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Manthan: Boosting Agricultural Productivity
Team Details
Abhishek Kumar
Priyank Kanade
Shrijit Venkatesh
Harmeet Singh Saroya
Vikas Kumar
Boosting Agricultural Productivity
Boosting
Agricultural
Productivity
Growth in
wages and
remunerative
prices
Growth in per
hectare
output and
productivity
Access to
credit for
crafting
agricultural
growth
Creation of
infrastructure
and cold
storage
facilities
Problem Statement:
Boosting Agricultural
Productivity
Our Approach:
• Understand current
agricultural sector
• Identify the pain-points
plaguing Indian
agricultural sector
• Cultivate solutions
targeting the pain points
• Overall, a 4 pronged final
approach for better
productivity
Indian Agricultural Industry – A Snapshot
• Indian economy has grown steadily –7% in last 10 years
• Low and inconsistent growth in agricultural sector – it is dependent on the monsoon
• Agriculture contributes 18% to GDP but 60% population lives off agriculture
• Mostly small marginal farms with low inputs
• Yield levels are generally much lower than world averages
• Total cropped area is 197 million hectares
• Highest area under irrigation (40%)
• Green revolution helped India gain self sufficiency in food production
• Agricultural production increased from 50 million tons to 227 million tons; however,
growth flat over last 10 years
• Population, currently at 1.15 billion, is continuing to increase
• Tremendous pressure to increase agricultural productivity
• New technologies must be deployed
• Seed industry will continue to play a key role
Sector Identification – Indian Agricultural Industry
Ancillary Support to Produce
• Agricultural machinery
• Seed technology
• Fertilizer technology
• Irrigation technology
• Supply chain-cold storages
• Technology in Ancillary support-Manufacturing
technique
• Biotech-To increase output
• Weather forecasting technology
Processing of Produce
• Packaged processed foods
• Technology to increase value-add
• Supply chain & logistics
Animal husbandry
• Dairy Industry
• Meat
• Poultry
• Technology for high produce
• Supply chain-cold storage
• Leather goods
Beverages
• Non-alcoholic beverages
• Beer
• Other alcoholic beverages
• Technology
• Supply chain
Approach for Boosting Agricultural Productivity
Boosting
Agricultural
Productivity
Growth in
wages and
remunerative
prices
Growth in
per hectare
output and
productivity
Access to
credit for
crafting
agricultural
growth
Creation of
infrastructur
e and cold
storage
facilities
Growth in Wages and Remunerative Prices
Skill
development
Effective
Diversification
Market Linkage
for Best Prices
• Address underemployment: Under-employment rate of 20.9% primarily
due to seasonal nature of agriculture (Jan 2013)#
• Skill enhancement in food processing and cultivation techniques for crop
diversification to overcome underemployment and to improve wages
• Training: To enable the effective use of mobile and internet platforms
#Source: http://www.census.gov.ph/content/employment-rate-january-2013-estimated-929-percent-results-january-2013-labor-force-survey
• Extending Diversification through Demonstration: Support to farmers
for crops , such as , sunflower, safflower, pulses and other field crops.
Other farmers may opt to diversify to get better prices and reduce their
dependence on low income yielding crops.
• Microfinance to support seed purchase and financing farm equipments.
• Contract farming: Providing grading and traceability features to enable contract
farming and exports
• Supply Chain Management: Improving cold storage facility and market
connectivity to reduce waste (details in next slide)
• Demand Forecasting: Better demand forecasting and making farmers aware of
commodity price forecasts to enable them to make well-informed decisions
Boosting Output and Productivity
Indian Seed Industry-Current Status
PAIN POINTS PROPOSED SOLUTION
•Indian seed market, estimated at US$1.1 billion, is the 6th largest in the world
•It has grown @ 12% compared to <5% growth of global seed market
•Private sector not investing in self
pollinated crops to develop and promote
new varieties
•Seed replacement ratio continues to be
low
•Large acres of self pollinated crops – rice,
wheat, legumes, etc.
