Latin America –  India’s Agricultural Outsourcing Provider Dave Ramaswamy Allied Venture [email_address]
The South is the new North
Impact on Food Consumption? Population  projections (In millions) 2005 2025 2050 India 1130 1431 1613
Demand side – India will become a net food importer Source: WorldwatchInstitute.
Betting on billions of samosas eaten
World Population Growth, in Billions Number of years to add each billion (year) All of Human History (1800) 130 (1930) 30 ...
India – Projected Supply/Demand Gap Source: Surabhi Mittal, ICRIER
When Supply side is gloomy…
With Falling water tables in N. India
From pumping 4-6 hrs daily with free electricity
Water bomb ready to go off
… Especially in Punjab <ul><li>Which produces  </li></ul><ul><li>20% of India’s wheat,  </li></ul><ul><li>11% of its rice,...
We’ve seen this movie before in urban India
Scenario will move to rural India
AGRICULTURE OUTSOURCING
6X size of India with Less than ½ the population Latin America Brazil Argentina Uruguay Paraguay
 
Knowledge Generation
World Water Resources versus World Water Depletion Source: World Mapper
PAR: BRA: URU: ARG: IND: 56k 45k 40k 21k 2k Total Annual Renewable Water Resources(TARWR) Cu.MT/Year/Capita
Success   Factors in LatAm <ul><li>ROI – 20 to 25% (annual based on 5yr avgs, leased farming) </li></ul><ul><li>Cost - $20...
Agriculture Value Chain - The Soybean Example in Uruguay Total Cost of Production to farmer: Includes seeds, fertilizers, ...
Resting on a strong Foundation
Mercosur (Brazil, Argentina, Uruguay, Paraguay)  share of world exports
Agribusiness in LatAm is like IT in India
Case Study: Olam
LatAm vs Africa Brazil Ethiopia
In Africa, risks of many ‘Singurs’ occuring Source: UN Population Database Population growth (in millions) - 2005 to 2050 ...
Also less water per capita compared to LatAm Source: Aquastat TARWR/ m3/percapita/year Argentina 20,940 Ethiopia 1,680 Bra...
Latin America is an immediate opportunity Latin America Africa Buy/Lease Land Yes No  (lease only) Service Providers (plan...
Almost “Free land” in Africa: Maintaing a gift elephant is not free Note: Numbers based on median Latin American land conv...
Other Latin American advantages
 
 
 
Agricultural Land in MERCOSUR  (in ‘000 hectares) Land area Agricultural area Arable land and Permanent crops POTENTIAL Ar...
<ul><li>There is  space to double agricultural land in most Mercosur countries </li></ul><ul><li>The  world in the next 40...
Investment Opportunities
Contract Farming
Oilseed crushing
Biofuels Palm Oil Ethanol Co-generation
Pulses
Food Processing
Best time to plant a tree…was 20 yrs ago
Second best time is now!
Recommendations <ul><li>Consider a pilot contract farming project in Uruguay </li></ul><ul><li>Explore oilseed crushing in...
www.alliedventure.com http://induslatin.com We are at your service!
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Latin America - agriculture outsourcing provider for India

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Presentation summarizes why Latin America can meet India's needs especially in edible oils, pulses and sugar

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  • Will feed more people in next 40 years then all of history
  • Will feed more people in next 40 years then all of history
  • Land per capita is shrinking – 1 to 1.5 acres, 0.3 hectares Malincentives Farming is a terrible business – 45% want to quit farming, middle class nightmare Increasing cost of land - $20,000+ acre, 10 to 100 acres, illegal corp farming, land ceiling act
  • Need some figures for this slide What is land per capita? Cost of average farm Water resources Can add 3 slides here – see the LatAm charts I sent out earlier.
  • Climate Change – glaciers Damming the Brahmaputra Water table is falling – NASA image, water table
  • 100 million hectares being farmed. 170-200 million hectares can be brought online Soya, - USDA projections Sugar, Oilseeds, Fruits, Dairy, Milk Grow the pie, not compete with Indian farmers, Non zero sum game
  • Brazil, Argentina, Uruguay – plenty of arable land Closer to India than California Brazil – 3X India pop of U.P., Uttaranchal Argentina - ~India, pop of Delhi, Mumbai, Calcutta Uruguay - ~Karnataka, pop 1/2 Bangalore
  • Rainfall Land - $200 to $2000 acre Technology Knowledge Creation Talent Free market
  • US trained agronomists and agriculturists Collaboration with Indian scientists, especially in Africal South-South cooperation
  • 10 to 30 times fresh water as India Mehta Joke, Water, play We could use all the water we can get
  • Respected profession Specialized providers in the value chain – planting, spraying, harvesting, logistics, management company Ecosystem – universities, research, can compete with best in the world Scale massively Entrepreneur-driven Export driven and world-competitive without subsidies
  • Respected profession Specialized providers in the value chain – planting, spraying, harvesting, logistics, management company Ecosystem – universities, research, can compete with best in the world Scale massively Entrepreneur-driven Export driven and world-competitive without subsidies
  • Farmers selling land at high prices should utilize some of the sale proceeds to consider owning shares in a South American farming company that will acquire land and start farming Nestle, Danone, Cargill, Dreyfus, Kraft, Unilever Easier than you think it is.
  • Latin America - agriculture outsourcing provider for India

