Agri-tech: The emerging field for an Indian entrepreneur to grab more opportunities
−− This field is for an Indian entrepreneur who can grab more opportunties
Sep. 13, 2019
"Farming is a profession of hope". India has perhaps the largest agricultural community in the world, with about 60% of the population engaged in some kind of agricultural activity. The industry remains unorganized and fragmented in the country.
Target to double the average farmer's income by 2022
The central and state governments have woken up to the farm crisis and are aggressively pursuing policies to better the lot of the farmer. The Modi Government has targeted to double the average farmer's income by 2022. This is possible only when Agri-startups fill the gap.
There are multiple issues that make the agricultural sector lag. There is a fragmented land-holding pattern, massive decline in agricultural land in comparison to the growth in population and a lack of technological advances that add to the issue.
- The fundamental problems of depleted ground-water, low-quality seeds and ravaged soil quality due to over-use of chemicals add to the woes in the sector
- The lack of market linkage creates a considerable gap in the industry that is struggling to eradicate the present malpractices in the marketing structure of production
- The facilities for transportation and storage are notoriously inadequate
- The scarcity of credit or high lending rates by local entities causes thousands of farmers to commit suicides
The buzz words are technology, aggregation and organized marketing to help standardize market practices. The Indian agri-startups have seen a massive surge since 2014. The Inc42 Datalabs has recorded an approximate growth of nearly 100% in agriculture and allied activities in 2014-2015. The agri-exports saw a jump of CAGR 6.75% to $32.08 billion in 2015-2016. Agri-tech companies have been instrumental in jump-starting the organized growth in this sector.
The sector had secured a funding of $73 million in 2018, according to NASSCOM. The global focus on the existing gaps and the potential of phenomenal growth has created a surge in the funding in the year 2019. The agri-tech industry has been able to raise humongous financing of over $248 million till June 2019.
Market linkage, farmer markets in the digital space, superior database management, digital agriculture and micro-financing are gaining in popularity, making the sector conducive to attract funding.
South-East Asia, Europe, Africa and South America are also benefitting from the surge in Indian agri-tech startups.
The various areas of improvement, like the reduction of input costs, better nutritional value in food crops, better quality seeds that drive crop production and improving soil quality. Using technology to predict weather patterns, irrigation cycles and soil quality are the focus of some startups. This enhances the quality of production.
The other side of the coin
The other side of the coin has the problems that plague agriculturists after the crop has been harvested. The supply chain is fragmented and highly unorganized. The middle-man culture soaks up the profits and leaves farmers with marginal gains.
- This issue is compounded by wastage in the distribution system, inadequate storage facilities and weak market linkage
- The inability of small farmers to reach lucrative markets has brought forward a group of passionate agri-tech companies who strive to bridge the gap
- The use of smart technology and superior logistics infrastructure has created a new eco-system of agri-marketing
New-age startups are leveraging technology to tap the retail as well as B2B marketplaces through Digital agronomy startups. The challenges are enormous, but the bridge is being implemented with rapid improvements day after day. The Digital agricultural services market is set to touch $4.55 billion by 2020, according to Accenture. Agri-tech startups primarily accentuate this growth.
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