AGRICULTURE, a major component of Indian economy, has significantly changed from just farm activity to a prodigious market-driven business. Emerging as a highly promising segment with vast opportunities to foster much-needed linkages between the farm and the market, agri-business has exhibited huge growth in recent decades under the open market environment. It has acquired a broad canvas that encompasses businesses involved in food production, including farming, farm machinery, seed supply, fertilisers, agri-chemicals, irrigation equipment, distribution, processing, marketing, trade, wholesaling and retailing. India is among the 15 leading exporters of agricultural products in the world. According to a report released in March this year by the Indian Brand Equity Foundation of the Ministry of Commerce and industry, the essential agricultural commodities’ export is likely to reach $60 billion by 2022. Traditionally an agricultural country, India needs to infuse professionalism in the agri-business sector to accelerate the flow of recent advancements to cash in on its inherent competitive advantage. It can better be achieved through giving a practical shape to innovative ideas and the application of Information and Communication Technology.
Startups are acknowledged worldwide as the first step towards revolutionary changes in different spheres. Startups have creativity and innovation as their key elements. These were introduced almost three decades ago in India, but picked up in the beginning of this century. Various reports have positioned India after the US and the UK in overall technology-driven startups. Startup India, a flagship scheme launched in 2016 by the Government of India, is aimed at facilitating entrepreneurship and promoting innovation to boost the startup ecosystem and help technologists becoming job creators instead of job seekers. As per a report of the Department of Promotion of Industry and Internal Trade (DPIIT) presented in Parliament, 44,534 startups were registered by the department by February 24, 2021. Leveraging the adoption of agricultural technology (agri-tech) and the implementation of next generation technologies like Artificial Intelligence (AI), Machine Learning, the Internet of Things (IoT) and Software as a Service (SaaS) can offer solutions for numerous pain points across the spectrum of traditional agricultural practices.
There is an urgent need to create awareness and motivation among farmers to adopt collectivism, upscaling linkages with the market, involving them in technological solutions, partners in research, policy planning and offering a range of support and network services for quick access to modern and scientific advancements, strengthening extension activities and eliminating knowledge gaps for better returns, for which agri-tech startups can contribute a lot to minimise stress in Indian farming. In our thickly populated, small holder-dominated agricultural system, agri-business is less remunerative to farmers as well as processors. Agri-tech startups can eliminate informalities in domestic markets, enhance scalability, traceability and transparencies in the agri-value chain and build end-to-end technology-enabled set-up of the integrated value chain covering production processing and distribution.
Agri-tech startups also have scope in areas such as development of farm-specific, data-driven diagnostics to ascertain soil and crop health and collection of real-time data on pests and diseases in field crops through image recognition technology. Agri equipment renting is a high potential area to reduce the input costs since modern farm equipment is not affordable for the average farmer. Farming services’ startups have a large scope to organise farmers groups and ensure timely availability of various material to needy farmers. So far, mostly money has been flowing in cash in agriculture. The Direct Benefit Transfer (DBT) mode of payment to farmers of their produce is a big step for a change in agri-financial management. This shift will create opportunities for fin-tech startups for digitising payment from and to farmers through various gateways linked to their accounts and create a credit profile system for funders and lending, thus replacing any exploitative lending system. Apart from several market-linking models, agri-tech startups can play a pivotal role in implementing IoT for farmers, promoting smart, high-tech, precision farming and automated farming technologies, thereby enhancing efficiencies and improving productivity levels.
Other than Startup India, Atal Innovation Mission, NewGen Innovation and Entrepreneurship Development Centres, Venture Capital Assistance promoted by the Small Farmers’ Agri-business Consortium are government schemes supportive of such initiatives. There are several promising avenues to pursue under the ‘Agriculture Grand Challenge’ plan of the Union Ministry of Agriculture and Farmers’ Welfare providing incubation support for frontier technology agri-tech startups such as quick grading solutions and handling large quantities of agricultural commodities under eNAM, quick e-soil testing, connecting food processors with farmers through e-market places, dissemination of information to the last mile, village-level reliable yield estimation modelling, web-based spatial decision support system, increasing shelf life of perishable produce, technological detection of adulteration in food, input availability through direct and online mode, technical solutions for paddy transplanting and alternative usage of its straw, substitution for usage of toxic pesticides and seeking affordable, accessible, easy-to-use technologies, products or services to increase agricultural productivity in Indian farming.
About 450 registered agri-tech startups gained growth at the rate of 25 per cent during 2019, as reported by National Association of Software and Services Corporation (NASSCOM). The number of such startups has swelled to almost 600, which still accounts for about 1 per cent of the potential market opportunity as per the February 2021 report of FICCI–PwC. Punjab-based agri-tech startups working on digital solutions for improving the quality of produce, cost optimisation and food traceability, converting paddy stubble into fuel pellets and enabling higher access to better technologies for dairy farm management, including facial recognition of cattle, have been recognised at the global level.
Public-private partnership in the agriculture value chain is gaining ground for startups as it can improve decision-making, streamlining DBT and subsidies. Fund-raising, relevant experience, interpretation of basic data, proper planning and implementation of unique ideas, effective management, mutually gainful dealing with stakeholders and conventional farmers, etc. are some of the important ingredients for the success of any startup. There is an encouraging growth trend towards supply chain, finance and related solutions, infrastructure development, farm data analytics and information platforms. However, areas like AI-based smart solutions and increased usage of new technologies like robotics and drones and advanced farm analytics are still awaiting the attention of trailblazer entrepreneurs. To make the agri-tech startup ecosystem grow and establish itself, there is a need for a robust policy framework.
India is heading towards becoming the most populous country by 2027; it is expected to be the youngest country, as per age group statistics, as well. The demographic dividend must be reaped by agriculture to retain its status as the largest employment generation sector. The agri-tech start ups have the potential to boost this contribution.
The author is former V-C, Maharana Pratap University of Agriculture and Technology, Udaipur
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