•Low hybrid adoption rates in most crops
due to marginal growing conditions
and/or subsistence farming
•Medium and small sized companies
should make investments in research and
seed processing infrastructure
•More than 40 seed companies have Govt.
recognition for their R&D units and this
number should grow over 100.
•Indian companies should introduce
increased GM trait in their germplasm
•More investment in innovative
biotechnology research
Boosting Output and Productivity
Move away from Primitive Methods of Agriculture
Fragmented Land
Holding
Lack of Knowhow
Low level of
Mechanization
Low affordability
to employ best
practices
Over-Dependence
on Labor &
Shortage of Labor
Primitive
Methods of
Agriculture
…Low level of Mechanization
Boosting Output and Productivity
… due to extremely low land holdings
...along with other factors has resulted in
very low mechanization
 Affordability is low to begin with
 Low education and skill levels results in negligible uptake in
advanced, value generating, technologies
Holding size (hectares)
# holdings (M)
<1 1 to 2 2 to 4
0
1
23
76
121
4 to 10
60
30
7
120
>10
150
14
90
Total
Source: Central Institute of Agricultural Engineering (CIAE), Bhopal; CII: Wealth Creation in the Farm sector of India: Ten point agenda for Policy Intervention
 Fragmentation - a result of various land holding acts
 The average size of land holding has continued to decline
(from 2.63 ha in 1996 to 1.06 ha in 2003–2004)
 Situation further worsened by labor shortages:
‐ Alternate employment opportunities
‐ Guaranteed employment schemes (NREGA ) and
subsidies
Dominance of small holdings
Prohibitively high cost per acre of technology application
Farm mechanization continues to significantly lag behind
global norms
Boosting Output and Productivity
Full suite of advanced agricultural
technologies combined...
...that will significantly impact a
farmer's bottom line...
• Radical improvement in productivity from
application of modern technology
• Lower/ eliminate capital expenditure
required on mechanisation
– Convert the farmers’ capex into opex
Agronomy
High Quality
Crop Care
Mechanisation
Sensing and
precision
actuation
...to create a “technology as a
service" offering...
...effectively unlocking demand for
mechanisation technology and its
application
• Creates the ability to aggregate demand
for mechanisation
• Allows low cost provision of services due
to economies of scale
Pay Per Use
Service
Offering
Reasonable
Prices
Government
Private
Partnership
Technology, as a Service, must reach the bottom of Pyramid
Enabling Access to Credit and Micro-finance
• Need for an exclusive regulator body for MFIs.
• Need for transparency of interest rates
Unregulated MFIs
• Launch training programs for clients.
• Require more informed decision from MFIs before lending.Loan Defaults
• Uniform distribution of MFIs in rural and urban areas.
• More collaboration with foreign MFIs to bring in best
practices in technology and process.
