Landmark Reforms in Indian

Agriculture

Opening up of Agri Markets

25 June 2020
India has a strong
advantage in the Agri sector
Agri contributes to ~15% of GDP & livelihood for
>50% of population
"Agriculture has a
World’s largest producer of spices, pulses, milk, key role in making
tea, cashew, jute, bananas, jackfruits, etc. India $5 trillion
Second largest producer of wheat, rice, fruits
and vegetables, sugarcane, cotton and economy"

Copyright © 2018 by Boston Consulting Group. All rights reserved.

oilseeds
Fourth largest producer of agrochemicals
Largest livestock population of around 535.8
~Hon'ble PM Shri
million (31%) of world's livestock Narendra Modi
Largest land area under irrigation
Top five net exporters in the world
2
Developing a strong Agri
ecosystem is a key focus area for
government
Create a consistent and standardized Agri-framework across
the country

Attract capital and technology to our agrarian economy

Provide marketing interventions for both agricultural buyers &

sellers
• Access to better marketing avenues for farmers' produce
• Freeing up the sector from restrictive laws
3 new ordinances have been
announced to create a free &
efficient Agri ecosystem

The Essential Commodities (Amendment) Ordinance 2020

Remove restrictions on stocking food produce

Farmers' Produce Trade and Commerce Ordinance 2020

To end the monopoly of the APMC and allow anyone to freely purchase and sell
agricultural produce giving farmer multiple market options (inter and intra state)

Farmers Agreement on Price Assurance and farm services

Provide legal framework for agreements between farmers and buyers including
processors, wholesalers, large retailers, etc.
Expected to have significant
benefits…
The Essential Commodities (Amendment)
Stability of market prices for consumers
Uplift in investment in storage facilities, cold storages etc.
Better price realization for farmers

Farmers' Produce Trade and Commerce (Production & Facilitation)

Farmers to have more choice in selling their produce
More transparency and better provision of services in marketplaces
Increase in inter-state movement and price for farmer
More private players expected to enter and set up e-trading platforms
Farmers (Empowerment & Protection) Agreement on Price Assurance
and farm services
Direct contract between buyer and seller, no conflict with APMC
Fair price and faster payment, consistent income for farmers
Crop intelligence support - traceability, quality control
Farmer to have access to modern technology and better inputs
… across all stakeholders
Illustrative or non-exhaustive

• Best price realization basis harvest quality

Farmer / FPOs • Sufficient infra and value added services

• Real-time access to demand via platform

Logistics players • Open market driven by process efficiency

• Transparent access with predictable demand

Warehousing • Open tenders / empanelment opportunities

Credit providers • Access to integrated seller and buyer base via platform

• Agri specific insurance products

Insurance providers • Reduced crop wastage compensation

Retailers and end • Reduced prices by elimination of middleman

consumers
Free Agri-marketplace will unlock
opportunities for new investments Illustrative or non-exhaustive

Credit/Financial Institutions
Organized sales improves credit score and enables
formal channels to finance farmers

Digital commerce platforms Assaying and Grading

Tech based platform directly Multi party professional players in
connecting farmers to end buyers advanced and fast assaying/ grading &
sorting systems

Insurance Warehousing and Cold storage

Customised insurance products - Agriculture Cost efficient and flexible
Harvest, Crop Transit etc storage solutions

Logistics Food Processing Units

Tech platforms for End to end Organized and potentially cheaper
connectivity of farmers to end consumers access to Agri-produce to promote
setting of food processing units and
export promotion
Strengthened by several enabling
schemes planned by govt.
Financing facility of $ 14 Bn for PACs, FPOs , Agri -
Agri Infra fund entrepreneurs, start-ups
PHM infra project: cold chains, community assets, etc.

Form 10,000 FPOs and support each FPO for 5 years

Scheme for 10,000
Implementation by central and state agencies with
FPOs
DAC&FW

Digital Agri-stack built on the foundation of Farmers

Digital and smart Database
agriculture
Key enabler for online marketplaces and smart Agri

Additional credit $ 28 Bn of concessional credit

boost through Special drive will include 25 million farmers who do
KCC not, at the moment, have the KCC
Agri Infra Fund: post harvest
infrastructure

Size of the fund – ~$ 14 Bn, Post harvest management

disbursement over 4 years projects like –
• Warehouses
• Silos
Beneficiaries – farmers, FPOs, PACS • Pack houses
and Agri tech entrepreneurs and • Assaying units
startups • Sorting &grading units
• Cold chains
Participating institutions – All • Logistics facilities
scheduled commercial banks, • Primary processing centers
Cooperative banks, RRBs, Small • Ripening Chambers
Finance banks, NBFCs, NCDC • Soil testing labs, etc.
Scheme for 10,000 FPOs: Objective
to turn farmers into businessman

Vision – Form 10,000 FPOs and

Grants for FPOs – Equity grant,
support each FPO for 5 years from
Credit Guarantee Fund
inception

Total budgetary provision – Training and handholding – for

$600 Mn+ for 5 years plus $300 Mn+ each FPO by CBBO engaged by
committed liability implementation agency

Implementing agency – Joint

Aspirational districts – 1 FPO in
effort of central and state
each block of every district
agencies
Digital stack will be key enabler for
online marketplaces and "Smart
Agriculture"
1
Enabling a Digital Agri-stack built on the foundation of Farmers
Database

2
Database - Linkage to state land records and land holdings GIS
data

Data standardization for onboarding information from satellite

3 imagery, IOT devices and databases both in private and public
domain

4
A model for monetization of data on Agri stack maybe built to
ensure sustainability
 Aspirational Vision for "Atmanirbhar
Agriculture"
National Targets
Atmanirbhar Agriculture

Transform farmers into "entrepreneurs" with higher incomes & better quality of life (2x farmer income)

Make India the "food basket" for the world ($60 Bn+ exports by 2022)
Vision

Make agriculture the "go to" investment opportunity

Step change in India's "brand recall" for agricultural produce (Make-in-India)

Empowering farmers Cluster based integrated Drive higher value realization

through FPOs development Free trade & reforms
Interventions

Setup 10,000 FPOs Export oriented clusters Farm to fork infra

Credit & Insurance facility Organic oriented clusters Value addition & Branding

Sustainable and resilient National Open Digital R&D on inputs for

agriculture Ecosystem (NODE) Indian soil conditions
Govt. envisions a significant role of
private sector to realize National
Agri Vision
Public private partnership model
Integrate genuine models to drive international private sector investments in the
Indian agri-sector

Changes in legislative framework

Ensure large scale private investment in post-production agriculture gets
incentivized

Dispute redressal mechanism

Protect both farmer and buyer interests under complaints and dispute
management

Objective - Higher private sector investment across value chain

 Let’s together build a new India

 A clear and friendly policy map to encourage investments by GOI

• An opportunity for global investors to take benefit of the new environment (similar to
Indian telecom and e-commerce value creation)

 Indian agri-entrepreneurs have built businesses across the Agri-value chain

• Energy needs to be powered by quality growth capital for achieving scale

 Technology integration and e-platform (along with physical trade avenues)

• Two game-changing initiatives to unlock the value chain benefits for all stakeholders

Robust Demand Attractive Opportunities Policy Support Competitive Advantage