Nirman Agri Genetics Ltd Management Discussions

Indian Economy

The agriculture sector in India is a critical component of the countrys economy, with a substantial impact on employment, food security, and rural development. Agriculture contributes approximately 17-20% to Indias Gross Domestic Product (GDP). While this share has been gradually declining due to the growth of other sectors, agriculture remains a significant part of the economy. About 40-45% of the Indian work-force is employed in agriculture. This sector is a major source of livelihood for rural populations, though many are underemployed or work in subsistence farming.

India has around 159 million hectares of net sown area. The land is primarily used for crops like rice, wheat, sugarcane, and pulses. However, land productivity varies widely across regions. Major food crops include rice, wheat, maize, and pulses. India is one of the worlds largest producers of rice and wheat.

Important cash crops include sugarcane, cotton, tea, and spices. India is also a leading producer of various fruits and vegetables. While India has made significant strides in improving agricultural productivity, there is still considerable variation in yields between different regions.

Efforts are ongoing to enhance productivity through improved technology and practices. Approximately 45% of the total cropped area is irrigated. The sector relies heavily on monsoon rains, and variability in rainfall can impact agricultural output. There are ongoing e orts to improve irrigation infrastructure and water management. The Indian government implements various schemes and policies to support agriculture, such as the Minimum Support Price (MSP) system, subsidies on fertilizers, and crop insurance schemes. Initiatives like the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) aim to improve irrigation facilities.

Agricultural sector in India

India is primarily an agrarian economy. While agriculture is estimated to account for just over 17 percent of the US$2.6 trillion economy, the sector employees over 60 percent of the population.

India has largely achieved self-sufficiency in production of food grains, delivering strong and fast economic growth for the past several years, and this trend is projected to continue in the future. The country has unique competitive advantages with the largest arable land area (60.44 percent) of an estimated 179.8 million hectares and diverse agro-climatic conditions supporting the cultivation of various crops. The agricultural sector indeed plays a vital role in Indian economics, politics, and society.

India is among the highest-ranking countries in production volume for various commodities like rice, cotton, dairy, fruits, vegetables, meat and seafood, but the nation has access to only 60 percent of the produce due to lack of storage infrastructure, which leads to an estimated loss of up to 40 percent of the produce. In fact, these losses are estimated at $13 billion annually.

Over the past decade, agriculture and horticulture outputs have seen record growth year- after-year. Yet, crop yields are still generally lower compared to the world average. This low productivity is due to many factors such as erratic monsoons (over 50 percent of cultivated land is monsoon dependent), shrinking groundwater resources, decline in soil fertility, inefficiency in the food distribution system, lack of storage, transportation, lack of awareness in the use of modern agricultural practices and technologies among the farming community, unpredictable weather, small average farm sizes of 1.08 hectares, and agricultural subsidies that distort market signals and hamper productivity-enhancing investment.

Indian seed industry

The Indian seeds industry has emerged as a significant contributor to the countrys agricultural growth and food security. With a market size of over _20,000 crores, it plays a crucial role in providing high-quality seeds to farmers, enhancing crop yields, and driving agricultural productivity.

Opportunities & Threats

Demand for agricultural inputs such as hybrid seeds and fertilizers and allied services like warehousing and cold storages increasing in India at a faster pace. High proportion of agricultural land, diverse agro-climatic conditions encourage cultivation of different crops. Indian agricultural sector is predicted to increase to US$ 24 billion by 2025 on the back of government initiatives, sustainable farming practices and concern to escalate crop productivity by extension of services. Hybrid seeds play a pivotal role in mitigating food shortage, curbing wastage, addressing climate challenges, and ameliorating food quality issues within Indias agriculture sector. They substantially boost farm productivity, thereby augmenting the Profitability of farmers. To promote widespread adoption among small farmers, the implementation of appropriate policy reforms and targeted subsidies is imperative.

Weather conditions play a major role in affecting the productivity of any crop. Accurate and intensified weather forecasting coupled with correct and timely advisory system at grass root level will definitely help in improving the productivity.

Outlook

Agrochemicals, also known as crop protection chemicals, play a vital role in advancing Indias agriculture sectors. Together with genetically improved crop varieties, they have been instrumental in the successful implementation of the green revolution.

India holds the position of the worlds fourth-largest agrochemical producer and enjoys a trade surplus in this sector. Projections suggest that the agrochemical market is poised to reach $8.1 billion by 2025, presenting ample opportunities for growth across the value chain.

The overall outlook for the agrochemicals industry in India remains favorable, driven by robust domestic demand, expanding export opportunities, strategic collaborations with innovators for new product development and potential exploration of o -patent products along the value chain.

Your Company has in place an adequate system of internal control commensurate with its size and nature of business. The system provides reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies.

The Company has put in place proper controls, which are reviewed at regular intervals to ensure that transactions are properly authorized and correctly reported and assets are safeguarded.