Money Making Agriculture Business Ideas in an unorganized industry

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Agriculture is the foundation of our economies. It forms the primary source of livelihood in most rural areas across India, contributing more to the GDP than any other. As a matter of fact, several urban industries like the Ag-Tech industry are directly or indirectly dependent on agriculture and farm produce. So, it makes sense that adept entrepreneurs have taken initiatives to invest in the agricultural industry.

Farms and agricultural businesses can be a great way to make money. The market is huge, but the industry is not that organized which has led to a lot of problems. As a result, a lot of people have started their own farms and agricultural business. Some have been successful and some have failed. This article will look at different options that you have when it comes to starting a farm or an agricultural business and end with a much-needed dose of motivation with some success stories.

A Brief Look at the Agriculture Sector in India

Agriculture has been a core part of India’s history and societal foundation since the Indus Valley civilization, with some parts in the South dating even further back. It remains one of the most important sectors and industries in India. The demand for agricultural goods is constantly on the rise as rural and urban development continues to grow across the country.

Over 58% of the Indian population rely on the agriculture sector for their source of income. The sector along with the related industries held a significant 20.2% share of gross value added (GAV) in India during the pandemic-ridden FY20. The agriculture-allied food industry in India is the sixth-largest in the world. The market is constantly growing and evolving to meet the ever-changing demand of consumers.

Major Sectors Under Agriculture

India remains the largest producer of various agricultural products: milk, jute, and pulses. The agriculture industry in India has been divided into 17 major sectors:

  1. Farming: The farming sector has the largest share in the agricultural industry.
  2. Agriculture Equipment: The agricultural machinery industry in India is expected to reach [INR 901.41 billion, with a CAGR of 10.7%] from 2019.
  3. Fertilizers: After the iron and steel industry, the fertilizer industry is considered the second most important industry in India.
  4. Pesticides: The pesticide industry saw an investment of over [INR 70 billion] in 2019 alone.
  5. Warehousing: The warehousing industry is expected to have a CAGR of [9.1%] up to 2026.
  6. Cold Chain: The cold chain industry in India had an estimated value of USD 19.6 Billion in 2020.
  7. Food Processing: The food processing industry in India has an aggregate output valued at [$158.69 billion]
  8. Dairy Market: In 2020, the Indian dairy market was valued at INR 11,357 billion.
  9. Floriculture: The floriculture industry is estimated to be worth INR 546.4 billion by 2026.
  10. Apiculture: The apiculture industry is growing at a CAGR of 12.4% between 2022 and 2027.
  11. Sericulture: India is the second-largest global producer of silk.
  12. Seeds: India’s domestic seed market is worth USD 1300 ****million, while it is valued at USD 37 million in international trade markets.
  13. Fisheries: India is the third-largest global producer of fish and its fisheries industry has an export value of INR 334.41 billion.
  14. Poultry: The poultry industry, including broiler meat and eggs, had a total value of [INR 1,988 billion] in 2020.
  15. Animal Husbandry: Animal husbandry accounts for 33.25% of the agriculture sector’s contribution to the GDP.
  16. Animal Feed: With a CAGR of 15% from 2021 to 2027, the animal feed industry in India was valued at INR 403.5 billion in 2020.
  17. Bio-Agriculture: Forecasts estimate that the bio-agriculture sector will be worth INR 66,595 million in 2026.

Growth of the Sector Over the Years

The agriculture industry contributed up to 54% of India’s GDP from 1950 to 1951. However, the overall sector has declined to a mere 15.4% in the year 2015 to 2016. Despite this decline, the production of food grains is constantly increasing while India holds the title of the top producer in wheat, rice, pulses, sugarcane, and cotton. The impact of the agriculture sector on the Indian economy is significant due to the reliance on food crops.

The growth rate in the agriculture sector has been relatively volatile since the 2000s, as the manufacturing and industrial sector have benefitted from immense development and the resultant increase in GDP contribution. Key reasons for this volatility are:

  • Reduction in agricultural land holdings
  • Dependence on the monsoon season
  • Limited access to irrigation
  • Loss of fertility of soil through imbalance usage
  • Limited access to modern technology in parts of the country
  • Lack of access to formal agricultural credit
  • Restricted procurement of food grains by government agencies
  • Unfair remunerative prices to farmers

Population Involved in Agriculture

While the contribution to the GDP has been on a decline, recent years have shown a reverse migration trend when it comes to the agriculture sector. The share of employment attributed to the agriculture industry has gone up from 42.5% in 2018-2019 to 45.6% in 2019-2020.

The workforce seems to be migrating from the manufacturing industry back to the agricultural sector due to involuntary reasons like lack of employment opportunities in non-agricultural sectors. Out of the total workforce in India, 60% of women were employed in the agriculture sector.

7 Business Ideas in Agriculture

1. Vermicompost Business

Vermicompost is the process of creating compost using earthworms. The resulting organic fertilizer is one of the foundations of sustainable agriculture production. It improves the quality of soil, increases yields, and reduces diseases and pests in the crops.

Entrepreneurs engaged in vermicomposting are supported by the government and receive technical assistance from NGOs like Krushi Vikas and Citizens Environment Improvement Society (CEIS). States in South and Central India prioritize the use of vermicomposts, making them the ideal regions to market your products.

Vermicompost requirements comprise of biodegradable, organic materials like:

  • Cow, sheep, goat dung
  • Organic sludge
  • Plant leaves
  • Residue from crops
  • Sawdust
  • Sugarcane waste
  • Weeds
  • Coir waste
  • Biogas plant slurry
  • Poultry droppings in small quantities as they are high in nitrogen
  • Vegetable waste

There are specific indigenous earthworms used for composting in India. The Red Earthworm, or Eisenia Foetida, multiplies quickly which is suitable for commercial purposes. On average, the composting process can take 45 to 50 days.

