Agriculture plays a vital role in India’s economy. Over 58% of the rural households depend on agriculture as their principal means of livelihood. However, the use of technology in the agricultural industry has been limited in India. As a result, the agriculture industry in India contributes merely 17-18% to its GDP. The agro based industry saw a growth at a CAGR of 16.4% over FY10 to FY18. Agricultural exports from India reached US$ 38.54 billion in FY19 and in FY20 (till November 2019) US$ 22.69 billion. With many initiatives for farmers, the government aims to double farmers’ income by 2022.
However, in the last couple of years, India has seen a rise in the number of agritech start-ups that are not only making technology more accessible but also helping these farmers to improve their lives.
Agriculture sector in India is suffering from a variety of problems like the use of outdated equipment, improper infrastructure, and farmers unable to access a wider range of markets with ease while making just limited profits on crop sales. Lack of proper infrastructure and supply chain management are the more pressing concerns.
- Despite a pandemic-hit year, agritech start-ups in 2020 saw over $300 million of investments.
- As per a recent study by Accel-Omnivore, funding in the agritech sector rose from $45.8 million in 2016 to $430.6 million in 2020—a 4x growth during this period.
- The number of such start-ups has shown steady growth with around 600-700 start-ups dominating the Indian agritech ecosystem.
- According to a Ken Research report,
- the Indian Agritech market was expected to grow at a CAGR (revenue) of 32 per cent from FY20 to FY25.
- Karnataka, Maharashtra and Delhi-NCR had the most number of Agri-tech start-ups in the country.
- It is estimated that $10bn will be invested in Indian Agri-tech start-ups over the next 10 years.
- Currently, 8% or 1294 of the total recognized start-ups in the country are in Agri startups space as per the Economic Survey of 2019-20.
- Of these, 54% are classified as Agri-tech while the rest are in the field of dairy farming, food processing and organic agriculture.
- Agri-tech is a sector that has a promising potential, as the sustainable growth of agriculture systems offers synergistic opportunities for collective growth of capital investment and agriculture.
- With improvement in areas of technology, digitization and startup culture growing rapidly, there are many new ones entering the Indian startup ecosystem.
- Agritech startups have a strong focus in solving real problems than perceived problems unlike other startups today, which is enough to loop in quantitative investment.
- The Agri startups in India are providing information, techniques and efficiencies to farmers.
- Over the last decade, the sector is being streamed with the stream of educated youth, fired by the ideas, passion and innovations to launch newer kinds of technology and business models to lift the face of agriculture from primitive to hi-tech one.
- Startups are providing missing links in the agri value chain and delivering efficient products, technologies and services to the farmers on one hand and the consumers on the other hand,
- Technology can play a disruptive role in input costs optimisation, farm management, precision farming, integrating financial services, value chain enhancement among many others, for agriculture and allied sectors such as livestock, fisheries and non-timber forest produce.
- From ICT apps to farm automation and from weather forecasting to drone use and from inputs retailing and equipment renting to online vegetable marketing, and from smart poultry and dairy ventures to smart agriculture and from protected cultivation to innovative food processing and packaging, its proliferation of all innovations and technology driven powerful startups set to revolutionize the food and agriculture sector.
- Modern techniques and methods will surely elevate agriculture to the next level and ease the burden on farmers. This therefore creates a huge scope for Agriculture Startups in the country.
- Transformation of Agriculture to Agri-business is one of the important strategies where enterprising farmers practice profitable agriculture.
- These startups are at present capable to address intrinsic challenges of Indian agriculture happening from the starting and are now able to offer right techniques, information, and efficiencies to small-scale farmers exclusively for pre-harvest operations and post-harvest use cases.
- Promoting Agri-Startups:As still the majority of Indian workforce is employed in agriculture, there is a need to clear roadblocks and promote agri-startups.
- The new farm acts give greater choice to farmers and incentivise start-ups to transform the agriculture value chain in storage, finance, transport, aggregation, and marketing.
- Start-ups in High-end Technology:The recently-released Draft Space Policy states that “Indian entities can undertake design, development and realization of satellites and associated communication systems.
- Bridging Digital Divide:There is a need to fill infrastructure gaps especially in rural areas, promote digital literacy and help people become more knowledgeable about the digital world. In this regard, the government initiative of Digital Saksharta Abhiyaan is a step in the right direction.
- Integration with School Curriculum: The National Education Policy, 2020 envisages to promote student entrepreneurs by offering vocational education in partnership with industries and introducing coding for schoolchildren.
- This can have a favourable impact on the start-up ecosystem in India, if entrepreneurial skills are integrated with the education curriculum under new education policy.
Agri Startups are making headway in the areas of farm management, field monitoring, crop monitoring, yield mapping, equipment guidance, precision farming and implementation of automation and electrification. Agrowave, BharatAgri, Bijak and Ergos are some of the companies working on data-science led personal advisory, logistics and marketplace models. But these companies unlike the tech sector have longer investment cycles and have a high need for patient capital, a need that social impact venture funds are slowly addressing. For these startups to make a difference, an appropriate agritech ecosystem in the country will be required.
