Agribusiness Industry Analysis in India

It is estimated that agribusinesses contribute about 30 percent to the gross domestic product of India, with the agricultural sector employing the largest percentage of the workforce (approximately 45.5 percent, according to a recent survey by the Labor Bureau). Agribusiness continues to be a powerful growth engine for the Indian economy. SMEs will play a key role in the segment, reaping the fruits of the plethora of opportunities the segment.

Definition / Scope
Market Overview
Market Risks
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References

Definition / Scope

As India’s economy transcends its US$ 2 trillion benchmark, agriculture is moving towards agribusiness. India, with the world’s second largest arable land, and with diverse agro-climatic zones across the country, has tremendous agricultural production advantages, with the potential to grow a wide range of agricultural products.

This strong agricultural base provides a large and varied foundation of raw materials for food processing. If optimally leveraged, these benefits may lead to India becoming the world’s leading food supplier.

In most developing countries, small and medium enterprises (SMEs) are considered essential for economic progress. In developing Asian countries such as India, SMEs have made considerable contributions in terms of employment and GDP growth.

The importance of small and medium-sized businesses to developing countries has been well documented and studied. This study by numerous researchers is a testament to the relevance of SMEs, particularly in the rural economy. Research indicates that 80-90 percent of all businesses are made up of SMEs and generate about 50-80 percent of overall employment in developing Asia.

There is a growing sub-set of enterprises within the category of SMEs that give special priority to achieving financial as well as social and environmental returns.

These enterprises are referred to as Social Enterprises (SEs), and while a nascent form of business, SEs are increasingly recognized in the development space as potential game changers. Because SEs have the purpose of producing measurable social and/or environmental outcomes and financial returns intentionally, they hold the promise of scalability beyond donor funding.

In India, because agriculture is such an important sector, SMEs associated with agriculture are defined as those enterprises operating within the value chain of agriculture. These may include individual farmers and producers.

Figure: Agribusiness Value Chain in India

Market Overview

For about 58 percent of the population of India, agriculture is the primary source of livelihood. Agriculture, forestry and fishing gross value added (GVA) was estimated at Rs. 19.48 lakh crore (US$ 276.37 billion) in FY2020 (PE). In agriculture and allied sectors, GVA growth stood at 4 percent in FY20.

Due to its immense value-adding potential, particularly within the food processing industry, the Indian food industry is poised for enormous growth, increasing its contribution to the world food trade every year.

The Indian food and grocery industry is the sixth largest in the world, with retail contributing 70% of sales. The Indian food processing industry accounts for 32% of the total food market of the country, one of India’s largest industries, and is ranked fifth in terms of production, consumption, export and expected growth.

For the period from April to September 2020, essential agricultural commodities exports increased by 43 percent to Rs. 53,626 crores (US$ 7.3 billion) over Rs. 37,397 crores (US$ 5.1 billion) in the same period last year.

The number of MSMEs in the Indian agribusiness segment is increasing exponentially, from a total count of 9,000 (including Registered and Unregistered MSMEs), it has increased to a total of 55,400 MSMEs, thereby contributing significantly to the growth to the segment both in terms of revenue and social and environmental impact.

Market Risks

Some of the major Risks for SMEs in the Indian agribusiness industry are

Lack of Access to Finance for SMEs

Restricted access to finance is one of the biggest challenges facing small and medium-sized enterprises across Asia, especially rural enterprises and those working in the agricultural sector. It is estimated that a majority of the existing funding deficit is in debt.

India’s formal SME credit gap in 2020 was estimated at US$ 380 billion, with an estimated 45-55 percent of formal SMEs not having access to loans from formal financial institutions, and that figure is up to 72 percent when it involves informal SMEs and micro-enterprises. In 2020, the demand for loans from smallholder farmers in India was estimated at US$ 220 billion.

Agricultural producers require capital for the financing of farm equipment, expansion projects, and working capital for the purchase of inputs like seeds and fertilizer. While equity funding channels are increasing as equity investors enter developing markets, agricultural SMEs do not have adequate access to equity in most countries. Furthermore, such funds may not meet all the capital needs of small and medium-sized agricultural enterprises that typically need working capital to finance the acquisition of inputs.

Lack of Access to Markets

While financing is usually a major challenge for small and medium-sized producers and processors at the beginning of harvest and production cycles, access to competitive and high-value markets is low, with most of them having poor access.

