Private equity investors are betting big on agri and food sector, considered as recession-proof, in the aftermath of global financial crisis.

The value of private equity investment in the agri & food sector in India has already reached $162.4 million in 2010 so far, as against $103.5 million for the whole of 2009.

PE investments in the same sector spurted 230% to $103.5 million in 2009 as against $31.5 million in 2005.

According to a report by VCCedge, a data service by VCCircle engaged into private equity deals, the average private equity deal amount in the agri & food space has gone up to $16 million in 2010 from $10 million in 2005. Agriculture and food segment accounts for one-fifth of India’s GDP and 56% of the workforce.

According to the report, the three reasons for increased investment flows into this sector are marketing initiatives in both domestic and export markets, higher demand for farm and food products and a value chain that provides opportunities in logistics, cold storage, packaging, commodity markets and last-mile retail.

Indian companies like Ruchi Soya and LT Food, both NSE-listed companies, are pursuing expansion plans with heightened investment plans in agri and farm sector.

Ruchi Soya Industries, an edible oil processor, plans to acquire 1,50,000 hectare for palm plantations in Africa and Asia over the next three to five years.

Said Dinesh Shahra,managing director, Ruchi Soya, ?We plan to acquire 1,50,000 hectare on lease in Africa and Asia over the next three to five years. Since this will be on lease, our investment will not be much.?

The company plans to set up two subsidiaries in Singapore and Dubai respectively. While Dubai one will take care of Africa business, Singapore will look after Asia.

?We plan to get some private equity placements at the subsidiary-level,? Shahra added.

On similar lines, basmati rice exporter LT Foods is aiming the export of 1 lakh tonne of its own basmati in 2010-11, 10% higher than previous year.

VK Arora, managing director, LT Foods, said , ?At present, we are focusing very hard on the US market to grow our market share from 40% to 50% in 2010-11.

The company is also interested in overseas acquisitions, especially of rice-related companies which are value-adding in nature, he said.