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Gulmohar Hall, India Habitat Centre, New Delhi May 17, 2013

Gulmohar Hall, India Habitat Centre, New Delhi May 17, 2013. Partnering for Rural Prosperity Farmers as Owners. 1. Investment in agri value chain with business rigor by active involvement of farmers. DSK Rao, Director, GISPL & Former Coordinator AGRIBUSINESS KNOWLEDGE CENTRE(AKC)

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Gulmohar Hall, India Habitat Centre, New Delhi May 17, 2013

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  1. Gulmohar Hall, India Habitat Centre, New Delhi May 17, 2013 Partnering for Rural Prosperity Farmers as Owners 1

  2. Investment in agri value chain with business rigor by active involvement of farmers DSK Rao, Director, GISPL & Former Coordinator AGRIBUSINESS KNOWLEDGE CENTRE(AKC) (A PPP initiative between NAARM (ICAR) & Gyantech Information Systems Private Limited( GISPL) , Hyderabad)

  3. Agenda • India’s Agricultural Scenario • 3 Years of AKC PPP Project Initiative • Linking Unorganized to Organized – Indian Success Case Stories • Issues in Replicating Success Case Stories in Agriculture • Current Investment Models • Suggested Investment Models for Improved Value Chains • Way Forward

  4. Agenda India’s Agricultural Scenario 3 Years of AKC PPP Project Initiative Linking Unorganized to Organized – Indian Success Case Stories Issues in Replicating Success Case Stories in Agriculture Current Investment Models Suggested Investment Models for Improved Value Chains Way Forward 4

  5. India’s Agricultural Scenario India with 329 million hectares of geographical area and 140 million hectares of cultivable land in 638,000 villages falling in 250,000 Panchayats in 616 districts of 28 states & 7 union territories with 15 Agro Climatic Regions and 127 Agro Climatic Zones capable of growing around 400 crops  with around 4000 varieties by  125 million farmers of which 87 million farmers are poor and dependent on rain fed farming. . With the RTF(Right-to-food) policy announced by GoI, how do we feed the 1230 million population of India today and 1326 million by 2020 on a sustainable basis with 62% of it’s population dependent on Agriculture vis-à-vis 3% in developed countries 5

  6. India’s Agricultural Scenario The Challenge is how do we reach these 125 million farmers especially the 87 million farmers who are small and poor and increase their productivity for their improvement and reduce spoilage & quality of Food to ensure Food Security. How do we enable backward & forward Value Chaining of agriculture produce? Modern India has an Organized tech savvy retail sector with a huge appetite for matured Supply Chain which needs to be fed by an Unorganized farming system! With 100% FDI open for Multi Brand Retail, how do we go forward? 6

  7. India’s Agricultural Scenario Unlike establishing Supply Chains and forward / backward linkages for other commodities, agriculture produce has a great challenge due it’s perishable nature and need an entirely different approach in terms of it’s procurement, transportation, Storage and finally retailing. GISPL/AKC has been studying on finding solutions to the Indian Scenario for the last 3 years which is very much different from that of developed countries 7

  8. India’s Agricultural Scenario India’s food grains production itself is about 250 million MT. It is very essential that we produce, protect, preserve and bring to our plates the Food with least wastage. It is estimated that 30% - 40% of Horticulture Produce gets wasted in this country due to various reasons at an estimated Rs.40,000 Crore value. 8

  9. Agenda India’s Agricultural Scenario 3 Years of AKC PPP Project Initiative Linking Unorganized to Organized – Indian Success Case Stories Issues in Replicating Success Case Stories in Agriculture Current Investment Models Suggested Investment Models for Improved Value Chains Way Forward 9

  10. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) A Public Private Partnership (PPP) agreement for activities related to an Agribusiness Knowledge Centre initiative is signed between NAARM, Hyderabad and Gyantech Information Systems Private Limited, Hyderabad on 17th April 2010 valid for a term of three years from the date of the agreement. The basic agenda is to leverage the academic research & infrastructural excellence of NAARM & Industry contacts & Business understanding of GISPL for creating Agribusiness Knowledge for the benefit of Farmers, Academia, Research & Industry for Value Chaining. GISPL has to Fund & pay for all expenses related to administering the AKC as per the agreement. 10

  11. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) National Workshop on Agribusiness Knowledge Exchange: A 3 Days National Workshop on Agribusiness Knowledge Exchange attended by about 40 leading companies like ITC, SGS, Coromandal etc was conducted from 22-24th April 2010. The Industry strongly expressed the need to have mature Supply Chains established by Backward Integration of Farmers and also Quality Packaged Foods. AKC had several rounds of discussions with Industry till date and the Industry is looking forward for further interactions with FDI in Retail getting announced. There is a huge opportunity in waiting which would be addressed by AKC Private Limited 11

