A webinar was organized by Agribazaar on the theme, “Landmark reforms in Indian Agriculture: Investment Opportunities Arising in Agri-enterprises”. The supercharging webinar was promoted and covered by Krishi Jagran.
Many eminent personalities from the agriculture and allied industry took part in the webinar, and discussed the impact of present reforms in agriculture and opportunities arising due to it. The webinar was attended by almost 8,000 participants from 50 countries all over the world.
The main outcome of the discussion was that how India shifted from a policy maker for attaining food security, to a nation working for managing food surpluses. India has a huge potential for growth in the agriculture sector, but due to some regulatory constraints it was unable to do so. The present reforms by the NDA government will go a big way in improving agriculture growth. Young agripreneurs and agritech start-ups need to come forward with innovative ideas to boost this sector, so that the vision of our PM Narender Modi of ‘Atmanirbhar Bharat’ is fulfilled.
Importance of Agriculture sector and investment opportunities
Mr. Sanjay Agarwal, Secretary (Agriculture), Government of India (GOI) put light on the importance of agriculture in India. He said that agriculture contributes around 15% of GDP and employs around 50% of the workforce. Due to combined efforts of Farmers, GOI and various other stakeholders, India has emerged as world’s largest producer of spices, pulses, milk, tea, cashew, jute, banana, jackfruit etc.
He further added that India is also the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds in the world. We rank fourth among the agrochemical producers and top five in terms of net agricultural exports in the world.
Despite all these strong points, we were lacking somewhere in boosting our agriculture sector. Developing a strong agri ecosystem is a key focus area of the government and thus the GOI has now shifted its policies to create a consistent and standardised agri-framework across the country, attract capital and technology to our agrarian economy and improved market intervention for agriculture buyers and sellers.
The GOI has passed following three new ordinances to reform the agriculture sector:
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The Essential Commodities (Amendment) Ordinance, 2020 removes the restriction on stocking food produce
It aims at stability of market prices for consumers and better price realization for farmers. This will give an uplift to investment in storage facilities, cold storages etc.
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Farmers Produce Trade and Commerce Ordinance, 2020 removes the monopoly of the APMC and allow anyone to freely purchase and sell agriculture produce
This will improve transparency and better provision of services in market places and inter-state trade of agri-produce. The ordinance will provide big boost to investment in setting-up of e-trading platforms.
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Farmers Agreement on Price Assurance and Farm services provides legal framework for agreement between farmers and buyers
This ordinance will provide faster payment, consistent income for farmers. Contract farming will get a boost through it, and improve the use of modern technology in Indian agriculture.
Through recent reforms in agriculture sector, a win-win environment will be created for all the stakeholders like Farmer Producers Organizations (FPOs), Logistic players, Warehousing, Credit providers, Insurance providers and Retailers and end consumers. Free Agri-market will unlock opportunities for new investments in following areas –
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Digital Commerce platform
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Insurance
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Logistics
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Credit/Financial institutions
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Assaying and Grading
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Warehousing and Cold storage
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Food processing Industry
Endorsing the statement of our honourable PM, “Agriculture has a key role in making India 5 trillion USD economy”.
Atmanirbhar Bharat Abhiyan through Food Processing Industries
Ms. Pushpa Subrahmanyam, Secretary (Food Processing Industries), GOI revealed the potential of food processing industries in Atmanirbhar Bharat Abhiyan. Through food processing we can increase the value of the product and help farmers in attaining more profits. At present only 2% of fruit and vegetables, 6% of poultry, 8% of marine and 35% of milk is processed in India.
Around 95% of processing takes place in the micro enterprises in the country. To formalise them a centrally sponsored scheme has been launched in partnership with state governments, with a financial outlay of INR 10,000 crore. The scheme aims to formalize and upgrade 2 lakh enterprises through one district-one product strategy.
India has a great potential to grow and become world leader in food processing sector. There is a rich and diverse raw material base, 18 operational Mega Food Parks, 57 mini food parks, and 289 approved cold chain projects.
Strong domestic demand, supply side advantage and export hub are the main market drivers in the country. Various support are provided by GOI to boost investment in food processing sector:
Enabling Liberalized Regulatory Regime –
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100% FDI through automatic route
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100% FDI for trading for Indian made products
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Investment Facilitation Portal/ Invest India desk
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USD 263 million fund with NABARD for credit
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Income tax exemption on capex
Enabling Progammatic Support
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Financial assistance under Pradhan Mantri Kisan Sampada Yojana (PMKSY) with outlay of INR 6,000 crore
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Support for infrastructure creation like Mega Food Parks, Agro Processing Clusters, Cold Chain, skill development, Food Testing labs
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Value Chain Development through Operation Greens for TOP crops, Backward Forward linkage
Reforms-Initiatives-Opportunities in Fisheries sector
India is the second largest Aquaculture Producer and fourth largest Sea Food Exporter in the world. Dr. Rajeev Ranjan, Secretary (Fisheries), GOI said that the fisheries sector grew @ 10.87% in recent years. The fisheries sector has a great role to play in boosting the agricultural income, contributing around 1.24% to National GVA and around 7.28% to agriculture GVA.
He further added that, fish is an affordable source of protein, nutrition, income and livelihood. Realising the importance of fisheries in India a separate department was created in 2018-19 and a new Ministry of Fisheries, Animal Husbandry and Dairying was set up in 2019-20.
