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How Agritech Startups Are Revamping Agriculture In India?

Indian agriculture is facing formidable challenges in the form of decreasing agricultural land against a rising population, small and fragmented land holdings, poor quality of seeds, lack of mechanisation, lack of analytics and data, low yield per unit crop and a reliance on middlemen.

Agriculture in India has not seen any major evolution since the green revolution back in the 1960’s. India is at an inflection point with an impending Agri-tech revolution closely following the footsteps of ed-tech & fin-tech.

Currently, India holds the record of being the second-largest agricultural land globally. Around 60% rural households in India make their living from agriculture, creating a great scope for Agri-Tech start-ups in the country. Research shows that the total Agri-Tech market will be approx. $24 Billion by 2025 while the current market is placed at $204 million which is ~1% of the overall potential.

Current Challenges in Indian Agriculture

Indian agriculture is facing formidable challenges in the form of decreasing agricultural land against a rising population, small and fragmented land holdings, poor quality of seeds, lack of mechanisation, lack of analytics and data, low yield per unit crop and a reliance on middlemen.

In addition, absence of unified physical marketplaces, inadequate transportation facilities and storage, existence of malpractices in the unorganised agricultural markets, scarcity of organised credit, and lack of visibility in terms of pricing, market etc are all afflictions which cripple the Indian agricultural sector.

The advanced technical know-how used globally, abundance of analytics and data, mechanized farming and superior R&D are currently missing in the ecosystem,  

How Agritech Start-ups are Revolutionising Indian Agriculture

Currently, there are 48 unicorn start-ups in India but not a single one pertains to Agri-Tech. Thus, here lies a major growth opportunity.

Various Agri-Tech startups are working in diversified ways – from offering micro-level on-ground assistance like soil analysis of a specific agricultural farm to macro-level services such as forecasting environmental effects using satellite images. Agri-Tech players are transfiguring how agriculture is done traditionally across every stage of the value chain.

New age Agri-Tech startups are focussing on connecting the physical markets digitally though e-marketplaces, where farmers and processors can sell their products Pan-India without having a physical presence. They provide value added services like logistics, quality standardization & secure payments. They have introduced technology to improve food traceability and sustainability in the agri-business.

The farm inputs segment is seamlessly adopting and blending technology with physical infrastructure to provide farm inputs at a better price. Precision agriculture and farm management companies are aiding farmers in improving their yields by up to 30 percent. Similarly, financial service players are serving around 30 percent of farmer households via greater access to credit, and 65 percent of farmer families via access to crop insurance. 

FaaS model is also emerging as the future of agriculture. Farming-as-a-Service offers innovative solutions for agriculture and allied services through a subscription – based or pay-per-use model. These solutions enable stakeholders to make effective data-driven decisions to help boost productivity and efficiency.

Government schemes have been a catalyst in the rise of the Agri-Tech sector. Setting up of the National Centre for Management and Agricultural Extension in Hyderabad (MANAGE) and the Department of Science and Technology have given a tremendous boost to the sector. The focus area of the latter was accelerating Agri-Tech start-ups by providing mentoring, industry networking and investor pitching guidance.

In 2020 alone, over 20 agritech start-ups have together raised more than Rs. 920 crores across venture debt, equity and conventional debt rounds.

“AgriTech in India is at an inflection point and is witnessing a surge in investments from across the globe. Our goal is to leverage technology to facilitate and prop up, the very large, albeit archaic, Agri-Commodity market” says Bilal Khimji, Chief Strategy Officer at TradeBridge. 

Summing Up

Agriculture in India so far has not been part of the tech revolution, despite being an industry which provides employment to almost half the country. However, we see the next decade being dominated by Agri-Tech Unicorns, which shall bring about a tectonic shift in the Agri ecosystem.

Source: Business World

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