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External Environment Challenges

Challenges

Solutions

Asking the farmers to diversify their


crop portfolio to meet the changing
climate
Competition
in
domestic
&
international markets can be intense
due to presence of big players
Withdrawal of government subsidy
can limit JISLs growth
Bad Quality Competition
Lack of trust amongst the small scale
farmers
Backward
integration
of
JISLs
multinational companies in the food
processing business can lead to lost
opportunities

Trainings to educate the farmers


regarding the damages by climate
change-Jain Education Program
Lobbying and maintaining relationships
with the government
Competition
in
domestic
&
international markets can be intense
due to presence of big players
Increase loyalty through a loyalty
program for existing clients and host
regional trade shows to show the
impact of better MIS

DID YOU KNOW? - Facts

70% of the worlds freshwater is used for agriculture


Many big food producing countries have reached, or are
close to reaching, their renewable water resource limits
The main causes of wasteful and unsustainable water use
are:
leaky irrigation systems
wasteful field application methods
cultivation of thirsty crops not suited to the environment

Excessive irrigation can also increase soil salinity and wash


pollutants and sediment into rivers

GLOBAL FOOD SYSTEM Key Affecting Drivers

Global
population
increases
Changes in
the size &
nature of
per capita
demand

Climate
Change
Competition for
key resources
such as
Land for food
production
Competition
for
key resources
such as
Global water
and energy
demand

How to counter the effects


SEEDS
1.
2.
3.
4.

High quality seeds


Gnenetically modified for higher
yields
Require less water
High disease resistant

IRRIGATION
1.

Avoid old irrigation practices


such as flood irrigation

2.

Use water efficient practices


Micro irrigation system

FOOD WASTE
MANAGEMENT
1.

2.

Reduce wastage in
processing
Reduce household wastage

FOOD HABITS
(1)

Switch to vegetarian habits

(2)

Increse dependency on marine


food

Government Greater spending on Agriculture (Avg. 10% of GDP)

IRRIGATION Micro Irrigation System &


Advancement
Video on MIS
MIS - https://www.youtube.com/watch?v=irTPXgUe5kU

IRRIGATION Other Agricultural Advancements


Biotechnology : genetically modified crops,
which make them more resistant to droughts,
increase the productivity
or make them grow faster

Equipment: tractors with GPS assistance which are


able to measure the harvest and map the productivity
of the different areas of the farm so the production can
be optimized by distributing fertilizer in a correct way

Bacteria and fungi tests : incorporated into


the seed they can improve their resistance
and productivity

Hydroponic irrigation: plants grow in an


inert medium, which provides the pH,
nutrients, etc. The drain water
can be reused

JISL - Overview

1963 JISL was


founded
selling fuel and
agricultural
inputs

1983 Bhau
discovered microirrigation

1964 1970s JISL


expanded abroad,
added tractor and
automobile
dealerships,
fertilizer, pesticide
and seed sales

1990s opened plastic


sheet manufacturing
plant, moved into food
processing, started
investing heavily in R&D

Late 1980s the


company was
manufacturing and
selling a variety of
MISs

2010 became
largest MIS
company in India
and 2nd largest
worldwide

2000s expanded
more in India by
opening new
production plants
and sales offices,
and internationally
by acquiring
established
companies

2011 established
a non-banking
financial
company (SAFL)

JISL The Business

Contributes 50% Revenue

Research, Developing & installing MIS


for small scale farmers

Product life 3-7 years

MIS

SAFL finances the subsidized part of the total amount


It also gives loan to farmers at a lower rate than money
NBFC enders for the non-subsidized part
SAFL is established to counter the burden created on JISL
due to long subsidy realization period of 6-12 months
It helps JISL to free up its tied cash for other purposes

Food
Processing
Then sells this to big companies under
JISL buys agro produce at floor price
brand Farm Fresh

Contributes 16.9% revenue

Energy, Solar based products pumps


Bio-Tech
Hybrid Seeds, pest restraint & fast maturing
& Research varieties of crops
Other precision farming techniques

JISL SWOT Analysis

Strong brand and leadership positions in


its businesses in India
Business model provides complete
solution for agriculture to the small
farmers
Strong track record of dealing with the
government and bringing positive policy
changes related to growth of MIS market
Continued emphasis on innovation and
R&D
Exclusive channel to push its products
with extensive reach to rural markets

MIS has a huge potential and remains


prone to expansion
Growing need for food will require an
efficient water usage system and
enhanced productivity
Ability to build and sell commercially
viable renewable energy applications to
overcome energy scarcity
Food processing market is estimated to
grow at a pace of 20-30% in India

Growth of the MIS segment is heavily


reliant on government subsidies, which
are credited only 180 to 365 days after
approval
Highly leveraged business model with
constantly increasing cost of maintaining
a cash to cash cycle of 150 to 170 days
Risk of default rate and challenge of
collecting loan from farmers
Failed to create a pool of middle level
managers who can work independently
HR and recruitment processes also dont
do enough to continually produce
competent middle level managers

Small competitors selling inferior quality


MIS can negatively impact its utility as a
booster of farm productivity
Competition in domestic & international
markets can be intense due to presence
of big players
Withdrawal of government subsidy can
limit JISLs growth
Backward integration of JUSLs
multinational companies in the food
processing business can lead to lost
opportunities

RECOMMENDATIONS

Expansion by using a hub and spoke model

Increase loyalty through a loyalty program and the complete ecosystem

R&D to apply MIS to wheat and rice cultivation

Promote solar for big farmers and community Bio-gas plant for smaller farmers

Have in-house production facilities to improve cost-control

Spend research to produce pipes fast at low cost or build new plant To fulfill
the demand of pipes

Diversify portfolio of SAFl to mitigate default risk of farmers and use existing
distribution network of JISL to gain the trust of farmers

Develop technology for better traceability and quality control to increase


product portfolio

Attract middle level of managers by providing incentive for international


exposure and training