Agri-tech startups in India and their potential
- High potential in terms of value: An Ernst & Young 2020 study pegs the Indian agritech market potential at $24 billion by 2025, of which only 1 per cent has been captured so far.
- Supply chain segments: Among various agritech segments, the supply chain technology and output markets have the highest potential, worth $12.1 billion.
- Currently, it is estimated that there are about 600 to 700 agritech startups in India operating at different levels of agri-value chains.
- Modern technology to agriculture: Many of them use artificial intelligence (AI), machine learning (ML), internet of things (IoT), etc, to unlock the potential of big data for greater resource use efficiency, transparency and inclusiveness. Eg: Ninjacart, Dehaat, and Crofarm (Otipy) are a few of the many startups that are redefining the agrifood marketplace.
- Establishing an ecosystem: The novelty of startup-led value chain transformation is not limited to empowering farmers but also co-opting local grocery, mom-and-pop, and kirana stores as well as small agrifood businesses that are an integral part of the agri-food ecosystem.
- Expanding economy around agri economy: At the same time, the start-up network is able to leverage the bigger front-end players who demand bulk quality produce and have challenges in directly linking with farmers.
Issues faced by the startups
- Government policies: Although government has made a shift in their policies related to agriculture but we still have a long way to go. Today we have Digital India, Make in India, Start-up India, Skill in India but nothing converges at the farm level.
- Many agtech firms are grappling with their own set of issues. These include rigid business models that are at times difficult to scale up and lack of insights and expertise on the subject matter which is essential in network build-up.
- Resistant farmers unwilling to adopt technology and most farmers being small and subsistent makes it difficult to introduce technology in agriculture.
- There are glaring gaps in the supply chain management and also poor last-mile connectivity especially at grass-roots level as well lack of investments to drive the businesses.
- Farming companies are also impacted by limited traceability and visibility. Agri input companies still struggle with inefficient field force management and operations along with lack of centralised database that causes huge losses along the value chain.
Hence, it becomes imperative for the government, agritech businesses and food supply chain companies to collectively fix these loopholes and create a transparent system which, in the long-term, will benefit all the stakeholders involved including the investors.
Measures needed
- The startup-FPO partnership can be further strengthened by incentivising the FPOs under the central government’s programme to add 10,000 new FPOs by 2024.
- Collaboration across sectors: The network of agritech start-ups, incubators, accelerators and investors need to work closely with policymakers, academia, think tanks, and government departments to develop a more nuanced understanding of the dynamics of the agrifood sector.
- This will also enable the government and policymakers to leverage the existing agritech pool and co-create solutions for shared value.
- If policies, institutions and partnerships can harness the current momentum, the startup ecosystem can be the next-generation technology revolution in the agrifood sector.
- Experts, agritech entrepreneurs and investors believe that new approaches and new institutions are required which can really pull farmers from lifelong penury. This can be achieved if both private and public companies work together in unison to boost the agriculture space in a massive way.
- Skilling farmers to infuse technology in agriculture will not only lead to better agri-incomes, it will also make agriculture more efficient. Government aids are available to buy machineries and these can be made available to ensure start-ups can scale their reach to farmers.
Conclusion
The Indian agriculture industry, pegged at $39.1 billion as on 2019, is poised for huge growth and contribution to the world food trade. Startups have a crucial role to play in helping farmers harness technology, which will increase crop yield and double the income of farmers. With the infusion of technology in the sector, agriculture is set to make big gains and move towards Aatmanirbhar Bharat.
