Agri-business Financing-New Credit Products-New financing opportunities

1. Agri-business Financing-New Credit Products-New financing opportunities By Mr.R.Prabha,General Manager,Canara Bank Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

2. Introduction • Food production in India has been stagnating since 2001-02. • It is time we started the next round of green revolution • Agri Business and Agri Processing should drive the second round of “Green Revolution” with diversification of crop production. • Developed countries have converted their agriculture into Agri Business. • India is in the threshold of transforming its agriculture into Agri-business. Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

3. Introduction…contd • India is the second largest producer of fruits and vegetables in the world. • It has a huge emerging domestic market with the change of lifestyle of middleclass and high potential for exports to developing as well as developed world. • Agri Business to create job opportunities in rural areas. Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

4. Transformation of Agriculture into Agri Business – major issues Policy Initiatives Technology Investment Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

5. Financing opportunities in Agri Business – strength of Indian Banking • Vast outreach - a Branch network of 68116 with an average population per Bank Branch of 16000 Rural 31958 Semi Urban 15375 Urban 11498 Metropolitan 9285 • High domestic saving rate of 28.1% of GDP • Deposits – USD 400.77 billion (Rs.1753174 Crores) * • Advances – USD 264.67 billion (Rs.1157807 Crores) * • Specialized Branches and experienced personnel • Leverage the strength of banking for investing in Agri Business/ Agro Processing/Food Processing. • * Conversion rate adopted is 1 USD = 1 INR 43.745 Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

6. Indian Agri- Business as an investment opportunity • Corporates – Both Indian and Multinational – identifying agro processing as an opportunity. • Scope for Joint ventures with global players. • Investment by venture capitalists. • Huge potential for infrastructure creation like cold storages, chilling plants, market yards and handling facilities. Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

7. Financing opportunities for Commercial Banks • Post harvest management • 1/3rd of fruits and vegetables produced in the country are wasted due to poor cold storage and handling facilities. • Cold storages – controlled atmosphere cold storages for fruits and vegetables. • Milk chilling plants • Refrigerated vehicles • Creation of market yards and other infrastructure • Financing quality testing and certifying agencies • Labeling and Packaging industry • Food parks with common facilities for storage, effluent treatment etc. Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

8. Post Harvest Management – financing opportunities • Finance against goods stored in warehouses – in association with Collateral Management Companies. • Bill discounting facilities to agriculturists against acceptance of Bill of Exchange by the purchasing company. • Opportunities in price risk mitigation using commodity derivatives. Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

9. Agro Based Industries – financing opportunities Contract farming Sugar cane Cotton Broiler Poultry Seed Production Grapes Vegetables Gherkins Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

10. Agro Based Industries – financing opportunities • Project Financing Appraisal of Projects Syndication of Loans Long term Loans in local currency and foreign currency for buildings, machinery, technology with debt equity ratio of 1:2 to 1:3. • Working capital facilities • Export financing • Term Loans for Upgradation of existing units to adopt modern technology/HACCP / EUREP GAP Standards Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

11. Agro Based Industries – financing opportunities Some examples Meat and meat products Marine exports Egg powder Vineries Seed production Bio Technology Fruits and vegetables processing Food grain processing Extraction of oleoresins Natural dyes Extraction of aromatic compounds Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

12. Agro based industries – emerging opportunities • Processing of vanilla for extraction of vanillin • Conversion of sugar cane to ethanol • Extraction of bio-diesel Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

13. Agri Business - Other opportunities for banks • Channel financing and financing modern retail outlets • IT kiosks in rural areas • Private Agri -extension initiatives • Organic farming • Consultancy for project formulation and appraisal – as a fee based activity Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

14. TO SUM UP… • Transforming Agriculture into Agri-business and value addition of agricultural products is a huge opportunity for developing countries like India, which has the potential to transform its business landscape . • With low labour cost, varied climatic conditions and diversity of crops, India has the potential to emerge as the food processing centre of the world. • There is a need to bring in world-class technology and infrastructure in food processing through a co-ordinated effort by the Government, Corporates, entrepreneurs and the financial institutions. • Banking Industry in India, particularly Canara Bank as a major Bank in the Public Sector, is committed to make this happen. Presentation by R.Prabha, General Manager, Canara Bank on “Agri Business Financing – New Credit Products – Financing Oppprtunities”

15. Thank you