Farm graduates turn grassroots entrepreneurs

Business Standard - B Ramakrishna / Chennai/ Hyderabad August 25, 2011, 0:57 IST

It's not just the well-off engineers and MBAs who are taking to setting up own businesses, but also the hard-pressed agriculture graduates. Though government jobs are their first choice, these are hard to come by and never in large numbers.This was the case with 25-year-old Md Afroz of Miryalaguda in Nalgonda district. He says he tried hard for a government job after his B Sc in agriculture, trying his luck with several exams.

He had never thought of becoming an entrepreneur before, but changed his plans after going through a two-month training programme for budding entrepreneurs that he attended earlier this year to fill his gap period.

Afroz is now in the process of getting a bank loan to fund his farm machinery venture that requires an investment of Rs 20 lakh.

Others like T Yella Goud from Dubbaka in Medak district, who is also an agriculture graduate and already had plans to set up a dairy farm, consciously decide to go for the training. The two are part of 162 people from Andhra Pradesh who went through the training till date in 2011.

The training in question is part of a central government programme called Agri-clinics and Agri-Business Centres, devised as way to balance the available human resources with the required agricultural services.

According to P Chandrashekara, director, National Institute of Agricultural Extension Management (MANAGE), the course provides exposure to business management principles, possible areas for enterprises, ways of getting bank loans, as well as one-year hand-holding support after the venture is established. It helps with bank loans of up to Rs 20 lakh, with a subsidy in the range of 36-48 per cent.As a nodal institute for the programme, MANAGE has trained 24,400 people since 2002 through 57 partner institutes across the country. Uttar Pradesh, Maharashtra and Tamil Nadu are the leading states in terms of the number of trainees.However, he says the numbers trained is not the same as numbers converted to entrepreneurship. Out of 24,400 trained so far, around 9,500 have set up ventures in 32 categories ranging from agri inputs, advisory services, veterinary clinics, nurseries, magazines and CDs, food processing and tourism, among others.

“The programme helps by turning youngsters into job creators rather than seekers, with each agri-preneur estimated to provide jobs for six other people on average. It also helps by promoting a reverse migration of educated youth from urban to rural areas,” Chandrashekara tells Business Standard.According to him, there are 48 agricultural universities in the country, producing 15,000 graduates a year and thousands of diploma holders. Though the public sector extension system provides 85 per cent of the current services, it cannot absorb such large numbers of job aspirants.The agri-preneurs trained so far can cover 2.5 million farmers in 125,000 villages. According to an internal survey by MANAGE, their services are found to have led to a 17 per cent increase in yields and 28 per cent improvement in incomes.

“The ideal ratio of field-level extension workers to farmers would be reached when the number of agri-preneurs reaches the critical mass of 50,000,” Chandrashekara says.He adds that the programme is at a take-off stage now, as the awareness grows among agri graduates and also indirectly through the first-generation agri-preneurs.One such 'agri-preneur,' B Krishnamurthy, who started an artificial ripening system in Hyderabad, agrees. He says, "The programme is very useful. It helps us with getting bank loans and other things. The awareness about it will also grow, but it's another matter that we were not able to attend regularly because of other work."

Urban waste, no longer trash for fertiliser firms

Hindu Business Line - New Delhi, Aug. 22: 

Marketing of organic manure from city garbage is becoming a serious business, with even chemical fertiliser companies increasingly incorporating it in their product portfolio.

Take Coromandel International Ltd (CIL), which annually sells around 35 lakh tonnes (lt) of fertilisers mainly di-ammonium phosphate (DAP) and complexes.

In 2010-11, CIL also marketed 50,000 tonnes of compost produced from municipal solid wastes (MSW), which it plans to more than double to 1.1 lt this year. That, at Rs 5/kg, would be worth Rs 50 crore – a fraction of the company's Rs 8,000-crore operational revenues. But it is a business growing by over 20 per cent a year, noted Dr G. Ravi Prasad, President (Marketing), CIL.

Besides CIL, Nagarjuna Fertilisers & Chemicals, Zuari Industries, FACT, Kribhco and National Fertilisers Ltd are also selling MSW-based compost, though the quantities they are doing are only a few thousand tonnes each.

