"Agri Business Management Prospective"

"Agri Business Management Prospective"

India has 297 million hectares of land, of which over 54% is arable.India is the third largest producer of agri-products and processedfood, just behind the US and China.The Indian processed food industry is estimated to be Rs. 6 trillionand is growing at a rate of 10%. Export of processed food has beenaround Rs.370 billion and is growing at 8%. The Indian foodprocessing industry is becoming an attractive FDI destination; itattracted an FDI around Rs. 45.19 billion during the period 1991-2005.Higher disposable incomes have led to an increase in consumption ofprocessed foods across all categories. For example, the consumptionof products like nuts, frozen foods, and pasta have witnessed anaverage annual growth of over 10% during the last 5 years. The ready-to-eat segment is experiencing an explosive growth of above 50%, withthis trend expected to continue in the future.Though, as of 2007, the industry is dominated by unorganized smallplayers who constitute 75% of the industry, several companies, bothdomestic and foreign, are expected to enter in the near future.However, the rate and degree of corporatization varies across thesegments. For example, while the beverages and confectionery segmentsare dominated by the organized sector, segments like fruits &vegetable processing, dairy, and poultry are largely served by small,unorganized processors.India's share of processed food in the global market is very low atabout 2%. While India continues to surge ahead with a GDP rate of9.2% during 2006-07 the only sector that has not kept pace isagriculture, which grew at 2.7%. Since, in India, more than half ofthe population is dependent on agriculture, the government has takensome policy initiatives to encourage agri-businesses and the foodprocessing sector.The policy initiatives as well as strong demand side factors such asincreasing urbanization, rising incomes, increasing number of double-income-nuclear families, increasing health awareness among consumers,increasing demand for healthy and nutritious foods, etc. haveattracted several companies such as ITC, Dabur, and HLL to theindustry. Undoubtedly, the industry is getting more organized......Viru