Low Depth of Outreach
• Introduce better savings and insurance services.Inflexible Products
Supporting Infrastructure and Cold-Storage Facilities
Problems in Supply Chain Management for Agricultural products
Inflation
Low monetization
opportunity for producers
Higher cost of production
PAIN POINTS PROPOSED SOLUTION
• Improve rural infrastructure and cold
storage facilities
• Collection points from farmers for direct
sale
Better
connectivity
• Lesser intermediaries
• Competition among buyers
• More bargaining powers for farmers
Reduce
unwanted
supply chain
cost
• Short-term production loans for farmers
• Quick settlement mechanisms for contract
(commodity or market) disputes
Unrestricted
cash flow
during high
inflation
• Intermediaries inappropriately benefited
during inflation, farmers left with minimal
share of sale
• Inflation → higher living cost → high cost of
production → squeezing down profits
Challenges and Mitigation factors to proposed solutions
• Resistance of the rural class to adapt to new changes
• Transparency and Regulatory challenges in controlling
MFI
• Wholesalers and intermediaries will oppose these
moves
Challenges
• Change Management – Adopting changes
• Strong Regulatory body
• Get buy-in from the stakeholders on the proposed
solutions
Mitigation
Factors
Thank You

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ISBSynergy888

  • 1. Manthan: Boosting Agricultural Productivity Team Details Abhishek Kumar Priyank Kanade Shrijit Venkatesh Harmeet Singh Saroya Vikas Kumar
  • 2. Boosting Agricultural Productivity Boosting Agricultural Productivity Growth in wages and remunerative prices Growth in per hectare output and productivity Access to credit for crafting agricultural growth Creation of infrastructure and cold storage facilities Problem Statement: Boosting Agricultural Productivity Our Approach: • Understand current agricultural sector • Identify the pain-points plaguing Indian agricultural sector • Cultivate solutions targeting the pain points • Overall, a 4 pronged final approach for better productivity
  • 3. Indian Agricultural Industry – A Snapshot • Indian economy has grown steadily –7% in last 10 years • Low and inconsistent growth in agricultural sector – it is dependent on the monsoon • Agriculture contributes 18% to GDP but 60% population lives off agriculture • Mostly small marginal farms with low inputs • Yield levels are generally much lower than world averages • Total cropped area is 197 million hectares • Highest area under irrigation (40%) • Green revolution helped India gain self sufficiency in food production • Agricultural production increased from 50 million tons to 227 million tons; however, growth flat over last 10 years • Population, currently at 1.15 billion, is continuing to increase • Tremendous pressure to increase agricultural productivity • New technologies must be deployed • Seed industry will continue to play a key role
  • 4. Sector Identification – Indian Agricultural Industry Ancillary Support to Produce • Agricultural machinery • Seed technology • Fertilizer technology • Irrigation technology • Supply chain-cold storages • Technology in Ancillary support-Manufacturing technique • Biotech-To increase output • Weather forecasting technology Processing of Produce • Packaged processed foods • Technology to increase value-add • Supply chain & logistics Animal husbandry • Dairy Industry • Meat • Poultry • Technology for high produce • Supply chain-cold storage • Leather goods Beverages • Non-alcoholic beverages • Beer • Other alcoholic beverages • Technology • Supply chain
  • 5. Approach for Boosting Agricultural Productivity Boosting Agricultural Productivity Growth in wages and remunerative prices Growth in per hectare output and productivity Access to credit for crafting agricultural growth Creation of infrastructur e and cold storage facilities
  • 6. Growth in Wages and Remunerative Prices Skill development Effective Diversification Market Linkage for Best Prices • Address underemployment: Under-employment rate of 20.9% primarily due to seasonal nature of agriculture (Jan 2013)# • Skill enhancement in food processing and cultivation techniques for crop diversification to overcome underemployment and to improve wages • Training: To enable the effective use of mobile and internet platforms #Source: http://www.census.gov.ph/content/employment-rate-january-2013-estimated-929-percent-results-january-2013-labor-force-survey • Extending Diversification through Demonstration: Support to farmers for crops , such as , sunflower, safflower, pulses and other field crops. Other farmers may opt to diversify to get better prices and reduce their dependence on low income yielding crops. • Microfinance to support seed purchase and financing farm equipments. • Contract farming: Providing grading and traceability features to enable contract farming and exports • Supply Chain Management: Improving cold storage facility and market connectivity to reduce waste (details in next slide) • Demand Forecasting: Better demand forecasting and making farmers aware of commodity price forecasts to enable them to make well-informed decisions
