eChapters

Introduction

Secondary agriculture is described as an enterprise-level productive activity that uses as raw material the primary product and byproducts of agriculture, as well as other biological resources available locally in its rural agrarian neighbourhood. The Government of India's Committee on Doubling Farmers' Income (DFI, Vol. IX, 2018) raised the issue of food waste and loss and proposed secondary agriculture. The committee classified secondary agriculture into three types: A, B, and C. Type 'A' avenues focus on adding value to primary agriculture production systems, either as input or output; Type B avenues focus on alternative firms that do not compete for resources; and Type C avenues focus on primary agriculture crop residues and wastes (Singh et al., 2022).

Sustainable development goals want to link primary, secondary, and tertiary sectors by using idle factors of production like land and labour. Promoting secondary agriculture can help reach these goals by increasing production in primary agriculture, capturing "value" in primary agricultural activities, and making businesses more money (Financial Express, 2019).

In this chapter, four opportunities for income augmentation in secondary agriculture, viz. plant nursery enterprise, herbal gulal farming, mushroom farming and beekeeping, have been explained.

Introduction

Agribusiness refers to the industry that deals with farming and the selling of agricultural products, including the cultivation of crops, their processing, and their distribution to retailers. Producing and distributing crops, agrichemicals, fodder, breeding, farm equipment, seed supply, raw and processed commodities of food and fibre, warehousing, transporting, packing, marketing, retailing, soil testing, and testing for nutrient deficiencies are all part of the agribusiness industry.

It's important for an excellent brand name to provide a solid basis on which a company can grow. Companies need to identify who they are trying to sell to. Will people have no trouble pronouncing it? The tongue shouldn't have to work too hard to say it. Can you pronounce the name easily? Your brand name needs to be audible to consumers. Have you tested the name's spelling ability?

Choosing what aspect of agriculture or agribusiness you want to enter is the f irst step. So, you can't make a call like this until you have a firm grasp on your company's long-term goals, operational strategy, and financial situation. You can still enter the market if you aren't an expert in the equipment, products, grains, soil, seeds, or plants involved; nevertheless, you should go in with your eyes wide open, a well-thought-out business plan, and a competent team.

Introduction

The smooth functioning of an organisation depends on its financial resources. For a newly established venture, it is important to accurately predict its financial requirements for the purpose of raising funds and assessing the profitability of the proposal. While the major investment in an organisation could be for short term and long-term purposes, there are multiple sources from which these funds could be raised. The conventional sources mainly include commercial banks and other financial institutions; non-conventional sources include lease financing, angel investors, venture capitalist firms, factoring, and bill discounting.

Finance is the basic requirement for the smooth functioning of any organisation. Finance is required to meet the short-term and long-term requirements of a f irm. While the short-term fund is required to meet day-to-day expenses, long term funds are required for the acquisition of long-term or fixed assets that would yield benefits in the future, financing the permanent part of working capital, and for the growth and expansion of a business.

The quantum of both finances depends upon the nature and size of the business’s organisation, and the sources from which one acquires these funds also have a multi-dimensional range.

Introduction

Business planning is required to meet the expectations of the future of any business and to meet the expected or unexpected obstacles that the future may hold. In the absence of a proper business plan, any business tends to fail. Not many are aware of the importance of preparing a good business plan. A good plan not only helps in planning as per the expected outcomes, but it also aids in seeking the right funds and bringing favourable investment into the business. However, the question remains: how to prepare an effective business plan. To aid in business planning, many use a Business Model Canvas. A Business Model Canvas or BMC (Figure 1), is a tool that represents different organisational components briefly in a very creative way. These components create the value of any organisation. The BMC is a strategy tool that also analyses the business situation of an existing business. There are nine components of a BMC, which are also referred to as the building blocks of an organisation. These are customer segments, Proposition, Channels, Customer Relationships, Key Resources, Key Activities, Key Partners, Cost Structure, and Revenue Structure. If BMC is prepared well, there are good chances that the Business plan will be developed well, which reduces the chances of failure in business. At the same time, it helps the business sail through the competitive environment smoothly and stay sustainable in the long run (Johnson, 2020).

