New ways of farming through third-party service agencies

Asian rice farmer

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New ways of farming through third-party service agencies
New ways of farming through third-party service agencies
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SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Food and Agriculture
Business Model Description

Invest in third-party service agencies that provide farmers with actionable information and perform tasks on their behalf, e.g. providing services and instructions on what to plant, when to plant, when to harvest, what pesticides to use, etc.

For example, KingFarm, established in July 2017, is a national modern agricultural service platform that provides farmers with services on soil improvement, crop nutrition program, agricultural technology training, machine-driven seeding, planting, and harvesting.

There are mainly three models as below. 1) Farmers pay for the services they purchase on a one-off basis 2) Farmers receive some services for free, but are obligated to purchase input from the agency 3) The agency takes responsibility of the operation and management of land on the farmers’ behalf (full trusteeship) (Jack Chen, IFU)

Expected Impact

The positive impact includes to provide professional advice for farmers with a lack of farming knowledge.

How is this information gathered?
Updated: 26 Oct, 2021 Date of Production: 30 Sep, 2021
China
Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
10% - 15% (in IRR)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
For the agricultural service enterprises, every increase of 1 percent penetration rate can contribute 20 billion revenue scale for the enterprises.
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Zero Hunger (SDG 2)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8)

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Sector Sources
IOA Sources
  • 21) Nyguancha.com, 2018, http://www.nyguancha.com/bencandy.php?fid=76&id=8166 22) State Council, 2020, "China No.1 Central Document of 2020", http://www.fao.org/faolex/results/details/zh/c/LEX-FAOC192850/ 23) Party Central committee and the State Council, 2017, http://www.scio.gov.cn/xwfbh/xwbfbh/wqfbh/37601/37885/xgzc37891/Document/1618270/1618270.htm 24) Ministry of Africulture and Ministry of Finance, 2013, http://www.jcs.moa.gov.cn/trzgl/201408/t20140804_3989380.htm 25) Ministry of Africulture and Ministry of Finance, 2017, http://www.gov.cn/gongbao/content/2017/content_5234539.htm 26) Sohu.com, 2017, https://www.sohu.com/a/192000739_651395 27) Moa.gov.cn, 2019, http://www.moa.gov.cn/gk/cwgk_1/nybt/201908/t20190826_6323148.htm 28) Chinatax.gov.cn, 2018, http://www.chinatax.gov.cn/n810219/n810744/n3439465/n3439475/n3439539/c3448065/content.html "29) Moa.gov.cn, 2019, http://www.moa.gov.cn/gk/cwgk_1/nybt/201908/t20190826_6323148.htm "