Wednesday, January 31, 2018

Agriculture Value Chain Finance: A perfect model of agriculture finance

Govt is providing a lot of finance to rural and agriculture sector in India but leakage is a major issue. Finance doesn’t reach where it must reach.  Untimely farmers come under pressure of debt.  That leads to suicide, farmers agitation, damage to public property, Increase in a bad loan, loss of business. Govt finance to farmers and farmers starts cultivation and he gets good return/production but at the end of cropping season, he doesn’t find the buyer. All his challenging work, investment, uses of resources goes to waste. The problem of farmers and agriculture reaches at the same point. In other case govt finance to agriculture industries but they don’t get good quality of raw and material and channel to sell their produce. Finance goes to waste.  Due to the shortage of agriculture produce inflation keeps rising. 

In case of onion in MP (India) during last year. Farmers were throwing onions, started agitation and forced govt to purchase. Govt purchased it at Rs 6/Kg. without proper storage, all the material decomposed, and onion went into waste.  A lot of public money was wasted in this entire process. Ultimately it led to the shortfall in supply. After two months same prices of onions reached at peak prices and customers were buying the onion at Rs 50/Kg. Stockist enjoyed this opportunity.

Govt and financial institutes must come with policy or product where it finances the entire agriculture value chain. First of all govt should identify the value chain and then invites it's all stakeholders if they are agreed then finance should be given to the entire agriculture value chain. At the end of the day, profit will go to pockets of all stack holder. If farmers sell tomato at 2 Rs and retailer sell the material at 40 Rs then after deduction of value addition expenses at every point, the profit should be calculated. This profit should be dispersed among all stack holders of entire agriculture value chain. Govt can also give incentive to stack holders involved in the value chain.
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Agriculture Value Chain Finance
This system will give the guarantee to production that it will reach to end consumer. If production will reach to the consumer then the complete chain will not fail. There can be some point of bottleneck. There will be proper arrangement of backup. It will create regular employment. This will create rural and agriculture employment. 50% Indian population is engaged in agriculture sector this 50 % population is largest consumer base of agriculture produce.  This system will empower producer and at another side, it will also give purchasing power to the largest consumer base.

Thursday, January 25, 2018

Agriculture land consolidation in India

In agriculture there are two types of cost; fix cost and variable cost. Variable cost vary with size of land but fix cost is per unit cost involved in running individual agriculture farm unit. At this time most of agriculture finance, provided to small marginal farmers is going to fix cost, but agriculture finance is given to cover variable cost. This is basic loophole in agriculture policy making process where polices are talking about variable cost, but actual result depends on fix cost in the case of small and marginal farms. Here I would like to mention in simple way that fix cost are related to run “Farm”/ “Farmer” and variable cost are related to do “Agriculture”.

Govt of India has taken one step closer to understand actual problem by renaming agriculture ministry as Ministry of Agriculture and Farmer welfare. Agriculture land consolidation can help agriculture in many ways and it can make Indian agriculture profitable and productive venture.

Profitable farm size: When land size is small then per unit fix cost increases and after a certain limit it overlaps the variable cost. After that limit, farm can’t be profitable even production from that unit is very high. Farm size should not be below profitable size.

Agriculture FinanceAgriculture finance in India is collateral land based. If one farmer is having one acre land near to Delhi or in NCR he will get more finance from bank in comparison to farmer who is having same type of land located 400 km far from Delhi. Agriculture finance should be crop based on recommendation of local agriculture department. Expenses for wheat cultivation and gram cultivation will be different. In small land holding farmer take loan up to his maximum credit limit but he cultivates low investment crop, and major part of agriculture finance goes to living expenses of farmer, after production that farmer will become defaulter. If farm size will be bigger than most part of agriculture finance will go to variable cost and it will be more productive.

Maximum land utilization: Small farms make small - small individual units. Every unit requires some operational space, space for path, space for farm activities, irrigation facilities. In bigger unit there will be fully utilization of complete land and operation land requirement will low. Bigger farm unit will be more productive with same inputs and production of small farm units.