Garbage potential

Moreover, none of the fertiliser concerns, including CIL, are manufacturing the compost themselves. The ones doing it are the likes of IL&FS Environmental Infrastructure & Services Ltd (IEISL), Hanjer Biotech Energies, Ramky Enviro Engineers and A2Z Infrastructure Pvt Ltd.

Mr Mahesh Babu, Managing Director of IEISL, estimates India's total MSW-based compost production now at 2.5 lt. The potential is much larger, given the roughly 500 lt of MSW generated annually by the cities and towns here. That works out to 140,000 tonnes a day (tpd), with Delhi and Mumbai alone contributing 9,000 tpd each, Chennai and Kolkata 5,000-6,000 tpd, and Bangalore and Hyderabad 4,000-5,000 tpd.

“From every 100 tonnes of MSW, 15-20 tonnes of compost can be made. So, from the entire 500 lt, you can get about 80 lt. And this will only go up with further urbanisation,” Mr Babu pointed out.

IEISL operates composting units at Delhi, Jalandhar, Mysore, Kozhikode, Erode, Pollachi, Mettupalayam, Udumalpet and Coonoor that can together process 1,480 tpd of MSW. By this fiscal-end, it aims to add another 900 tpd through new facilities at Jaipur and Tiruchi and expanding its 200-tpd plant at Delhi to 500 tpd (A2Z Infrastructure has the country's single biggest facility of 1,800 tpd at Kanpur, followed by Hanjer Biotech's 800-tpd unit at Nagpur).

Unique Selling Proposition

The composting firms receive the raw garbage free of cost from municipal authorities, which they process, bag and sell either to fertiliser companies or under their own brands (such as IEISL's “Harit Lehar”). The processing cost comes to about Rs 1.80/kg, with bagging and transport adding another Rs 1.30 or so.

The nitrogen (N), phosphorous (P) and potash (K) content in MSW-based compost typically ranges between 0.5 and 1.5 per cent each. These are way below the levels in urea (46 per cent N), DAP (18 per cent N and 46 per cent P) or muriate of potash (60 per cent K). But the USP of compost – which fertiliser firms are seeking to project – is its OC (organic carbon) content of over 12 per cent.

“Indian soils have very low OC, which is due to their being farmed continuously and the depleted carbon not getting refurbished through green manuring or putting back crop residues. By adding compost, not only would the OC in their soils go up, but farmers will also see a dramatic improvement in the nutrient use efficiency of the chemical fertilisers applied by them.

To that extent, they can probably reduce urea or DAP consumption,” said Dr Prasad.

Soils with higher OC also have higher water-holding capacity, while exhibiting greater porosity and tilth. “Groundnut seedlings will wilt within six days if there are no rains, whereas in compost-treated soils, they can last for 12 days.

The plants also show better root development and tillering,” he added.

IEISL, similarly, claims that farmers near Agra in Uttar Pradesh have increased per-acre yields of wheat from 16 to 21 quintals by using its compost along with regular fertilisers.

Karimnagar is the new rice bowl of State

KARIMNAGAR: Karimnagar district is all set emerge as the ‘rice bowl' of Andhra Pradesh with an expected record paddy production of over 12.60 lakh metric tones during this rabi season.
Thanks to the bountiful rainfall from 2006, paddy production has been increasing considerably. During the 2006-07 rabi season, paddy was cultivated in 1.43 lakh hectares and the production was 9.01 lakh metric tones.
In 2007-08 rabi season, the production was 9.5 lakh tonnes in 1.7 lakh hectares.
In 2008-09, 1.95 lakh hectares were brought under cultivation and the yield was around 12.5 lakh tonnes. However, there was a fall in the yield during the 2010 rabi season due to drought.
The Agricultural Department are expecting a bumper harvest of over 12.60 lakh MT paddy during the current 2010-11 rabi season as the paddy was cultivated in 2.12 lakh hectares against the normal area of 1.38 lakh hectares during the rabi season. Thanks to the bountiful rainfall and increase in the ground water table, the area of paddy cultivation had increased considerably in the district making it the rice bowl of State.
About 50 per cent of area of paddy was cultivated in Sri Ram Sagar project command area and the remaining under 3.5 lakh agricultural pumpset connections in the district. The agricultural authorities attributed increase in paddy production due to good drainage system in the district fields compared to the East and West Godavari districts, where the water is logged for a longer time.
In Karimnagar, the paddy fields have good drainage system where water is aerated easily, thus yielding record harvest of around 35 to 40 bags of rice per acre, the authorities said.

