Strengthening the agri startup ecosystem
FASAL is an agri startup that has helped farmer Sangarmesh Talikotti install sensors and cameras on his 2.5-acre tomato farm. The startup’s Bengaluru-based artificial intelligence-driven platform regularly relays information to Talikotti’s smartphone on the quantum of irrigation needs, the risk of a pest attack and the use of pesticides. The data collected through readings is converted through ‘Internet of Things’ (IoT) into precise actionable intelligence.
On the other hand, AgNext is a Chandigarh-based agri startup that uses computer-based vision for effective post-harvest quality inspection of crops to substitute visual inspection. Agri startups such as Ninjacart, Crofarm and KrishiHub procure fruits/vegetables directly from farmers and sell them to retailers. They use myriad technologies to keep their target farmers abreast of the quantum of demand and current prices, coupled with optimised logistics and online payments.
Over 600 such agri startups are a part of a robust agriculture technology ecosystem nurtured by several initiatives of the Government of India. The ‘Digital India’ initiative aims at widespread adoption of technology through digital platforms, analytics, artificial intelligence, blockchain, machine learning, Software-as-a-Service (SaaS) and IoT.
The reformed Rashtriya Krishi Vikas Yojana (RKVY) has now been innovatively designed to promote such initiatives. Herein, five national knowledge partners and 24 agri-business incubators across the country are promoting agri-preneurship through support to agri startups. The areas of ‘idea’ incubation are as diverse as farm inputs, precision agriculture, farm management, quality as well as traceability, supply chain/output market linkages and access to financial services.
Besides, the Atal Innovation Mission (AIM) is also a plug-in to aggressively push technological innovation with its over 1,000 Atal Tinkering Labs (ATLs) that have been set up across districts. State governments, too, under the Startup India initiative, have begun to support agri startups in partnership with the private sector. Uttar Pradesh’s incubation network at the Indian Institute of Technology (IIT), Kanpur, with funding from Bill and Melinda Gates Foundation and Tata Trusts, is an example.
Experts opine that the Covid-19 pandemic has led to an increase in the number of agri startups that work across the agricultural value chain. Their key areas of innovation focus range from farm mechanisation, cold chain logistics for perishables, plant-based protein products, food biofortification, drone applications, micro-irrigation, dairying and financial services. But the key hitch, experts add, is still the small farm size, besides low digital adoption by small and marginal farmers. Hence, they recommend a hub-and-spoke model that nurtures these agri startup initiatives. To ground this model, a key role is being played by ICAR-led Krishi Vigyan Kendras (over 700) in tandem with entities such as ITC’s
e-Choupal 4.0 in agro-climatic regions to impart digital literacy and share best practices among farmers.
Three other steps taken by the Centre in conjunction with state governments strengthen the above model. First, making farm mechanisation equipment available to farmers through farmer group-run custom hiring, high-tech centres and machinery banks. Second, initiating the electronic National Agriculture Market (e-NAM) in 1,000 regulated wholesale spot markets for real-time price discovery and quality assaying. e-NAM is also now a demand-driven electronic ‘platform of platforms’ connected to other public-private agri platforms. Third, launching of the scheme for creation of 10,000 Farmer Producer Organisations (FPOs) to bring economies of scale through aggregation of farmers and allowing FPOs to trade online.
Experts also opine that agri startups are relooking at the way food has been grown and distributed in the country. This relook is fuelled by critical factors such as climate change vulnerabilities, reduction in water availability, tolerance of pests, decrease in quality of soil, labour shortages and the changing food basket. Therefore, they suggest an enhancement of funding for initiatives on ‘on-farm’ and post-harvest management. The creation of the Rs 1-lakh-crore Agri Infrastructure Fund (AIF) is a step in the right direction. It provides access to credit, with interest subvention, for agri-entrepreneurs, FPOs and state governments to invest in rural community assets and post-harvest infrastructure. Recently, an umbrella-based Credit Guarantee Scheme for startups has also been announced.
Another key issue raised by experts is that while agri startup such as Sammunati, Waycool, Agrostar, Jambotail and many others do reach out to farmers in their areas of business operation, how can such startups be scaled across the countryside? These entities have partially reformed the fragmented agricultural value chain. They also continue to co-opt the unorganised retail industry, consisting of small shops and street markets. One way to do the needful is to strengthen their partnership with the FPOs and, more importantly, food processing companies. This could be further coupled with online collaborations between buyers, sellers, incubators, accelerators and investors. In this context, the ongoing development of the government-backed Open Network for Digital Commerce (ONDC) is a welcome step. It will enable countrywide access to processes and technologies typically deployed by large e-commerce platforms.
An Ernst & Young study pitches India’s agritech ecosystem at $24 billion by 2025 with the potential for supply chain and output market-based agri startups at the highest. But this ecosystem can be effective at the last mile only when technology interventions connect with and empower small and marginal farmers in large numbers. To enable the same, the district administrative machinery in the state and, more importantly, local self-governance institutions have to be sensitised about agri value chain technology issues. They, in turn, in partnership with the private sector, have to perform the role of effective trainers and leaders in widespread dissemination of the same to small and marginal farmers in the country.
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