IRJC Asia Pacific Journal of Marketing & Management Review Vol.1 No. 2, October 2012, ISSN 2319-2836

THE ENVIRONMENT FOR AGRICULTURAL AND AGRIBUSINESS INVESTMENT IN INDIA: POLICY IMPLICATIONS OF KARNATAKA DR. H. RAMAKRISHNA* *Associate Professor, Department of PG Studies in Commerce, Smt. Saraladevi Satischandra Agarwal Government First Grade College, Bellarly, Karnataka, India.

ABSTRACT The Government of Karnataka has developed Integrated Agribusiness Development Policy in 2011 covering agriculture and allied sectors By admitting the constraints and drawbacks in Supply Chain Management (SCM), post-harvest losses and agri-exports, the government has expected substantial changes in terms of technology, markets, institutions and policy and in turn, to increase in income of farmers, state‟s GDP, better value addition and above all the food security. Among others the strategic objectives of the policy are: Substantial increase in investment to the sector to increase agricultural value chain. Creation of favorable business environment for private sector to take part in research related activities and agro-ecological activities. Policy also aims to bring modernization in existing agri-infrastructure, cold chain, controlled atmospheric storage, refrigerated, transport, agri-clinics, food processing corridor. Agri-business investment regions, food parks, agri-SEZs etc, agro-based industry including dry land farming, precision farming. To make the agri and allied sectors more effective, the policy had given much importance for the prorate investment dose. The strategic view is to what extent the sector will get more private investment from foreign as well as domestic investor to boost agro-exports at par with the global standards.

Agribusiness include not only those that farm the land but also the people and firms that provide the inputs for example, seed, chemicals, credit etc. process the output for example milk, grain, meat etc., manufacture the food products for example ice cream, bread, breakfast cereals etc., and transport and sell the food products to consumers for example restaurants, supermarkets. A business that earns most or all of its revenues from agriculture. An agribusiness tends to be a large-scale business operation and may dabble in processing and manufacturing and/or the packaging and distribution of products. Agribusiness is synonymous with corporate farming. It combines the words agriculture and business and it involves a range of activities and methods used involving modern food production. This involves farming, seed supply, agrichemicals, farm machinery, wholesale and distribution of products, processing, marketing, and retail sales. They

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INTRODUCTION

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KEYWORDS: agri, agro, agriculture, FDI, investment.

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do not necessarily take into consideration environmental and social best practices when doing business. Their ultimate result for their bottom line is profit. REVIEW OF LITERATURE Before we come up with the objectives and other aspects of the study, let us observe the important studies already completed in this area. Braun et al (2005) have observed the strategic issues and reform option for Indian agriculture and rural development. It has been addressed the need of increasing investments in rural infrastructure and to promote pro-poor rural and agricultural development. At the end, in the study it has been advised India to go for increase investments in rural infrastructure, reorient its social safety nets to create more employment in rural area and trade liberalization. The International Food Policy Research Institute (IFPRI) has recommended to increase investments in rural infrastructure including transport and information technology that connects villages and agricultural R & D. The study has advocated the necessity of liberalizing its marketing and trade policies to encourage coordination between farms, firms and forks (super markets) increased inflow and rural credit especially to small holders through Non Banking Financial Corporations

NEED OF THE STUDY India and China are the two largest agrarian economies in the world. Foreign investment is flowing to both the nations. No doubt, the policy reforms with regard to capital, human resource, and foreign nations certainly influence on the flow of foreign capital. The agriculture is the backbone of India-the emerging economy. More than 70% of the Indian population depends upon agriculture. Despite the tremendous development in agriculture, the Indian agriculture sector is not in a position to achieve self sustenance. The reasons are many. It may be due to more dependence on traditional method of cultivation, more hurdles to come out from the

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Pray and Latha Nagarajan (2012) International Food Policy Research Institute‟s (2012) study on “Innovation and Research by Private Agribusiness in India” focuses on the private innovations and its contribution to the agricultural productivity and incomes. The study has disclosed that Research and Innovation by private industry led to the boom in cotton exports and to rapid increases in exports of generic pesticides and agricultural machinery. Similarly increases in innovation and Research and Development were led to increases in demand for agricultural products, and in turn demand for land, labor and water saving inputs. Ultimately this will be allowed large Indian Corporations, business houses, and foreign firms to invest in Agriculture and Agribusiness.

