Where to start – Agro Business?

The agro-business has multiple options to start working. To make a decision you have to understand certain barriers which I have explained in my early blogs. If you have gone through them all then we can start further, to choose something good for you.

For better understanding, please check out the flow chart below-

Let take a brief tour of this all-

1.       Agro Business –

Agriculture is an industry which has very simple definition “Production of food & fiber”. So it’s your call, where to start.

1.1   Processing industry – Agro-processing industry needs a lot of grading, packaging, weighing, waxing, washing, pulverizer, peeling, dicing, slicing etc. machines. Options are so many like pulps making, juice making, spices manufacturing etc. Processing industry requires a big investment, fund planning, and excellent marketing team. Sometimes you will need pack houses, cold storages and refrigerated vans depending upon your project requirement. An average agro-processing industry requires minimum 1 Cr. INR,  which will be spent on-

Ø  Land

Ø  Building

Ø  Machinery

Ø  Raw material purchase

Ø  Labor

Ø  Packaging material

Ø  Marketing

Ø  Logistics

Ø  Electricity

Ø  Water

Ø  Maintenance

     If you are a fresher then hire a professional who can look after the raw material purchase,         machinery selection and purchase at the right price, labor training, packaging material selection, production capacity decision, marketing strategy, brand making, right market selection and logistics. No shame in telling him if you don’t understand the industry but want to start the work.

1.2   Domestic & Export supply-

You can supply both processed and fresh produce in domestic and export markets. The major thing is you will have to get the information that which market is appropriate for your products and in what form like, if you supply papaya fruit – North central Indian markets require the bigger size of papaya but Mumbai market requires small size papaya. The Same thing is with processed agro-products. Even the international markets have different norms. You can supply material –

Ø  Own production supply –

You can start your own cultivation practices to get quality material and make your own brand in domestic and international markets but for you will have to assure a consistent and reliable production capacity and quality.

Ø  Middleman/ Trader –

If you have a group of farmers in contact or any reliable suppliers that you can be a middle man and supply the material to domestic buyer or export it. Be prepare for “credit” in both markets, domestic market credit period is 7-10 days and export market credit period is 45 -90 days.

Better to hire a professional for this to identify appropriate markets, products, payment terms and certain specific documents for an export market.

Note: - There is also an option to enter into the partnership with some experienced team, it will also investment but safety for money.

1.3   Cultivation/ Production-

Cultivation/ production is comparatively safe than other two option but also less profiting than both two options, big risk big gain- no risk no gain.

For this option please read another post in this blog “Seeking success in AGRI-BUSINESS?”

For any query, please do not hesitate to mail me at “contact.agrofayda@gmail.com”