With the onset of harvest season, the paddy harvesters are busy doing roaring business in the district. The harvesters are charging anywhere from Rs. 1500 to Rs. 2,000 per hour. Sensing possible threat due to unseasonal rains and hailstorms, the farmers are forced to shell out huge amount for harvesting their paddy produce.

Harvesters in great demand in W.G.

The HIndu 5/5/11

ELURU: The harvesters are in great demand in the paddy-rich West Godavari district as rabi operations peaked, thanks to the acute shortage of manpower. The machines on hire in different sizes are rolling into paddy fields from far-off places such as Karnataka, Tamil Nadu and Telangana region. Combined harvesters which are used for harvesting, threshing, winnowing, and even packing at times have become most sought after.
The labour problem has been worrying farmers for quite some time. The Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS) has reportedly worsened the situation with the district witnessing a reverse migration with settlers finding employment in their native villages in north coastal Andhra under the scheme. The demand-supply mismatch on the labour front has resulted in an increase of wage component in agriculture manifold.
According to Yerneni Nagendranath of the Andhra Pradesh Rytanga Samakhya, the district administration is not able to cope with the demand for harvesters. The administration had arranged bank finance to the ryot clubs for purchase of 45 harvesters under the Centrally-sponsored Rastriya Krushi Vikas Yojana (RKY) scheme in the previous financial year at the rate of one per mandal. The demand was so great that each village should have at least one harvester for smooth agricultural operations, he said.
200 harvesters
Medikonda Ramesh of Unguturu said not less than 200 harvesters were seen undertaking agricultural operations in Unguturu mandal alone in the current season. He harvested the crop in seven out of his 15 acres manually by paying Rs. 5,700 per acre in phase I. But the machines engaged in the rest of the fields in the next phase brought down the cost to Rs. 2,000, says Mr. Ramesh.
Complaints
He highlighted the need to ensure that the harvesters imported from China and Japan suited local conditions. The complaint is that the harvesters get bogged down in the water-logged and marshy delta fields and the grains harvested by machines are prone to having higher moisture levels. He called for change in the designs of the harvesters to address these problems. If the machine can undertake harvesting operations in one acre within an hour, at least 4-6 workers were required to take up the same amount of work, he said.

Mechanisation helps sugar mills tackle rising cane harvest costs

Hindu Business Line - 21/4/11

Runaway increase in labour cost for sugarcane harvest has hit growth of area for the crop in Tamil Nadu. Mechanisation is emerging the only long term option, say sugar millers.

Labour for harvest that was around Rs 375-400 a tonne at the start of the season has increased to about Rs 550 and even Rs 600 in some places. This is about a third of the sugarcane price that farmers get, making it unattractive to them. In addition to the cost, the shortage of labour aggravates the problem.

During the current season, the State Government has fixed the price for sugarcane at Rs 2,000 a tonne, including transport charge, linked to a sugar recovery of 9.5 per cent. This is nearly twice the price paid in 2006-07 when the State Advised Price was Rs 1,034 a tonne, linked to 9 per cent sugar recovery. Labour was around Rs 100 then, according to industry figures.

The increase in labour costs has eroded the benefit of higher sugarcane price. Leading sugar mills are looking at mechanisation of harvesting as a solution.

Thiru Arooran Sugars has inducted about 30 harvesting machines in the last few years across its four mills. It now has 22 in operation, and is adding eight more during the current season, said Mr Ram V. Tygarajan, Chairman and Managing Director, Thiru Arooran Sugars. “Without mechanisation, there is no future for sugarcane,” he says.

Tamil Nadu's peak sugarcane output of about 258 lakh tonnes in 2006-07 is not likely to be repeated in the near future. Mills are struggling to get to 160 lakh tonnes.

Sakthi Sugars, among the earliest to mechanise, has 10 machines in operation and is considering more. Nearly half the harvesting at one of its mills has been mechanised, according to its Vice-Chairman and Managing Director, Mr Manickam.

Mechanised harvesting costs around Rs 300-400 a tonne, in addition to the advantage of assured availability. But for now, due to the high costs of machines individual service providers cannot offer harvesting services, as they do for paddy cultivation which is almost completely mechanised. Typically, a set of sugarcane-harvesting machines, including the cutting machine and accompanying loaders, can cost up to Rs 1.25 crore-1.5 crore, he says.

