- oilseeds, fibres, fruits can be grown which do not require irrigation • India is the forth largest producer of oilseeds, thus it will help us to generate foreign currency • Being exporter, we have a fair chance to maximize our profits
  8. 8. Step 1: discuss mapping of land with FPO and farmer’s share of return Step 2: allocation of funds to all departments and procurement of raw materials as well as machinery. Custom hiring of agricultural goods is also feasible Step 3: supply chain management looks after the delivery of agriculture inputs from input suppliers to the agricultural site Step 4 : Laborers recruited from the village thereby increasing employment in village and work according to our strategy under the guidance of management system Step 5 : Harvesting of crops through machinery and then dry them, grade them, pack them using bar code so that it can be easily traced. Step 6 : Logistics department will handle the transport of Packaged goods to warehouses Step 7 : interaction with agro processers and retailers and they will issue a tender notice for their produce and they will keep updating interested dealers about increasing our yield Step 8 : R&D will survey the land, 1 month before the end of crop season, analyze the soil properties and recommend the suitable crop that can be grown in the next season Step 9 : setting up of training camps to make farmers aware of new farming techniques, computerization and cost effective technologies that are used in farms. This will benefit us in building a positive relationship with farmers in bringing transparency in work
  9. 9. Risk: • Production risk: natural calamities, pests and disease outbreaks, bush fire are major risks that lead to production volatility • Market risk: risks like commodity and input price volatility, exchange rate and interest rate volatility usually materialize at the market level • Environment enabled risk: change in government or business regulation, political risks, conflict, trade restrictions which lead to financial losses Risk management strategies: • Mitigation: Activities that reduce the likelihood of an adverse event or reduce the severity of actual losses. • Transfer: Transfer of risk to a willing party for a fee or premium. Commercial insurance is a well known form of risk transfer. • Coping: Improving the resilience to withstand and cope with events. Example include social safety net programs, savings and strategic results. A risk layering approach, based on the probability of occurrence and potential losses, is used to select an appropriate
  10. 10. • 1000 acres of small and defragmented village land to be used. • Hundreds of small land owing farmers will be benefitted. • 35 members management system will work on increasing the per hectare productivity of these lands. • Value added: • Many laborers will get employment in rural areas. • Save large wastage. • Keep quality of produce fresh, thereby helping farmers in fetching better prices. • Contract will be renewed after very crop season so that owners of these lands proper time to rethink upon. • R&D team will suggest the about high-yielding seeds, fertilizers, machineries to be used to increase the per hectare productivity of these lands. • Owners of these lands will get acquainted to new farming techniques. • Storage and transaction cost per farmer will get reduced.
  11. 11. • Employees Salary = 5*4 + 5*9 + 5*10 + 5*15 + 5*15 + 5*20 + 5*30 = Rs. 5,15,000 p.m • So total Employees salary = 515000 * 12 = Rs. 61, 80,000 (or Rs. 61.8 lac) • R&D cost expenditure= Rs. 15,000 per year • Cost to Labourers (40 in numbers) = Rs. 18,000*40= Rs. 7.2lac per year • Fertilizer expenditure= 63.2kg/acre * Rs. 10/kg= Rs. 632/acre • Estimated cost(1000acres)= 6.32lac • Machinery expenditure= 27.9lac ($46,500 US)=27.9*3= 83.7lac • Total =83.7lac+ 6.32L=90.02lac • Agriculture loan=90.02L
  12. 12. • State of Indian Agriculture 2012-13 • Gulati, A. & Jain, S. (2012, December 20). Credit inclusion, farm lease and forming clusters can help small farmers overcome poverty much faster. The Economic Times. Retrieved from • 20/news/35933641_1_small-farms-farm-output-farmlease • World Bank. (2012). India: Issues and Priorities for Agriculture. Retrieved from • priorities • Agricultural Census, Government of India. (2012). All India Report on Agricultural Census 2005-06. Retrieved from • Agriculture & Climate Change by Dhurjati Mukherjee from Kurukshetra (June 2012) • Law of the People's Republic of China on Land Contract in Rural Areas (Order of the President No.73)