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The study of Sharma‟s (2008) on Indian‟s agrarian crises and corporate led contract farming has explored the determinants of participation in contract farming in order to observe whether contract farming affects the farm income or not. The study has focused on contract farming and its importance in the present context. Contract farming enable farmers to access better quality inputs such as seeds, fertilizers, pesticides, extension services and credit from the corporate sector. The study has concluded that there is a need to promote non-political farmers, organizations to improve small holders bargain power as well reduce transition costs to agribusiness companies.

IRJC Asia Pacific Journal of Marketing & Management Review Vol.1 No. 2, October 2012, ISSN 2319-2836

religious dogma, improper plans by the policy makers, underdeveloped agricultural markets, more restrictions in inviting private capital to boost agriculture sector and many more. The income from agriculture is shrinking. At the same time the debt of the farmer is rolling year by year. Therefore, the agriculture sector needs to be overhauled with private investment touch. Hence, the analysis of the present study looks in to the need of private investment for agriculture and agribusiness investment into India in general and the state of Karnataka in particular. OBJECTIVES OF THE STUDY The following objectives have been set for the present study: 1. To know the business environment for private sector to take part in research related agricultural activities. 2. To analyze the wave of FDI in agriculture 3. To understand the options available for private investment in the newly introduced Integrated Agribusiness Development Policy (IADP) 2011 of the Government of Karnataka METHODOLOGY The present study is based on secondary data. We have analyzed the Integrated Agribusiness Development Policy (IADP) 2011 of Government of Karnataka from the investment angle. We have also used policy research of working papers of United States Department of Agriculture, Economic Information Bulletin, Economic Research Service etc. we have also used the policy measures available in International Food Policy Research Institute (IFPRI).

No FDI/NRI investment permitted other than tea sector The FDI permitted in tea sector including tea plantations with prior Government approval Equity allowed under automatic approval route was 100%

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Indian Investment Regulation presently permits 100% FDI in most of the sectors and in most cases with automatic approval. Key agricultural areas where FDI is currently not permitted viz. agricultural production except for floriculture, horticulture, development of seeds, animal husbandry, fisheries, cultivation of vegetables under controlled conditions, tea plantations and services related to agriculture and allied sectors. FDI policy on Agriculture and allied activities has been changed from time to time. For example, the important features of FDI policy of 2005 with regard to agriculture and allied sectors were:

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FDI POLICY

IRJC Asia Pacific Journal of Marketing & Management Review Vol.1 No. 2, October 2012, ISSN 2319-2836

But, the policy of FDI on agriculture has been changed during 2011. Let us observe the FDI Policy on Agriculture and Animal Husbandry-2011. TABLE: GOVERNMENT RESTRICTIONS ON LARGE INDIAN FIRMS, IMPORTS OF TECHNOLOGY AND FOREIGN DIRECT INVESTMENT Sector

1980s

Mid-1990s

Seed/biotech

Reserved until 1986.

Large Indian and Foreign Direct Limited vegetable seed Investment (FDI) imports. allowed in joint ventures with Indian Other seed imports firms. prohibited. Vegetable seeds Open General Licensing (OGL). Limited imports of coarse grain and oilseed seed.

Current FDI allowed 100% under “noncontrolled” conditions since April 2011. Import of vegetable seeds and other seeds and planting material allowed under OGL.

Government imports of rice, wheat seeds.

50% formulation reserved for small industry. No imports of formulated products. Product patenting

AI imports with 35% tariff. No imports of formulated products. No reservation for small scale. Customs duty on imports as high as 65%.

Imports of formulated products allowed since 2004. 100% FDI allowed through automatic route since 2008. Customs duty on imports slashed to 7.5%. Maximum excise duty is 15%. Joined TRIPS– WTO regime in 2005.

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New Active Ingredients (AIs) allowed for limited time at 150% tariff and then must manufacture in India.

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Pesticides

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abolished in 1970. Fertilizer

Restricted to Same as 1980s. cooperatives and Indian domestic firms.

Since 2005, 100% FDI allowed.

Imports controlled by government under Foreign Exchange Regulation Act (FERA). Agricultural Machinery

No imports and restricted under FERA. Equipment reserved for small-scale domestic enterprises.

