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In Focus

Entrepreneurship can transform the face of agribusiness in India

Rajesh Aggarwal, New Delhi, March 2016 


With 60% of India’s population still engaged in agriculture and allied activities, economists and policymakers often talk about the need for creating new work avenues and industries to shift a major segment of this population out of farming. 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 a 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 for work, often in the unorganized unskilled sector. This highlights the need for developing more innovative mechanisms in the rural economy that can boost employment opportunities in the agri sector. The success of cooperatives in India, particularly that of Gujarat’s dairy co-operatives and of Maharashtra’s sugar co-operatives, is an example of what innovation and entrepreneurial thinking can do for the rural sector. Enterprising young entrepreneurs who flooded urban India with startups in recent years have unfortunately neglected the rural economy
Not only in developing alternative sources of employment, entrepreneurship can also help radicalize farming techniques and bring innovation to improve yields per hectare. The sectors that can benefit hugely from entrepreneurial intervention are those of food processing and packaging, preservation of seasonal fruit and vegetables, seed processing, flower farming in addition to crop farming.
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 entrepreneurship in agriculture can immensely benefit the Indian economy by reducing the burden on farming, generating employment opportunities for rural youth, reducing the need for migration from the rural to urban areas and increasing individual and national income. 
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. 
Floriculture: 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 land. 
Pisciculture: Fish farming is practised by a lot of farmers to augment their incomes. However, they do so on an 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. Boosting entrepreneurship in the sector can make a difference, as done in the Western countries. 
Farm technology: 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 increase productivity by incorporating modern technologies in the farming sector. With increasing awareness and technology the risk of monsoon and price trends in the markets can be taken care of.  
(The author is the Managing Director of Insecticides India Limited, a pan- India agrochemical company headquartered in Delhi.)


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