The growth trajectory brought in with the use of big data, AI, IoT, Machine learning and analytics will see greater growth and excitement in the coming years.
While most industries were struggling during the pandemic, Agritech thrived with digitisation accelerating like never before and resilience becoming a key theme of the industry. From 2017 to 2020, India received ~US$ 1 billion in agritech funding. India also ranked third in agritech funding and the number of start-ups that came up within this period. Reports suggest that by 2025, Indian agritech companies are likely to witness investments worth US$ 30-35 billion.
Drivers of Change
Despite the challenges of fragmentation, limited access to finance and storage, risks related to lack of trust and enforceability, broken supply chains, business costs and challenges within policy frameworks, digitisation and tech-driven innovation helped Agritechs outperform other industries in the last two years.
The design and deployment of contemporary technology have been core to the developments of the industry in the past few years. Emerging tech-driven startups and the influx of funding have enabled greater efficiencies and transparency in the agri value chain. The focus on health in these difficult time has been crucial and food quality, food loss and food security have been a central conversation in all growing markets.
The pandemic sped the creation of digital agricultural markets and the electronification of the agricultural commodity markets. The growing active subscribers of smart phones contributed significantly to this spurt in the agritech sector. Solutions needed to be quick, efficient and easy and the gaps in the market were filled with smart tech and young entrepreneurs. The growth trajectory brought in with the use of big data, AI, IoT, Machine learning and analytics will see greater growth and excitement in the coming years.
Road Ahead
2022 will see application of analytics and smart devices with predictive models to provide improved outputs and better control on the future harvest. Diverse data sources like satellite, soil, weather, historical crop, and farm equipment data will be used to analyse the farmlands and forecast for future yield.
We are already seeing a digital transformation at the grassroot levels. There has been a rise in the subscription-based service model which aims to cut down costs and provides farmers with real-time alerts on crop conditions and inputs required. Such actionable insights aids farmers in optimization of daily tasks and provides them with greater control over their future harvest.
This certainty in improved crop yields and cash flows will increase interest from financial institutions and bring in innovative agri finance models. Fintech players will work towards resolving the impediments to Agri finance for smallholders with commodity finance loan options for swift borrowing. 2021 has already seen the emergence of self-decisioning fintech platforms with embedded financing and technology will enable further transparency in processes and the shift of power into the hands of the agricultural borrower as in other personal finance industries.
The initiation of Blockchain technology in agriculture will allow for precise data, limited food loss, better farm and inventory management and secure transactions. With high initial investments, we have seen the emergence of new agri-trading platforms which in the coming future will enable a seamless integration of services, more efficient market linkages and greater returns. Together, the currently fragmented Agri-sector will see a shift towards enforceability, trust and transparency.
Another emerging conversation for 2022 will be climate change. Keeping with the vulnerabilities that farmers face with regard to the day to day changes in weather and the climate changes, farm advisory services will play a crucial role in building resilience and developing mitigation solutions using climate data, satellite imagery and other tech interventions.
Rising digital engagement will create better networks for learning and knowledge sharing and generate better momentum in skilling and knowledge dissemination within the farming community. While the past year showed analytics as a crucial contributor in improving per Hectare productivity and farm outputs while minimising losses, in the coming year advisory services will provide farmers with crucial data inputs on what to grow keeping with market needs & price outcomes. This will aid farmers to reap better benefits as the markets will not be flooded with same commodities which often results in price drops.
There is high growth potential in building smarter farms using sustainable practices such as alternative energy, better use of water and waste and reduced dependencies on unsafe chemicals. Sustainability will continue to emerge as a key mantra to agriculture and though limited, its impact will grow deep and wide with better inputs, smart farm equipment and crop assessment tools.
Conclusion
Indian agriculture is diverse, with multiple stakeholders and the costs of reaching out to the multi-lingual, multi-cultural users can be constrictive. Solutions will need to be customised while scalable and some crucial factors in success will be affordability, ease of access and operations, easy maintenance of systems and supportive government policies. However, the opportunities available in this $370Billion agri sector is immense and with the right approach, idea and execution, one can successfully create real impact.
Source: Business World
