Agriculture as Corporate Business

Agriculture in India is considered to be the backbone of our economy, but not considered as a potential job/business… I don’t know if I can get married if I were a farmer… But the reality is other wise… Agriculture is a great potential business and we can help create lots of jobs with the help of it…

It is true that agriculture in India is becoming a challenge and we keep hearing/reading  lots of news about farmer deaths… Currently I’m working on a project with my friend Vijay Krishna… We are planning to venture in large scale agriculture & benefit from economies of scale…

There are two types of farmers; one is farmer with big farm land & money and one with small land & less money… Farmer with small land has bigger challenges and there are challenges for some well to do farmers too…

Let me start by telling the challenges & simultaneously solutions too…

Fertilizers and Seeds: This has been a challenge for small farmers and for many big farmers (cash rich) to source these products on time & end up procuring them when prices are high…

Solution: When we have a huge land bank our consumption will be more and we can gain better discounts and can work out credit terms for purchase of huge volumes… Also we can have the luxury to procure them when they are cheap and stock them…

Sourcing of Manpower: This is one big challenge for Big Time farmers and to some extent for small farmers too… Agri products are time borne and harvesting has to be done on time else it will result in huge loss… It is big challenge to source people because everyone will need people at the same time as harvesting time is common & since the demand is high the wage also increases because of our urgency…

Solution: There are machineries which can help harvest huge acres of lands within days… But these machines are expensive which farmers can’t afford to buy… Again when we have huge land bank we can buy these machineries and improve efficiency doing right things at right time…

HR in Agriculture: Agriculture jobs are unprofessional, unorganized and are disjoint units which makes sourcing & coordinating with people to get work done very challenging… Also we need to source different people for different skills, which results in time loss and productivity loss…

Solution: We need to train people in Agriculture and help them to gain a steady source on income and make the sector organized, by giving them frequent training and improving their standard of living… Currently people work on daily wage basis… We must train them on different skills so that we can hire them and pay them on a monthly basis…

We are working ways to coordinate with HR professionals and train them in agriculture and in turn make them interact & collaborate with Agri universities to train and mould people with the type of skills we need…

Risk from Cattle & Theft: We have to keep a vigil on the crops from being destroyed from cattle and from thief’s… This brings down yield of the crop…

Solution: We must fence the field and work with security agencies to guard the fields… Also this can be done only when we have big land base which can be added in our ROI…

Selling of commodities: Once the harvesting is done we have the yield, we make money by selling the commodity… Most farmers don’t get information on price and they sell it for lesser price or they will be compelled to sell to meet their ends or to their repay debts… Even if they have information they might not have the facility to stock the commodity…

Solution: We can have a separate team to get information on commodity prices, fluctuation and we can build warehouse to stock the commodities and we can sell it when the prices are high…

Also there are many more challenges like excess water or deficit water supply… We can over come this by storing excess water and work on efficient supply chain methods to carry the surplus to water to draught farms…

Over all this one is very big and challenging project, we are planning to bring in professionalism by bringing HR, Finance, Admin, Marketing, Accounts and Operational functions and improve efficiency & productivity…

We are currently working on the project report as we need huge funding to make this a reality… We are planning to take debt and equity route to meet our needs…

There are lots of advantages to convince investors like

• There are lots of government subsidy
• No income tax on income from agriculture
• Growth in consumption/demand on food products
• Returns on Investment are high…
• Also we have a contention that we have fulfilled our Social Responsibility…

We don’t want to wait till we finish the project report… We are planning to start this in a phased manner and start with a small module which will help us to build a brand and reputation…

To start with we are planning to start with paddy, by procuring the yield from different farmers, stock them and sell them when the price of paddy is high… To start his we need an initial investment of Rs.20 lakh or 2 million INR… Though we can raise this capital ourselves we are planning to form a consortium of people and take investment from them and start it… As this will help us to learn how to manage investors and we have an opportunity to create & develop relationship and build a trust… Also with this experience & credibility we can approach Banks, VC’s, PE’s for investment…

You can be a part of this initiative by making a small investment… We are planning to collect Rs.50,000/- per head ($1100 USD)… You can also help us by promoting this post by sending email forwards, by posting it in your blog and through other social media initiatives… Please email me to get more information about this project…