Introduction

The global food system is anticipated to supply safe and nutritious food to a population that is expected to increase from 7.5 billion now to approximately 10 billion by 2050. Not only will there be more mouths to feed, but as incomes rise in rising and developing nations, demand for meat, fish, and dairy will rise as well (Brooks et al., 2019). Demand for agricultural commodities is rising rapidly as the world's population grows. Agriculture’s deep connections to the world economy, human societies, and biodiversity make it one of the most important frontiers for conservation around the globe (world wildlife).

Today's connected world has given entrepreneurs millions of new places to start small businesses, and the Internet has a lot of information to help them. Also, the internet has made it easier for business owners to connect with their peers, learn from their mistakes, and use their good decisions as a guide for their paths.

Structure of a business or legal framework

1. Sole proprietorship: A private company is a form where an individual is the exclusive proprietor of the business. It constitutes a straightforward setup where the owner is one person who manages the everyday operations of the company. In this case, the business is not regarded as an independent entity. Therefore, earnings and debts are merged into their personal accounts, which are assessed and taxed at the individual level.

Advantages of the sole proprietorship structure include

• Complete Control: As a sole proprietor, you have the right to make all business decisions and do not have to negotiate with other partners, managers or shareholders as in other structures.

• Easier Startup: The creation of a private company does not necessitate completing forms or remitting a state fee. This can ease the procedure and render it more affordable.

• Simple tax reporting: Because a business is not legally a separate entity, your income tax return includes the expenses and income of the business. As an added bonus, you can use business losses to offset your earned income, which can result in a higher taxable income.

• Privacy: Sole proprietors do not have to file annual reports with state or federal governments. Therefore, the company is not disclosed in the same way as in other structures.

Project Report

A project report is a written document associated with every investment. It includes the details upon which the project was evaluated and deemed viable. It encompasses information regarding economic, technical, financial, management, and production elements. It assists the entrepreneur in understanding the interests and aids in securing loans from banks or financial institutions.

The project report provides comprehensive details on the necessary land and buildings, yearly production capacity, production methodology, machinery and equipment along with their costs and technical specifications, raw material needs, electricity and water requirements, labor needs, market costs of the project, production, financial analyses, and the financial viability of the project.

Contents of a Project Report

1. General Information: The project report needs to incorporate details regarding the industry relevant to the project. It ought to present information about the industry’s historical background, present condition, challenges, and future outlook. It must include details about the product to be created and the rationale behind the product selection if the proposed organization is a manufacturing entity. It should indicate the demand for the product in local, national, and international markets. It should distinctly outline the business opportunities and provide explanations for initiating the business.

1. National Sources of Finance

A. Medium and Long-term Sources

i. Venture Capital: Funding from affluent investors who prefer to invest their money in enterprises with long-term growth prospects is referred to as venture capital. The individuals who provide such investments are known as venture capitalists. Venture capitalists usually acquire equity in the emerging company in return for their backing, which is typically provided as preferred stock.

Venture Capital is a funding source for new businesses. ‘Venture capital refers to investments made in ‘new and untested enterprises’ that do not have a solid growth history’. It comes as capital invested as shareholdings, aimed at establishing and creating firms focused on innovative concepts or new technologies that carry a high perceived risk, yet possess the potential for rapid expansion. Venture capital is generally arranged as equity or quasi-equity f inancial instruments. A venture capital firm acts as an intermediary between investors seeking high returns on their investments and entrepreneurs who require funding to launch their businesses.

Types of Venture Capital Funding

The various types of venture capital are classified according to their applications at various stages of a company’s lifecycle. Early stage financing, expansion f inancing, and acquisition / buy out financing are the three main types of venture capital.

