The seed industry is hopeful that the State government will establish a ‘seed valley’ to meet its needs.

The global seed industry currently stands at $37 billion with conventional seed share at $19 billion and Genetically Modified (GM) seed at $18 billion.

While the domestic market of India stands at $2 billion, exports from India stand at $360 million. The seed export industry is expected to rise to $600 million in the next five years. Ram Kaundinya, Director General, Association of Biotechnology Led Enterprises (ABLE), feels that there is good opportunity in south-east Asia and African countries which are trying to enhance food production to meet the increasing demand. It was stated that there will be great demand for Genetically Modified (GM) seed that can withstand adverse weather conditions.

“Telangana can become the seed export hub of India as it has congenial weather conditions. We have to establish a seed export promotion council and a seed valley for this purpose, in addition to framing regulations that match the seed demand and regulations of various countries,” said Mr. Ram, who was recently at International Crops Research Institute for Semi Arid Tropics (ICRISAT). He says that GM seed has good potential for export.

“There is also a need to establish a seed export zone, quarantine department, cold storage facility, testing and registration, marketing support from the government, logistic support, quick clearance and follow-up mechanism,” Mr. Ram told The Hindu . He said that up-scaling the production would be easy in Telangana as temperature and humidity is seed-friendly and field seed production experience among farmers at Karimnagar, Nizamabad and Warangal is high and handy in meeting the export market.

Even Pocharam Srinivas Reddy, Minister for Agriculture, who attended the meeting, wondered why the success story of Ankapur near Armoor of Nizamabad district cannot be replicated across the Telangana in developing quality seed.

Mongolia is planning to sow grain on 315,000 hectares of land, wheat on 304,000 hectares of land, and potato on 15,400 hectares of land this spring.
Regarding the spring sowing, the parliament of Mongolia decided to exempt 20,000 tons of crop seed from customs tax and value added tax (VAT).
Seeds will be imported from Altay Prefecture in China and Buryatia in Russia.
The state is allocating quotas for the seed importing businesses. The Fund on Supporting Crop Farming has therefore planned to import 8,800 tons of seeds this spring.
Spring sowing will start in late April and will end by May 10, according to the preliminary plans of the Ministry of Industry and Agriculture.

The production and availability of certified/quality seeds in the country for the year 2013-14 is 347.31 lakh quintals against the requirement of 335.26 lakh quintals as reported by the States.

The production of certified/quality seeds in the country has increased from 140.51 lakh quintals in 2005-06 to 347.31 lakh quintals in 2013-14. To increase seed production in the country, the Government of India is assisting the State Governments and seed producing agencies on various activities related to seed production viz, production, storage, training for capacity building of farmers in seed production technology, etc., under the various crop development programmes/schemes viz:- National Food Security Mission (NFSM), Rashtriya Krishi Vikas Yojna (RKVY), Integrated Scheme of Oilseeds and Oilpalm (ISOPOM), Initiatives for Nutritional Security through Intensive Millets Promotion (INSIMP), Technology Mission on Cotton (TMC), Technology Mission on Jute & Mesta, National Horticulture Mission (NHM), Technology Mission for the North East (TMNE), Development & Strengthening of Infrastructure Facilities.

This information was given by Shri Tariq Anwar, Minister of State for Agriculture and Food Processing Industries in written reply to a question in the Lok Sabha today.

The small farmer is affected by low yields, high cost of production and low price realisation. Farmers can be helped out by: helping cut down their costs of production and marketing, providing stable and remunerable market access and improving price realisation and/or increasing yields.

The corporate sector is involved in marketing agricultural inputs to farmers and buying farm produce from them.

Agribusiness or agricultural franchising is new in India, though it is quite commonly used in other businesses such as fast food, hotels and other service industries, where service quality is crucial for brand equity.

THE CONCEPT

An agribusiness franchise can be defined as a right, permission, or licence (often established by contract) granted by an agribusiness firm (called the franchisor) to another agribusiness firm (the franchisee) to distribute, manufacture, and/or use the trade name of the former’s products and services usually in a specified territory for a specified duration.

In addition, the franchisor provides assistance in organising, training, and merchandising. In return, the franchisor receives a certain amount from the franchisee as initial fee and a royalty on business volumes conducted.

The arrangement can be a product, business format or trade name franchise. Franchising helps franchisors spread faster in markets, achieve higher turnover, establish brand presence and leverage local resources for growth of the brand without taking all the risk.

On the franchisee side, the advantages of franchising include access to credit, technology, market, marketing, and higher turnover.

EVOLUTION IN INDIA

There have only been a few experiments in agribusiness franchising in India in the recent past by private and public agencies. NAFED (National Agricultural Co-operative Marketing Federation) has 2,000 franchisees across eight States of India for selling inputs, especially fertilisers (supplied by Indian Farmers’ Fertiliser Co-operative, IFFCO) and seeds, with 1,400 of them in UP alone.

Similarly, IFFCO, a national level fertiliser co-operative, has set up franchises in rural areas. It offers businesses such as rake handling, transportation, and warehousing of fertilisers and offers help in educational and promotional activities to 1,307 Primary Agricultural Co-operative Societies (PACS).

Each PACS gets Rs 60,000 for purchase of office furniture and agricultural implements. The insurance is provided by IIFCO-Tokio (IT) General Insurance Company. The PACS also sell seeds, pesticides, agricultural implements, and offer credit to member farmers.

Some years back, a private corporate agribusiness, Mahindra Shubhlabh Services Ltd (a subsidiary of tractor major-Mahindra and Mahindra), had set up dozens of franchises in rural India across States to provide one-stop solutions to small farmers.