It affects their capacity in the long-term to support businesses and livelihoods. Establishing secure and reliable market access is essential in order to preserve income sources for SMEs. Access to markets, however, is a major challenge for SMEs and small producers in the Agriculture sector. This impact both manufacturing SMEs and other upstream roles, as well as farmers who are producers.

Sometimes, farmers are both eager and able to produce more than their levels of current output, but because of the lack of access to the market and the perishable nature of agricultural produce, they are only able to sell small quantities of farm produce. Exacerbating this problem is that farmers are always forced to sell at the height of harvest when prices are lowest because of the local market’s over-supply of the particular crop at that time.

Top Market Opportunities

With increasing mobile penetration and internet coverage, India is witnessing a slow but steady development of startups and SMEs in the field of agriculture.

Supply chain infrastructure and contract farming

In India a critical segment of today’s agriculture is warehousing. Critically linked to food security and agricultural development, it has yet to develop completely in line with demand in India. The country currently has a total agricultural warehousing capacity of approximately 91 million metric tons for large quantities to be processed and conserved by state agencies.

They own 41% of the potential and equilibrium of private entrepreneurs, cooperative societies, producers, etc. Despite the warehousing of the public sector and private players, like cold chains, millions of farm produce is wasted each year.

There is a strong need for start-ups at the local level to handle farm produce to avoid perishability. The need for warehousing has also been felt in industries other than agriculture, such as retail trade, over the last two decades.

Warehousing is also seen as an integral part of the supply chain where items are processed not just for safekeeping but also where other value processes are added, thus reducing waste and costs. Warehousing in agriculture is simply part of the broader ecosystem of agriculture. However, the warehousing industry, just like agriculture, is local, unorganized and fragmented.

The services of public warehouses, also known as third party logistic firms, are used by many small and medium landholding farmers. By storing and, often, packaging and shipping goods, these warehouses support farmers.

In a public-private partnership model, storage and cold chain cooperatives at the village level; washing, processing and packaging of vegetables and fruit by village women at the village level; collection, processing and packaging of milk in various quantities at the local level; and building warehouses in cooperation with villagers can be established.

Production and marketing

Another sector where agrarian start-ups can focus is the processing and selling of agricultural produce. There is an inefficient and insufficient Indian supply chain.

The share of farmers in the price realized is much less. In this region, several start-ups have begun working to bring farmers closer to consumers. Bengaluru-based start-up Farmily, for example, offers farmers micro-sites to show their farm products and brings customers and farmers on a single platform.

It allows buyers to order or express interest on the Farmy platform in buying the farmer’s produce, immediately after which an SMS will be sent to the farmer. Farmers will be able to respond to the demand and negotiate and conclude deals online. Another startup based in Mumbai, Frutunes Food Products, founded in 2020 by Prathap Selvan, sells biocharbased (organic component) products.

High-quality inputs, fertilizers and agro-chemicals are constantly required in the field of agriculture to increase productivity and yield. Start-ups may be scheduled for the desired end user of this sector to procure and arrange agri-inputs.

Studies show that farmers are still unable to procure agricultural inputs, such as seeds, pesticides, fertilizers and agrochemicals, on time. There is enormous scope for study of the agri-market climate, segmentation of agricultural inputs, positioning of agri-products, distribution channel design and many other start-up opportunities.

Farm management services

New agri-business, providing inputs such as seeds and fertilizers and providing farmers with advice and training on the latest agricultural practices.
This introduces efficiencies in the entire spectrum of agricultural practices.
Provides assistance at reasonable rates to sell goods.
In December 2019, a task force was formed by the Department of Agriculture, Cooperation and Farmers’ Welfare to establish a complete farmers’ database for better planning, tracking, policy formulation and smooth country-wide implementation of schemes.

Potential global outsourcing hub

Small arable land against cultivation
Inhabitants make agricultural inputs important.
There is a huge opportunity for agri-input segments such as seeds and nutrients for plant growth.
Commercial seeds account for a small percentage (25 per cent) in India and a huge demand for quality branded seeds is expected.
As a big outsourcing centre, multinational retail majors are looking at India.
A rare opportunity for entrepreneurs, including foreign investors, to access the Indian food processing sector is the establishment of food parks.
As of 2019, out of the country’s 40 licensed mega food parks, 18 are operational.
The World Bank approved Rs 3,000 crore (US$ 429.25 million) in Sept 2019 to finance mini and mega food parks in the country.

