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Taking Up Farming


wealthymattersFarming is not a preferred choice of career for many of India’s educated young people,even when they have a family background and experience of farming.The reasons are manifold:Firstly when people think agriculture they often see subsistence farming with dependency on the vagaries of the monsoon and fluctuating incomes versus the steady income from a job.Secondly,it involves a degree of physical labour,something that our society honours less than intellectual labour. Thirdly,calling oneself an IT Professional or manager rather than farmer probably betters one’s chances in the Marriage Mart.

Farming doesn’t necessarily consign you to penury.After all there is a large market for Mercs,BMWs and other luxury vehicles in rural areas from crorepati farmers.Indeed as agricultural income doesn’t attract taxes,farming is worth exploring as a means to build wealth.My experiments  return 10-40% per year on the capital invested.Moreover,as India’s population rises and grows more affluent there is a growing need for quality food produce.The government is concerned about this situation from 2 angles,national security being compromised as a result of over dependence on external food suppliers and the BOP problems arising from the outflow of foreign currency to import food products.Hence the government subsidies to encourage agriculture.Here is a scenario ripe for an enterprising person to make money.

Should you choose to take up agriculture,the first problem you will come across is access to agricultural land.You’re lucky if you have inherited enough land already.Else the best way is to lease it.Each region has some or other tradition of oral leasing.Buying agricultural land,to pursue agriculture, is generally not a very good idea as the returns from such purchases is not very good and the payback period is sometimes as much as a 100 years,if you go for retail land purchases.

The next issue will be the availability of water.You’re lucky if your land is canal irrigated,year-round.For most people the option is a single crop in the rainy season or investing in a bore-well,pump-set and electricity connection.Drip irrigation and sprinkler systems make scarce water go a log way and cut-down on manpower requirements.

In the last couple of years,agricultural labour has become the biggest challenge.Men find migrating to the city and working as security guards and  construction labourers a more stable livelihood.So,if you choose to farm,you will have to depend on female workers or opt for mechanization.Obviously,the latter option is becoming increasingly popular nation-wide for according to the Indian Tractor Industry report: ICRA: June 2013, the growth in the tractor industry will remain at a volume CAGR of 8-9 % in the forthcoming five years.

Tractors of course,represent a fairly large capital expense.So one way around ,if outright purchase is not an option,is to rent one for the time you require it on-farm.The hassle here is that during the peak season when you wish to access a tractor,every neighbouring farm too is going to want it .The way round is to finance the purchase of your own tractor.You could make a little money on the side by hiring out your tractor when you are not using it on your farm.Both private and public sector banks offer tractor loans.So too do many NBFCs. However,your best bet is the financing arm of tractor manufacturers.

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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