Crop cultivation planning: Crop cultivation planning becomes easy in larger land size. There can be better planning of crop selection, mix cropping, period of crops. There will different options for long term and short-term crops. In small land holdings farmers don’t have many options, he has to follow what his neighbor is doing.

Better utilization of farm resources: In small farms there are lot of seepage in resources. Water get destroyed, fertilizers get destroyed, labours don’t have full day work. With bigger farm size  there will be complete utilization of available resources.

Employment generation: When land holding will be big then task related to primary agro processing will be completed at farm itself and it will be profitable for farm. Local villagers will get employments through these activities. Now a day’s farm produce goes to city or some urban location and primary agro processing related to jobs are transferred to those cities.

Cheaper Farm inputs : With bigger farm size there will requirement of large quantity farm-inputs, Farms can attract more companies for supply of quality farm inputs. There will be more competition. and farms will have more negotiation power. Agri input companies will cut the margin of middle chain and farms will get farm inputs at cheaper price. 

Low cost of cultivation : When fix cost will come down then cost of cultivation for per unit land will come down, seepage will come down, utilization of resources will increase, farm inputs will be available at cheaper price. With same conditions per unit cost of cultivation will come down and profit will increase.

Better price of farm produce : Farms will be in condition of negotiation for better price for their farm produce. Bigger farms can attract industrial buyers. Unnecessary middle men will be eradicated from supply chain. Seller will get better prices and buyer will get farm produce at cheaper price.

In agriculture land consolidation bigger question will be ownership of land and management. Farms can be converted into Private limited companies and these companies will issue shares to current owner with respect to their current land ownership. Ownership will be transferred to that farm production company.  Existing farmers will be shareholders in company and current farmers will be actual owner. Exiting farmers can be covered under social security scheme of Govt and they can be employed for farm job. Farmers and Agriculture will be separate. Govt can make separate policies for each of them.  Productivity of existing agriculture land will increase, cost of crop cultivation will come down, revenue will increase and ultimately profit share of existing farmers will increase. 

Sunday, January 21, 2018

Primary agriculture processing will profitable for farmer

Prices of agriculture commodities and produce are volatile in nature. Just after production farmer goes to market and try to sell his agriculture produce. He has three major disadvantages with just after harvest selling; peak supply period, non-graded material decreases final value of his produce, self-life or perishability of produce.

Value addition: If farmer goes for primary processing of his agriculture produce, it adds some value as buyers have to do same processing with that agriculture produce after buying from farmer. By primary processing farmer can do primary value addition to his agriculture produce which is necessary for further processing. This value addition will increase his earning from same agriculture produce. His quality will give an advantage.     

Reduction of Extra cost:  A lot of transportation cost and time is involved for transpiration of agriculture produce from production point to processing point. Generally, there is some waste material with main agriculture produce, if that waste material is separated from agriculture produce at farm level then it will save cost for complete value chain.  It is very easy to segregate waste material at first stage from agriculture produce. Once waste material will come in value chain then it will bite some share from profit earned from agriculture produce.

Bypass peak arrival time: By doing primary processing of farm produce by farmer, it will consume some time. During this processing period peak arrival will come down in market and after this period arrival for that agriculture produce will go down. farmer will get premium price for same agriculture produce by avoiding the peak arrival period and quality agriculture produce.

More profit  during increasing price: Profit share in case of upward movement of price of agriculture produce. If farmer store his farm produce after primary processing. It will reduce his time consumption in selling process of agriculture commodity/ farm produce. Quality agriculture produce get decent price in upward price movement. In the case of pulses, if demand of processed pulses increases during festival period specially Diwali of other festival. End consume require processed pulses, farmer can directly sell his pulses to end consumer if it is properly processed and he can earn money by by-passing the cycle of trader, stockist, processor, whole seller retailer and consumer. He can get premium price at that time. 

Hedging against price falling. When price of agriculture produce fall sharply then first effect comes to raw commodity and prices is quoted low for normal commodity.  If same agriculture commodity is processed and value added, then farmer will have time to exit before prices fall effect come to final agriculture produce. In the case of Tomato, prices of tomato fall sharply but price of source of tomato-poori don’t come down in same proportion.