Market Drivers

The Key Drivers for SMEs in the Indian agribusiness Industry are

Introduction of Contract Farming

The introduction of contract farming has also created a positive impact on the agriculture industry. By growing private sector investment in agriculture, contract farming decreases the pressure on the central and state-level procurement structures and also provides ample opportunities for SMEs to get into the segment. It also provides SMEs with greater exposure to world-class agricultural-related mechanized technologies.

Emergence of Modern Retail

A significant driver for the agricultural industry has been the advent of modern retail. Modern retail helps remove middle men from the distribution chain, while providing farmers with better remuneration. Organized retail helps farmers to sell their produce directly to modern organized retail networks, allowing them to get a better price than local small-scale vegetable markets.

These distributors have also begun to sign supply agreements with different farmers that further guarantee a minimum income for them. In addition, these agreements help farmers minimize waste, transport costs and the availability of fresh food products to customers.

Establishment of Rural Banking and Credit System

The establishment of a rural banking and credit system has also played a key role in the agricultural industry’s growth. The transformation of agriculture from subsistence to commercialization, along with the use of modern inputs, involves investment in the farm. The availability of credit has reduced the constraints on certain inputs such as crops, fertilizers, pesticides, hired labor, etc.

Market Restraints

The Major Factors restraining the growth of the SMEs in the Indian agribusiness Industry are

Entry of Global Agribusiness Firms

The main issue is the entry into the Indian trade market of global agribusiness firms, particularly the retail sector. There is no doubt that global companies carry technology, capital and management skills with them, but there are many other aspects that need to be taken into account while keeping in mind

Enabling direct foreign investment in the retail sector. First, through their very strategy, multinational corporations increase their income by procuring or buying from the cheapest markets/areas/countries worldwide and indulging in dumping, leading to pricing out of domestic manufacturers and small local retailers.

Second, in the sense that there are a large number of farmers and a few traders, global agricultural trade is extremely asymmetrical. The top 10 companies’ dominance of global trade has been stated to be 84 percent in agrochemicals, 51 percent in crops, 24 percent in food retail, and more than 90 percent in trade in food grains.

Thirdly, due to the concentration of trade power among a few firms, the international decline in basic product prices in importing countries has not resulted in cheaper food.

Commodity Price Volatility

Price volatility associated with commodities adds to the operational complexities for businesses — particularly in case of pulses (compared with cereals), as highlighted in the graph below. In 2019, prices of pulses almost doubled and also witnessed major volatility.

High Operational Complexity due to wide regional preferences

Due to diverse regional references, India has a wide variety of regional food preferences with high operational complexity. Within Rice there are ten different varieties of rice, with a clear regional preference. Sona Masuri rice are usually eaten in Andhra Pradesh, for example, while surti kolam rice is preferred in Madhya Pradesh, kolam rice, and in Gujarat.

In terms of distribution, inventory control, etc., these regional preferences add to the organizational complexity. In the case of rice, as most consumption centers are closer to production centers, the complexity is still reduced. The operational challenge is greater for pulses, as the overlap between output and consumption is greater.

For instance, Gujarat, Maharashtra, and Madhya Pradesh are major production states in the case of moong pulse, while it is consumed primarily in Punjab, Haryana, and Himachal Pradesh.

Industry Challenges

Startups and SMEs necessarily have an associated risk factor. Start-ups in agriculture are therefore more vulnerable to risk. In terms of lack of awareness among start-ups of potential capital raising options, lack of understanding by the investor community as the sector does not have the glamour quotient associated with start-ups in sectors such as technology, telecommunications, entertainment, the agricultural sector faces additional challenges.

In addition, farmers, who are the key start-up buyers, are also wary of new technologies. It is a major challenge to sell goods and technology to farmers and it is one field where many startups and SMEs have not worked out a successful model. Aligning with the farmers’ needs and committing to improve productivity is not an easy task.

In addition, regulations in this sector are complicated as agriculture is a subject of the state with a strong central government control. For different stakeholders, this often causes uncertainty. While there is growing government support, the policies pursued are limited in continuity, which adds to the challenges.

