Contents
‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ An introduction Factors enhancing Agribusiness Opportunities Opportunities in India Benefits to Corporate Sectors Benefits to Farmers Few Cases Role of Banks Conclusion

the most important sector in Indian economy.Introduction ‡ Agriculture . ‡ Around seventy percent of the Indian population still depends on agriculture and allied areas for live hood. . ‡ Contributes more than 20 percent to the GDP.

Corporate farming .

marketing. . storage. specifically. what is seen by some as the practices of would-be megacorporations involved in food production on a very large scale. but also the entire chain of agriculture-related business. advertising. and encompasses not only the farm itself. including seed supply.Corporate farming is a term that describes the business of agriculture. agrichemicals. transport. distribution. and retail sales. food processing. It is a modern food industry issue. machinery.

FACTORS ENHANCING AGRIBUSINESS OPPORTUNITIES Strong agriculture State support Multi product environment Vibrant economy Product availability throughout the year 5) Strong domestic market 6) Land area not a constraint 7) Products for global markets 8) Wealth of human resources 9) Presence of global MNCs 10) Exportable surplus 11) Processing capability 1) 2) 3) 4) .

concentrates. Red pepper. Guava. Essential oils etc.Opportunities in India The area in which the potential exists are Fruits which include Mango. Assorted. assorted products . Onion. Butter. Tamarind. Bell peppers. Milk powder. Cauliflower. Dairy products include Milk. Beans. frozen fruits. Cottage cheese etc. Peppers. Pineapple. Garlic. Medicinal and Aromatic plants. extracts. Aqua products including Fish. Ghee. Crab. Banana. etc. Ginger. flavours. Tomato. Gherkins. Processed Fruits and Vegetables includes Fruit pulp. pickled products. frozen vegetables. Vegetables which include Carrot. Peas etc. Papaya. Okra. Pomegranate. . Poultry & Meat products. Shrimp. Cabbage. Value added products etc. Spices including Black pepper. Mushrooms. Lime. Sweet orange. Grape etc.

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production on estates. for example. . More consistent quality can be obtained than if purchases were made on the open market. Production is more reliable than open-market purchases and the sponsoring company faces less risk by not being responsible for production.Benefits to Corporate Sectors Contract farming with small farmers is more politically acceptable than. Working with small farmers overcomes land constraints.

Benefits to Farmers Inputs and production services are often supplied by the sponsor This is usually done on credit through advances from the sponsor Contract farming often introduces new technology and also enables farmers to learn new skills Farmers¶ price risk is often reduced as many contracts specify prices in advance Contract farming can open up new markets which would otherwise be unavailable to small farmers .

FEW CASES .

000 farmers working in over 10. Kashmir and Maharashtra for the supply of potatoes.000 acres across Punjab. Encouraged by the sweeping success of contract farming in tomato in several districts of Punjab. potato and other crops.P. apart from other vegetable crops like. U.200 farmers in Rajasthan to cultivate barley in a tie up with the United Breweries Group. PepsiCo has been successfully emulating the model in food grains (Basmati rice). PepsiCo India has also partnered with 1. It had set up a 27-acre research and demonstration farm in Punjab to conduct farm trials of new varieties of tomato. Karnataka. . spices (chillies) and oilseeds (groundnut) as well.. Jharkand West Bengal. The company has partnered with more than 10.PEPSI PepsiCo was a pioneer in the concept of contract farming under which the company transfers agricultural best practices and technology and procures the produce at a guaranteed price.

weak infrastructure and the involvement of numerous intermediaries. The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture. one of India¶s largest exporters of agricultural commodities. characterised by fragmented farms. among others.ITC s e-Choupal ITC¶s Agri-Business Division. has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis. .

Backed by intensive research and knowledge. They see the µe-Choupal¶ as the new age cooperative for all practical purposes. ITC has taken care to involve farmers in the designing and management of the entire µe-Choupal¶ initiative. The active participation of farmers in this rural initiative has created a sense of ownership in the project among the farmers.As India¶s µkissan¶ Company. Another path-breaking initiative ± the µChoupal Pradarshan Khet¶. The services are customised to meet local conditions. ensure timely availability of farm inputs including credit. . brings the benefits of agricultural best practices to small and marginal farmers. this initiative provides Agriextension services which are qualitatively superior and involves pro-active handholding of farmers to ensure productivity gains. and provide a cluster of farmer schools for capturing indigenous knowledge.