Challenge

Mr Tyagarajan says companies face the challenge of investing ahead of cane availability, as that is the only option to increase cane areas now. This year's planting will be dependent on the harvesting capacity of sugar mills. Increasingly, farmers, too, are accepting the idea of mechanised harvesting, and are changing the cultivation practice to enable mechanisation.

The mills are now working on increasing efficiency and output of the harvesters, which are new to the field conditions here, he says.

According to industry sources, one machine does the job of about 60-65 workers. A pair of workers can cut up to 1.5 tonnes of sugarcane a day, while a machine cuts 150 tonnes in 12 hours. But the machines are capable of cutting up to 400 tonnes. As is the norm for mechanisation, large blocks of land and level conditions are ideal, but that is often not the case. Mills charge around Rs 350 a tonne, while the actual cost could work out much higher. But costs could be controlled with increasing efficiency. In a cutting season lasting about 160 days, the machines should cut about 40,000 tonnes, but now the operators are managing about one-fourth of that capacity.

Sales of complex fertilisers soar thanks to new subsidy regime

The Hindu Business Line dt.21.4.2011

 

New Delhi, April 20: 

Sales of complex fertilisers have registered a 20 per cent jump in 2010-11, following the introduction of a nutrient-based subsidy (NBS) regime.

The fiscal that ended on March 31 saw fertiliser firms selling 98.3 lakh tonnes (lt) of complexes, containing various proportions of nitrogen (N), phosphorous (P), potash (K) and sulphur (S). This was roughly a fifth more than the 81.9 lt they did in 2009-10.

On the other hand, despatches of conventional fertilisers such as urea and di-ammonium phosphate (DAP) recorded lower growth – 6.7 per cent and 9.3 per cent respectively – while even falling by 16.8 per cent in the case of muriate of potash (MOP).

The spurt in complex sales is largely being ascribed to the NBS, effective since April 1, 2010. Under it, subsidy is provided on fertilisers based on their N, P, K or S content. This was as against the earlier system, where the subsidy was limited to specific products (urea, DAP, MOP) with no real linkage to nutrient content.

Value proposition

The NBS subsidy is currently Rs 27.481 for a kg of N, with these at Rs 29.407 on P, Rs 24.628 on K and Rs 1.692 on S. That translates into a subsidy of Rs 16,648 on a tonne of the popular NPK complex, 12:32:16, enabling it to be retailed at around Rs 9,500. Lower prices (against Rs 10,750 for DAP) and the presence of K (unlike in DAP, which only has 18 per cent N and 46 per cent P) makes it a value proposition for farmers.

“Not only farmers, even companies are finding attractive to market complexes because their prices can be raised quietly without inviting the attention that DAP or MOP would,” an industry source noted.

The Indian Farmers Fertiliser Cooperative (Iffco) – the leading player in complexes along with Coromandel International Ltd – has virtually stopped making DAP at its Kandla plant, which is now only producing 10:26:26 and 12:32:16 complexes. Even MOP is being increasingly incorporated into complexes, as evidenced by imports that have gone up despite the dip in direct sales.

The other indicator of the increasing preference for complexes is imports, which touched a record 11.7 lt in 2010-11. The importers included Indian Potash Ltd (7.38 lt), Iffco (1.32 lt), Zuari Industries (0.77 lt), Mangalore Chemicals & Fertilisers (0.31 lt) and Rashtriya Chemicals & Fertilisers (0.30 lt), besides the likes of Nagarjuna Fertilisers that do not manufacture complexes.

According to the source, complex sales would have easily scaled the 100 lt-mark, but for the political upheavals in North Africa and West Asia.

“The disruption in supply of rock phosphate, phosphoric acid, ammonia and sulphur from these countries impacted our production. Moreover, the cost of these raw materials, too, went up,” he added.

As a result, the year-on-year sales growth for complexes, which amounted to over 29 per cent during April-January, slowed down to 20 per cent by the fiscal-end.

DAP price increase?

Meanwhile, most companies are said to have effected, or are planning to, increase retail prices of DAP by around Rs 600 a tonne for the coming kharif planting season. The maximum retail price, excluding local levies, will go up from Rs 10,750 to Rs 11,350 a tonne. In addition, firms are passing on the one per cent excise duty levied in the recent Union Budget to the farmer.

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