Docstoc

presentation EN

Document Sample
presentation EN Powered By Docstoc
					Creating Viable Export Agriculture
Through     Integrated      Finance:
Experience with Agri-Export Zones
      Presented By: Mukul Sarkar, Exim Bank




             Mumbai, March 16, 2007
          Presentation Structure                      Exim India



 India’s   agri exports potential and constraints.
 Brief   background of AEZ.
 How     AEZ helps in establishing a value chain.
 Financing    needs in AEZ and Integrated Finance.
 Performance     of AEZs.
A   word on Exim Bank.




                                                           2
            India’s Agri Exports: Potential                              Exim India


   The size of the global food trade is about USD 650 bn.
   Value of India’s agri exports is about USD 10 bn i.e. less than 1.50%.
   India has one tenth of world’s arable land (size is more than China’s).
   It has rich and diverse agro climatic zones with more than 50 major
    crops.
   One fifth of world’s irrigated land.
   2nd largest producer of fruits and vegetables.
   3rd largest producer of agri commodities (largest in food grains).




                                                                              3
         Agri Exports – India’s Potential                             Exim India


   No. 1 Producer of Tea, Mango, Banana, Cashew, Cauliflower, Okra,
    Pulses, Milk etc.
   Largest producer, consumer and exporter of spices.
   The country is a treasure house of medicinal aromatic plant species.
   Exports are mainly confined to commodities. Tremendous scope for
    value addition.
   In horticulture products, India has certain competitive advantages.
   WTO regime provides great opportunity for exports.
   Farmers can benefit from exports of high value products.




                                                                           4
        Agri Exports: What Constrains Us?                            Exim India


   Low productivity due to inappropriate cultivation practices and
    improper harvest methods. This affects international competitiveness.
   Inadequate infrastructure.
   Too many middlemen in the procurement chain.
   Lack of contract farming practices.
   Quality problems due to poor post-harvest management. Inadequacy
    of domestic quality standards.
   Not able to meet stringent SPS/Codex requirements of developed
    countries.
   No clear focus on exports due to vast domestic market with low quality
    standards.



                                                                          5
             AEZ: Concept                                            Exim India


   It was announced in the Budget 2001-02.
   Identifying geographically contiguous areas with similar agro climatic
    conditions with potential for one or few agri products for exports.
   End-to-end development of exports across the entire value chain.
   Integration of various assistance programmes of both State and
    Central Governments.
   Incentives under EXIM Policy.
   APEDA is the Nodal Agency.
   Other stakeholders are MOFPI, NABARD, NHB, State Govt. Agencies,
    Agricultural Universities, R&D organisations, Banks/FIs etc.
   Aim is to induce private sector investments.



                                                                          6
         AEZs in Various States                         Exim India


State              No. of AEZ     Agri Products
Maharashtra        8              Grape, wine, mango,
                                  flowers, onions,
                                  pomegranate, banana &
                                  orange.
Punjab             3              Vegetables, potatoes,
                                  Basmati rice.
West Bengal        6              Pineapple, lychee,
                                  potatoes, mango,
                                  vegetables and tea.
Karnataka          4              Gherkins, rose onion,
                                  flowers, vanilla.
Uttar Pradesh      4              Potatoes, mangoes,
                                  vegetables, Basmati rice.
                                                              7
          AEZs in India……                           Exim India


State             No. of AEZ   Agri Products
Uttaranchal       4            Lychee, flowers, Basmati
                               rice.
AP                5            Mango pulp, vegetables,
                               mango, gherkins, chilli
MP                4            Potatoes, wheat, lentil,
                               orange, seed.
Other States      22           Coriander, cumin,
                               Ginger, medicinal plant
                               etc.
        Total     60



                                                          8
          Gap Between Farmers and Exporters   Exim India


                         Inputs

                      Infrastructure

                        Storage
Farmers                                   Exporters
                     Transportation

                       Technology

                        Finance

                    Quality Assurance

                        Training
                                                      9
          Broken Agri Chain in India                                      Exim India




  Production         Supply Chain          Processing             Marketing




•Poor extension     • High wastage       • No assured          •Poor infrastructure
•Supply of inputs   •Lack of storage       supply of inputs    •Lack of grading
•Low productivity   • Poor transportn.   • Lack of             • No market
•Outdated farming   • Many                 processing facility linkages
 practices            intermediaries     •Technology


       Broken chain increases credit risk and limits credit flow

                                                                               10
         What AEZ Offers to Improve Value Chain?                   Exim India


   Training of farmers and strengthening of extension services.
   Soil testing laboratories.
   Supply of quality seeds/plants.
   Setting up pack houses with sorting/ grading facilities.
   Greenhouses
   Pre-cooling units, cold storage.
   Refrigerated vans
   Irradiation units/ vapour and heat treatment units
   Perishable cargo handling facilities at airports



                                                                        11
        What AEZ Offers to Improve Value Chain?          Exim India


   Waiver of electricity duties for processing units.
   Transport subsidies.
   Waiver of sales tax on packing materials.
   International certifying agencies.
   Encouraging private investments.
   Promoting Contract Farming.




                                                              12
            Financing Needs in AEZ                                Exim India


   Farmers need finance for purchase of quality seeds, fertilizers,
    pesticides, harvesting equipment etc.
   Service providers like cold storage, pack house, refrigerated vans,
    testing facilities need finance to create infrastructure.
   Processors need finance to set up processing facilities and working
    capital.
   Exporters will need trade finance for exports.




