Agribusiness in India
There is continuous development in the agriculture sector and so the agribusiness in India is also on the boom, there is a whole agribusiness system to continuously develop the agribusiness sector. The agribusiness industry is expected to grow at a CAGR of 7.91% in 2024-2029. Due to the rise in the agribusiness industry in India Agribusiness management is also on the rise, agribusiness management is the study of business skills and knowledge about the technical knowledge that is needed in the agribusiness the supply chain management, operations in agribusiness, microfinance, agribusiness entrepreneurship, and many more.
Now let’s get more insight with the below article on how the evolution of the agribusiness concept has been done.
What is agribusiness?
The word “agribusiness” is derived from two words that are agriculture and business. Agribusiness refers to all the activities that are done from procuring raw materials, and manufacturing the final product to distribution of the farm supplies, (it is the process of production operation on the farm) and storing, processing, and distribution of the farm commodities.
There is a whole agribusiness system that is involved in the agribusiness involved in the coordination of all the activities from production, processing, storage, marketing, financing, and distribution of the agricultural commodities.
What is the status of Agribusiness in India?
The food demand is growing in India due to the increasing population in the country. The projected overall food demand will grow at 2-3% in 2025. We have an idea that India is a major agricultural producer of major agri commodities. Agriculture is the biggest employer in India and this is understood by the Indian government and all large firms that everything else can come down but agribusiness is the sector that will remain constant or will increase but will never go down. Let’s have a look at the past when in 2020 during the Corona period in the world every market and every sector was suffering but agriculture was the one sector that was not affected by that.
The recent developments in the technology in Indian agriculture make agribusiness a suitable choice for many new entrepreneurs, and the Indian government is taking full charge to improve this sector so that Indian agriculture becomes self-sufficient as well as we will be able to export more agricultural products out of the country.
The government of India has set some targets,
- To increase the farmers’ income in India
- To make Indian products widely available to the whole world
- To become a self-sufficient country
The Indian government has implemented various schemes to support and promote agribusiness in India as it has coming opportunities for a growing country like India. Schemes such as Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), Pradhan Mantri Fasal Bima Yojana (PMFBY), Agriculture Infrastructure Fund, and Credit facility to agribusiness entrepreneurs, and many more.
Several advancements have happened in agriculture which boom the agribusiness in India as well as technological advancements that are integral to attaining sustainability. Satellites, GPS, Sensors, Robotics, Smart irrigation, drones, and automation these technological advancements help in precision agriculture with effective use of resources.
Another big advancement in the agriculture world has happened is Blockchain technology where anyone in the intricate supply chain system of agriculture can know about where the product has been born and where the product is consumed.
There have been several domestic and international investments pumped into the sector of agriculture. In recent years private investments have boomed in the last four years, a report states that agritech startups will jump 2-fold to $4.6 billion in financial year 2022.
Growth of the sector with new policies implemented by the Indian government in agri sector
Recognizing the significance of agribusiness in India’s economy, policymakers have taken major steps on a series of reforms aimed at liberalizing the agricultural sector. Initiatives such as the Agricultural Produce Market Committee (APMC) Act reforms and the introduction of the Electronic National Agriculture Market (eNAM) have aimed to create a unified national market, thereby enabling farmers to fetch better prices for their produce. Additionally, schemes like Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) provide direct income support to small and marginal farmers, bolstering their financial resilience. This will ultimately make the Indian farmers strong in financial and educational terms and thus the agribusiness sector will also rise in the country because if there is a strong farmer community in India this will help the new agribusiness start-ups as well to grow.
Rise of Agri-Startups in India
The entrepreneurial spirit is booming in India’s agricultural landscape, with a growing ecosystem of agri-startups driving innovation and disruption. These start-ups influence technology to address various challenges faced by farmers, spanning from access to credit and market linkages to post-harvest management and logistics. Platforms facilitating farm-to-fork supply chains, agritech solutions offering predictive analytics, and fintech startups providing credit facilities are transforming the way agriculture is practiced and perceived in India. The rise of agri-startups not only injects dynamism into the sector but also attracts investments, signaling its immense growth potential.
There are several Agribusiness start-ups in India which are:
- Absolute, founded in 2015 provides 100% natural and non-GMO products with a total revenue of $42.85 M.
- Apna Godam, founded in 2016 is a warehousing, Financing, and E-Mandi facility with a total revenue of 3$M.
- Agrowave, founded in 2017 facilitates transportation, logistics, Supply Chain, and Storage with total revenue of $5.09 M
- Agostar, founded in 2013 is an agritech, rural E-Commerce, retail, advisory, exports, and agri inputs
Like these there are several other new start-ups in the country and many more are coming which shows how this is a booming industry in the coming years.
Export Opportunities in the agribusiness sector
India’s agricultural skill extends beyond meeting domestic demand, presenting opportunities for export and global integration. With a diverse range of agro-climatic zones and a rich agricultural heritage, India claims an excess of agricultural commodities with export potential.
From rice and spices to fruits, vegetables, and processed foods, Indian agribusinesses are tapping into international markets, capitalizing on the growing global demand for quality and exotic produce. Strategic trade agreements and collaborations with other nations facilitate market access and raise the agricultural positioning of India as a key player in the global agribusiness field.
Challenges in Agribusiness in India
Despite the remarkable progress, India’s agribusiness sector struggles with several challenges that need attention. Issues such as fragmented land holdings, inadequate infrastructure, post-harvest losses, and climate change-induced risks pose difficult hurdles to the sector’s growth and resilience. Addressing these challenges necessitates concerted efforts from all stakeholders, including policymakers, industry players, farmers, and academia.
Investments in infrastructure development, research and development, farmer education, and risk mitigation measures are vital to unlock the sector’s full potential and ensure inclusive growth across rural India.