    1. 1. Latin America – India’s Agricultural Outsourcing Provider Dave Ramaswamy Allied Venture [email_address]
    2. 2. The South is the new North
    3. 3. Impact on Food Consumption? Population projections (In millions) 2005 2025 2050 India 1130 1431 1613
    4. 4. Demand side – India will become a net food importer Source: WorldwatchInstitute.
    5. 5. Betting on billions of samosas eaten
    6. 6. World Population Growth, in Billions Number of years to add each billion (year) All of Human History (1800) 130 (1930) 30 (1960) 15 (1975) 12 (1987) 12 (1999) 14 (2013) 14 (2027) 21 (2048) Sources: First and second billion: Population Reference Bureau. Third through ninth billion: United Nations, World Population Prospects: The 2004 Revision (medium scenario), 2005.
    7. 7. India – Projected Supply/Demand Gap Source: Surabhi Mittal, ICRIER
    8. 8. When Supply side is gloomy…
    9. 9. With Falling water tables in N. India
    10. 10. From pumping 4-6 hrs daily with free electricity
    11. 11. Water bomb ready to go off
    12. 12. … Especially in Punjab <ul><li>Which produces </li></ul><ul><li>20% of India’s wheat, </li></ul><ul><li>11% of its rice, and </li></ul><ul><li>11% of its cotton, </li></ul><ul><li>from only 1.5% of its </li></ul><ul><li>geographical area.  </li></ul>
    13. 13. We’ve seen this movie before in urban India
    14. 14. Scenario will move to rural India
    15. 15. AGRICULTURE OUTSOURCING
    16. 16. 6X size of India with Less than ½ the population Latin America Brazil Argentina Uruguay Paraguay
    17. 18. Knowledge Generation
    18. 19. World Water Resources versus World Water Depletion Source: World Mapper
    19. 20. PAR: BRA: URU: ARG: IND: 56k 45k 40k 21k 2k Total Annual Renewable Water Resources(TARWR) Cu.MT/Year/Capita
    20. 21. Success Factors in LatAm <ul><li>ROI – 20 to 25% (annual based on 5yr avgs, leased farming) </li></ul><ul><li>Cost - $200 to $2000/acre </li></ul><ul><li>Scale – </li></ul><ul><li>Sustainability – </li></ul>
    21. 22. Agriculture Value Chain - The Soybean Example in Uruguay Total Cost of Production to farmer: Includes seeds, fertilizers, agrochemicals, fuel, service providers (for planting, harvesting and spraying). Includes management costs. Farmer Profit before taxes: Transport Costs (including transport’s p rofits) . Port & Elevator Costs (including their p rofits) . <ul><li>It is important to note that these percentages are based on averages prices and yields, but are dynamic from year to year: </li></ul><ul><li>The production cost per hectare varies depending the yields per hectare. </li></ul><ul><li>The price of Oil also affects production costs, transport and port costs. </li></ul>
    22. 23. Resting on a strong Foundation
    23. 24. Mercosur (Brazil, Argentina, Uruguay, Paraguay) share of world exports
    24. 25. Agribusiness in LatAm is like IT in India
    25. 26. Case Study: Olam
    26. 27. LatAm vs Africa Brazil Ethiopia
    27. 28. In Africa, risks of many ‘Singurs’ occuring Source: UN Population Database Population growth (in millions) - 2005 to 2050   2005 2025 2050 Argentina 39 46 51 Brazil 186 214 218 Uruguay 3 4 4 Paraguay 6 8 10         Ethiopia 75 120 174 Kenya 36 58 85 Tanzania 39 67 109 Madagascar 18 28 43 Mozambique 21 32 44 Senegal 57 91 133 Sudan 39 57 76
    28. 29. Also less water per capita compared to LatAm Source: Aquastat TARWR/ m3/percapita/year Argentina 20,940 Ethiopia 1,680 Brazil 45,470 Kenya 930 Uruguay 40,420 Tanzania 2,420 Paraguay 55,830 Madagascar 18,830 India 1,750 Mozambique 11,320 Sudan 1,880
    29. 30. Latin America is an immediate opportunity Latin America Africa Buy/Lease Land Yes No (lease only) Service Providers (planting/spraying etc.) Yes No Qualified Manpower Yes No Political Risk (low populations, democracies, corruption etc.) Low High Tested high yield crop/seed varieties Yes No
    30. 31. Almost “Free land” in Africa: Maintaing a gift elephant is not free Note: Numbers based on median Latin American land conversion rates to convert raw land to agriculture ready land. Africa figures could be higher/
    31. 32. Other Latin American advantages
    32. 36. Agricultural Land in MERCOSUR (in ‘000 hectares) Land area Agricultural area Arable land and Permanent crops POTENTIAL Argentina 273669 133350 33500 60,000 Brazil 845942 263500 66500 120,000 Paraguay 39730 20400 4400 8,000 Uruguay 17502 14683 1383 4,000 Total 1176843 431933 105783 192000
    33. 37. <ul><li>There is space to double agricultural land in most Mercosur countries </li></ul><ul><li>The world in the next 40 years will need 120 million more hectares (FAO Report) </li></ul>
    34. 38. Investment Opportunities
    35. 39. Contract Farming
    36. 40. Oilseed crushing
    37. 41. Biofuels Palm Oil Ethanol Co-generation
    38. 42. Pulses
    39. 43. Food Processing
    40. 44. Best time to plant a tree…was 20 yrs ago
    41. 45. Second best time is now!
    42. 46. Recommendations <ul><li>Consider a pilot contract farming project in Uruguay </li></ul><ul><li>Explore oilseed crushing investments </li></ul>
    43. 47. www.alliedventure.com http://induslatin.com We are at your service!

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