Agriculture inputs play a decisive role in enhancing crop production and with arable land declining, production of crops can only be increased by using quality inputs. Concerted efforts are being taken by the farmers to transform agriculture, improve farm productivity and achieve food security. The global seed market is expanding as demand for food will grow in the backdrop of increasing world population anticipated to reach 10 billion by 2050. One of the major trends which has influenced the seed market worldwide is the significant shift in farming practices. Farmers are increasingly buying commercially-produced enhanced seed varieties, as against using seeds from the last harvest due to advantages of higher yield, improved nutritional quality, reduced crop damage and better disease resistance.
India has a vibrant seed market with an estimated $2.5 billion value with heightened support from the government and rapid advancements in seed technology. This has strengthened the in areas of Research & Development , product development, supply chain management and quality assurance. Growing foodgrain production and increasing government investment in agriculture are augmenting demand for seeds in the country and this is compounded by rising disposable incomes, commercialisation of agriculture and growing awareness among farmers regarding the use of certified seeds. The large-scale adoption of BT cotton seed in India has been the driving force behind the share of increasing cotton cultivation. Irrigation is an area of major concern globally driven by depleting water levels and uneven rainfall due to climate change. With about 20% of global agricultural area irrigated, there is a growing demand for mechanised irrigation systems that can address farm water needs, while minimising consumption. Strong support from governments globally, higher returns on investments compared to alternatives, water usage efficiency are further driving adoption of such systems. In India too, where less than half of the net sown area is irrigated, the need for irrigation solutions is imminent and the government has laid special focus on irrigation.
Fertilisers are important for maximising yields and improving fertility and have played a key role in the success of India’s green revolution and subsequent self-reliance in foodgrain production and this growth will increase crop production to meet the growing demand for food. India has retained its position as the world’s second largest consumer of fertilisers. Crop protection chemicals play a major role in increasing agriculture productivity as they help in minimising plant diseases, weeds, and other pests that damage agriculture crops, thus increasing and maintaining crop yield. India is the fourth largest producer of agrochemicals, after US, Japan and China. Crop protection comprises insecticides, fungicides, herbicides and bio-pesticides. India’s pesticides consumption is currently one of the lowest in the world and opportunities for the Indian market are increasing with China shutting down capacities . There are many crop protection and chemical companies but Rallis India Ltd is a good stock to buy from a portfolio perspective. The Rallis stock quoting at Rs 185 can deliver a 30% return in one-year time frame. With the government looking to double farmers’ income in the next few years, India’s crop protection industry and Rallis stock can be purchased by investors for smart gains.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.