Agri-business Financing-New Credit Products-New financing opportunities

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Agri-business Financing-New Credit Products-New financing opportunities

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Food production in India has been stagnating since 2001-02. ... of crops, India has the potential to emerge as the food processing centre of the world. ... – PowerPoint PPT presentation

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Title: Agri-business Financing-New Credit Products-New financing opportunities


1
Agri-business Financing-New Credit Products-New
financing opportunities
  • By Mr.R.Prabha,General Manager,Canara Bank

2
Introduction
  • Food production in India has been stagnating
    since 2001-02.
  • It is time we started the next round of green
    revolution
  • Agri Business and Agri Processing should drive
    the second round of Green Revolution with
    diversification of crop production.
  • Developed countries have converted their
    agriculture into Agri Business.
  • India is in the threshold of transforming its
    agriculture into Agri-business.

3
Introductioncontd
  • India is the second largest producer of fruits
    and vegetables in the world.
  • It has a huge emerging domestic market with the
    change of lifestyle of middleclass and high
    potential for exports to developing as well as
    developed world.
  • Agri Business to create job opportunities in
    rural areas.

4
Transformation of Agriculture into Agri Business
major issues
Policy Initiatives Technology Investment
5
Financing opportunities in Agri Business
strength of Indian Banking
  • Vast outreach - a Branch network of 68116 with
    an average population per Bank Branch of
    16000
  • Rural 31958
  • Semi Urban 15375
  • Urban 11498
  • Metropolitan 9285
  • High domestic saving rate of 28.1 of GDP
  • Deposits USD 400.77 billion (Rs.1753174 Crores)
  • Advances USD 264.67 billion (Rs.1157807 Crores)
  • Specialized Branches and experienced personnel
  • Leverage the strength of banking for investing in
    Agri Business/
  • Agro Processing/Food Processing.
  • Conversion rate adopted is 1 USD 1 INR
    43.745

6
Indian Agri- Business as an investment opportunity
  • Corporates Both Indian and Multinational
    identifying agro processing as an opportunity.
  • Scope for Joint ventures with global players.
  • Investment by venture capitalists.
  • Huge potential for infrastructure creation like
    cold storages, chilling plants, market yards and
    handling facilities.

7
Financing opportunities for Commercial Banks
  • Post harvest management
  • 1/3rd of fruits and vegetables produced in the
    country are wasted due to poor cold storage and
    handling facilities.
  • Cold storages controlled atmosphere cold
    storages for fruits and
  • vegetables.
  • Milk chilling plants
  • Refrigerated vehicles
  • Creation of market yards and other infrastructure
  • Financing quality testing and certifying agencies
  • Labeling and Packaging industry
  • Food parks with common facilities for storage,
    effluent treatment etc.

8
Post Harvest Management financing opportunities
  • Finance against goods stored in warehouses in
    association with Collateral Management Companies.
  • Bill discounting facilities to agriculturists
    against acceptance of Bill of Exchange by the
    purchasing company.
  • Opportunities in price risk mitigation using
    commodity derivatives.

9
Agro Based Industries financing opportunities
Contract farming Sugar cane Cotton
Broiler Poultry Seed Production Grapes
Vegetables Gherkins
10
Agro Based Industries financing opportunities
  • Project Financing
  • Appraisal of Projects
  • Syndication of Loans
  • Long term Loans in local currency and foreign
    currency for
  • buildings, machinery, technology with debt
    equity ratio of 12 to 13.
  • Working capital facilities
  • Export financing
  • Term Loans for Upgradation of existing units to
    adopt modern technology/HACCP / EUREP GAP
    Standards

11
Agro Based Industries financing opportunities
Some examples Meat and meat
products Marine exports Egg powder
Vineries Seed production Bio
Technology Fruits and vegetables
processing Food grain processing
Extraction of oleoresins Natural dyes
Extraction of aromatic compounds
12
Agro based industries emerging opportunities
  • Processing of vanilla for extraction of
    vanillin
  • Conversion of sugar cane to ethanol
  • Extraction of bio-diesel

13
Agri Business - Other opportunities for banks
  • Channel financing and financing modern retail
    outlets
  • IT kiosks in rural areas
  • Private Agri -extension initiatives
  • Organic farming
  • Consultancy for project formulation and appraisal
    as a fee based activity

14
TO SUM UP
  • Transforming Agriculture into Agri-business and
    value addition of agricultural products is a huge
    opportunity for developing countries like India,
    which has the potential to transform its business
    landscape .
  • With low labour cost, varied climatic conditions
    and diversity of crops, India has the potential
    to emerge as the food processing centre of the
    world.
  • There is a need to bring in world-class
    technology and infrastructure in food processing
    through a co-ordinated effort by the Government,
    Corporates, entrepreneurs and the financial
    institutions.
  • Banking Industry in India, particularly Canara
    Bank as a major Bank in the Public Sector, is
    committed to make this happen.

15
Thank you
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