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  • 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. 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. 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. 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. Farmers FPO Training camps Logistics R&D Finance Sales department Control Unit
  • 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. • 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. 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. 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. • 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. • 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. • 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 • http://articles.economictimes.indiatimes.com/2012-12- 20/news/35933641_1_small-farms-farm-output-farmlease • World Bank. (2012). India: Issues and Priorities for Agriculture. Retrieved from • http://www.worldbank.org/en/news/feature/2012/05/17/india-agriculture-issues- priorities • Agricultural Census, Government of India. (2012). All India Report on Agricultural Census 2005-06. Retrieved from http://agcensus.nic.in/document/ac0506/reports/Chapter-4_2005-06.pdf • 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)