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What is alternative asset investment all about?

We all love options, don’t we?  With the emergence of Alternative assets, the investment arena is brimming with options like never before.  Diversification and higher returns define the essence of alternative investments and one needs to put in thorough due diligence before parking funds in them.

To put in simple words, An alternative investment is a financial asset that does not fall into one of the conventional investment categories. Conventional categories include stocks, bonds, and cash.

Alternative investments, or alternatives, have gained favour among financial advisors in recent years. As markets have become more unpredictable, investors have sought assets that are less correlated with the variations experienced with daily market pricing. This has advanced an allocation model with four general investment options and among them one is Alternative investments.

Here are some common alternative investments that all investors should know:

1. Private equity.

2. Direct investments in start-ups and private companies.

3. Venture capital.

4. Real assets.

5. Hedge funds.

6. Fund of funds

7. Private placement debt.

Like all the other investments, alternative investments also has its own pros and cons.

Some of them are:

Pros:

•Counterweight to conventional assets

•Portfolio diversification

•Inflation hedge

•High rewards

Cons:

•Difficult to value

•Illiquid

•Unregulated

•High-risk

Alternative investments are not as much of a substitute as a complement to portfolio’s assets by adding diversification features. Alternative investment options are not suitable for all investors. Government bonds are guaranteed by the full faith and credit of the United States government as to the timely payment of principal and interest, while returns in non-traded investments, stocks, and real estate are subject to losses and/or gains. Stock reflects traded securities and shares are easily redeemed. However, the markets experience daily price swings, sometimes based upon market sentiment.

Large institutional investors have successfully invested in alternative investments for years and now certain individuals have the opportunity to invest in these assets.

Institutional investors invest with strategies, terms and conditions different from those of individual investors, who have a shorter investment time horizon, lower risk capacity, greater liquidity needs and pay higher fees and expenses for retail offerings.

How profitable is agriculture ?

Person with good grip on marketing will earn good profit not just in agriculture but in all most all professions.

Any business is profitable, as long as the product it is offering is answering a community problem. Farming is no doubt a solution as it is one of the people’s basic needs. It offers solution to hunger along with employment opportunities to many.

 On a day-to-day basis, people need food and this is their primary need. So, investing in feeding people is obviously a business with an extremely large market, because people want it no matter what the circumstances are.

 So, if you are looking for a businesses whose profitability has to do with the fact that they are needed, farming takes the first place.

But before investing or stepping into any business we should have a brief knowledge about it. 

Farming is an unpredictable business. Except for natural factors effecting it, it can be profitable if done right. It really comes down to what you plant, how much you plant, how long the growing season is, the fertility of the soil and also if it suits the crop you want to grow in it.

In short we have to plan in advance and know the weather and other natural phenomenon from meteorological department at earliest and also the local market where produce are given value and then invest in it.

Like any other business, there are pros and cons And ups and downs in farming too. There’s no  business in which you get high gains without any risks.

So,  concluding this, agriculture can be the most profitable business if the person doing it is clever enough to plan in advance and has a good knowledge about the plants and farming and also is skilled in marketing field.

An overview of agricultural marketing in India

In India there are myths about agricultural marketing. People with less knowledge and with no proper guidance jump into the agricultural marketing and end up in debts and losses. They start  misguiding people about farming.

How is agricultural marketing doing in India?

If done right how profitable can it be?

Here’s an overview of agricultural marketing in India

Agriculture is the primary source of livelihood for about 58 per cent of India’s population. Gross Value Added by agriculture, forestry and fishing is estimated at Rs 18.53 trillion (US$ 271.00 billion) in FY18.

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. The Indian food processing industry accounts for 32 per cent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 8.80 and 8.39 per cent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13 per cent of India’s exports and six per cent of total industrial investment.

Market Size

•During 2017-18* crop year, food grain production is estimated at record 284.83 million tonnes. In 2018-19, Government of India is targeting food grain production of 285.2 million tonnes.

  • India is the second largest fruit producer in the world. Production of horticulture crops is estimated at record 314.7 million tonnes (mt) in 2018-19 as per third advance estimates.
  • India is also the largest producer, consumer and exporter of spices and spice products. Spice exports from India reached US$ 3.1 billion in 2017-18. Tea exports from India reached a 36 year high of 240.68 million kgs in CY 2017 while coffee exports reached record 395,000 tonnes in 2017-18.
  • Food & Grocery retail market in India was worth US$ 380 billion in 2017.

Some major investments and developments in agriculture are as follows:

  • Investments worth Rs 8,500 crore (US$ 1.19 billion) have been announced in India for ethanol production.

By early 2019, India will start exporting sugar to China.

  • The first mega food park in Rajasthan was inaugurated in March 2018.
  • Agrifood start-ups in India received funding of US$ 1.66 billion between 2013-17 in 558 deals.
  • In 2017, agriculture sector in India witnessed 18 M&A deals worth US$ 251 million.

Achievements in the sector:

  • Agriculture storage capacity in India increased at 4 per cent CAGR between 2014-17 to reach 131.8 million metric tonnes.
  • Coffee exports reached record 395,000 tonnes in 2017-18.
  • Between 2014-18, 10,000 clusters were approved under the Paramparagat Krishi Vikas Yojana (PKVY).
  • Between 2014-15 and 2017-18 (up to December 2017), capacity of 2.3 million metric tonnes was added in godowns while steel silos with a capacity of 625,000 were also created during the same period.
  • Around 100 million Soil Health Cards (SHCs) have been distributed in the country during 2015-17 and a soil health mobile app has been launched to help Indian farmers.

