Farming System - New Paradigm - 041208

8/8/2019 Farming System - New Paradigm - 041208

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CHANGING RURAL AGRIBUSINESS

ECONOMY

THE EMERGING PARADIGM

Devashish


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Farming changing life of Rural

people


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Why Agri Business?

Two sectors have the ability to enable India

leapfrog development-wise : Agriculture and

Information Technology. These areas are

capable of generating maximum wealth with

relatively modest investments.


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Indian Agriculture: Imperatives

Present

Value

Potential

ValueMarket

Inputs

Finance

Research

Education


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Indian Market

Dispersed Spread over600,000 Villages

Fragmented - Over100 million Unique Customers

Heterogeneousin nature.

Poorpenetration of communication facilities

Poorinfrastructure facilities

Low literacy levels

However, Purchasing Poweron therise


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The Agri-businessDomain - The Players

FarmerOutput

Inter-

mediaries

Output

Companies

ServiceProviders

Extension

Workers

KnowledgeProviders

Input

Dealers

Input

Companies

Development

Organizations


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Current Scenario

Lack Of Credit &Insurance

Dependence On

Dealer / Brokers

Substandard Goods

Nil BargainingPower

High Cost OfBorrowing

Results In

Lack Of AuthenticInformation

LeadsTo

Poor Choice OfPortfolio

Poor ManagementPractices

Inability To Store


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INEFFICIENCY IN FARM OUTPUT BUSINESS

FARMERKUCCHA

ARTEYA

PUCCA

ARTEYA

BROKER BUYER

LOCATION

ROLE

OTHER

BUSINESS

MARGINS

FARM

2 5%INTEREST > 36%

2 5%

GROWS

CROP

VILLAGE MAIN MANDI TOWNS

2 5%

AGENT

CONSOLIDATEOUTPUT

FINANCEFARMER

AGENT

CONSOLIDATESTOCKS OFKUCCHAARTEYA

LINKS PUKKAARTEYA WITH

BUYERS

GETS INFOFROM MANDIS

DEALER IN

INPUTS

INTERMEDIARIES ADD 35 50% TO COSTFOR MARGINAL SERVICE


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So.

Look at the Alternate of the same in a littledifferent perspective


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MarketLed Model

Focus-

Farm as

Enterprise

Money-to-Money

Technology Base

Diverse

Market need

based Choice

Farmer seen as

AGRIPRENEUR Monitoring strongand very

important

IT a tool for manybusiness process

e.g. MI, MR

Reaching Farmers

In Groups,

Cooperative,

Producers

Companies

Market Research

Farmer

Research &

Development

Farmer

Expected Output

Higher Return

per unit

Investment

Extension Agent

Joint Analysis

Facilitator

Consultant

Collaborator

Key Consideration

Optimizing Return

per Unit

Investment


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The draft National Policy for Farmers alsorecommends:

Corporate farming; and

Company farming

Besides many other options


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To achieve:

Contract Marketing through PPP;

Market Linkages Backw

ard & Forw

ard byreengineeringsupply chain;

Financial Linkages for Productive andConsumption loans and address the need for insurance;

and

Knowledge Linkage Skills, Trainings, New

IEC Tools & Techniques


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Whether as:

Patrons of farmers in welfare-mode as

extended arm of the governments, donors,

others; or

Friends of the farmers in supply driven

participatory development mode; or

Collaborators and partners in developmentin demand driven business mode

interfacing farmers with trade & industry.


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Thank You !

Farming System - New Paradigm - 041208

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