2. Dry Flower Business

The floriculture industry is one of the fastest-growing sectors under agriculture. The demand for dry flowers is visible in the domestic and international markets. India exports dry flowers worth INR 100 crore per year to various countries and regions including the USA, Japan, and Europe.

A dry flower business can easily be started at home and run as a side business or a full-time venture. For your business, you can either grow the flowers yourself before the drying process or source them from a third party. There are two main techniques that you can choose from when producing dry flowers:

  1. Drying techniques include
    1. Sun Drying
    2. Freeze Drying
    3. Pressing
    4. Glycerin Method
    5. Polyset Polymer
    6. Silica Driers
  2. Dyeing

Your dry flower business can also include dry flower products like potpourri, dry flower pots, and dry flower handicrafts for sale.

3. Groundnut Oil Processing

Groundnut processing can be an entrepreneur’s gateway into the edible oil industry. This profitable venture involves the production and sale of highly nutritious oil that does not cause any concerns around cholesterol. It is used in various activities like cooking, baking, and soap manufacturing.

It is important to use the right machinery when processing groundnuts. A thorough market analysis will help you assess the demand for groundnut oil in your area and find the right source for the required raw materials. Creating a concrete business plan for your venture will be the key to your success.

4. Sunflower Farming

Sunflowers are considered a cash crop in India, making it a profitable business for you to get involved with. However, it is also a food crop for humans, cattle and poultry. They are also as aesthetically pleasing as ornamental plants.

You will require around 3kg of seeds to cultivate an acre’s worth of sunflowers, which will yield around 9 quintals worth of flowers. Depending on the variant, the sunflowers can take 3 to 4 months to grow. You can sell sunflowers whole or harvest their seeds for snack products and processing oil.

5. Dairy Farming

Dairy farming is considered an all-season venture, as it can be conducted throughout the year, unlike some agricultural activities. The constantly growing demand for milk and milk by-products make it a highly profitable industry.

For a successful dairy farming business, you will need some land with a shed for your cattle. If possible, additional land can be used to grow fodder crops. A single acre of land can home around 7-10 cattle animals, depending on the breed. The cattle will also need to be vaccinated regularly to maintain their health and ensure quality produce.

6. Poultry Farming

An effective way to include protein in one’s diet is through poultry produce like broiler chicken and eggs. The upward trend of maintaining a balanced diet has been profitable for the poultry farming industry. With poultry farming, you have various options like broiler poultry, layer poultry, and country chicken farming.

The size of the land you intend to use for poultry farming depends on the number of birds you intend to raise. Also, having a farm further away from the city might be helpful in finding cheaper labour. Ideally, the location should be pollution-free and away from predatory animals for the wellbeing of your animals.

In India, both domestic and foreign breeds are available for poultry farming. Your choice of breed depends on what you intend to sell from your poultry farm: eggs or broiler meat. Cockerels are great for meat but have a relatively slower growth rate when compared to broilers.

7. Bamboo Farming

Bamboo cultivation is a profitable venture in India as it is a commercial cash crop for both small and large farmers. It is an evergreen, flowering plant. Madhya Pradesh, Maharashtra, Orissa, Andhra Pradesh, and Karnataka are a few of the Indian states that are known for growing bamboo.

Also known as the “Poor Man’s Timber”, bamboo is often used as a substitute for wood. When entering into a bamboo farming venture, you will need to consider the soil condition and plan for an intercropping routine. But not every variety of bamboo is viable for commercial use. Some ideal types of bamboo are Bambusa Nutans, Bambusa Balcooa, Bamboosa Bambos, and Bambusa Tulda.

3 Successful Agri-Businessmen

1. Dr. Gajendrakumar Kantilal Bamania

A veterinary doctor with an MBA degree in International Agribusiness Management, Dr. Bamani started XCell Dairy to support his dairy passion and for the improvement of dairy farmers. He realized rural areas require more veterinary care compared to urban areas.

He uses his ten years of experience working in Uttar Pradesh to bring Xcell Breeding and Livestock Services Pvt. Ltd. to his native state. His business is a step above the usual dairy businesses as he uses his knowledge of technology to develop software that monitors breeding services provided to dairies.

2. Shri Innasimuthu

After completing his Diploma in Agricultural Science, Shri Innasimuthu was not satisfied with keeping a regular job. Eventually, he started his venture as a self-employed gardener. He rented a spade and offered his services in Madurai’s residential areas.

In 1994, he launched his Green Madurai Nursery Garden. He also later launched his agri-venture  Green Madurai firm with support from the Nodal Training Institute. Green Madurai is engaged in raising a variety of plant saplings and sale of bio-manure.

3. Shri Arun Ishwar Wandre

Bamboo has properties useful for the gasification and synthesis of petrol and diesel. Conveniently, it is also one of the quickest growing plant species in the world. One of the highest biomass productivity crops, bamboo has a low ash content and alkali index, with a higher heating value when compared to other agricultural residue fuels like grass and straw.

Ishwar AgriBusiness and Energy Solutions were started by Shri Arun Ishwar Wandre with the aim of bringing forth a scientific form of agriculture through a market-led enterprise. He realized that bamboo is an ideal crop for wastelands. The ecological situation in Kolhapur made it the ideal market for his business.

Conclusion

The agriculture industry offers a variety of opportunities for entrepreneurs. It is an evergreen industry that the population of the country depends upon. The sector is evolving with various advancements in technology and science to help improve yields and marketing.

If you want to learn more about how you can make the ideal business plan for your agricultural venture, we have an article for that as well

This post is also available in: English

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