No imports. No reservation on equipment.

Some imports allowed, especially small equipment, including power tillers.

FDI allowed. 100% foreign ownership allowed.

Foreign firms allowed in joint ventures for tractors. Import restrictions 1999–2000 grandparent Grandparent stock imports allowed stock imports continued. under OGL. restricted.

Sugar

Reserved for smallscale and cooperative sectors.

Sugar industry de-licensed in 1998.

Large Indian companies can invest outside.

Sugar restricted.

Reserved until 1998, when deregulation started.

FDI allowed up to 100% through the automatic route.

imports

Quantitative restrictions on

Import duty on sugar up to 60% since April 2011

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Tariffs at 25%.

Parent stock imports banned.

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Poultry

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exports removed.

(previously removed in 2009).

Futures trading for sugar introduced. Food Processing and

Reserved for scale sector.

small- Reserved until 1998.

FDI still prohibited in retail food markets.

Supermarkets Source: compiled from the FDI policy of India of various years. FDI POLICY ON AGRICULTURE AND ANIMAL HUSBANDRY-2011 FDI is permitted up to 100% on the automatic route, subject to applicable laws/sectoral rules/regulations/security conditions. 100% FDI is allowed via Automatic Approval. In case of agriculture and animal husbandry sector, the allied sectors like floriculture, horticulture and cultivation of vegetables and mushrooms under controlled conditions, development and production of seeds and planting material. 100% FDI is also permitted in animal husbandry (including breeding of dogs), pisciculture, aquaculture under controlled conditions and services related to agro and allied sectors. Any import of genetically modified materials shall be subject to the conditions laid down in the notifications of Foreign Trade (Development & Regulations) Act, 1992. Import of materials shall be in accordance with the National Seeds Policy. Poultry breeding farms and hatcheries where micro climate is controlled through advanced technologies like incubators, ventilation systems etc.

1. Substantial increase in investment is expected to improve the agricultural value chain and has assumed drastic decrease in transaction costs. 2. Creation of favourable business environment for private sector to take part in research related activities and agro-ecological activities.

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The Govt. of Karnataka has developed Integrated Agribusiness Development Policy (hereafter called IADP) in 2011 covering agriculture and allied sectors (like horticulture, fisheries, animal husbandry, sericulture and food processing etc). By admitting the constraints and drawbacks in Supply Chain Management (SCM), post-harvest losses and agri-exports, the government has expected substantial changes in terms of technology, markets, institutions and policy and in turn, it has also expected to increase in income of farmers, state‟s GDP, better value addition and above all the food security. The IADP-2011 came into existence from 22-022011. The strategic objectives of the policy are:

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AN OVERVIEW OF INTEGRATED AGRIBUSINESS DEVELOPMENT POLICY (IADP)-2011 OF KARNATAKA

IRJC Asia Pacific Journal of Marketing & Management Review Vol.1 No. 2, October 2012, ISSN 2319-2836

3. Modernisation of existing agri-infrastructure in the state: Policy aims to bring modernisation in existing agri-infrastructure, cold chain, controlled atmospheric storage, refrigerated, transport, agri-clinics, food processing corridor. Agri-business investment regions, food parks, agri-SEZs etc, agro-based industry including dry land farming, precision farming, extensive IT & GIS application in agriculture and farming solutions. 4. Boosting agro-exports by meeting EU, HACCP, & other international standards 5. Emphasizing small scale agro-based units to remain competitive in global market 6. Inviting private investments in Agriculture and allied sectors AN ANALYSIS OF INTEGRATED AGRIBUSINESS DEVELOPMENT POLICY (IADP)2011 OF KARNATAKA FROM PRIVATE INVESTMENT ANGLE for Options available for private investments

1.

Agri-Infrastructure: Include both infrastructure and industrial segments pertaining to agriculture, horticulture, agro-forestry, animal husbandry, fisheries, sericulture, apiculture, and food processing sectors Modernisation proposed in the IAD Policy-2011: Post-harvest infrastructure, cold chain, controlled atmospheric storages, grading and packing halls, refrigerated transport, warehouses, agri-clinics, product certification centers, agri-education hub, center of excellence for R & D, agri-investment regions, food parks, agri-SEZs, agrilogistics, retail outlets for perishable and non-perishable products.