  • 7. Boosting Output and Productivity Indian Seed Industry-Current Status PAIN POINTS PROPOSED SOLUTION •Indian seed market, estimated at US$1.1 billion, is the 6th largest in the world •It has grown @ 12% compared to <5% growth of global seed market •Private sector not investing in self pollinated crops to develop and promote new varieties •Seed replacement ratio continues to be low •Large acres of self pollinated crops – rice, wheat, legumes, etc. •Low hybrid adoption rates in most crops due to marginal growing conditions and/or subsistence farming •Medium and small sized companies should make investments in research and seed processing infrastructure •More than 40 seed companies have Govt. recognition for their R&D units and this number should grow over 100. •Indian companies should introduce increased GM trait in their germplasm •More investment in innovative biotechnology research
  • 8. Boosting Output and Productivity Move away from Primitive Methods of Agriculture Fragmented Land Holding Lack of Knowhow Low level of Mechanization Low affordability to employ best practices Over-Dependence on Labor & Shortage of Labor Primitive Methods of Agriculture …Low level of Mechanization
  • 9. Boosting Output and Productivity … due to extremely low land holdings ...along with other factors has resulted in very low mechanization  Affordability is low to begin with  Low education and skill levels results in negligible uptake in advanced, value generating, technologies Holding size (hectares) # holdings (M) <1 1 to 2 2 to 4 0 1 23 76 121 4 to 10 60 30 7 120 >10 150 14 90 Total Source: Central Institute of Agricultural Engineering (CIAE), Bhopal; CII: Wealth Creation in the Farm sector of India: Ten point agenda for Policy Intervention  Fragmentation - a result of various land holding acts  The average size of land holding has continued to decline (from 2.63 ha in 1996 to 1.06 ha in 2003–2004)  Situation further worsened by labor shortages: ‐ Alternate employment opportunities ‐ Guaranteed employment schemes (NREGA ) and subsidies Dominance of small holdings Prohibitively high cost per acre of technology application Farm mechanization continues to significantly lag behind global norms
  • 10. Boosting Output and Productivity Full suite of advanced agricultural technologies combined... ...that will significantly impact a farmer's bottom line... • Radical improvement in productivity from application of modern technology • Lower/ eliminate capital expenditure required on mechanisation – Convert the farmers’ capex into opex Agronomy High Quality Crop Care Mechanisation Sensing and precision actuation ...to create a “technology as a service" offering... ...effectively unlocking demand for mechanisation technology and its application • Creates the ability to aggregate demand for mechanisation • Allows low cost provision of services due to economies of scale Pay Per Use Service Offering Reasonable Prices Government Private Partnership Technology, as a Service, must reach the bottom of Pyramid
  • 11. Enabling Access to Credit and Micro-finance • Need for an exclusive regulator body for MFIs. • Need for transparency of interest rates Unregulated MFIs • Launch training programs for clients. • Require more informed decision from MFIs before lending.Loan Defaults • Uniform distribution of MFIs in rural and urban areas. • More collaboration with foreign MFIs to bring in best practices in technology and process. Low Depth of Outreach • Introduce better savings and insurance services.Inflexible Products
  • 12. Supporting Infrastructure and Cold-Storage Facilities Problems in Supply Chain Management for Agricultural products Inflation Low monetization opportunity for producers Higher cost of production PAIN POINTS PROPOSED SOLUTION • Improve rural infrastructure and cold storage facilities • Collection points from farmers for direct sale Better connectivity • Lesser intermediaries • Competition among buyers • More bargaining powers for farmers Reduce unwanted supply chain cost • Short-term production loans for farmers • Quick settlement mechanisms for contract (commodity or market) disputes Unrestricted cash flow during high inflation • Intermediaries inappropriately benefited during inflation, farmers left with minimal share of sale • Inflation → higher living cost → high cost of production → squeezing down profits
  • 13. Challenges and Mitigation factors to proposed solutions • Resistance of the rural class to adapt to new changes • Transparency and Regulatory challenges in controlling MFI • Wholesalers and intermediaries will oppose these moves Challenges • Change Management – Adopting changes • Strong Regulatory body • Get buy-in from the stakeholders on the proposed solutions Mitigation Factors