Storage time increase. It is very hard to store processed material. If the material is processed properly then we can store agriculture produce for long time.  In case of potato if broken potato are mixed with unbroken potato, then broken potato will start to decompose fast and it will increase the decomposition of good potato.

Farmer must understand benefit of value addition of agriculture produce. He must add value to his agriculture produce up to his highest limit, so that he can increase his profit share from his agriculture produce / farm produce / agriculture commodity.

Friday, January 19, 2018

Stray cattle /animal management in agriculture

Stray animal / cattle is emerging as a major challenge in agriculture specially in India. They destroy crop at different stages. Farmers keep running behind cattle and cattle keep running behind green farm. Farmers have to keep watching their farm to save their farm from attack of stray animal.

In fact, stray animal is not hazardous or harmful. Due to hunger it keeps moving here and there. It eats less food but destroy more crop due to movement. Sometimes it destroys mature crop then loses are high.

To keep their farm safe, all farmers stay awakened whole night to keep their individual farm safe. This problem can be solved at community level. Generally, farmers send animals from one village to another village. Animals of two three villages make a group of 40-50 animals. This group enters in a farm and destroy crop very fast due to movement. Instead of above action farmers can make a stray animal yard in every village. On an average hardly, there will be 10-20 animals in each village.

Generally, there is village panchayat land or some grazing land or some other public land in every village. If there is no grazing land, then at village level two or three neighboring farmers can make a animal yard on joint land. 1/2 acre land is sufficient for that. Now the question is food and take care.  Village can collectively arrange straw for cattle and water.

Benefit 1: If cattle are open and stray then generally they make 10-time loss of what they eat due to movement during grazing. Now these cattle will be feed collectively then these cattle will not make loss to farms.  

Benefit 2: Farmers will not have to make overnight monitoring of their farms. They can make a normal monitoring of their farms. They need not to worry for three four months

Benefit 3: Last benefit is the most important. These cattle will give nutrient rich manure in return. Generally dry straw takes 4-5 months to decompose totally. If the cattle will eat this straw within 12 hour it will convert into dung. This dung will decompose within 15-30 days and same material can be used in farms as manure.

Cattle are symbiotic in nature for farmers. Due to individual effort and poor management stray cattle seems a problem. If it is managed properly then this is not a problem. Community level problem is solution is beneficial for farmers. It is effective way to enrich the organic carbon and other micro nutrients in farm soil.  

Thursday, January 18, 2018

Is aloevera cultivation profitable ?

Aloevera is a medicinal plant. It is widely cultivated throughout world. There are many species but only few species are useful. Aloevera is a multiyear plantation crop.  Leaves of aloevera is used as production of aloevera gel. Aloevera gel is used in many health problems. It is used in cosmetics. It is used as health drink.

 It is a three-year’s crop. After the plantation we can take crop up to three years. After three years we have to re plant baby plants.  In one acre 10,000 plants are planted. After six-month leaves are ready to harvest as per climatic condition.

Leaves can be sold to any herbal juice manufacturing company or any ayurvedic medicine making company.  Framer can install a small gel extraction unit in farm. Gel form save money in transportation and its is easy to transport and self-life is more than green leaves. In market green leaves are sold at SR 4-5 Rs /Kg. Juice or gel is sold at Rs 30-35 Rs /Litre in bulk. If farmers can invest in branding and packing, then he can sell it at Rs 80-100 Rs /Litre. I market aloevera gel is sold in many flavour.

Farmers can increase their income through Aloevera cultivation in waste land where opportunity cost of land is zero or low.

Tuesday, January 16, 2018

What can agriculture expect from union budget?

This is last full budget of Shri Narendra Modi led NDA Govt. As per expected there will be a lot of things for poor, farmers and common man as all there are major vote contributor. For the benefit of farmers Govt will give through agriculture and for common man govt will give through industry. What does farmer or agriculture need?

Govt must come with complete supply chain assistance which will assist both farmers and common man. Govt must come with two or three crop specific supply chain system in every district.  It will require farmers for production, common man for employment and industrialist for run this concept.

