Entrepreneurship Can Transform the Face of Agri-business in India Entrepreneurs who can transform the face of the rural economy have failed to emerge in rural India.

By Rajesh Aggarwal

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With 60 per cent of India's population still engaged in agriculture and allied activities, economists and policy makers often talk about the need for creating new work avenues and industries to shift a major segment of this population out of agriculture.

However, this is not the only solution to the economic woes of India's rural poor. Apart from generating new sources of jobs and income, it is equally important to bring about transformational change in the agribusiness sector to augment incomes, create more sub-industries within the agricultural sector and help the rural poor add to their agricultural resources.

Most agricultural outliers are forced to migrate to nearby towns and cities in search of work, often in the unorganized unskilled sector. This highlights the need for developing more innovative mechanisms in the rural economy that boost employment opportunities in the agri sector.

The success of cooperatives in India, particularly Gujurat's Dairy co-operative and Maharashtra's sugar co-operative are examples of what innovation and entrepreneurial thinking can do for the rural sector.

Enterprising young entrepreneurs who have flooded urban India with startups in recent years have unfortunately neglected the rural economy. Or to put it this way, entrepreneurs who can transform the face of the rural economy have failed to emerge in rural India.

Not only in developing alternative sources of employment, entrepreneurship can also help radicalize farming techniques and bring innovation to improve yields per hectare.

Smart farming is the need of the hour. Biotechnology can be also utilized in agriculture for benefits by increasing the health of the soil and reduce the intake of the nitrogen intake.

The sectors that can benefit hugely from entrepreneurial intervention are food processing and packaging, preservation of seasonal fruits and vegetables, seed processing, flower farming in addition to crop farming etc.

Agro based industries can flourish in rural sectors where labor is abundant and labor cost is low. Small and medium enterprises set up at rural level to supplement traditional farm income in a big way and create alternative sources of income.

Time for Agricultural Startups

As discussed above, India today is emerging as a major startup hub with the urban sector giddy with new entrepreneurial energy. Unfortunately, the agricultural sector has remained out-of-ideas and out-of-mind.

The government has already initiated to offer attractive incentives including easy loans, insurance schemes and tax benefits to farmers-cum-entrepreneurs.

Developing entrepreneurs in agriculture can immensely benefit Indian economy by

  • Reducing the burden on agriculture
  • Generating employment opportunities for rural youth
  • Reducing the need for migration from rural to urban areas, thereby reducing pressure on urban cities etc.
  • Increasing individual and national income

Sectors where entrepreneurship can help the agribusiness:

1. Food processing

Agriculture-based industrial products account for half of all exports from developing countries. However, most of them involve exports of raw material as against developed countries whose exports mostly comprise processed goods. By continuing to operate at a low level of value chain, we are losing income and production. An entire food processing industry can be developed in rural areas, augmenting income and employment.

2. Floriculture

In a number of cases flower farming can be done on small tracts of land. In fact, bulks of flowers are cultivated on "micro farms'. Farmers can utilize a part of their land to cultivate seasonal flowers alongside regular conventional crops.

But, this needs markets in the vicinity or processing and preservation units. Entrepreneurs having knowledge of flower cultivation and marketing can set up parallel industries in fertile rural lands.

3. Pisciculture

Fish farming is practiced by a lot of farmers to augment their incomes. However they do so on amateurish and small scale basis. A conscious business effort to develop small pond fish farms in rural areas can enable pisciculture to become a valuable sector in the rural economy. Fish cultivation on market scale needs some knowledge and boosting entrepreneurship in the sector can make a difference, as done in the western countries.

4. Farm technology

Dependence on outdated and inefficient technologies lead to poor productivity and low income. While large scale farmers have adopted modern technology on a major scale in India, most small farmers still rely on age-old farming techniques with mostly manual methods.

Boosting entrepreneurial minds in agriculture can boost productivity by incorporating modern technologies in the farming sector. With increasing awareness and technology the risk of monsoon and the price trends in the markets can be taken care of.

Rajesh Aggarwal

MD, Insecticides India Limited

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