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Even when the agricultural sector’s share in the Indian economy has declined, India remains an agricultural powerhouse of the world. In fact, the agricultural sector grew during the pandemic when the entire economy stalled, and every other sector witnessed negative growth. 

Today, with the growth of the agricultural value chain and the rise of online platforms, agribusiness has become a viable option. These platforms are streamlining farming processes, including: 

  • Input supply

  • Production

  • Processing

  • Packaging

  • Marketing

  • Retailing 

As the agricultural sector continues to grow, it is the right time to enter into the farm business. However, you need to have a roadmap or your agriculture business plan before you make your business operational. 

So, read on to find out what you must know before creating a business plan for agriculture.

A Step-by-Step Guide to Start an Agriculture Business

If you are drafting a business plan for farming, you must follow a step-by-step approach where you state all the components. So, when creating a business plan, you need to be ambitious yet realistic.

Here, you must include these components in your agriculture business plan to ensure long-lasting success: 

1. Mission Statement

The mission statement will help you find the intent behind an agricultural business. This would help you know why you want to do this business and who you want to cater to.

2. Goals

When creating a business plan, decide on what you want to achieve with it. It will help you understand the core values and beliefs of your business.

3. Business Information

Here, define all the critical information relating to your business. For instance, try to outline the following:

  • Type of business

  • The location of your business

  • The land or area for business operations

  • Their commencement

  • Current scenario

4. Strategy

Devise a business strategy that is lined up to promote and achieve your business’ statement and goals. To thrive in a competitive business environment, you must consider the following when creating a business strategy for your farm business plan:

  • The target customer you want to cater to

  • The products or services you will offer

  • Pricing, placement and promotion

  • Adding value to your products or service

5. Marketing Strategy and Distribution Plans

To draft marketing strategy and distribution plans, you need to analyse the market. It is one of the most important components of creating a business plan. Market analysis provides you with details like: 

  • Market trends

  • Customer needs

  • Market demand

  • Competition in industry

 

Once the market analysis is completed, it is suggested that you also conduct a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. With such an analysis, you can make the right decisions when drafting an agriculture business plan.

With this analytical data, you can strategize how you would set up a distribution plan for your business. It guides your business plan to take your products to the target customer base.

6. Financial Plan

For any agriculture business plan to see the light of day, it has to be backed by strong and robust financial planning. It not just includes analysing your current financial scenario but also making future projections.

Financial planning allows you to decide whether you can fund your agri business plan or whether you would need a loan. So, when drafting your plan, assess how much money it will take to start your business and run it for a specific time period.

Consider the investment opportunities you may have and the expenses that you may incur in the business operations. 

7. Management Summary

It is the last component that you need to keep in mind when planning for your agribusiness. Here, you need to highlight your achievements to attract potential investments. 

So, when you create a management summary, mention how the journey of your agribusiness started and to what extent it has grown. This would help you to convince your investors, distributors and vendors to get on board with your business. 

To show the stakeholders that you have successfully grown and will continue to do so, present your financial performance and future projections in summary. 

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Comparison of Business Loan Interest Rates offered by Top Banks/NBFCs

If you lack the funds when planning for your agribusiness financially, you can avail a business loan offered by Banks and NBFCs. Here are the interest rates at which various lending institutions offer business loans:

Bank/NBFCs

Interest Rate

Flexiloans

Starting from 1% per month onwards

Indifi

16% p.a. onwards 

Lendingkart

1% - 2% per month

Disclaimer: The rates mentioned are subject to change as per the lender’s policies.

Innovations in Agriculture Business and Start-up Enterprises

Thanks to recent innovations, agribusinesses and start-up enterprises have been growing rapidly. For instance, the pharmaceutical industry is focussing on producing plants like Aloe Vera and Neem at a massive scale. 

Although these plants require a high capital inflow at the beginning, they guarantee sustainable revenue and growth in the later stage. The plantation can be established in your backyard or open space, such as a terrace and large balconies.

Once you decide on the variety of produce and location for the plantation, you can now take help from a financial expert. The expert would devise a financial strategy for your agriculture business plan.

Important Facts for Running the Agriculture Business

If you are planning to start an agribusiness and drafting a farm business plan, you need to keep in mind the following: 

  • Agribusiness in India involves huge risks due to seasonal variations. The crops can fail in case of excess rainfall or no rainfall at all. Pets and insects also pose a threat to crops.

  • Before entering into agribusiness, you must assess all the risks and take the necessary steps to protect your business from any potential threat.

  • Recent innovations in IT, like digitisation, have changed the landscape of agribusiness in India. It has led to the growth of the e-commerce sector in the agricultural space. 

  • To ensure sustainable revenue generation and growth, you must invest in recent technology, like drone pesticide sprayers, online selling platforms, etc. 

Uses of an Agriculture Business Loan

You can use the agriculture business for the following purposes:

  • To purchase land for farming activities

  • To buy cattle and livestock

  • To buy farm and irrigation equipment

  • To meet storage, warehousing, transportation or marketing expenses

  • To meet expenses of day-to-day activities

Sources of an Agriculture Business Loan

You can avail an agriculture business loan either from the public sector or private sector banks or Non-banking Financial Corporations (NBFCs).

Eligibility criteria for an Agriculture Loan

To avail of the agriculture loan, you must fulfil these eligibility criteria:

  • You must be between 18 to 70 years of age

  • You must use the loan amount for cultivation purposes 

Documents Required for an Agriculture Loan

To complete the loan process, the bank or NBFC would require you to submit the following documents:

  • ID proof such as an Aadhaar card, PAN card, Voter ID, etc.

  • Address proof like Aadhar card, ration card, passport, etc.

  • Land ownership proof

How to Apply for a Business Loan at Bajaj Markets

You can apply for the business loan at Bajaj Markets to boost your agriculture business plan. Just follow these simple steps:

  • Go to the Business Loan application page

  • Now, click on the ‘Apply Now’ option

  • Fill out the application form

  • Select the preferred lender from the list of loan offers

  • Choose the loan amount and repayment tenure

  • Submit your application to complete the loan process

FAQs for Agriculture Business Plan

What is the most common Agribusiness prevalent in the country for which loans are required?

Common agribusinesses that require large capital inflow and hence, a business loan are poultry, horticulture, fertiliser distribution, bee keeping, etc. 

Who can be categorised as Small and Marginal farmers, and what are the new Start-ups that they are into?

Any farmer who is in possession of less than 2.5 acres of irrigated land or 5 acres of non-irrigated land is categorised as a small and marginal farmer. These farmers are entering into numerous start-ups like fodder farming, dairy farming, tea planting, medicinal crop plantation, etc.

What is the amount of security against which an agriculture Loan can be availed?

As per the rules notified by the Government of India, you do not need any collateral to avail a loan of up to ₹1 Lakh. However, the requirement for collateral for a loan of more than ₹1 Lakh varies from lender to lender.

Can women avail agriculture loans in India?

Yes. In fact, Central and State governments encourage women to take loans to boost the agricultural productivity of their land.

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