  12. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 12

  13. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 13

  14. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 14

  15. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 15

  16. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 16

  17. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 3 Days Seed Management Course: AKC has identified with it’s interaction across India with Farmers & Industry that besides problems with Soil fertility eroding due to excessive commercial farming & lack of irrigation facilities, the major challenge being faced is availability of Quality Seed to the farmers at their doorstep when needed. According AKC had successfully planned & organized from 23rd September 2010 – 25th September 2010.. A comprehensive ‘Seed Manual’ was prepared along with ICAR Institute Directorate of Sorghum Research. AKC was highly appreciated by the industry for this course attended by representatives of major seed companies, academia, research institutes, NGOs & farmers. AKC Private Limited proposes to leverage the huge opportunity in Agri Input Sector including Seeds, Organic Inputs etc 17

  18. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 18

  19. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 19

  20. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 20

  21. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) Incubation Cabins Facilitation October 2010: In order to have industry at the door step of NAARM, AKC had extensive discussions with the Industry and could convince Five companies to apply for Cabin Space at NAARM with a vision of joint projects with AKC. AKC Private Limited proposes taking up Mango Project similar Apple Project at Uttarakhand by SJS India. Futureage Infrastructure Mozo Bamboo Plantations Sahaja Aharam Shree Jagadamba Samiti (www.sjsindia.org) Yes Bank 21

  22. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) Agribusiness Knowledge Exchange Portal: GISPL along with it’s technical partners has designed, developed & hosted a state-of-art ICT Portal Prototype www.akcnaarm.com for AKC to facilitate knowledge exchange among farmers, academia, research & industry in December 2010. Twenty man months of effort has gone into developing this proto type portal. With necessary funds, this Portal can be enhanced as a multi lingual, mobile enabled Agribusiness Exchange. There are several enquiries to upgrade this Portal and AKC Private Limited will definitely enhance the portal. 22

  23. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 23

  24. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 24

  25. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 3 Days National Mega Meet on Technology Commercialization : AKC has observed that farmers/producers/processors are to a large extent unaware of the latest research happening and are facing problems. AKC has accordingly planned & organized 3 Days National Mega Meet on Technology Commercialization was conducted from 29th September 2011 – 1st October 2011 with Delegate Fee Charged from participants. Around 50 technologies from ICAR, ICRISAT, Private Companies, NGOs & Individual Innovators were presented which were assessed by a specially formed ‘Expert Team’ drawn from CIIE, IIM(A), Honey Bee, Innovation Companies etc. A report is prepared identifying 5 Technologies for Immediate Commercialization. There was also an Exhibition of all the Technologies including Rural Technologies/ Innovations. The meet could be conducted commercially successful even after paying NAARM for Delegates Boarding & Lodging. AKC Private Limited is excited about the huge potential that exists in ‘Technology Commercialization’ 25

  26. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 26

  27. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 27

  28. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 28

  29. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 29

  30. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) MoU with eFreshIndia: AKC has observed during it’s visits to various districts that farmers are indiscriminately using Fertilizers without understanding the NPK composition of their Soils & also have no idea on the quality of water they are using for irrigation. This is resulting in poor yield per acre along with high input costs. AKC was approached by eFreshIndia Hyderabad which operates a Mobile Van Rythu Ratham 208, which goes to farmers fields and does Soil & Water testing there and then. They also provide Digital Extension Services by show casing through projection system best agricultural practices. AKC had entered into a MoU with eFreshIndia on 19th October 2011 to help in promoting ICAR institutes content etc. AKC has visited few districts with eFreshIndia for the benefit of farmers 30

  31. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 31

  32. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) SHGs & Farmer Group Support: AKC has provided support in terms of Value Chaining, Labeling Standards, Packaging Practices, FSSAI Registration Support & GAP to SHGs & Farmer Groups. Accordingly visits were made to Aepur, Gundrampalli (Nalgonda District) , KVK Gaddi Palli & Aroor. AKC had provided support to SHGs for Value Chaining ‘Moringa Leaf Powder’ & ‘Nava Dhanya Ragi Malt’ besides understanding the farmer’s problems. These visits have given access to Farmers/ Farmer Groups and their problems. AKC Private Limited proposes to leverage this knowledge for creating Backward Integration with Farmers/ Producer groups 32

  33. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 33

  34. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 34

  35. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 35

  36. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 36

  37. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 37

  38. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) Amla – T market linkages: Dharani Forestry & Orchards Limited, Guntur, AP which manufactures ‘Organic Certified’ Amla – T and which is also Ayush Approved had approached AKC in June 2012 to help in taking the product to Retail Chains. AKC suggested product modifications in terms of usage & packaging and could successfully introduce the product in Food World Outlets in Hyderabad after several iterations from March 2013. 38