In spite of these obstacles, however, entrepreneurs have been able to build creative businesses that show considerable traction. Companies are developing creative ideas that will provide farmers, investors, entrepreneurs and all stakeholders with significant value. The positive thing about this industry is that the scale of the market is massive, and it is possible to tackle the challenges facing it. If any start-up can solve even a few of the current challenges faced by the industry, multi-billion-dollar opportunities can be generated.

Technology Trends

The emerging technologies influencing the growth of the Indian agribusiness Industry are

Farming as a Service

Farming as a Service offers innovative, professional-grade solutions for agricultural and allied services via a subscription or pay-per-use model.

Several solutions are organized, successful reinventions of existing Practices, whereas others are inventions powered by tech.

The first FaaS category is Farm management solutions, which Provide information sharing, analytics, and tools for precision farming. This includes management of information among farmers, State, corporate, advisory and financial institutions.

The second FaaS category is the Production assistance, which Provides on-farm services in order to help development. This includes Rental of facilities, labor resources and energy services.

The third and final category of FaaS provides market access, Platforms that connect farmers to agrochemical suppliers and the buyers of their agricultural produce.

Such solutions have been introduced worldwide to include a Gateway to developments through the supply chain of agriculture.

Digital Agriculture

The use of digital technologies for incorporating agricultural production from the paddock to the market is digital agriculture. These innovations will provide resources and knowledge for the agricultural industry to make more informed decisions and increase productivity.

New and evolving digital technologies, such as robots, new packaging materials, biotechnology and digital and wireless data measurement technologies, weather tracking, animal monitoring, geospatial monitoring and the precise application of water and chemicals, provide opportunities to improve productivity in the agricultural sector.

Regulatory Trends

Some of the major regulations impacting the growth of the Indian agribusiness industry are

The Tribal Cooperative Marketing Production Federation of India (TRIFED) introduced 100 new Forest Fresh Organic Products from tribes across India into its e-marketplace in October 2020. (tribesindia.com).
Agri-lender Nabard (National Bank for Agriculture and Rural Development) proposed plans in October 2020 to create a subsidiary to provide guarantees for agricultural and rural development loans.
The government declared in October 2020 that it would put in place a shared data infrastructure for the country’s farmers. A popular database, along with land record information, will be used to incorporate PMFBY (Pradhan Mantri Fasal Bima Yojana), PM-Kisan and the Soil Health Card.
In December 2018, the Government of India approved the Agriculture Export Policy 2018. The new strategy was planned to increase India’s agricultural exports to US$ 60 billion by 2022 and to US$ 100 billion by a secure trade policy regime in the next few years.
The Government of India will provide Rs. 2,000 crores (US$ 306.29 million) to the Primary Agricultural Credit Society (PACS) for computerization to ensure that digital technology supports cooperatives.
The Pradhan Mantri Krishi Sinchai Yojana (PMKSY) was launched by the Government of India with an investment of Rs. 50,000 crore (US$ 7.7 billion) to establish irrigation sources to provide a permanent drought solution.

Other Key Market Trends

Public Private Partnerships are slowly coming together

Positive changes in the marketing aspects of farm produce, risk and uncertainty reduction, social mobilization, capacity building of farm families and economic empowerment of farmers have made the effect of the PPP concrete.

Knowledge Management
Creation of High-end Technologies
Building the resilience of farmers to environmental shocks and reducing threats and uncertainties
Mechanization of Farms
Social mobilization: development departments establish alliances through SHGs, Farmer Interest Groups, commodity groups, farmers’ clubs, and cooperative farmers’ societies to create a stronger social relation.
Strengthening efficiency

Impact of COVID-19 on Indian agribusiness Industry

All walks of life have been affected by the current health crisis around COVID19. The goal of countries has been to protect the lives of people suffering from the disease as well as frontline health responders.

Since the Corona virus attack created an unprecedented situation, governments have turned to action. India announced a three-week nation-wide lockdown till mid-April in the initial phase, which was subsequently extended for achieving adequate containment of the virus spread.

Concerns have been raised about the adverse effects of the COVID19 pandemic on the agricultural economy. This is India’s rabi season peak and crops such as wheat, gram, lentil, mustard, etc. (including paddy in irrigated tracts) are at or almost reaching maturity at harvestable level.

This is also the time when the farm harvests enter the mandis (market yards) by designated government agencies for assured procurement operations.