2.

Development of agri-infrastructure is proposed in the policy through PPP for greater opportunities in agribusiness. Proposed to create world class supply chain infrastructure for providing impetus to the development of agri and allied sectors through development of post-harvest infrastructure, agrocorridor etc. Upgrade, modernize and augment existing industrial infrastructure, environment infrastructure, specialized infrastructure

Development of agro-based industry Project opportunities for investment in IADPincluding food processing units 2011 1. Investment in agriculture and allied sectors

Proposed to attract investments both in infrastructure and industries, research skill, development through a structured

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Strategic areas viable agribusiness development

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Sl. No.

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and transparent process Creation of Special Purpose vehicle (SPV) to facilitate agribusiness in coordination with other agencies Policy support and promotional initiatives for value added agro and food product exports Single window clearance for investment Proposed to conduct investors meet, road show, trade fair regularly

specific value addition parks for selective products and Brand building for such products

Karnataka has competitive advantage and well known for certain products and they have geographic indication also such as Bydagi chilies, coorg honey, Rose onion, Nanjangudu Rasabale. A strategic plan for promoting & measures for exports. Allowed cooperative & private sector to set up value addition units & branding besides setting up of Research Centers, Quality Certification etc.

4.

Amendment to APMC Act to take up Contract forming & Terminal markets

Proposed to take up contract forming by private sector or other agencies within the purview of APMC Act. An amendment to APMC Act is proposed to establish Terminal markets under

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3.

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Special Purpose vehicle (SPV) : Karnataka Agri-Business Development Corporation (KABDC) proposed as SPV to look after investment related activities including conducting investors meet, identifying project opportunities for investment, appointment of agencies & experts for facilitating investment promotions, periodical follow-up of investment quarries etc.

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Food Processing Center corridor

With the aim of enhancing revenues to farmers and employment potential to local people, the Agri related & allied corridors proposed along major transport arteries. The corridor would include the development nodes include agribusiness investment regions(large size of about 5000 acres covering food parks, Agri SEZs, common processing hubs etc.), Agribusiness investment areas, Knowledge hubs, horti-tourism zones, food parks, food SEZs, food processing industries etc.

6.

Agri-Horti, Animal Husbandry, Fisheries, Education and Knowledge hubs

An ample opportunities created in the areas including market information center, R & D institutes, skill development institutes, know-how dissemination centers

7.

Special Zones

Specialized tourism zones aim to promote agriculture tourism to provide employment & economic stability in rural communities. An investment is invited to farm vacation, farm stays, camping sites themed special events and festivals, agro-shopping, culinary tourism, bed & breakfast, boating, health (naturopathy & ayurvedic) tourism. This type of programmes provides an opportunity for urban people to get back to the roots.

8.

Investment Promotion

Agro-Tourism

Investment

The state government is already conducting regular promotion events like Global Investors Meet (GIM). BioTechnology Summit to promote investment into state. Along with these, it is proposed in the policy to conduct Multiple Global Agribusiness Investors Meet (GABIM), Road Shows, B2B Meetings etc.

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5.

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private sector.

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In order to woo investment from nook & corner of the world, the policy has contemplated the state government entering MoUs with regarding national and international R & D and financial institutes 9.

Land for Agro-based Industries and Agri-Infrastructure Projects

Potential investors can locate the spots from the „Land Bank‟ (list of government lands available for investment declared by the state government) for infrastructural facilities either in earmarked industrial parks, SEZs or Industrial Estates It is also proposed to involve land owners in the project in terms of equity structure/revenue sharing/business partnerships Agro-based industries and agriinfrastructure entities are entitled to hold private agricultural land on longterm lease for agribusiness activities Proposed in the policy to make available government lands and agriculture farms on lease basis at concessional rates

The major incentives available for large, MSME, large and Mega Agro-based industries and Agri-Infrastructure are:

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Through the Karnataka Industrial Policy 2009-14, government has put efforts to concentrate the entire state for industrial development. Moreover, Dr.D.M.Nanjundappa (an eminent economist) Committee Report on Regional Imbalances has also suggested to extend some concession and privileges to industrially backward districts and taluks in the state. In this direction the government of Karnataka is putting its efforts towards the development of the whole state irrespective of regions like old Mysore, Hyderabad-Karnatka, Bombay-Karnataka, Malnad etc.