District “X” produce a lot of tomato. First of all, govt must ask agri input companies for quality seeds and micro nutrient fertilizers as per general soil analysis of that district. It will require an expert team of agronomist for tomato cultivation so that attack of disease and insect can be controlled at first step.  Assist farmers in better production. During the cropping period govt must assist industry to establish sufficient storage facility (it can be permanent or temporary) and all possible processing facilities, which can be pulp extraction, sauce making, dice tomato canning, drying, powder making and long-term tomato storage. 

Now question is consumption. Govt must come with concept of promotion of this processed tomato. There must be some GST benefit for a period to ready to eat or processed. Food. Once people will start to use these production then demand will increase slowly and slowly. Dehydration if most stable form which can be stored for long time with zero additional charge. Dry form will also easy to transport. But it must cover complete value chain from production to end consumption.

For some time ready to eat packaged food must keep out of GST. These processed food can be distributed to mid-day meal program. It will save cost of mid-day meal preparation at every school and children will get nutritive food. Processed food have maximum solution of inflation, price falling, storage, consumption, wastage. 

This is just an example there can be several other idea. In current budget govt focus on food processing, with complete value chain setup ( from production to consumption) and consumption of processed food. 

Sunday, January 14, 2018

Throwing Potato or other produce on road is a solution for Indian agriculture and farmer ?

Every year we get some news from various parts of country that farmers are throwing agriculture commodities of road. It is embarrassing that farmers produces a commodity after a lot of hard work, investment of time, money and farm inputs; after production he has not option except throwing commodity on road. Every year we read such news like burning sugarcane, throwing milk, crushing tomato, throwing potato, throwing onions, throwing vegetables. 

There are two major problem behind it first unplanned cultivation and poor market price due to peak arrival. Generally, these incidents happen in perishable items, where self-life is very short in open climate conditions. Farmers start cultivation of a common commodity/ crop by seeing his/her neighbor. When climatic conditions are in favor and everything goes well then crop fruit very well and at the time of harvesting it becomes hard to find buyer.  Due to poor warehousing and storage condition it becomes hard to store the commodity for longer times. He has period of three – four months to action even the govt has time to act. When things go out of control then farmer start throwing and govt starts to buy produce for throwing.

Last year in Madhya Pradesh farmers were throwing onions then govt purchased onion from farmers and stored where ever they find place to put like railway stations, schools, mandi yard. After 20-25 days onions started to decompose and there was bad odor /smell everywhere. It was hard to stand near such places where onion was laying and ultimately that onions had decompose/ thrown. 

During the period of cultivation govt / farmer may act as per position of estimated production. Farmer must develop some infrastructure for himself at his farm so that he don’t need to run to nearest market just after production. At the same time govt must develop some temporary infrastructure where estimated production can be stored this infrastructure can be used also used by buyer/traders.  Govt purchased onion at the rate of Rs 6/Kg and govt had to bury / destroy the onion of Rs 600 crore. This Rs 600 crore was sufficient to develop of storage facilities. After 4-5 months onions was sold in market at the price of Rs 50/Kg due to this loss.

The same thing was happened in Haryana last year. Farmers throw tomato on road after bumper production.  Onion can be dried, potato can be dried, and tomato can be processed in sauce. But due to lack of complete understanding of supply chain, whole produce was destroyed.

Govt assists for one step but don’t act for next step. It was ok for procurement of Onion but after that there was no planning and complete wastage of public fund. Another example is potato of UP. Last year there was bumper production of potato. Govt assisted traders in construction of cold stores for potato. Everything was working fine farmers stored their potato in cold store. After one-year next crop arrived in market due to poor price it was not economic for farmers to pick potato from cold stores and cold stores thrown potatoes on road when rent of cold stores were higher than cost of potato stored in ware houses.

Third example if pulses. Govt procured pulses from market for store to control inflation. There was not pulses in market and prices of most of pulses reached around Rs 100/Kg. After that costly pulses were imported from foreign countries. This year market is fully saturated with and now pulses are being sold below the MSP in local market. Most of pulses are being sold below 10-20 % of MSP in agriculture markets.

