Agriculture & Farm Business Registration in India
Agriculture remains the backbone of the Indian economy, employing nearly 42% of the workforce and contributing about 20% to the country's GDP. With the government's focus on doubling farmers' income and transforming agriculture through technology and modernization, there has never been a better time to establish an agriculture-based business in India.
This comprehensive guide covers everything you need to know about registering and operating an agriculture or farm business in India, from company formation and land acquisition to accessing government subsidies and navigating regulatory requirements.
Agriculture Business Opportunities in India
The agriculture sector offers diverse business opportunities beyond traditional farming. Understanding these segments can help you choose the right business model for your venture.
Primary Agriculture
- • Food grain production (wheat, rice, pulses)
- • Commercial crop farming (cotton, sugarcane)
- • Horticulture (fruits, vegetables, flowers)
- • Plantation crops (tea, coffee, spices)
- • Organic farming and certification
Agri-Processing
- • Food processing and preservation
- • Dairy processing units
- • Oil extraction and refining
- • Grain milling and processing
- • Cold storage and warehousing
Agri-Services
- • Farm equipment rentals
- • Precision agriculture services
- • Agricultural consultancy
- • Pest control and crop protection
- • Soil testing laboratories
Agri-Tech & Input Supply
- • Seed production and supply
- • Fertilizer and pesticide trading
- • Agricultural drones and IoT
- • Farm management software
- • E-commerce for agri-products
Legal Structures for Agriculture Business
| Structure | Best For | Key Benefits |
|---|---|---|
| Private Limited | Large-scale farming, agri-tech startups | Limited liability, investor-ready, professional |
| LLP | Partnership farms, joint ventures | Flexible partnership, tax benefits |
| OPC | Solo entrepreneurs, family farms | Single owner, limited liability |
| Producer Company | Farmer collectives, FPOs | Democratic control, government support |
| Partnership Firm | Small family operations | Simple setup, low compliance |
Step-by-Step Registration Process
Choose Business Structure
Select the appropriate legal entity based on scale, number of partners, and funding requirements. For farmer groups, consider forming a Farmer Producer Organization (FPO) or Producer Company for maximum benefits.
Company Registration
Register your entity with the Registrar of Companies (ROC) for companies/LLPs, or execute partnership deeds for partnership firms. Obtain PAN and TAN for the business entity.
Udyam Registration
Register under Udyam (MSME) portal to avail priority sector lending, subsidies, and government scheme benefits. Agriculture businesses qualify for special schemes with higher subsidy rates.
Land Arrangement
Acquire agricultural land through purchase or lease. Ensure land records are clear (7/12 extract, mutation entries). For contract farming, register agreements under state-specific laws.
GST Registration
Register for GST if aggregate turnover exceeds ₹20 lakhs. Fresh agricultural produce is exempt from GST, but processed foods attract GST at various rates (5%, 12%, 18%).
Industry-Specific Licenses
Obtain FSSAI license for food processing, pesticide license from CIB&RC for trading chemicals, seed dealer license for seed business, and organic certification for organic produce.
Key Licenses and Registrations
Essential Registrations
- • Udyam Registration: MSME benefits and priority lending
- • GST Registration: For processed agri-products
- • FSSAI License: Mandatory for food processing
- • PAN & TAN: Tax compliance requirements
Sector-Specific Licenses
- • Seed License: State Agriculture Department
- • Pesticide License: CIB&RC authorization
- • Fertilizer License: Controller of Fertilizers
- • Organic Certification: NPOP or PGS-India
- • Cold Storage License: State government
Export Registrations
- • IEC Code: Import Export Code from DGFT
- • APEDA Registration: For scheduled products
- • Spices Board: For spice exports
- • Organic Export: NOP certification for USA/EU
Government Schemes and Subsidies
| Scheme | Benefit | Eligibility |
|---|---|---|
| PM FME Scheme | 35% subsidy (max ₹10 lakh) | Food processing units, FPOs |
| Agriculture Infrastructure Fund | 3% interest subvention | Post-harvest infrastructure |
| National Mission on Edible Oils | Up to 50% subsidy | Oil palm cultivation |
| NABARD Dairy Entrepreneurship | 33-50% back-ended subsidy | Dairy farming units |
| Paramparagat Krishi Vikas | ₹20,000/acre for 3 years | Organic farming clusters |
Tax Benefits for Agriculture
Income Tax Exemptions
- • Section 10(1): Agricultural income is fully exempt from income tax
- • Section 35D: Amortization of preliminary expenses
- • Section 32: Higher depreciation on farm equipment (40%)
- • Section 36(1)(ib): Premium for crop insurance deductible
- • Section 80JJAA: Deduction for new employment generation
Note: Income from agricultural operations is tax-free, but income from processing or trading may be taxable depending on the nature of activities.
Funding and Financial Support
Institutional Finance
- • NABARD: Refinance for agriculture projects
- • SIDBI: MSME loans for agri-processing
- • Commercial Banks: Priority sector lending
- • Regional Rural Banks: Farmer-focused loans
Government Support
- • AIF: Agriculture Infrastructure Fund
- • MUDRA Loans: Up to ₹10 lakh for small farmers
- • Startup India: For agri-tech ventures
- • SFAC: Venture capital for agribusiness
Success Factors for Agribusiness
Operational Excellence
- ✓ Adopt modern farming techniques
- ✓ Focus on quality and standardization
- ✓ Build strong supply chain networks
- ✓ Leverage technology for efficiency
Market Linkages
- ✓ Connect with eNAM platforms
- ✓ Explore export opportunities
- ✓ Build direct consumer channels
- ✓ Participate in FPOs for bargaining power