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THE KARNATAKA INDUSTRIAL POLICY 2009-2014

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1. Stamp duty exemption to an extent of 50% and concessional registration charges is available for lease deeds, lease-cum-sale and absolute sale deeds executed with KIADB, KSSIDC, KSIIDC, Industrial Estates. 2. 100% exemption from payment of Entry Tax on Plant & Machinery and Capital goods for an initial period of three is available. 3. One time capital subsidy up to 50% of the cost of Effluent Treatment Plants (ETP) subject to ceiling of 100 for MSME, Large & Mega agro-based industrial unit & Rs.500 lakhs for common Effluent Treatment Plant established as part of agri-infrastructure facility. CRITICAL ANALYSIS OF IADP-2011 FDI in Indian agriculture sector and the latest developments (highlighted on consolidated FDI Policy of GOI w.e.f. April 1st, 2011, circular 01 of 2011) Department of Industrial Policy and Promotion (DIPP) working under the Ministry of Finance, GOI has issued the circular 01 of 2010with regard to the policy on FDI. With the new guidelines, FDI is permitted up to 100% through the Automatic Approval route covering horticulture, floriculture \, development of seeds, animal husbandry, pisciculture, aquaculture, cultivation of vegetables, mushroom services related to agro & allied sectors. Surprisingly, no FDI/NRI/OCB was allowed in the FDI Policy-2004 other than Tea sector. FDI was permitted up to 100% in Tea plantations with prior government approval. Further, it requires compulsory divestment of 26% equity in favour of the Indian partner or Indian public with a maximum period of Five years. With the liberalized attitude of GOI, the sector is able to attract FDI.

In India, more than four-fifth of farmers relay on farm saved seeds leading to a low seed replacement rate. Therefore, Government of India has addressing this issue. Indian seed programme including ICAR, Agri-Universities , state governments, farmers, plant breeds, cooperatives and private sector (Source: Economic Survey 2010-11, p-95 www.indianbudget.nic.in) But, the Department of Industrial Planning and Promotion through its press note, has incorporated major changes to the consolidated FDI Policy. FDI has now been permitted in the development and production of seeds and planting material without the stipulation of having to do so under controlled conditions.

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In order to bring a green revolution, Government of India on 31st March, 2011 has introduced New FDI Policy which aims at inviting FDI in the sectors which were closed for foreign investment earlier. As per the circular, the investing company shall carryout the cultivation of floriculture, horticulture, vegetables and mushrooms under controlled conditions, wherein rainfall, temperature, solar radiation, air humidity are controlled artificially.

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FDI IN AGRICULTURE SERVICES: BOONE OR BANE?

IRJC Asia Pacific Journal of Marketing & Management Review Vol.1 No. 2, October 2012, ISSN 2319-2836

The sector wise FDI inflows for agriculture services from April 2000 to May 2012 is Rs.7015.01 crores, this is 0.84% to total FDI inflows (Rs.791854.12 crores) for the said period. (www.dipp.nic.in) TABLE: 01 PUBLIC AND PRIVATE INVESTMENT IN AGRICULTURE AND ALLIED SECTORS IN TOTAL GDP AT MARKET PRICES (2004-05 PRICES) (RS.IN CRORES) Investment

Share (%) in Total

Year

GDP at Market Public

Private

Total

Public

Private

Total

2004-05

16182

62666

78848

3239224

0.5

1.9

2.4

2005-06

19909

73212

93121

3540559

0.6

2.1

2.6

2006-07

22978

71422

94400

3874632

0.6

1.8

2.4

2007-08

23040

86966

110006

4247918

0.5

2.0

2.6

2008-09

24452

114145

138597

4465360

0.5

2.6

3.1

Source: Central Statistical Organization, New Delhi (accessed on 15-7-2012)

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From table 01 It is the share of private sector in agriculture and allied sectors in total GDP is considerable. Nearly 80% of investment in the agri & allied activities is made by the private sector. The share of agriculture and allied sectors in total Gross capital Formation (GCF) in % is 10.2% in 2008-09 whereas the share of public investment is 5.9%.(Table :02)