In addition, any significant disruption in the supply of perishable fruits and vegetables, dairy products, fish, etc. that has been mobilized to meet the rising demand of both the bulging middle class and urban and rural consumers will cause irreparable harm to all actors in the supply chain.

Measures adopted by Government to mitigate the risks involved with the Pandemic

The Indian Finance Minister declared an INR 1.7 trillion package immediately after the nation-wide lockdown was announced, largely to shield the vulnerable parts (including farmers) from any adverse effects of the Corona pandemic.

Among a slew of benefits, the announcement included the advance release of INR 2000 to farmers’ bank accounts as income support under the PM-KISAN programme.

The government has also increased the pay rate for employees working under the NREGS, the largest wage guarantee system in the world. Pradhan Mantri Garib Kalyan Yojana (Prime Minister’s scheme for the protection of the poor) was declared as part of a special scheme to take care of the needy population.

Additional grain allocations to registered beneficiaries have also been reported. A separate PM-CARES (Prime Minister’s Citizen Assistance and Relief in Emergency Situations) fund was also declared to provide cash and food assistance to citizens involved in the informal sector, mainly migrant workers.

Market Size and Forecast

The market size of agribusiness in India has been estimated at approximately US$ 323 billion in 2020. This is predicted to hit a market value of US$ 350 billion by 2022.

Cereals Market in India

The country’s cereals market is worth approximately US$ 0.4 Billion, and has been growing at an annualized rate of 3 percent for the last five years. Among cereals, rice and wheat account for approximately 85 to 90 percent of the overall market, both in terms of value and volume.

Since the advent of the Green Revolution, India has achieved food sufficiency in cereals with negligible imports. The Cereals Market is expected to grow at 3.4% in the forecast period to reach a market size of US$ 0.44 Billion in 2022. In terms of Volume, the current production of Cereals in India is estimated at 135.21 million MT.

Product	Size	Market	Basis of Differeniation
Flaked Rice (Poha)	US$ 2 Bn	B2C	Quality, Hygiene
Puffed Rice	US$ 2.1 Bn	B2C	Quality, Hygiene
Starch	US$ 0.3 Bn	B2B	Quality
Flour, Cereals and Others	US$ 1.8 Bn	B2B + B2C	Quality
Rice Bran + Oil	US$ 0.4 Bn	B2B + B2C	Quality, Hygiene	Brand Health

Dairy Industry in India

The Indian dairy industry is projected to expand to hit INR 9.4 trillion (US$ 0.12 Trillion) by 2020 at a CAGR of 15 percent Y-O-Y. With India already being the world’s largest dairy producer, the value creation and addition that has been characteristic of this sector can be attributed to its considerable growth.

In fiscal year 2019, milk production amounted to around 187 million metric tons, up from 176.3 million metric tons the previous year. The country’s milk production had a 6.5 percent rise over the previous year.

Meat Industry in India

The Indian meat market is rising at a 20 percent CAGR of US$ 44.5 billion and it will hit US$ 65 billion by 2022.

India consumes nearly US$ 45 billion of meat annually, 90% of which is controlled by an unorganized sector.

This is the only largest segment that has not been structured out of the overall US$300 billion grocery industry. The Meat Industry in India offers a plethora of opportunities for Organized players from the SME segment.

Fruits and Vegetables Segment in India

In the past five years, food spending has ranged from 26 to 29 percent (FY2015-FY2020). The demand for F&V was Rs. 7,600 billion (US$ 10 according to 2020 figures, with a historical growth rate of 12 percent. The projected size of the F&V market in 2010 was pegged at Rs. 3.000 billion to Rs. 3.200 billion, using the historical proportional share of F&V in total food spending.

India is F&V’s second largest market worldwide. The value of F&V in India will only increase in the future as the per capita consumption level of F&V in the country grows, far behind other nations.

The current production volume of Vegetables is estimated to be 59,472 Million KG in India in 2020. Potato production in India has been projected to be about 48 million metric tons during fiscal year 2020.

The other vegetables cultivated in the nation include, among others, tomatoes, onions, eggplants and cabbages. The country has an enormous export market as a leading producer of low-cost fruits and vegetables. Onions, mango pulp, fresh mangos, dried walnuts and fresh grapes are the major exports.

The total value of Vegetables in India is estimated to be US$ 51,865 Million in 2020 and is poised to grow at 7.2% in the forecast period from 2021 to 2022 to reach US$ 59,602 Million in 2022.