                                                                       13
           Integrated Finance through Contract Farming                    Exim India


   In Agri Exports, assured supply of the quality agri products is critical.
   Price stability can also be achieved through contract farming.
                                        Farmers

         Contract
         Farming                         Finance


                    Processors                          Exporters/ Retailers


                                            Buyback


                                                                                14
          Advantages of Integrated Finance?                      Exim India


   Risk to stakeholders is minimized.
   Unknown risks to calculated risks.
   Risks are shared among stakeholders.
   Enhances credit flow to agri sector
   Makes agriculture more sustainable.
   Overall efficiency and productivity of the chain improves.
   Reduction of losses and wastage.
   Improves traceability and better control on quality.




                                                                      15
       PERFORMANCE OF AEZs                                    Exim India


 Total investments are about Rs.810 crores in 60 AEZs.
 Exports of USD 1.10 bn during the last 5 years.
 Both investments and exports are less than half of the originally
  projected levels.
 More needs to be done in the area of infrastructure.
 AEZs for gherkins, basmati rice, mango, mango pulp, grape,
  walnuts, onions in different states have done well in terms of
  exports.
 Products with no ready local market have a better chance of
  success.



                                                                   16
           Exim Bank of India
                                                       Exim India



                    THE GENESIS

   SET UP BY AN ACT OF PARLIAMENT IN SEPTEMBER 1981

   WHOLLY OWNED BY GOVERNMENT OF INDIA

   COMMENCED OPERATIONS IN MARCH 1982

   APEX FINANCIAL INSTITUTION TO PROVIDE MEDIUM AND

    LONG TERM EXPORT FINANCE


                                                            17
                  Objectives                                   Exim India



Established “for providing financial assistance to exporters
and importers, and for functioning as the principal
financial institution for coordinating the working of
institutions engaged in financing export and import of
goods and services with a view to promoting the country’s

international trade…”

                              (Export-Import Bank of India Act, 1981)


                                                                    18
       Range of Products & Services
                                                                            Exim India


Presence Across All Stages of Business Cycle         Value Based Services



             Export        Pre-                            Advisory
            Marketing    Shipment                          Services

    Export                            Post-
  Production                        Shipment              Knowledge
                                                           Building
      Export
     Product                    Investment
   Development                    Abroad
                                                         INFORMATION
               Import    Advisory
               Finance   Services
                                               SUPPLEMENTS FINANCING PROGRAMMES


                                                                                 19
                    Organisation                                   Exim India

                                OFFICES

Head Office             Mumbai
Domestic           9 Mumbai, Delhi, Kolkata, Chennai, Bangalore,
Offices              Hyderabad, Ahmedabad, Pune, Guwahati

Overseas Rep.      5 Washington D.C., Singapore, Budapest,
Offices              London, Johannesburg


   Customer-centric organisation
   Inter-Office connectivity



                                                                        20
          Exim Bank’s Loan Products                                  Exim India


   Exim Bank finances only exporter or importer.
   Term Loan for setting up new project, expansion, modernisation, import
    of machinery, technology.
   Term loan for setting up JV/WOS abroad.
   Financing overseas acquisition.
   Pre-shipment/Post-shipment finance.
   Working Capital Term Loan.
   Buyer’s Credit.
   Supplier’s Credit.
   Equity investments in overseas ventures.
   Factoring through Global Trade Finance


                                                                          21
      Exim Bank Lines of Credit (LOCs)
                                                                          Exim India


                 A Catalyst for Trade Promotion
   Enables import of Indian equipment and technology on deferred credit terms

   Direct exposure on overseas borrowers

   No recourse to Indian exporters

   Exporters get payment on shipment

   Particularly relevant for small and medium sectors

   Extended to Overseas Governments, Government agencies overseas,
    National or regional development banks abroad, Commercial banks abroad

   GOI Lines of Credit also extended through Exim Bank

   More than 60 Operative LOCs amounting to approx. US$ 2 billion in over 60
    countries in Asia, Africa, CIS and Latin America
                                                                                 22
        Basic Terms of Exim Bank’s LOCs
                                                        Exim India




   Advance Payment:       10% of FOB/ CIF value
   Credit offered:        90% of FOB/ CIF value
   Credit Period:         5 years for capital and
                           engineering goods
                           2 years for other goods
   Availability period:   18 months for opening L/c
                           24 months for disbursement


                                                             23
                 Benefits of LOCs                      Exim India



 Developing countries who lack forex can buy Indian
 goods on credit.

 Entry mechanism for new markets/development of new
  market.

 Exporters receive cash payment for exports under LOC.

 An arrangement for financing a number of export
  contracts under one umbrella.

                                                            24
Research Activities
                                                             Exim India

Occasional & Working Papers on Agri and Agro based sectors

Floriculture

Herbal medicinal plants

Agro & Processed foods

Fresh Fruits and Vegetables and Dairy

Organic Products

Biotechnology

Vanilla




                                                                  25
                   Exim Bank :
              Partner in Globalisation                 EXIM India
                                                      Exim BANK

   Technology                        Final Products
   Capital                           Capital Goods
    (Foreign Investment)
                                            Capital
   Raw Materials
                                       (Overseas Ventures)
   Capital Goods


                                      Product
                                       Development
                                      Production
                                      Marketing
                                      Pre shipment
                                      Post shipment
                                                            26
                          EXIM BANK




THANK YOU
      Visit us at
  www.eximbankindia.com
  www.eximbankagro.com

				
DOCUMENT INFO
Categories:
Tags:
Stats:
views:0
posted:3/22/2013
language:English
pages:27
xeniawinifred zoe xeniawinifred zoe not http://
About I am optimistic girl.