  39. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 39

  40. 3 Years of AKC PPP Project Initiative(17th April 2010 – 16th April 2013) 40

  41. Agenda India’s Agricultural Scenario 3 Years of AKC PPP Project Initiative Linking Unorganized to Organized – Indian Success Case Stories Issues in Replicating Success Case Stories in Agriculture Current Investment Models Suggested Investment Models for Improved Value Chains Way Forward 41

  42. Linking Unorganized to Organized – Indian Success Case Stories Apple Project IndiaIn India, Apple farming is practiced only in the high hilly areas. Villages there are very scattered. Again apple orchards are located in the remote hill-slopes in dense forests, where there are no modern ways to reach. In some cases the orchards are 12 km inside the forest. Till few years back, it was common for the farmers to grow apples in the age old conventional methods. Though apple production generates good revenues they hardly took care of right time of harvesting, transportation and selling in the market at a reasonable price. This was due to small and marginal farming, harsh and unpredictable weather condition, lack of communication and last but not the least “know-how” of the quality and economy. Fortunately, a new approach of socio-economic development approached to the Nagaon area of Uttrakhand and Jubbal area of Himachal Pradesh through Apple Service project India which is initiated by a consortium of partner organizations named Fresh food technology (FFT)[1], Agriculture & Organic Farming Group(AOFG) and Shri Jagdamba Samiti (SJS). The advent of ICT with this consortium has changed the scenario of cultivation and the livelihood of these unreachable villages. The farmers are convinced that ICT  is the right step for supporting agriculture, and it is a new dimension in the field of agriculture and how it plays an important role in giving solution to the challenges faced by the farmers as well as the organization and also to accelerate earnings.FFT is consortium leader for the project, AOFG is overseeing the organization of farmer groups and coordinating the implementation in the field and Shri Jagdamba Samiti (SJS) support’s the farmer groups’ directly on location. This consortium is under the financial assistance of SHGW (A Private Dutch Foundation).  42

  43. Linking Unorganized to Organized – Indian Success Case Stories GISPL/AKC has been working relentlessly to formulate a Indian centric strategy to establish backward/forward linkages to the 400 different crops grown in India with about 4000 main varieties. Fortunately, an excellent technology driven model for procurement, transportation, storage / processing and distribution of a perishable item ‘Milk’ is available in the form 43

  44. Linking Unorganized to Organized – Indian Success Case Story ANAND, Gujarat. Technology driven milk collection centers at the village level procure Milk from the Unorganized Villagers after ‘Testing’ for FAT Content & SNF and transported in chilled vans for ‘Pasteurization’ and processing which includes preparation of Value Added Products & making milk sachets to store them in cold storages and distributed in cold vans in a Organized manner! 44

  45. Agenda India’s Agricultural Scenario 3 Years of AKC PPP Project Initiative Linking Unorganized to Organized – Indian Success Case Stories Issues in Replicating Success Case Stories in Agriculture Current Investment Models Suggested Investment Models for Improved Value Chains Way Forward 45

  46. Issues in Replicating Success Case Stories in Agriculture On scrutiny by GISPL/ AKC on why these excellent models can not be replicated for other Agriculture Produce, it is observed that the major bottleneck is in establishing the Unorganized - Organized interface equivalent of the Apples/ ‘Milk Testing & Collection Centres’ for the 400 crops which are cultivated randomly to some extent by the farmers. Grading & Sorting and Quality Identification & Aggregation becomes a Challenge with fragmented uncontrolled current farming practices. 46

  47. Issues in Replicating Success Case Stories in Agriculture Coupled with this, we also have different ‘optimum’ temperature & humidity levels for each of the agriculture produce. Handling & Transportation and associated Wastages also become important, especially in case of F&V items. Due to these factors, it may be interesting to know that the current 5400 storage facilities in the country with a capacity of 23.66 million MT which is about 9% of Food Production are partially utilized! 47

  48. Agenda India’s Agricultural Scenario 3 Years of AKC PPP Project Initiative Linking Unorganized to Organized – Indian Success Case Stories Issues in Replicating Success Case Stories in Agriculture Current Investment Models Suggested Investment Models for Improved Value Chains Way Forward 48

  49. Current Investment Models For Small & medium Farmers in India , it is observed that there are currently 5 avenues for Funding namely PACS – Primary Agricultural Credit Societies which are supposed to be providing Short Term Crop Loans, but are in many places found to have become defunct and/or highly politically inclined SHG Finance from Government Agencies 49

  50. Current Investment Models For Small & medium Farmers in India , it is observed that there are currently 5 avenues for Funding namely 3. Micro Finance from MF Institutions/ Scheduled Banks/NABARD 4. Money Lenders 5. Agri Inputs etc on Credit with buy back of produce in lieu 6. Private Finance has not entered this sector in a Big Way due to the associated risks 50

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