In general, an unwell entity is one that fails to regularly create a surplus and frequently relies on outside funds to exist. The Sick Industrial Enterprises (Special Provision) Act 1985 characterized sickness as “a financial loss over two successive accounting periods and a total loss that is equal to or exceeds the net assets of the enterprise at the conclusion of the second accounting period”.

Revised Definition of Sick Smallscale Industry “A small scale industrial unit is deemed sick if it has incurred losses at the conclusion of the accounting year that are equal to or exceed 50% of the highest level of its net assets in the immediately preceding five f inancial years”.

Symptoms of Sickness

The continuation of many signals for a long time is called a symptom of a disease, and the various symptoms are ultimately reflected in the operation of the facility (capacity utilization rate, financial capital ratio, stock market value practice in various financial areas, production, marketing and labor relations in the industry).

Among the key signs are

• Deterioration of financial relations

• Review delay

• Lack of constant cash flow

• Continued decline in stock prices

• late payment obligations

STARTUP India is an innovative initiative started to help people who want to start their own business. These individuals are reflective and resilient. Therefore, the government provides assistance for them to realize their concepts and expand. The Government of India introduced the ‘Startup India’ initiative on January 16, 2016, in New Delhi.

What is a Start Up?

According to the government notification, the journal number will replace the G.S.R. 364(E) dated 11 April 2018 as amended by Notification No. G.S.R. 34 (E) on 16 January 2019 by DPIIT.

Definitions

In this announcement: An entity shall be measured as a Startup

• Any entity for a period of ten years from the date of incorporation/registration, if registered as a private limited company (as defined in the Companies Act, 2013) or listed as a partnership (registered under Section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.

• The revenue of the entity has not exceeded one hundred crore rupees for any of the financial years since registration/registration.

• The business unit works to innovate, develop or improve products, processes or services, if there is a scalable business model with high potential for performance or value creation. But the enterprise created by revolution, by revitalization of the existing business, is not called a “start-up”.

Introduction

Creativity and innovation are planned alternatives that an entrepreneur can use to promote his business. Business is a creative process. Success in business today requires constant innovation. Creating new solutions to problems, and the ability to create new products or services for a changing market, is part of intellectual capital. They also provide a company or business organization with a competitive advantage. Creativity is the basis of creativity. It is a process and skill that can be developed and managed throughout the organization.

Learning Objectives

• Describe the different types of creativity and Innovation

• Explain the process of creativity and phases of innovation

Creativity Definition

Creativity has different meanings. Many researchers have said that creativity is the generation of new ideas that include a creative process or a new solution to a problem and the original resolution of problems. It can also be said that the installation of the innovative solution is easy.

The term entrepreneur is derived from the French word entreprendre, which translates to “to undertake. “In the context of business, this refers to the initiation of a business. According to the Merriam-Webster dictionary, an entrepreneur is defined as an individual who organizes, directs, and takes risks in a business or enterprise. An entrepreneur can be described as “a person who establishes, organizes, and directs any enterprise, particularly a business, typically involving significant initiative and risk. “ Peter F. Drucker (1985) characterizes an entrepreneur as a person who continuously seeks change, responds to it, and leverages it as an opportunity. Innovation serves as a unique tool for entrepreneurs, enabling them to perceive change as an opportunity for launching another business or service. An entrepreneur is often regarded as an innovator – a creator of new ideas and business processes. Essential leadership skills and effective team-building abilities are frequently considered crucial traits for successful entrepreneurs. Economist Robert Reich (2002) regards leadership, management skills, and team building as vital attributes of an entrepreneur. The realm of entrepreneurship is influenced by a variety of combinations of socio-economic, psychological, cultural, and additional factors, including caste/religion, family background, educational level, level of insight, professional experience, migration capabilities, entrepreneurial spirit, nature of the business, investment capacity, and ambition/moderation. Entrepreneurship is often defined as “the ability and desire to develop, organize, and manage business activities and associated risks for profit”.