NEW MODELS

Another major agro player, Aadhaar Wholesaling and Distribution Ltd (earlier Aadhaar Retailing and a joint venture company of Future group and Godrej Agrovet with 70:30 equity) has 33 of its 50 outlets run by franchisees in Gujarat and Punjab, though farm input sales are a small proportion of the total sales of these outlets (10-20 per cent) and they are not involved in buyback of produce as yet.

It has moved from company owned and company operated (COCO) store model to franchisee model.

Small agri start-up firms have found this model useful. An agribusiness start-up to facilitate farmers with better inputs and extension and markets in Bihar (farms and farmers) uses the franchising model, under which it runs nine outlets/centres called DeHaat.

These cater to a total of 4,000 farmer members (who pay Rs 200 annually each) with each covering a 10-12-km radius with services such as soil sample analysis, crop selection, and technical support during the season and marketing of farmer produce.

The franchisee invests about Rs 15,000-20,000 to begin with and is trained by farms and farmers (franchisor) for three months and profits are shared in a 75:25 ratio with 75 per cent going to the franchisee.

POTATO FARMING

More interesting is the case of another relatively new private sector potato supply chain company (Sidhivinayak Agri Processing Private Ltd (SAPPL). It has set up a new network of 36 franchisees in collaboration with a development project in Uttar Pradesh that provides farm input supply and produce buyback services to smallholders.

The development project, Sunhara India, is funded by Bill and Melinda Gates Foundation and Implemented by Agribusiness Systems International (ASI), a US-based non-profit consulting firm for four years.

The franchisees are the hubs from which farmers seek and obtain various services such as input supply, extension advice and disposal of their output of potato on a pre-agreed price and market outlet.

The franchisees are appointed by SAPPL which has extensive experience with farmers and the potato crop and works in many States of India through the franchise route in potato seed supply and output procurement and, in turn, supplies to various potato processors.

SAPPL helps the system work as it lines up markets for the produce and delivers seed and other needed inputs at the franchisee level, who are local entities and close to farmers as they have background in farming and related businesses locally.

SAPPL provides all the information, products and even services such as soil testing to the farmers through the franchisees and buys back the potato crop, thus completing the whole value chain of the potato crop.

This is what is needed when one talks of linking farmers with markets.

The non-refundable fee of Rs 0.15 million payable by each franchisee was paid in the case of first 25 franchisees by ASI. In 2012-13, six new franchises have paid the above franchise fee on their own.

SAPPL helped with training, input supply, and in some cases with input licences. The franchisee in general can sell all non-potato inputs from other companies.

The model needs to be tweaked for making it suitable to smaller entities and players, perhaps by lowering initial fees and increasing royalty.

But it is perhaps the first case of a development project covering some risks of a private sector investor — that too in a State such as Uttar Pradesh, where private entrepreneurs are not interested in investing, for a variety of reasons.

The SAPPL franchise model did not rely on sub-franchisees to interface with the farmer, and did not ask for minimum purchases.

Also, NAFED and IFFCO franchises are more like exclusive dealer arrangements. Further, SAPPL model covers both input and output sides of the value chain, at least of the potato crop.

In terms of impact, the potato seed supply and buyback of potato on behalf of SAPPL made a big difference to the franchisee turnover.

All franchisees had soil testing kits and potato quality testing facilities.

It shows that all agribusiness activities and functions are amenable to franchising.

Producer companies (co-operative companies) in India can be roped in as franchisees as they are collectives of farmers, can raise volumes of business quickly, are locally based, and legally recognised.

The government today said the country would meet the target of producing 254.23 million tonne foodgrain in 2012-13 despite drought in some parts of the country.

India could not achieve the food production target in 2009-10 due to severe drought in many states. However, it had met the target since 2010-11.

"Despite drought in some parts of the country in 2012-13, foodgrain production is on course to realise target of 254.23 million tonne," Agriculture Minister Sharad Pawar said in a written reply to the Lok Sabha.

India's target for rice production in 2012-13 was 104 million tonne and as per the Second Advance Estimates, it would be 101.80 million tonne. In 2011-12 it was 105.31 million tonne and 95.98 million tonne in 2010-11, he said.

While pulses production target was 18.24 million tonne in 2012-13 and as per the estimates, it would be around 17.58 million tonne. Target for Jowar was 7 million tonne for 2012-13, and 5.26 tonne has been produced.

States such as Uttar Pradesh had target of 48.46 million tonne of food production last fiscal and as per the estimates, has produced 49.70 million tonne in 2012-13.

Similarly, Bihar has a target of 13.98 million tonne and produced 14.02 million tonne; Madhya Pradesh produced 21.82 million tonne against its target of 15.87 million tonne. Punjab has target of 27.98 million tonne and has met it in 2012-13.

However, some states such as Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Rajasthan fell short of their targets.

Answering to a separate query, Minister of State for Agriculture and Food Processing Industries Tariq Anwar informed the Lok Sabha that the seed industry in the country is growing at rate of 8-10 per cent in the last three years and has now turnover of about Rs 11,000 crore.

"The seed industry in the country has been growing approximately 8-10 per cent per annum over last three years. Present turn over of the industry is about Rs 11,000 crore," said Tariq.

He said the reason for fast growth in the seed industry is increased demand for quality seeds by the farmers to achieve higher production.

Moreover, price of these quality seeds has also increased by 5-13 per cent during that period and the government is providing assistance for seed production and distribution under various crop development schemes to provide seeds at reasonable rates to the farmers, said Tariq.

He further added that the central and state governments are organising various training programmes on safe and judicious use of pesticides to educate the farmers.