In 2021, revenue is expected to hit US$65,744m in the Fresh Fruits market. The market is expected to rise by 6.7 per cent each year (CAGR 2021-2022) to reach US$ 74,848 Million in 2022.

Top 10 Crops producing States

West Bengal

West Bengal is India’s largest food-grain producing province. It is renowned, followed by Andera Pradesh, Punjab, and Uttar Pradesh, for its rice production. It is also known for jute, sesamum, tobacco, and tea in the cultivation of rice.

The total output of rice in West Bengal is 146.05 lakh tons for a yield of 2600 kilograms per hectare. It falls under rice producing states in India. Including Mango, Litchi, Pineapple, Guava, and Orange, West Bengal is engaged in fruit production.

West Bengal is rich in food products, producing almost all products, including Cauliflower, Tomato, Cucurbits, Cabbage, Okra, and Brinjal. The main crops cultivated in West Bengal include rice, jute, and wheat.

Uttar Pradesh

Uttar Pradesh is in India’s top agricultural state and Uttar Pradesh’s rank has been included in India’s main state-wise crop production, bajra, rice, sugarcane, food grains, and many more.

It is followed by Haryana, Punjab, and Madhya Pradesh, and is among the top wheat producing states in India. There are 22,5 million tons of wheat in Uttar Pradesh, and the weather conditions are suitable for growing wheat. The land used to grow wheat in Uttar Pradesh is 96 lakh hectares.

The largest sugarcane hub is Uttar Pradesh, and sugarcane is the most widely grown crop in the world. Under hot and humid weather conditions, sugarcane rises, and Uttar Pradesh is best for that. It has 145.39 million tons of sugar cane and the state cultivates 2.17 million hectares.

Punjab

The most fertile state on earth is Punjab. In Punjab, it is best to make wheat, sugarcane, rice, vegetables, and fruits. The other name for Punjab is the Granary of India and the breadbasket for India.

Around 93 percent of the total productive land used for food grain production is used. The bulk of the land covered by wheat and paddy cultivation is in Punjab. And this field is growing throughout the year.

Punjab is India’s third largest producing state for farming crops. It is renowned for its irrigation scheme, which is ideal for agriculture. Punjab is also the third biggest maker of food grains.

Gujarat

In India, Gujarat is the fastest growing state. A wise development pattern was adopted by this state. They have invested in agriculture, oil, and industry, achieving double-digit growth. Gujarat’s climate is complex, and it is difficult to grow crops there. Manipulating crop environments by advanced management for high yields is one technique farmers may follow.

Cotton, groundnut, castor, bajra, tur, green gram, sesamum, paddy, maize, and sugarcane were produced by Gujarat. And Gujarat, followed by Karnataka, Maharashtra and Telangana, developed large-scale cotton. Groundnuts have also grown here.

Haryana

One of the main contributors to agriculture is Haryana. Approximately 70% of the local population are involved in agriculture. Haryana played an important part in India’s Green Revolution. With all of these, Haryana has a huge system of irrigation.

Sugarcane, paddy, wheat, and sunflower are some of the top crops produced in Haryana. And it is the 2nd largest sunflower producer in India. Haryana is also active in raising livestock. In India, 99.97 lakh livestock populations exist. On a daily basis, India consumes dairy products. It is a diet that is necessary. This is one of the top countries in India for agriculture.

Madhya Pradesh

Madhya Pradesh is known for its pulses production, followed by Maharashtra, Rajasthan, and Uttar Pradesh. It is famous for the production of soybeans and garlic, too. In pulse farming, Madhya Pradesh received considerable fame. The main sources of farmers’ earnings in Madhya Pradesh are wheat and maize. And urad, soybean, and tur are additional pulses.

Madhya Pradesh has the largest territory, so it has the best climate and soil conditions for a broad range of agricultural products. Madhya Pradesh’s agriculture sector is the backbone of the Indian economy. The agriculture sector in Madhya Pradesh has produced 65% of employment and is 1⁄4 of the GSDP (Gross State Domestic Product).

Assam

In India, Assam is highly dependent on agriculture. Assam ranks among the least developed states compared to other states. Assam’s near-economy is based on agriculture, and 70% of the population relies on livelihood income for agriculture. Tea is eaten on a daily basis after water in the world.

