Strengthening Agricultural Entrepreneurship in Odisha

Agricultural entrepreneurship holds significant promise for India’s rural economy, particularly in Odisha where almost half the workforce is engaged in farming but contributing just 19% to the state’s gross domestic product. The sector remains crucial for rural livelihoods and food security. Aspiring entrepreneurs face substantial barriers to establishing viable agricultural enterprises, especially in accessing seed capital and navigating complex regulatory environments. These constraints limit the growth of agricultural value chains and inhibit rural employment generation, a critical challenge in a state working to accelerate economic development and reduce poverty.

DPIC is conducting a process evaluation of the Mukhyamantri Krushi Udyog Yojana (MKUY) – a flagship scheme launched in 2018 to promote commercial agri-enterprises. The scheme provides capital subsidies covering 40-50% of fixed investment costs (excluding land) to agricultural entrepreneurs across sectors including animal husbandry, agri-services, horticulture, and fisheries. A notable innovation in MKUY’s implementation is the mirror account mechanism, which transfers 80% of the eligible subsidy to a dedicated account at the lending bank as security against the loan. This approach has reduced loan sanctioning times by nearly two-thirds, accelerating project implementation while protecting government funds until completion verification. DPIC is working closely with the Agricultural Promotion & Investment Corporation of Odisha Limited (APICOL) to identify additional process improvements and policy interventions that can further enhance program delivery.

Our analysis leverages administrative data about the scheme from the ‘Go Sugam’ portal. This dataset provides detailed information on applicant demographics, project characteristics, financing patterns, and processing timelines across all 30 districts of Odisha. To complement this quantitative analysis, DPIC conducted field interviews with beneficiaries and officials in select districts, gathering qualitative insights on implementation challenges and opportunities for improvement.

Initial findings reveal promising trends in MKUY implementation while highlighting areas for further research and optimization. Further research opportunities include exploring the long-term sustainability of subsidized enterprises, understanding the entrepreneurial journey from application to profitability, and investigating effective interventions to enhance business outcomes. DPIC is developing a comprehensive monitoring framework to track enterprise outcomes beyond subsidy disbursement, which could transform MKUY from a subsidy delivery mechanism into a true enterprise development program. These ongoing efforts aim to strengthen the entrepreneurial ecosystem in rural Odisha, potentially creating a model for evidence-based agri-entrepreneurship policy that could benefit other Indian states facing similar agricultural transition challenges.