Road Ahead

India is expected to achieve the ambitious goal of doubling farm income by 2022. The agriculture sector in India is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers.

Agricultural marketing solely depends on the Individual and his farming and marketing skills.

What farmers really need?

We know agriculture is the backbone of our economic system.

And still people are backing off from agricultural marketing and farmers are in huge debts. So how can we tackle this problem?

What do farmers really need to get good yelids?

Here are some major problems our farmers are facing today:

(i) Lack of Storage Facility.

(ii) Distress Sale.

 (iii) Lack of Transportation.

 (iv) Unfavorable Mandis.

 (v) Intermediaries.

 (vi) Unregulated Markets.

 (vii) Lack of Market Intelligence.

 (viii) Lack of Organisation.

 (ix) Lack of Grading..

 (x) Lack of Institutional Finance.

 (xi) Unfavorable Conditions.

(XII) Lack of knowledge about the modern ways of farming in many rural areas.

Solving these above problems can make agricultural marketing quite profitable.

Below are some needs of a farmer:

1. alternate water supply.

2.money for quality seeds, and regular upkeep of farms.

3. government fundings.

4.some online digital produce tracking system which enables them to review the past produce.

5.advance information about weather.

6.apps to improve literacy through online education.

These are to be provided to farmers to help them get good harvest and investment returns with some gains.

According to the National Sample Survey, the all-India average monthly surplus over cost per household 

from agriculture was Rs 3,350. That was a return of 152 percent. The corresponding amount for Punjab 

was 16,340 a month, or 139 percent of the amount invested. For example, on the basis of actual cost of 

cultivation of the kharif crop for the three years 2008-2011, a central government agency said cotton 

gave a surplus of 103 percent over paid out cost and imputed family labour, while that of paddy was 69 

percent

Government is also taking steps and initiatives to help farmers.

Some of the recent major government initiatives in the sector are as follows:

 The Agriculture Export Policy, 2018 was approved by Government of India in December 2018. 

The new policy aims to increase India’s agricultural exports to US$ 60 billion by 2022 and US$ 

100 billion in the next few years with a stable trade policy regime.

 In September 2018, the Government of India announced Rs 15,053 crore (US$ 2.25 billion) 

procurement policy named ‘Pradhan Mantri Annadata Aay SanraksHan Abhiyan’ (PM-AASHA),under which states can decide the compensation scheme and can also partner with private 

agencies to ensure fair prices for farmers in the country.

 In September 2018, the Cabinet Committee on Economic Affairs (CCEA) approved a Rs 5,500 

crore (US$ 820.41 million) assistance package for the sugar industry in India.

 The Government of India is going to provide Rs 2,000 crore (US$ 306.29 million) for 

computerization of Primary Agricultural Credit Society (PACS) to ensure cooperatives are 

benefitted through digital technology.

 With an aim to boost innovation and entrepreneurship in agriculture, the Government of India is 

introducing a new AGRI-UDAAN programme to mentor start-ups and to enable them to connect 

with potential investors.

How to invest in agriculture and earn profits?

 Cultivating crops in a proper manner with good guidance can yeiled you a good profit. AGRICULTURE IS BOOMING in certain places. 

How?

Because these people consult some agriculture scientists, agriculture researchers and experts in farming, take their advise, consider them and get to know all about agriculture and farming, and then decide WHAT CROP IS GOOD FOR THEM TO GROW, HOW TO GROW IT AND WHEN TO GROW IT. They do SMART AGRICULTURE. This is the reason they don’t  lose the money they invest and get good profitable returns from it. This has to be practiced by each and every farmer to make Agriculture a profitable business.

Working hard in farm Fields may sometimes not give you good yields and profit. but, working smart can. So if you ever thought of Investing In Farming, this blog is for you.

what are the different ways to invest in agriculture and earn profits?

There are many ways and options on how we can invest in agriculture. Today we will see

 The 3 Different Ways To Invest In Agriculture.

  1. 1. AGRICULTURE STOCKS

Investments in agricultural commodities carry inherent risks. Droughts, early frosts and other random acts of nature can trigger significant seasonal losses even within farming’s overarching upward trend. For risk-adverse investors, stock in farming supply and equipment companies offers a conservative investment alternative to commodities. Farmers need quality fertilizer, better seed and new machinery to boost crop yields and meet the growing demand for food. Sales and growth of companies such as Illinois-based John Deere, a global manufacturer of farming machinery, and Mosaic, leading producer of phosphate and potash fertilizers in Minnesota, are expected to mirror gains throughout the agricultural sector.

  1. CROWDFUNDING IN AGRICULTURE

 Crowdfunding is a close relation of  Peer-to-peer lending, but the two do differ. When people use crowdfunding to raise capital, they typically agree to give their investors a stake in the business or some other reward.

Agriculture is a broad, ever-changing field that is rapidly advancing to keep up with global consumers and increase yields and profits. A more slowly-evolving sector has been access to financing. Equity crowdfunding is an emerging option to help farmers obtain capital.

  1. FARMLAND

Retail investors can also put their money into farmland through small firms and funds managed by experienced farmers and real estate investors. Farmland generates annual returns through rental fees from farmers who work the parcels.While concerns have been raised over inflated prices and speculative bubbles, the value of farmland is tied to the value of the crops it produces. With growing demand, there may be some fluctuations, but farmland values are 

expected to remain fairly steady.

These were the top 3 ways on how you can earn profits by investing in agriculture.