Executive summary

• India is largely an agricultural country. But to say that India lives by agriculture does not mean that India is
agriculturally advanced. Rather she is extremely backward in this respect. Her annual yield of crops per acre
is lamentably below what it ought to be.

• Due to this, people who depend on agriculture face problems like poverty, unemployment or
underemployment and migrate to other regions, thus aggravating them.

• The implementation of modern technology in the Indian agriculture sector can be one of the solutions for this
problem.

• Hence, a business case has been formulated which will try to address issues which are prevalent in the
agriculture industry.

• This proposal targets specific areas and can result in both the company and the farmers being rewarded.

• The business case which has been proposed is to be implemented by a company with an agrarian division.
 Objectives
• To increase farm income and profitability.

• To improve the supply of services to the rural community in consideration.

• To reduce unemployment and/or underemployment.

• To reduce poverty through income-generating activities.

• To increase access to information and skills training.

• To create a demand for the tools and services required for farming in the rural areas.

• To make the business venture profitable and sustainable, keeping in mind the feasibility issues .
 Background information
• India is predominantly a rural country with two third population and 70% workforce residing in rural areas. Rural economy
constitutes 46 per cent of national income.

• Growth and development of rural economy and population are a key to overall growth and inclusive development of the
country. Traditionally, agriculture is the prime sector of rural economy and rural employment. Agriculture is both a
business and a way of life.

• Even though the above mentioned facts about rural economy are true, migration of people from these areas to
urban areas in search of job opportunities has led to the creation of slums which aggravate the already existing
socio- economic problems.

• This has been caused partly by the unwillingness of people to take up farming or related activities because of
underemployment and associated risks.

• The business case formulated shall try alleviate these problems, even if a little, with a commercial approach.
 Description of the solution
• The first step is to identify a remote, technogically backward area with farming villages which do not have severe climatic
issues but from where a large number of people have been migrating to other places.

• A background study related to such rural areas is necessary for deciding the area of operations.

• The soil quality, the type of crop grown in the villages etc, are all taken into consideration and an area which satisfy the
requirements will be chosen.

• Now, for every 3 km radius, identify a farmer and install a computer system with internet access, preferably by VSAT( very
small aperture terminal) in his house. The host farmer will not be charged for using the computer but will incur some
operating costs and will swear an oath to serve the entire community. Training will be provided to the farmer on how to use
the system.

• The cost of setting up such a system can range from 3 – 5 lakh. Along with it, an annual maintenance cost of around
Rs.5000 – Rs.10000 will have to be borne by the company.
• The farmers can use this computer to check the closing market prices in the local markets, which is where farmers sell their
produce to middlemen or purchasing agents as well as to track price trends on the national level. They can also use this system
to search for new farming methods as well as receive weather related updates, which can help in planning beforehand and
result in good produce.

• This can be done indirectly through the host farmer, who ahs been trained beforehand, since most of the farmers are illiterate.

• The system can also be used to order seeds, fertilizers, herbicides, soil test kits and other tools along with consumer goods
from the company at a lower price than village traders.

• The host farmer shall aggregate the demand for these products from the company and its partners and the orders will be
handled by a representative of the company.

• At harvest time, the company shall offer to buy the produce directly from any farmer at the previous day’s closing price in the
mandi, and then his crop shall be transported to a processing center of the company, where it is weighed and assessed for
quality. The farmer is then paid.

• ‘Bonus points’ will also be awarded to farmers based on the quality of the produce, which are exchangeable for the company’s
products
 Benefits and limitations
The benefits include:-
• Farmers benefit from more accurate weighing, faster processing time, and prompt payment, and from access to a wide
range of information, including accurate market price knowledge, and market trends, which helps them decide when,
where, and at what price to sell.
• In total, they benefit from lower prices for inputs and other goods, higher yields, and a sense of empowerment.
• At the same time, the company benefits from the lesser procurement costs and it has more direct control over what it buys,
reducing intermediaries.
• The system also provides it with direct access to the farmer and to information on pricing, product quality, soil conditions
and expected yields, enabling the company to better plan future operations.
• Additional benefits include the creation of market for the commodities produced by the company and its partners, thus
being a source of innovation for new affordable products.
Some limitations are as follows:-
• The initial investment to be made for the implementation of this system is huge, which may not necessarily guarantee
returns.
• The market in the area where we plan to operate has to be decent. Weak markets will have to be developed which will be a
burden on the company’s financial costs.
• Sudden disasters like drought, floods which cannot be prevented may destroy crops and thus will result in a loss for the
farmers as well as the company.
 Sustainability and feasibility
• The feasibility of the business case which has been proposed can be studied by looking at the costs associated
with the implementation of the system and its associated costs.

• The system would cost around 2-5 lakhs(one – time)

• The transportation costs and the labour costs would amount to rs. 20000 a year.

• Other miscellaneous costs would amount to Rs.1 lakh in a year.

• The commodities sold in the village through the host farmer can bring revenue of around 1- 3 lakh in a year.
• The filling and weighing labour, handling losses will be nil and the commission fee and part of the transport
costs it would otherwise pay to traders who serve as its buying agents will be reduced drastically.
• The produce by farmers will also be taken by the company and will be made into different products which
will also result in revenue. The produce can also be sold as organic farm products, for which there is a high
demand.
• The produce by the farmers, when sold by the company to consumers will also make profit.

• A bit of subsidization can be made initially, which will be gradually recalled later.

• Even though this system may incur some initial losses, in the long term, the profit will overshadow the
investment.

• The business case is thus favourable and sustainable, and can also be expanded in other such regions as well.