In both the cased complete supply was not ensured. Govt acted in pressured and forgot the next step. In the case of onion if govt has invested another Rs 100 crore then onion of Rs 600 could have been saved and consumer would not have to buy onion at Rs 50/Kg. in another case if UP Govt has focused on processing of potato before arrival of new crop then farmers would not have thrown potato on road. 

Instead of focusing only on storage or only infrastructure or only processing, govt must work on complete value chain from production to consumption. Govt must come with long term policy on promotion of processed food consumption in India. Industry needs a long-term incentive and promotion. India is a country with large population, so consumption is not a big problem. Only problem is how can food reach to consumer in consumable form from producer to end costumer.

At lower side instead of throwing on road farmers / traders should throw in farm so that it can convert into manure and land can become rich in organic manure. Throwing on road is not a last solution.

Friday, January 12, 2018

Are bad agricultural loan and food subsidies killing Indian agriculture ?

Today agriculture is stock in-between the producer and consumer. Where farmer is producer and he is poor and common man is consumer and he is also poor.  If prices of wheat or any food commodity rise, then it hurts common man at another side if commodity prices falls then it hurts farmers. At one side govt is trying to curb the inflation of food product with control distribution, crube on private stocking, importing of commodities, promoting import by lowering duty, banning export and a lot of food subsidy. At another side Govt is trying to help farmers by procurement and govt, minimum support price, opening the export and putting duties on import and a lot of farm subsidy. 

Govt is expanding a lot of money on both side for making farmers and consumer both happy. Every year there is farm loan waiver and every year there is distribution of food commodity at a nominal price.

To whom we are making foolish? 

One thing is clear we can’t make both farmers and consumers happy at the same time.  But we are killing agriculture and food business at the same time. At one side Govt has keep agriculture and farmers separate and at another side govt must separate the agriculture commodity business and consumer. So that agriculture and agriculture commodity business can take breath, and both can compete with international business scenario. 

On ground farm loan is going to lifestyle expenses in rich states. it going to living expenses in poor states. There is same situation with food subsidy. Food subsidy is going to importers, traders and other middleman. Bad agriculture loan has reached to Rs. 60,200 crore rupees in year 2017 with increase of Rupees 24,800 Crore in comparison to year Rupees 48,800 crore of year 2016.Govt is also giving a lot of food subsidy through PDS system.

Govt must come with Aadhar based social security scheme where every citizen can be covered. Farmers and consumers both will cover in same scheme and there will be no seepage in the fund meant for consumer and farmers. At another side investment in agriculture and other business will secure. Both the business will run independently without interfere of Govt. 

Wednesday, January 10, 2018

Govt is coming with a integrated agriculture policy on Organic agriculture.

India is leading agri production country in world. Green farm spread a natural beauty in country. With increasing use of pesticides agriculture is polluting with hazardous chemicals. These chemicals are reaching in our food through different food chains. Not only in India it is becoming a global problem. There is huge demand of organic food products. Govt is committed to increase the revenue of farmers through organic farming. There is enormous potential in organic agriculture products export. In next level central govt is coming with idea of promotion of export oriented organic will give a boost to export of organic products. 

As per commerce ministry potential or organic agriculture / organic farming still unexplored. States are tying at there level but there is huge policy level requirement to boost the export oriented organic production. Govt is working on policy to explore the complete potential of export of organic food products and organic farming in India.

Agriculture Ministry, Commerce Ministry and food processing ministries are jointly working on it and preparing a policy.  Commerce ministry with establish some dedicated centre in different states which will assist organic farmers in organic farming and make them capable to brand, promote and sell their organic food products in potential global market. 

Commerce minister Shri Suresh Prabhu addressed the third meeting of Council of Trade Development and Promotion organised in New Delhi, capital of India. He addressed that “ There is requirement of new agriculture policy which must be focused on export of value added products to potential international destinations, so that our farmer can increase their revenue and income by capturing the international market of organic food products and  organic agriculture. 

He has also asked state govt to explore the various possibilities to increase the export of value added agriculture products in their respective state. There is enormous potential in production of organic agriculture produce. organic farming is major value addition which can multiply the farmer income with same resources and crop.

