New market opportunities for agri startups in seed business


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There are enormous agribusiness opportunities for startups due to new consumer trends, exports business and business models; this session will provide for an overview of four such opportunities.

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New market opportunities for agri startups in seed business

  1. 1. New market opportunities for agri start-ups in Seed BusinessGlobal Agribusiness Incubation Conference 6-8 February 2012 Dr. S. K. Rao Principal Investigator Business Planning and Development Unit Jawaharlal Nehru Krishi Vishwa Vidyalaya, Jabalpur
  2. 2. Coverage• Status of Seed Industry• Opportunities in Seed Business• Challenges• How to Make Seed Business Successful• Incubation Support Services of BPD-JNKVV, Jabalpur 2
  3. 3. Thrust Areas in Agriculture• Need for increase food grain production• Technologies to produce crops with less water, less fertilizer and other inputs• Enhancing disease and pest tolerance• Breed crops to enable farmers practice sustainable agriculture• Develop technologies to reduce labour and enable mechanization 3
  4. 4. Impact of Quality Seed Year Food Grain Cotton Oil Seeds Quality seeds Production Production Production distributed (million tonnes) (million bales) (million tonnes) (lakh qtls)1950-51 50.82 3.04 5.16 -1960-61 82.02 5.60 6.98 -1970-71 108.42 4.76 9.63 5.01980-81 129.59 7.01 9.37 35.01990-91 176.39 9.84 18.61 57.102000-01 195.92 9.65 18.40 85.442007-08 227.30 31.00 28.82 110.00Quality seed supply is one of the important factors driving agricultural production in India 4
  5. 5. Global Seed Markets Country Value ($ Million)• $ 42 bn seed market USA 12,000 world wide China 6,000 France 2,400 Brazil 2,000• India is among top five India 2,000 countries at $ 2 bn Japan 1,400 Germany 1,261 Italy 780• Growth of Indian seed Argentina 600 industry is on an Canada 550 average 20% World 42,000 Source: ISF 2011
  6. 6. Indian seed industry• Govt. Sector - NSC, SFCI and 14 SSCs• More than 500 private seed companies operating at various levels.• Total value of seeds sold in India is estimated at Rs. 15,000 Crores 6
  7. 7. Opportunities for seed business• Seed Replacement Rate is around 25% - huge gap in quality seed requirement• Quality seeds will be main drivers of crop production• Need for development of improved technologies• Integration with other inputs like crop nutrition and protection• Several business opportunities in each stage of the seed value chain
  8. 8. Opportunities for seed business R&D Production Marketing • C & F Agents • Seed Production • Distributors &• Breeding and Biotech Organizers Dealers Research • Seed Processors • Extension Service • Transport Agencies Providers • Warehouses Farmer Producer Companies, Seed Cooperatives, Small Scale seed companies
  9. 9. Challenges• Increase in the number of seed companies• No entry barriers• Highly competitive markets• Long production lead-time• Concentrated seasonal selling period• Product line is perishable• Strict regulatory production• Quality assurance systems• Vulnerable to environmental stresses
  10. 10. Challenges• Development and registration of new products is often a long process• Customers are diverse• Have a wide range of product requirements• Long-term cash flow• Inventory management• Seed production, Processing and quality assurance• Market knowledge application• Product evaluation and development
  11. 11. KEY ISSUES Key Managerial Issues Value Chain ComponentCustomer requirementsIntellectual property Research: Variety Development andRelease procedures RegistrationGrower contractsProduction procedures Seed ProductionQuality AssurancePackagingProcessing procedure Processing and ConditioningQuality AssuranceAdvertisingLabeling Information Marketing and SalesDistribution and PricingExtension InformationCustomer Support FARMER
  12. 12. How to make seed business successfulSeed businesses are….• Highly dynamic• Demanding• Long-term commitment• Involvement• Drawing on the experience of the managers and employees from within and without the business,• Observing, learning and applying the daily lessons from the “shop floor” that will make a difference
  13. 13. The three pillars of the business plan VISION Production Products Equipment People Resources FinanceThe vision of a company is supported by three legs or pillars – the marketing, production and financial strategies
  14. 14. Indenting SEED ENREPRENEURESSeed association Director of Director to of India agriculture of each SAUs/ IC/ state Research ICAR for GOI prerelease varieties ADG [Seeds]
  15. 15. Seed for Exports• Testing of Indian hybrids abroad• Breeding of hybrids for export• Strict quality control• Yield improvement• Sales promotion
  16. 16. Benefits of Being Global• Earning valuable foreign exchange• Creation of job opportunities• Better quality seeds as well as better varieties• Equitable exchange of germ-plasm coming in from different countries
  17. 17. Business Support Sources• Technology – Agricultural Universities, ICAR Institutes, Private Companies• Finance – Commercial Banks, Venture Capitals, Govt. support in term of subsidies• People – Qualified agri. Personnel from SAUs• Processing facilities – Available all over India from govt. as well as pvt. players
  18. 18. Business Incubation Services offered by BPD - JNKVV• Help with business basics• Networking activities• Marketing assistance• Help with financial management• Access to capital – linking to banks• Links to university/corporate partners• Seed Business training programs• Mentoring and coaching
  19. 19. JNKVV Seed Consortium• Eligible for access to breeder seeds of improved varieties• Access to parent materials of hybrids by paying the license fees• Seed Company shall sign an agreement with JNKVV agreeing to the prescribed terms and conditions.• Consortium membership fee of @ Rs.1 lakh for 5 years
  20. 20. Supports Provided from BPD-JNKVV• Eleven seed consortium members – 4 have licensed for early maturity hybrid rice• Fifteen members start ups / cooperatives for seed business – Breeder seed support – Training of seed production technology• Seed business management training to producer company CEOs and officials of seed cooperative societies
  21. 21. Thank You Contact at