(DSCL).a rural business centre. is setting up a chain of centres aimed at providing end-to-end ground level support to the Indian farmer & thereby improving his "profitability" & "productivity". which is creating a far-reaching positive impact in bringing a qualitative change and revolutionizing the farming sector in India. is a pioneering micro level effort. capitalising its over 35 years of experience in the agri-input markets & first hand knowledge of Indian farmers. This would mean catering to cultivable land of over 30 million acres and touching the lives of over 10 million farmers. .DCM SHRIRAM CONSOLIDATED LTD "Hariyali Kisaan Bazaar" . It is also an example of how well meaning corporates can contribute to development of agriculture by building sustainable business models. DCM Shriram Consolidated Ltd. Future Plans Hariyali Kisaan Bazaar has plans to rapidly scale up the operations & create a national footprint covering all the major agricultural markets of the country.

it grows horticultural products. including M&M brands through Shubh Labh. It also offers borrowing support to farmers through the Mahindra Krishi Vihar. The company retails agri-inputs. quick sanctions. . a platform for banks to provide loans to farmers with minimum documentation. aromatic plants and flowers.MAHINDRA M&M's Shubh Labh network is spread over eight states with 36 outlets. Only three centers are run by M&M and the rest are franchisees. For banks it is a good way to make their rural lending safer without too much overhead. It also undertakes contract farming in over a lakh acre. and attractive interest rates. it grew oilseeds and cereals and in the year 2004. In the year 2003.

Banks Support to Agribusiness Cases From Few Banks .

Apart from the branches. Advances are given for very small activity covering poorest of the poor to hitech activities involving large fund outlays. . Bank has also agri specialists in various disciplines to handle projects/ guide farmers in their agri ventures. there are 427 Agricultural Development Branches (ADBs) which also cater to agriculturists To give special focus to agriculture lending Bank has set up agri business unit..SBI State Bank of India Caters to the needs of agriculturists and landless agricultural labourers through a network of 7400 rural and semi-urban branches.

commerce. and aim to make a Self Reliant Rural India. industry and extending credit facilities particularly to small and marginal farmers. Bank of Baroda. agricultural labourers and small entrepreneurs. over the years. . We extend loans for agricultural activities and a host of services for farmers well tuned to the rural market. trade.Bank Of Baroda With the objective of developing rural economy through promotion of agriculture. has reached out to larger part of rural India.

.NABARD¶s Initiatives in contact farming Recognising the potential and benefits of contract farming arrangements in the agriculture sector. NABARD took the important initiative of supporting such arrangements by the banking sector and developed a special refinance package for contract farming arrangements aimed at promoting increased production of commercial crops and creation of marketing avenues for the farmers.

which leverage the outreach of various stakeholders in the agri value chain. It also works closely with insurance and re-insurance companies to facilitate the development and distribution of need-based insurance products for the agri-sector.YES Bank AGRIBUSINESS RURAL & SOCIAL BANKING (ARSB): ARSB develops innovative financial models. the team provides financial services to the social sector and to socio-economically disadvantaged sections of society. to overcome the 'last mile challenges' in the agri and rural sector. As a Social Banking initiative. .

they are able to enhance labour and land productivity.CONCLUSION As the corporate sector generally undertakes large-scale commercial farming with the use of modern and capital intensive technology. The corporate sector promotes good agricultural and best management practices along with environment-friendly efforts at their estates that will ensure not only the high quality of their agricultural produce but also promote sustainable development for the industry. . The corporate involvement in agri-business at all levels in the food chain will not only provide much needed assured markets to the farmers but will also bring the latest know how to the farmers. It will also lead to better earning opportunities for the farmers through higher yield. higher prices for produce on one hand and this will also create direct and indirect employment opportunities for the farmers who are finding it difficult to be part of services led growth.