Govt is assisting farmers in organic farming, training, certification, branding, transportation, marketing of organic produce under “Paramparagat Krishi Vikas Yojana”.  Under Paramparagat Krishi Vikas Yojana more than 2,00,000 lac Hectare of agriculture land has covered and there are more than ten thousand clusters. In addition, there is dedicated Mission Organic Value Chain Development for north Eastern states, which is promoting entire organic value chain for organic farming from production to market of organic food products.

In India organic agriculture promoted under NPOP ( National Program for Organic Production). India organic agriculture standards are known as NPOP. India Produce more than 1.35 Million MT certified organic produce on 5.71 Million Hectare certified organic land for organic farming. Other than Paramparagat Krishi Vikas Yojana Organic agriculture is promoted and supported by other schemes like Mission for Integrated Development of Horticulture, Network Project on Organic Farming and Rashtriya Krishi Vikas Yojana. There are various certification bodies in India. These bodies certifies the Organic produce after successfully following of organic agriculture method and time to time strict audit. Export of organic produce is monitored under guidelines of APEDA.

What is stevia ? Is this a safest alternate of Sugar ?

Generally people ask , what is stevia ? Stevia is a medical plant. It is a plantation crop. It has successfully grown in India.  Stevia sweetener is 300 times sweeter than sugar. stevi is used to extract natural sweetener. Stevia is a natural sugar substitutes. Stevia is only natural sugar free sweetener alternate to sugar.

Green stevia leaf is dried, and it is grinded in green powder form. Stevia plant can easily survive in Indian climatic condition. There are many artificial sweeteners available in market. Artificial sweeteners not good for health.

Stevia is good for diabetes patient. Sativoside is good sweeteners for diabetics. Sugar is restricted for diabetes patients, they can easily use stevia. In green powder stevia in the raw form. There are number of stevia benefits. It is a healthy sugar substitute.

Many companies are selling stevia online. Stevia powder is available in tables, liquid and dry green leaves form.  Now question arises is stevia safe? yes stevia is safe, and many countries have approved it as natural sweetener.

Stevia is a best sugar alternative sugar alternative. Some extra health-conscious people go for organic stevia powder so that they can ensure that they are using pesticide free material. Stevia is a best sugar substitute in comparison to other artificial chemical sweetener.

Many products are available in market as artificial sugar. They are not sugar, they are chemicals. After sugar stevia is a best sweetener.  In Europe people have successfully done experiment of baking with stevia

Monday, January 8, 2018

Stevia farming Consultancy

Stevia farming is increasing in India. Stevia is one of the most profitable crops for  coming future. As the crop is only source of natural sugar free / calorie free sweetener. People are being less hard worker that why they need calorie free substitute of sugar. Artificial sweeteners are problematic for  long term consumption. In the countries like Japan and Korea stevia sweetener contribute 50% market share. Stevia crop is propagated by seedlings. 

We can provide you stevia seedling (plants) .You will require 30,000 seedlings per acre. We provide complete consultancy from cultivation technology, planting material supply, nutrient management (manure), water management (drip irrigation installation), and the most important one the Buy back. We can also provide buyback facility before starting the farming to the growers so that they can be ensuring at marketing side.

In the consultancy we will assist you in
  • Understanding the basics of Stevia crop
  • Farm visit
  • Soil and water sampling of your farm
  • Land Development
  • Manure and other farm input supply
  • Irrigation system installation
  • Planting material supply
  • Pest management
  • Drying of the leaves, Buyback facility
  • Export market development
  • Processing of the leaves.

We are leading Agro Technology and Agribusiness consultancy provider. We strongly believe in business ethics. We have highly professional team of subject matter specialist of agriculture and allied disciplines. We believe in truly consultancy with independent and profitable solutions. For us agriculture is the base of development, height of development, strength of development, depth of development. For a long term sustainable social & economical development agriculture must be the axel. Agriculture development must environment friendly, sustainable, efficient use of available resources and non hazardous.

We provide Agro technology and Agribusiness consultancy through better utilization of your resources, value of your money, independent consultancy, cost effective, profitable solutions and complete satisfaction without any deviation.