Entrepreneurship in Agriculture: Not only Opportunity, but also a Necessity
Agriculture has been the important and dominant sector of Indian economy because of its high share in employment and it being the source of livelihood for approximately 65 percent of Indian population till date. It still remains a major contributor to India’s GDP. It supports more than half a billion people and is providing employment to 52 percent of the workforce. Its contribution to the nation’s GDP is about 10.5 percent in 2014-15 (statisticstimes.com, 2015).
India is managing 17.5 percent of world population on 2.4 percent of world land. During independence, more than half of the national income was contributed by agriculture and more than 70 percent of total population was dependent on agriculture (Pandey, 2013). Due to changing socio, economic, political, environmental and cultural dimensions throughout the world, the farmers’ and nations’ options for survival and sustainability, and ensuring success in changing their respective economic environments, have become increasingly critical. The rapid growth of agriculture is essential not only for self-reliance but also for meeting the food and nutritional security of the people, to bring about equitable distribution of income and wealth in rural areas as well as to reduce poverty and improve the quality of life. Growth in agriculture has a maximum cascading impact on other sectors, leading to the spread of benefits over the entire economy and the largest segment of population.
The emergence of free market economies has led to the development of a new spirit of enterprise ‘Agripreneurship’ and the increased individual need for responsibility for running their own businesses (Alex, 2011). There is a need for tremendous innovation and investments in this sector. Government of India has allowed 100 percent FDI under automatic route in storage and warehousing and also for the development of seeds.
The social entrepreneurship ecosystem is on a growth path but is still very nascent in India. With the wave of social entrepreneurship flowing across various sectors of social impact, agriculture sector is not left untouched. Innovative social enterprises are coming up which are focusing on the problems and needs of farmers. With very few impact investment funds in India, there are even fewer, which have invested in the agriculture sector (Kirti Punia, 2013).
Entrepreneurial Environment for Farmers
The farmers-entrepreneurs operate in a complex but unstable and dynamic environment. They are the part of a larger collection of people including other farmers, suppliers, traders, transporters, processors and many others. Everyone is having an important role in producing products and moving them to the market through the value chain. Each one needs to be an entrepreneur and work in an integrated manner to make the whole system work better and to be more profitable in their business.
Entrepreneurship is a key factor for the survival of farming in an ever-changing and increasingly complex global economy. Farmers-entrepreneurs see their farms as a business and as a means of earning profits (David Kahan, 2012). They are so passionate about their farm business that they are willing to take calculated risks to make their farms profitable and their businesses grow. Many of them think that there is little future for farmers unless they become more entrepreneurial in the way they run their farms. They must have a positive thinking for increasing produce for markets and for earning profits. Becoming more entrepreneurial can be a challenge for small-scale farmers. They will need help from extension workers and other institutions to come up at better position as an agripreneur.
To become a successful farmer-entrepreneur, they must be technically competent, innovative and plan ahead to gear up their farm businesses through the stages of enterprise development – from establishment and survival to rapid growth and maturity. There are many challenges that these farmers face such as social barriers, economic barriers, regulations, access to finance and information, and their own managerial capacity to cope with risks and changes and to seize opportunities.
Entrepreneurship is connected with finding ways and means to create and develop a profitable farm business. The term entrepreneurship and agripreneurship are frequently used in the context of education and small business formation in agriculture. Dollinger (2003) has described entrepreneurship in agriculture as the creation of innovative economic organisation for the purpose of growth or gain under conditions of risk and uncertainty in agriculture.
Need of Agripreneurship Development
There is a need of entrepreneurship in agriculture for more productivity and profitability. This is the need of the hour as the people are facing growing unemployment and poverty in rural areas. But after the inception of New Economic Reforms, adoption of liberalisation, privatisation and globalisation and accepting objective of World Trade Organisation in 1995, it is expected that rural area has the capability of growing at par with urban area.
Entrepreneurship in the field of agriculture can generate wide range of economic benefits such as increased agri productivity, creation of new business ventures, new jobs, innovative products and services, development of rural areas and increased wealth. Agripreneur is a dynamic business manager who performs various agri-based activities using different resources viz, physical resources, financial resources, human resources and information, in order to accomplish a certain goal.
Promotion of Agripreneurship in India
India is having 52 percent of total land that is cultivable as against 11 percent in the world. All 15 major climates of the world exist in India from snow bound Himalayas to hot humid southern peninsula, and desert to heavy rain areas. There are 20 agro-climatic regions and nearly 46 out of 60 soil types in the country. The sunshine hours and day lengths are ideally suited round the year for cultivation of crops.
India is ranked the second largest producer of rice and wheat in the world. It is first in pulses and fourth in coarse grains according to the data. India is also one of the largest producers of cotton, sugar, sugarcane, peanuts, jute, tea and an assortment of spices. In terms of the real value added, the Indian agriculture sector ranks third, after China and the United States. The share of agriculture in the total value added to the economy, at around 13.2 percent, is still quite high. This implies that agriculture is likely to remain a priority, both for policy makers as well as businesses, in the foreseeable future and any move to ramp up the sector calls for a multi-pronged strategy.
Farmers need to adapt certain qualities to become entrepreneurs. They need to be innovative and look forward to accept challenges for managing their businesses as long-term ventures with a view to making them sustainable. They must learn to identify opportunities and grab them for their benefits. Some small-scale farmers do have these qualities, but they still focus on maintaining their traditional way of life. Their production decisions are based on ‘what they need’ and not on ‘what is possible’ (David Kahan, 2012). The farmers must develop an entrepreneurial spirit to cope with the risks they would face in the future. A farmer must be enthusiastic and careful enough for making different decisions about his farm in the context of the value chain that influences the profits of the farm business.
Other Challenges are as follows:
• Market-related risk;
• No easy access to finance and credit;
• Lack of information;
• Low bargaining power;
• Vulnerability to economic shocks;
• Lack of proper training.
Farmers may be given a specialised training to run their farms as a profit-making business and to invest profits back into the business to generate long-term growth. They also must be encouraged and motivated to develop and adapt new technologies and share them with other farmers. Extension workers can facilitate partnerships among farmers and between farmers and researchers to work together to identify, develop and test new technologies and practices to improve productivity and profitability. They must be aware of the fact that they have greater opportunities that allow them to produce beyond just surviving. However, by changing their resource mix and overcoming access and risk issues, opportunities can be expanded. They should expand their survival farming to include some economic activities and can move towards the path of developing profit-driven farming businesses (David Kahan, 2012).
Agripreneurship is the need of the hour in India to make agriculture a more attractive and profitable venture. There is a great scope for entrepreneurship in agriculture. The potentiality of the country can be tapped only by effective management of agri elements such as soil, seed, water and market needs. The youth who can bear the risk and having a quest for latest knowledge in agriculture sector can prove to be right agripreneurs. It also has a large potential to contribute to the national income while at the same time providing direct employment and income to the numerically larger and vulnerable section of the society. Agripreneurship is not only an opportunity, but also a necessity for improving the production and profitability in agriculture and allied sector.