Agri Business Environment Analysis

Cereals, Fruits and Vegetables

Group 1:

Pratik Ranjan: ABM14008

Radha Tulsyan: ABM14012
Anubhav Sinha:ABM14024
Nikita Goel: ABM14033
Rajan Burman:ABM14034
Tanya Garg: ABM14037
 Our Agenda
Sectoral Analysis
of Cereals, Fruits and Vegetables Sector
and Decision Making

Step 2
Trade Related &
Business Step 4
Risk Analysis

Step 1 Step 3 Step 5

Context Analysis and Market Trend & Decision Taking and
Production & Productivity Potential Analysis SWOT Analysis
Trend Analysis
 Context Analysis
Analysis of the technical environment

Political Technological
● Significant contributor to GDP, From subsistence to mechanization and
Directly impacts lives of many from mechanisation to digitization.
E-Chaupal (ITC)
people-Huge Vote bank. Economic ●
● Soil sensors
● Service and Manufacturing sectors
have progressed faster. ● On call consultation
Hence, major policies (~24% higher than ● Farm Mechanisation
before) are directed towards equipping the
fruit, cereal and grain sector Political Social
Legal
Economic
Microfinance Schemes by NABARD to improve Environmental Technological Irrigation- Legislative measures in Assam,
Bihar, Karnataka, MP, Maharastra to
access of the rural poor to formal institutional
construct and improve irrigation works.
credit and other financial products
-Bills to regulate and control development
547 Banks- 47 commercial banks, 158 RRB, 342
of groundwater
Cooperative banks, SHGs
-Crop Protection: Destructive Insects and
● Kisan Credit card, Farm Credit Package Legal Pests Act
-Fertilizers Control Orders
Social
● Harassment by moneylenders
● Lack of medical security Environmental
● Inclement weather & market
fluctuations High correlation with monsoons, 40% land
● High farmer suicide rates directly dependent on monsoon to irrigation.
Let’s talk Numbers
India Ranks
1 Irrigated Area,
Milk

2 Fruit, Vegetables
Rice, Wheat

3 Total Cereal Production

Implements(Tractors)

4 Coarse grains.
 Production & Productivity Trend Analysis
Domestic Production Trends
● 14-15% per annum expected growth
● 11% market growth rate
● Major Players: ITC, Dabur, MTR

Global Production Trends

● Fruit and Vegetable-2nd, Cereals-3rd
● Developed Countries-Fluctuating growth
● India-Relatively steadier growth
Compound Growth Rates of Area, Production & Yield
 Market Trend Analysis
Retail inflation rose in 2017

Costlier fruits and vegetables

Food inflation was driven by rising price

trends of onion at 88.46%,vegetables at
45%,fruits at 7.35% and milk at 3.94%
 SUPPLY TREND ANALYSIS
Buying motives and reasons for
buying vegetables from SABZI
MANDI

● To get vegetables at cheaper

prices
● To purchase in bulk
● Flexibility in decision making
● Lower income bound them to
bargain
 FOREIGN TRADE ANALYSIS
Major export destinations for India Vegetables exported:
● Onions
● USA ● Okra
● Iran ● Bitter Gourd
● Saudi Arabia ● Green Chillies
● Bangladesh ● Mushrooms
● Potatoes

Cereals exported : Fruits exported :

● Rice (major) ● Mango
● Wheat ● Wallnuts
● Millets ● Grapes
● Barley ● Bananas
● Maize ● Pomegranates
TRENDS IN EXPORTS AND IMPORTS
India- Third Largest exporter of Cereals
Potential Analysis
Factors on which agricultural yield depends:

Climate

Soil

Topography

Market

Transport facilities

Capital

Labour

Government policies
Rainfall effects
Total rainfall has not really changed
much

The concern is of increased water use

Increased demand-supply gap has led

to the perception that rainfall has
decreased

Area said to be water stressed when

annual water supply is below 1700
cubic metres per person per year

Change in food habits (more water

required for processing food that we
consume now-a-days)
Effect of market demand on agricultural produce
India’s Horticulture production
has been outstripping
Foodgrain production since
2013 with production crossing
283 million tonnes in 2015-16.
Horticultural crops are grown
in just 10% of India’s gross
cropped area compared to
50% used for foodgrains.
Signals the success of small and
Horticulture production exceeding foodgrain
marginal farmers in growing production due to higher demand.
fruits and vegetables
REGRESSION ANALYSIS
P value test : significant attributes
Cotton Groundnut Jowar Rice Wheat

Temperature 0.547536 3.41E–07 3.86E–07 0.003139 0.001137

Rainfall 0.784625 1.86E–06 0.653187 0.105878 0.018042

Ph 0.011752 2.55E–05 0.029733 5.08E–07 0.01834

Nitrogen 5.85E–05 0.071873 0.349257 0.000841 8.6E–06

Phosphorus 0.071843 0.043345 0.464847 0.025816 0.209524

Potassium 2.82E–07 0.643528 0.050831 1.43E–05 0.021422

Water 4.95E–05 4.92E–49 1.2E–102 1.22E–26 NA

Trend in Average Yield of food cereals in India (in Quintals per Hectare
)
Crop Yield forecast equation

Cotton
Yield = (7.149372) + (−0.14468)pH + (−0.00131) Nitrogen + (−0.00405) Potassium + (−0.00405) Water
Required
Groundnut
Yield = (2.79115) + (0.029217) Temperature + (5.78e–05) Rainfall + (−0.05681) pH + (−0.00127) Phosphorus +
(−0.00492) Water Required
Jowar
Yield = (−1.62694) + (−5.35e–02) Temperature + (0.051512) pH + (−0.00113) Potassium + (0.01685436) Water
Required
Rice
Yield = (−0.18503) + (0.041593) Temperature + (0.172042) pH + (−8.27e–04) Nitrogen + (−4.28e–03)
Phosphorus + (−0.00264) Potassium + (9.15e–04) Water Required
Wheat
Yield = (112) + (−4.14e–02) Temperature + (1.34e–04) Rainfall + (0.079153) pH + (−1.31e–03) Nitrogen +
 STRENGTHS (+) WEAKNESSES (–)
● Contributes 14% of Gross ● Low Yields

S W ●
Domestic Product
employs over 52% of
labour force of the
●

●
Low value addition and
Food processing
Post Harvest losses
country and ● Food wastage
● over 70% of Indian rural ● No access to modern
work force technology

O T ●
OPPORTUNITIES (+)
Rain fed Agriculture
● Diversification
● Organic Farming
● Sleeping Giants
● Food Processing Sector
● Agri-Clinics and Agri-
business Scheme
●
THREATS (–)
Size of Holdings
● Land Degradation
● Crop loss due to weeds,
insect and diseases
● Low seed replacement
ratio
● Climate Change

SWOT PUZZLE
Risk Analysis
Following factors lead to substantial production risks
● Production risk - this results from the uncertainties in the natural growth
process due to weather, diseases, pests
● Price or market risk - Risks and uncertainties about the prices that producers
will receive for their commodities
● Institutional risks - Uncertainties due to government actions such as tax laws,
environment protection laws
● Financial risks
o restricted credit availability
o increasing interest rates
Risk Analysis
Following factors lead to substantial production risks
● Human or Personal risk -

O Accidents, ill health, death, divorce are factors which adversely affect the farm
business
Risk Analysis
Following factors lead to substantial production risks
● Adverse climate conditions
O drought followed by rain, storms
O frost is a risk, but less significant
● Animal and plant diseases
O Inadequate system for disease control
O Lack of new drugs
O Threat of bio-terrorism