The government is taking every step to boost the fisheries in the country through schemes like PM Matsya Sampada Yojana (PMMSY), Fisheries infrastructure Fund, and World Bank funded project for strengthening fisheries value chain.
Reforms in Fisheries sector to boost investment –
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Fisheries and Aquaculture Infrastructure Development Fund
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Kisan Credit Card facility for Fishers
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National Marine Fisheries (Regulation and Management Bill)
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Aquatic Animal Disease and Health Management Bill, 2020
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INR 3,600 crore Aquaculture Exports and Economic Prosperity
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INR 1,605 crore for Modern Deep Sea Fishing Vessels (Make in India)
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INR 3,500 crore for Livelihoods, sustainable and responsible fishers
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INR 2,222 crore for Quality brood seed and feed
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INR 2,400 crore for value chain creation
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INR 600 crore for Integrated Aquaparks
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INR 5,000 crore for Harbour Development on PPP models
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INR 640 crore for Seaweed Cultivation
Opportunities in Animal Husbandry
Mr. Atul Chaturvedi, Secretary (Animal Husbandry), GOI put light on the vast avenues in dairy sector. Technological know-how, infrastructural support, human resource, compassion for growth and business friendly government are the five factors that aid in business development in the country.
At present, under the leadership of NDA government there is a huge scope in development of dairy sector. He further added that in recent years, the dairy sector grew @ 8.5% per annum. India produce around 22% of the world milk, but only 34% is processed.
Through initiatives like Animal Husbandry infrastructure development fund for processing and Dairy infrastructure development fund for cooperative sector, the GOI aims to bring more investment into this sector and boost farmers income.
There is a huge scope for collection, processing and chilling units in the country.
ITC plans for Atmanirbhar Bharat
Mr. S. Sivakumar, Group Head – Agri and IT Businesses at ITC also put forward his views on the recent reforms by GOI. Mr. Sivakumar told that the present reforms by GOI can be broadly seen from two perspectives: Transformative reforms and Opportunities for future.
Transformative reforms
Trade and Commerce ordinance will go a big way in promoting the agri-trade in the country. Farming Agreement ordinance will enable more contract farming, quality production and crop diversification. This will help the Indian farmers to cope up with the adverse effects of climate change and depleting natural resources. A boost to digital platforms will bring many digital players in the field of agriculture.
Opportunities
With the present reforms, there is a great scope for businesses to prosper. Food processing and Logistics business will see a great growth, as there is a huge jump in the demand of processed and packaged food in the market. Businesses involved in delivering farmers service like crop advisories, inputs etc. will see great investments from Agritech Start-ups.
He further added how an initiative of ITC, i.e., ITC e-choupal has been helping farmers and reducing the gap between lab to land, by making farmers aware of new technologies in farming. The initiative also links directly with farmers for procurement of agricultural and aquaculture products.
CDC Group Plans for Atmanirbhar Bharat
CDC group work in close collaboration with businesses and funds their initiatives. Mr. Srini Nagaranjan, Managing Director and Head of Asia at CDC put forward his views in the webinar. He said that despite lack of fresh water and fragmented land areas, the way Indian agriculture has progressed in really praiseworthy. The climate change, erratic rainfall and recent locusts attacks, has brought in front of us new challenges to shift our strategies.
Indian agriculture contribute 15% of GDP, yet there is lower interest from private sector mainly due to limited opportunity to invest, lack of high quality sponsors and diversification.
Agri processing, aquaculture, private mandis and agri-trading centres has a huge potential to grow. He further added that the time has come to treat farmer as trader, and not just a producer of food products.
Godrej Agrovet raises concern for Oil Palm production and Poultry sector
Mr. Balram Yadav, Managing Director, Godrej Agrovet said that agriculture comes under the state list in India, thus the state is the keyholder on agricultural activities. He advised various secretaries in the panel to resolve the issue jointly at GST council meeting, so that the benefit of reforms reaches to all the farmers in the country.
He further added that, more than one million farmers are associated with poultry in the country, thus for the welfare of poultry farmers there is a dire need of Poultry Board at the central level.
He also urged the Secretary (Fisheries) to pay attention towards the new species introduction and post harvest processing, so as to boost fish exports from the country. On lines of China and Vietnam, there should be a policy for open water bodies fisheries as many ponds are being constructed under NREGA in India.
India imports around 60% of oil palm. Mr. Balram showed grave concern over this issue and urged secretaries to kindly look forward for amendment in Oil Palm Act, so as to review contract for oil palm. There should be no state intervention in oil palm production, so that the business can develop and India can become self-reliant in Oil Palm.
Secretary (Agriculture), assured Mr. Balram Yadav of opening a platform for partnering with private players in oil palm production, so that the nation becomes self-reliant in oil production.
Temasek International in the webinar
Temasek International is an investment company based at Singapore. Mr. Anuj Maheshwari, Managing Director, Temasek International put forward his views on how we can connect food and agriculture sector and start up India. The way agriculture is growing, it’s sure to become a very profitable sector in future.
Conclusion
Mr. Akhilesh Tilotia, Head, strategy and New Initiatives, Axis Bank concluded the session with a beautiful speech. The way Indian agriculture shifted from a production oriented sector to a demand-oriented sector is really remarkable. With recent reforms in the Agriculture sector by GOI, it is sure that the investment will increase in this sector and farmers will get improved returns. The agriculture sector will play a very important role in attaining the vision of “Atmanirbhar bharat”.
Image source - Google