Entrepreneurship serves as a crucial element of economic development. In times of economic crisis, the significance of business development rises. Entrepreneurship has been linked to enhanced economic growth, greater wealth, and an elevated quality of life. In developing countries like India, the planning and implementation of entrepreneurship program development is essential for the standard of living of most of the backward areas due to their over-dependence on agriculture for employment (Uplaonkar and Biradar 2015). Entrepreneurship development therefore seems to be the best option to find job opportunities, generate income, reduce poverty and improve nutrition, health and overall food security in the national economy.

Entrepreneurship refers to the ability to take big risks to make a profit, to succeed, to manage and organize a new business. Entrepreneurship is a process in which a person becomes aware of owning a business as an alternative and develops new ideas for business. In addition, they try to learn the whole process of becoming an entrepreneur, and an initiative has been taken to develop entrepreneurship. It shows the practical application of all qualities such as innovation, creativity and risk in a work environment. The development of agriculture requires innovations in agricultural business. Stabilizing innovations and increasing productivity is a long-term and difficult business.

Project Implementation

Project Implementation is the process of putting a project plan into action. It takes place after the planning phase; planning phase includes key objectives, timeline and budget of the project. Execution includes organizing resources and assessing performance to guarantee the project stays within its anticipated scope and budget. It also involves handling any unforeseen issues in a way that keeps a project running smoothly.

Steps for Project Implementation

1. Assess the Project Plan: Before implementing the project, it is essential to create a plan that satisfies the expectations of the management, customers, and other stakeholders. The project manager must assess the project plan and guarantee that all team members comprehend the project and its requirements. The project manager must define the roles and the time required to complete each role. This step sets the standard for cooperation at work.

2. Execute the Plan: At this stage, the real work on the project begins. The project manager regularly discusses progress with his team. It measures progress along a timeline and tracks resource usage.

3. Make required Changes: Sometimes, during the implementation of the project, the manager has to make changes at the request of the customers or in other situations. Make these changes as needed, based on the design plan for solutions. Continue to interact with the team and ask questions to determine areas where they need more support.

4. Examine Project Data: It is crucial to gather and evaluate data throughout the execution phase of the project to assess the advancement of the project in comparison to its initial plan. Now, the day manager can use many project management software and information technology to collect and analyze real time data.

5. Assess the Feedback: After the conclusion of the project, it is crucial to gather feedback regarding the project outcomes from the clients, the project team and other stakeholders. This assists in determining the number of activities in the project that were executed as intended and aspects that require enhancement moving forward.

Investment Appraisal Techniques

A financial evaluation/ appraisal of Project considers the possible compensations of completing the Project against the anticipated expenses. The assessment of the project will rely on several factors, including the Size of the project, time span of project etc. The motivation behind the financial evaluation is to decide if the project is advantageous, contrasting its expenses and its expected normal advantages. These methods are primarily designed to evaluate the effectiveness of a new project. This investment evaluation technique includes Payback Period, Internal Rate of Return (IRR), Net Present Value (NPV), Accounting Rate of return (ARR), Profitability index etc. Each of these techniques evaluates the project from various angles and provides very useful insights. Investment appraisal techniques are divided in two parts namely, discounted cash flow methods and non-discounted cash flow methods.

Non-Discounted Cash Flow Techniques

Future cash flows are not brought to their Present value through Non-Discounted Cash flow methods. Non-Discounted Cash flow methods are also categorized into the following two techniques.

Construction of any building, airplane, poultry farm, dairy farm, agricultural business, even a new product are known as projects that require money and time, thus, all projects need to be finished in the least amount of time possible. All projects involve multiple activities, and all these actions need to be logically coordinated and successfully completed within the expected time frame. PERT and CPM are useful techniques for this purpose. PERT stands for Program Evaluation and Review Technique and CPM represent Critical Path Method. These techniques separate projects into various tasks and events and organize them logically in a diagram called a grid. Time estimates are obtained to conduct these different tasks and the total project time is decided based on these estimated times. With the help of these methods, the project can be completed in the given time and it also provides important information about the various activities related to the project and the project manager knows the importance of the various activities to which he pays more attention to reduce the time spent on the project.