IRJC Asia Pacific Journal of Marketing & Management Review Vol.1 No. 2, October 2012, ISSN 2319-2836

TABLE: 01 GROSS CAPITAL FORMATION IN AGRICULTURE & ALLIED SECTOR (AT 2004-05 PRICES) (RS. IN CRORES) GCF in Agriculture & Allied Sector

GCF of Economy

Public

Private Total

Public

2004 -05

16182

62666

78848

2005 -06

19909

73212

2006 -07

22978

2007 -08 2008 -09

Year

Share of Agriculture & Allied Sector in Total (%)

(by industry of use) Private

Total

Public

Private

Total

240755 770168

1010923

6.7

8.1

7.8

93121

278703 894368

1173071

7.1

8.2

7.9

71422

94400

324342 1037543

1361885

7.1

6.9

6.9

23040

86966

11000 6

379495 1189514

1569009

6.1

7.3

7.0

24452

114145

13859 7

414122 1116851

1530973

5.9

10.2

9.1

A collective from both the stakeholders i.e. public and private in the forward and backward linkages is the need of the hour. A private investment (either FDI or NRI or domestic private) in agriculture will not only affect on agriculture but also on allied and related industries sectors. FDI inflows to agriculture services also facilitated growth of other related areas (may be in the procurement & marketing of agri and allied products) like roads, water supply, irrigation.

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If we observe the public sector outlays/expenditure, the government (total of center, states and UTs except Maharastra & Uttarkhand), it has increased Rs.37546 crores, Rs.58933 crores, and Rs.136381 crores respectively during 9th Plan, 10th Plan, and 11th Plan for agriculture and allied activities. The government has also increased Rs.15879 crores, Rs.18460 crores, Rs.26222 crores, Rs.32490 crores, Rs.76603 crores and Rs.52980 crores respectively for the years 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 towards Fertilizer subsidy for agriculture sector. Even after putting all these efforts for the self-sufficiency of the Indian farmers, but, due to loopholes in the policies on agriculture and improper utilization of the funds allocated, the status of the Indian farmers is not improved as the policy makers have expected.

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Source: Central Statistical Organization, New Delhi (accessed on 15-7-2012)

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AGRICULTURAL RESEARCH AND INNOVATION IN INDIA: A NEW AVENUE FOR PRIVATE INVESTMENT Diversion of investment for Research and Innovation Management change are the two crucial issues in the agricultural arena. In fact, The Government patronaged research institutes and centers are striving to bring new and innovated Genetically Modified (GM) seeds into the field and these are extremely important to farmers. Research and Innovative activities are the part of business organisation and these are never ending activities. In the saga of Research and Innovation, we should not forget the role of investment by private players. The question to be discussed here is whether the IADP is giving solution to the following questions are not? 1. Adequate and appropriate storage and distribution system. 2. Technical support for the sector. 3. Consistence with supply and quality. 4. Superior quality of seeds and adequate supply of such seeds. 5. The least post harvest losses. 6. Proper handling of agriculture and allied sectors. 7. Good hygienic conditions. 8. Good slaughter houses. 9. Adequacy of exportable agri-products.

To realize the stated issues, the following proposals have been made in the policy: 1. DEVELOPMENT OF AGRO-INFRASTRUCTURE Proposed to create agro-corridor, agri-SEZs, agri-parks, common processing centers, auction houses.

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Thus, to give proper solution to the above agriculture and allied sector needs an abundant fund, technology, markets initiations of the Government and policy measures. In order to get good value addition, the said sectors need to be overhauled with new technology.

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10. Good post harvest infrastructure.