Assam is famous for manufacturing its tea. It is India’s largest tea producer, followed by Himachal Pradesh, West Bengal, and other states of North India. Nilgiri tea, Darjeeling tea, Assam tea, and Kangra tea are the most popular varieties of tea in India. Assam has risen to 52% of India’s total tea production.

Andhra Pradesh

62 percent of the population were involved in agriculture in Andhra Pradesh. There is more attention paid to the production of rice. In India, Andhra Pradesh accounts for 77 per cent of crop production. Jowar, bajra, maize, ragi, tobacco, pulses, sugarcane, and others are the other crops.

From the 1.5 million hectares of land used for horticulture in Andhra Pradesh. And approximately 720 thousand hectares of this allotted land are used for fruit production.

Karnataka

In Karnataka, the most important part of the overall economy is agriculture. Much of the state’s population is engaged in farming. Agriculture is strongly helped by the climate of Karnataka. Rice, maize, moong dal, red chili, sugarcane, groundnut, soybean, turmeric, and cotton are the Kharif crops of Karnataka. Mustard, sesamum, barley, wheat, and peas are Karnataka’s rabi crops. Karnataka ranks among the top farming states in India.

The state is famous for its coffee production, accounting for 70 percent of India’s total production. Karnataka has produced 222300 metric tons of coffee.

Chhattisgarh

Chhattisgarh is renowned for the Central India Rice Bowl. Rice, millets, and maize are some of the crops which are grown in Chhattisgarh. 77 percent of the area used for rice production is in Chhattisgarh. Chhattisgarh is totally rain-dependent. There is just 20 percent of the total area under irrigation.

Fruit Crops – Lime, Cashew-nut, Guava, Cheku, Mango and etc.
Vegetables Crops – Cucurbits, Cabbage, Beans, Cauliflower etc.
Spices – Ginger, Turmeric, Methi, Coriander, Chili, Garlic etc.
Flowers – Marry-gold, Gladiolus, Gaillardia, Gladiolus etc.
Medicinal Plants – Jamarosa, E.citridora, Pamarosa, Lemongrass etc.

Market Outlook

The ambitious target of doubling farm income by 2022 is projected to be achieved by Ndia. Due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing and cold storage, the agriculture sector in India is expected to generate better momentum in the next few years.

In addition, the increasing use of genetically modified crops is likely to increase Indian farmers’ yields. In the coming few years, India is expected to be self-sufficient in pulses due to scientists’ concerted efforts to obtain early maturing pulse varieties and the rise in the minimum support price.

There are many advantages to the adoption by the food processing industry of food safety and quality assurance systems such as Total Quality Management (TQM), including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP). Agri-based exports from India are likely to meet the US$ 60 billion target by 2022.

Distribution Chain Analysis

The Value Chain of the Agriculture & Food Segment is as in the below figure

Competitive Landscape

Due to the involvement of a few prominent players, the Indian agribusiness industry is highly competitive, along with many medium- and small-scale players (SMEs) accounting for market share.

JK Agri Genetics Ltd, HPC Biosciences Ltd, Nath Bio-Genes (India) Ltd, Dhunseri Tea & Industries Ltd, Raghuvansh Agrofarms Ltd, Goodricke Group Ltd, Kaveri Seed Company Ltd and Bombay Burmah Trading Corporation Ltd are main players in the Indian agri-business industry.

Competitive Factors

Key players in India’s agribusiness sector compete on criteria such as product quality and availability as well as technological advancement. In addition, as an effort to gain market share and expand their product portfolio, mergers and acquisitions are being pursued.

The following are some big investments and innovations in agriculture:

In March 2020, Fact, the nation’s oldest large-scale fertiliser maker, crossed the production and sales mark of one million.

In 2021, Rs. 700 crore (US$ 100.16 million) will be invested by Nestle India in the construction of its ninth Gujarat facility.

In November 2019, Haldiram entered into an agreement to e-tail its delicacies in the United States for Amazon’s global sale scheme.

In November 2019, Coca-Cola launched ‘Rani Float’ fruit juices to get out of the fizzy drinks trademark.

Key Market Players

Some of the key players in the Indian Agribusiness Industry include

Bombay Burmah Trading Corporation Ltd

The Bombay Burmah Trading Corporation, Limited (BBTCL) is a 150-year-old company. In 1863, as a public firm, the company based its fortunes on teak. A leading concern of the Wadia Group is the business.

