TN banks on value-adds to strengthen agri ecosystem

Given that agri-sector is a key component in the tariff faceoff between India and the US, what role does this primary sector have in Tamil Nadu's trillion-dollar economy target? According to the state govt, agriculture is a critical piece of the plan because of its value addition prospects. State industries minister TRB Rajaa explains the opportunity succinctly. "We consider agriculture a crucial sector for our ambitions of becoming a trillion-dollar economy, not just as a legacy sector but as one where significant value addition can be done," he says. "Our strategy is to move up the value chain through post-harvest processing, integrated directly with global markets to ensure that every acre of arable land contributes productively."In other words, TN is trying to integrate its most employment-effective sector with an industry 2.0 strategy that is both global and local. This new strategy bringing in capex from big investors is a huge plus too. Says state industries secretary V Arun Roy: "Agri and food processing has seen a couple of big expansions including by Dabur (Tindivanam), Pepsico (Mannapparai) and Britannia (Tirunelveli). On the other hand, small-scale agri processing is job intensive and critical to the rural economy." So how big is the sectoral footprint? Says TN agriculture secretary V Dakshinamoorthy: "As per the study done by the govt of Tamil Nadu, the crops and food and beverages processing sector is expected to contribute $57 billion by 2030." For investors, though, TN's significant presence in the procurement chain is a big reason why agri is attractive. Says Dabur India global operations head Saurabh Lal: "We are working towards establishing our first manufacturing facility in south India. With an initial investment of Rs 135 crore, scaling up to Rs 400 crore over five years, this facility in Tindivanam will generate direct employment for 250 individuals and create thousands of indirect job opportunities." Dabur, he says, considers Tamil Nadu an ideal location "to cater to the entire south India market". "Logistically, Tindivanam is placed in the centre of three of our major distribution centres in south India. So, it is ideal both from a depot delivered cost perspective and serviceability perspective. We procure several raw materials from nearby areas, making it an ideal location for our new manufacturing facility," he says. In fact, the state's value-add mantra ties in neatly with what corporate procurement teams have already been chanting. For instance, TN has emerged as one of the top sources for ITC's high value-added agri categories like spices, fruits, vegetables and coffee through implementation of organic and certified programmes. ITC runs its ITCMAARS ‘phygital' programme for TN farmers with hyperlocal advisories, farm services and market linkages. In spices, the business has presence in six key districts—Erode, Salem, Namakkal, Ramanathapuram, and Tuticorin among others. The company's primary sourcing portfolio in the state includes turmeric, coriander, and chillies, supported by targeted procurement of pepper, cardamom etc. In fruits and vegetables, ITC procures mango and tomato from the Krishnagiri district, one of Tamil Nadu's key mango belts apart from rain forest alliance (RFA) certified coffee from the state through a certification programme. "The integrated agri interventions in the state are expected to be further scaled up as these agri value chains gradually achieve traction," says a company spokesperson. TN is both a consumption and production hub. No wonder the state's agri investors are betting on making TN "a future-ready agrarian ecosystem," says Balram Singh Yadav, MD, Godrej Agrovet. Tamil Nadu, he says, has always been strategically important "both as a sourcing hub and a key market" and the company is looking to "invest, collaborate, and scale across oil palm, horticulture, poultry, and allied value chains." Clearly there's interest and potential. So what's the state govt's Agri 2.0 plan to tap it? According to minister Rajaa, TN's agri strategy is a cluster-based, export-driven, tech-enabled approach. And the good news: US tariffs have no play in this growth given that most agri exports go to GCC markets. Tamil Nadu, says Rajaa, has established dedicated value-addition clusters for over 18 priority crops, like coconut, banana, turmeric, chillies, pepper, and groundnut, amongst others, equipped with primary processing centres, cold storage, micro food parks, and scientific grading and packaging facilities that are "delivering up to 20% higher price-realisation for farmers." And for the 15+ crops identified for market-led diversification, "we have built comprehensive support systems: micro-irrigation subsidies for farmers, seed subsidies, input support and district-wise processing facilities linked directly to export markets," he adds. The cluster-and-value add approach is backed by infrastructure build up including the mega food park at Gangaikondan and seven agro processing clusters at Salem, Theni, Dindigul, Krishnagiri, Tiruvannamalai, Cuddalore and Madurai. "Plots are being leased out to set up food processing units at mega food park in Gangaikondan and leasing out of plots is under way at the seven agro processing clusters too," says Dakshinamoorthy. In addition, 84 Primary Processing Centres (PPCs) in various districts have been created alongside Value Addition Centres specific to crops like coconut at Chenbagaramanputhur, Kanyakumari and Pattukottai, minor millets in Kothagiri, Nilgiris, pepper and coffee at Ayyankolly, Nilgiris, maize at Perambalur and edible oils packing & promotion centre at Tiruvannamalai among others. In exports, too, the strategy is to pick and choose. Crops like rice, mango, moringa, jackfruit, banana, tomato, guava and coconut have been identified for value chain development, says Dakshinamoorthy. "The initiative aims to integrate decentralized production, centralized processing and distributed marketing through a model plan that establishes eight value chains for these key crops," he says. Minister Rajaa is clear that in exports, the positioning is the key. "To expand exports, we have operational export facilitation cells in all 38 districts, GI-tagged product support, and sector-specific missions for millets, oilseeds, and cotton," he says. "Our goal is to position Tamil Nadu's farm produce, from Madurai jasmine to Erode turmeric, in premium markets abroad, while also boosting our seafood, horticulture, and allied sector exports." Agriculture already contributes Rs 1.2 trillion to Tamil Nadu's GSDP and employs millions, but its role, he adds, is not just about export numbers. "It is about creating resilient rural economies, skilled agripreneurs, and sustainable practices that address climate challenges," he says.