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Creation of new fishing harbors and fish landing facilities with adequate forward and backward linkages. Upgrade, modernize and augmentation of existing industrial infrastructure and environmental infrastructure. 2. RESEARCH, SKILL DEVELOPMENT AND EMPLOYMENT GENERATION: Promoting excellence in basic, strategic and anticipatory research in crop science, horticulture, veterinary science, animal science, dairy science, food processing, food packing technology, food engineering,. It is also proposed to develop educational and research institutes and training centres, skill development centers for capacity building for sustained agricultural growth. Arranging regular technology exchange programmes Arranging regular technology programmes Training programmes for target groups like farmers, farmer societies, Self Help Groups, women development groups 3. AGRO-EXPORTS: In order to boost agro-exports, creation of new markets and new product lines and develop alternate marketing channels, encouraging high realization and value added exports meeting, meeting European Union and other international standards. 4. KARNATAKA AGRI BUSINESS DEVELOPMENT CORPORATION (KABDC): Through the establishment of KABDC, it is expected to act this agency as a single window for all the clearances. This corporation will also conduct the investor‟s meets, road shows etc. 5. DEVELOPMENT OF AGRI-INPUT SECTOR: For sustained agricultural growth, it is planned to develop agri-input sector including the following:

Pest management for animal husbandry Food processing and manufacturing equipments Development of Bio-compost plants using town domestic waste Agro and rural financing

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Seed certification centers

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Setting up of major seed production, processing and storage centers

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6. KNOWLEDGE SUPPORT CELL: The knowledge support cell would cover university, farmer interaction, corporate knowledge, knowledge dissemination, technologies, weather updates, soil and water testing services, promotion of information technology in agriculture, guidance to technical cultivation, farmer field schools, creating awareness of improved agricultural technologies among the farmers etc., POLICY RECOMMENDATIONS The following recommendations have been made for further improvement of the policy and enable to make more investment from the private sectors. 1. In order to invite private investment to this sector, the infrastructure need to be well prepared by the government fund initially. 2. World class supply chain need to be developed initially 3. An atmosphere of farm to fork has to be developed in a drastic manner 4. Promotional activities have to be developed to the need of the sector 5. Government has to take the risk of conducting the investors meet and road shows regularly. 6. In order to take up contract forming meaningfully and to uplift the economic conditions of the farmers the existing APMC Act need to be amended by taking the interest of stakeholders into account.

9. The government lands and agriculture farms of the government should be available to the stakeholders on lease basis at concessional rates to takeup the agricultural activities in a mass manner. 10. The environment should be prepared in such a way that the Potential investors can locate the spots from the „Land Bank‟ (list of government lands available for investment declared by the state government) for infrastructural facilities either in earmarked industrial parks, SEZs or Industrial Estates very easily.

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8. In order to woo investment from nook & corner of the world, the policy has contemplated the state government entering MoUs with regarding national and international R & D and financial institutes

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7. Research and Development centres and human skill development centres in order to protect the interest of the farmers need to be established at grass root level.

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Karnataka has taken a lead initiative in developing sustainable agribusiness enabled through an IADP-covering agriculture and allied sectors (like horticulture, fisheries, animal husbandry, sericulture and food processing) both in infrastructure and industrial segments on an end to end concept. Through this policy, the Government of Karnataka intends to offer immense opportunities for high growth in agriculture and allied sector. It has also been planned to give more attention to the priority areas such as improving production and productivity, reducing production cost, reduction of wastages, increasing value addition, use of high-tech agricultural technologies, Genetically Modified (GM) varieties, micro-irrigation, organic farming, integrated pest management, protected cultivation, green house technology, modernization of slaughter houses, modern fish handling factices etc. The agribusiness policy aims to create an institutional arrangement for resolving the said issues. The prime aim of the policy is to facilitate flow of investment, skills, technologies, and modern management practices. The policy is to facilitate state of the-art-technology, know-how, and avenues for interventional marketing of the produce apart from investments by private sector in developing agri-infrastructure and agro-based industries in Karnataka. REFERENCES 1. Pray, Carl E and Latha Nagarajan (2012), International Food Policy Research Institute‟s study on “Innovation and Research by Private Agribusiness in India”, Paper No-01181, pp. 1-33. 2. Sharma, Vijay Paul (2008), ”India‟s Agrarian Crisis and Corporate led Contract Farming: Socio-Economic Implications for Smallholder Products”, International Food & Agribusiness Management Review, Vol.11, Issue 4, pp. 25-46. 3. Joyachin, Ashok Gulati, Peter Hazell,Mark W. Rosegarant & Miarie Ruel (2005), Indian Agriculture and Rural Development, International Food Policy Research Institute, Washington, pp. 1-6. 4. www.dipp.gov.in

7. www.indiabudget.com

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6. www.karnatakaagriculture

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5. www.indianagriculture.com