As India gropes for ways to bring in a follow-up green revolution, the news that the crop farming sector was not only stable but profitable in the US, where the general economy has visibly underperformed, is nothing less than the first welcome showers of summer. (We just had one in Bangalore.)
A University of Illinois report comparing the returns from publicly traded companies from 2007 to the first quarter of 2011 shows 8.6% market value increase in agriculture-related companies whereas companies in S&P 500 experienced a 2.7% decline. Researchers created an AgIndex looking at five sectors: fertilizers, equipment, seed and genetic companies, crop production companies and first processors.
The S&P 500 is an index that tracks the market values of 500 large companies in the United States. All of the agriculture-related companies that were monitored have an interest in agriculture, but the majority also has interests in other entities, such as construction.
The full report is available here. As far as I know, there's no such Index in India (someone correct me if I am wrong) but if the government is serious about "agriculture being central to its growth strategy", it'd need to infuse money and enthusiasm in new technology, support services, improve marketing, and all of that.
Mercifully, baby steps, when it comes to technology, are being taken. In a recent meeting, Department of Biotechnology (DBT) Secretary M.K. Bhan said three years ago hardly any agriculture company applied for a variety of grants/soft-loans that the department provides for innovation. Now, 35% of the grantees are from agriculture. "Even a company like Rasi Seeds, which was thought to be a deadwood company, is now applying for grants. They have hired 'real scientists' to do research," he said, handing me two annotated files of the granted applications to "see for yourself if the quality of work being done was good or not".
I was impressed. To an extent, DBT is playing venture capitalist with Rs 350 crore in its kitty for BIRAP (Biotechnology Industry Research Assistance Programme) in the 11th Plan. Wide-ranging companies from Tata Chemicals to Advanta India to Mahyco are happy to be in its portfolio. Now we'll have to see if this VC gets a 4-5X returns for the country.
Updated Date: Dec 20, 2014 04:55:17 IST