Project management involves the use of knowledge, skills, tools, and techniques to design activities to fulfill project requirements. In other words, project management encompasses the skills, tools and management processes needed to successfully implement a project.

Project Management comprises

• Skill. Expert knowledge, skills and experience are necessary to reduce the risk level of a project and thereby enhance the likelihood of its success.

• A set of tools. Project managers use a variety of tools to improve their chances of success. Examples include document templates, records, planning software, modeling software, inspection checklists and inspection forms.

• Sequence of processes. Various Management methods and procedures are necessary to oversee and regulate the time, cost, quality and scope of projects. For example, time management, quality management, cost management, change management, problem management and risk management.

Project Management is adequate when or when should you use project man agement techniques

The term project originates from the Latin word projectum derived from the Latin verb proicere, “before an action” which originates from pro-, signifying precedence, something that occurs prior to something else in timing, and icere, “to do”. The term “project” therefore initially signified “before an action. “. A project is a distinct kind of production system that produces a sole unit of product. Like, building a ship or a house, moving a department or a plant, developing a new product or performing a study are examples of such one-of-a-kind products.

In modern business and science, a project is a joint effort, encompassing research or design, that is carefully organized to accomplish a specific goal. The project can also be described as a collection of interconnected tasks to be performed within a defined timeframe and under specific budgetary and other constraints. Projects can be additional defined as temporary instead of enduring social systems or work systems that are formed by teams within or between organizations to achieve specific tasks under time constraints. And all must be expertly managed to deliver the on-time, on budget results, learning, and integration that organizations need. A project in business and science is a provisional endeavor engaged in to produce a distinct item, service, or result. Basically, it is planned to attain a specific goal. The aim of a project is to achieve its goal and subsequently conclude.

Introduction

Over the course of past decades India is one of the fastest growing economies of the world with a robust growth and transformations in its economy. In this journey subsidies played a crucial role in influencing market behaviour, support industries, address market failures, and achieve social and economic objectives of the country. Now what actually the economic subsidies are.

Subsidies are financial incentives provided by governments to individuals, businesses, or industries in the form of cash, grants, or tax breaks to influence economic behaviour and outcomes. They aim to correct market failures, promote specific industries, encourage production, and address economic challenges. Subsidies can be direct (cash payments) or indirect (tax breaks), benefiting recipients by reducing burdens or promoting certain actions. They are in the public interest, supporting social goods or economic policies.

The importance of subsidies lies in their ability to offset market failures and externalities, leading to greater economic efficiency. By providing financial aid, subsidies can stimulate production, increase supply, lower prices for consumers, and drive economic growth in targeted sectors. They play a crucial role in stabilizing economies, responding to economic shocks, and promoting long-term economic stability. Subsidies can also help governments address poverty, encourage investment in research and development, and support essential industries like agriculture, energy, and healthcare.

Introduction

The economic cycle, also known as the business cycle, refers to the fluctuating state of an economy characterized by periods of economic expansion and contraction. It involves the cyclical pattern of growth and decline in economic activity, impacting various indicators like gross domestic product (GDP), employment rates, interest rates, and consumer spending2. The economic cycle is a fundamental concept in economics that helps determine the overall state of an economy as it moves through four distinct stages: expansion, peak, contraction, and trough. Understanding the economic cycle is crucial for investors, businesses, and policymakers as it influences investment decisions, business strategies, and economic policies based on the prevailing stage of the cycle.

1. Expansion

The upswing of the business cycle towards a peak is called an economic expansion. An economic expansion is associated with: Firstly, an increase in production and output is a prominent feature of economic expansion. This uptick in production signifies growing economic activity, as businesses ramp up their operations to meet rising demand.