It is the second oldest organization that has been publicly quoted. It is the largest sales-based agriculture company in India.

The BBTCL Group has a consolidated annual turnover of $1.2 billion. The Company has diversified its interests into tea, coffee, other plantation products, biscuit and milk products, components of automotive electric and white goods, weighing products, horticulture and landscaping services, dental, orthopedic and ophthalmic products for health care products.

Kaveri Seed Company Ltd

Kaveri is currently one of India’s fastest-growing seed companies, with a wide network of over 15,000 distributors and distributors spread across the country. With over 883 workers and a broad hybrid range of products.

With its renewed emphasis on R&D and a firm intent to invest in innovation by management to fulfill all brand commitments, the company is poised to go higher. It is the largest Indian seed company among the top seed companies.

Kaveri’s draught and disease resistant as well as high yielding hybrid and varietal portfolio includes one of the largest anthologies of crop germplasm in the world.

In cotton,
Grain, maize
Jowar, rice,
Bajra, as well as Bajra
Vegetables like Tomato and Okra

Goodricke Group Ltd

Goodricke Group Limited is active in tea processing and cultivation. Within 18 tea estates spread throughout West Bengal and Assam, the company operates and sells bulk tea in both domestic and foreign markets.

At its plant in Dooars, West Bengal, the company also manufactures Instant Tea primarily for the foreign market and has a good presence through its different brands in the Packet Tea domestic market.

Raghuvansh Agrofarms Ltd

The organization has been active in agricultural operations since its inception. The company is widely involved in the processing of organic vegetables, organic grains, and cereals. The Company has an integrated agricultural produce production, manufacturing and distribution plant.

The Company is also engaged in dairy farming, processing, distribution of dairy products and production of organic manure, in addition to the above. It is the fourth largest in India’s top 10 farming companies list.

Dhunseri Tea & Industries Ltd

Dhunseri Tea & Industries Ltd. (DTIL) was only engaged in the manufacture of tea until 2008-09 and then branched out into other segments. Tea is one of the Dhunseri Group’s oldest companies and has been the flag bearer for the last five decades.

DTIL extended its scope from 8 estates in 2003-04 to 10 estates in Assam in 2012-13. Consequently, the company is now one of India’s ten largest producers of tea. In Dhunseri Tea Estate (Assam) and Jaipur, the company’s tea packaging and blending units are located (Rajasthan).

Nath Bio-Genes (India) Ltd

Nath is a well-diversified company with interests in the fields of paper, crops, agro-research, biotechnology, pharmaceuticals & chemicals. Among the leading seed companies in India is Nath Bio-Genes.

Nath Bio-Genes is the first seed company to earn the ISO 9001 certificate in the Asia Pacific region. For large field crops, vegetable crops, and bio-stimulants, the business has an excellent selection of products and efficient pipeline products.

HPC Biosciences Ltd

HPC Biosciences Ltd. has several components that differentiate it from other agricultural companies, making it the market leader, especially in the crop rowing and broadcasting industries. HPC Biosciences Ltd. is proud to use a delicate balance between the new manufacturing process technologies and usable material usage.

JK Agri Genetics Ltd

JK Agri Genetics Ltd. (JKAL), a leading seed company with its headquarters in Hyderabad, Andhra Pradesh, was founded in 1989. (India). JKAL is one of the pioneers committed to serving the farming communities in the Indian seed industry. It is on India’s list of the top 10 farming firms.

JKAL is involved in the production, manufacture, processing and marketing of Cotton, Maize, Paddy, Pearl Millet, Sorghum, Sunflower, Castor, Mustard, Wheat, Sorghum Sudan grass, Fodder beet, Tomato, Okra, Chillies, and other seeds for vegetables. It is also listed in India as one of the top seed companies.

Strategic Conclusion

For multiple reasons, agribusinesses are important to India, such as their contribution to the economy, the number of people they hire, strategic food security reasons, supplying other industries with raw materials, generating demand for other industries, and inflation in more recent times.

References

Appendix

SMEs – Small & Medium Enterprises
SEs – Social Enterprises
MSMEs – Micro, Small and Medium Enterprises
GDP – Gross Domestic Product
GVA – Gross Value Added
FaaS -Farming-as-a-Service
Nabard – National Bank for Agriculture and Rural Development