The global pandemic in 2020 and the strict lockdown that followed disrupted existing supply chains and brought a coerced change in the status quo for millions of farmers and traders in India. The momentary paralysis in the existing linkages and services meant that farmers started looking for new means of getting their produce to market and in that process, the technology and e-commerce platforms in rural India got a booster shot, according to a recent whitepaper.
The report by Arthur D. Little suggests that agritech companies that had long been a supplement to the traditional systems now became the go-to players for farmer services. Farmers started engaging online through WhatsApp groups, community pages and seeking advice from their local trust centers on ways to improve yields and returns given this tectonic shift.
According to the authors, the recent growth of the agritech market in India reflects its enormous unrealized potential. Increased rural Internet penetration and the greater affordability of digital technologies assisted by rising investor interest have led to the ongoing digital transformation of the farming ecosystem. Needless to mention, technology and smart farming solutions by these agri-tech startups are playing a critical role in helping farmers take corrective measures on time, reduce waste and increase income.
There are more than 450 Indian start-ups in the agritech space with Indian start-ups featuring among one in every nine companies globally. Some of the major start-ups in the sector include Agrostar, Cropin, Jumbotail, Ninjacart and Stellops. The sector has been growing at a fast pace owing to a rise in the number showcasing interest in the Indian agritech start-up scene globally. According to NASSCOM, these start-ups attracted funding from top investors such as Accel, Ankur Capital, Omnivore and others.
Tech innovation for transformation
Technology advances in recent years are re-engineering the value chain to solve both demand- and supply-side issues in the agri-sector. According to the report, cutting-edge technologies (e.g., artificial intelligence, the Internet of Things [IoT], machine learning, big data, and blockchain) are poised to transform the sector by enabling higher productivity, superior quality, traceability, and real-time visibility while reducing the carbon footprint and increasing profits. These technologies can solve some persistent problems of Indian agriculture (see figure below).
An enhanced focus on cost, quality, and reliability are critical drivers of the increased adoption of precision agricultural technologies and in automation. The large volumes of data generated through farms can be captured, processed and valorized through advanced analytics to provide real-time insights to farmers and power timely and effective decision making, reducing production costs and improving yields. With labor becoming increasingly expensive and precision technology becoming more affordable via economies of scale, we envisage faster adoption of advanced solutions in Indian agriculture.
The analyst firm foresees the growing startup community creating affordable quality solutions across innovation categories, which can be exported to other developing and developed geographies and the strengths of its agritech sector are becoming all the more evident.
India’s fast-growing agritech market
According to the authors, by 2030, India will have the world’s largest population, representing a third of Asia and 17% of the world. (Source: UN). This calls for greater attention to large scale investment, innovation and sound infrastructure.
Already agritech companies in India, driven by the entry of younger agriculturists with a greater understanding of technologies, are increasingly using their agronomy knowledge, data, and technology to suggest solutions to Indian farmers.
One of the key to success, they believe, lies in Precision farming. The authors said, “Poor agricultural practices and lack of knowledge of scientific farming techniques among Indian farmers have kept productivity below global benchmarks. Precision-farming solutions collect farm-specific data about soil, weather, pests, and so forth, by using IoT sensors or geospatial technology and combining analytical capabilities to provide timely insights. This information helps manage farming systems, often in real time, through precision application of inputs like agro-chemicals and water.
Farming-as-a-service is also catching up. Farm mechanization in India is low, at 40%-45% compared to 95% in the US and 57% in China. (Source: The Economic Times) Offering services like on-demand machinery rental, field leveling, and pesticide spraying improves productivity.
As an example of strategic innovation in the sector, the authors shared the example of agri-horticulture park Innova was set up in Malur, Karnataka, India, with the motto to double farmer’s income by 2020. Horticulture parks bring best-in-class technologies to create and deliver value to both farmers and businesses by linking farmers and consumers. The food park’s focus is on making a positive and meaningful difference to farmers’ lives through business.
With robust digital infrastructure in the country, consisting of satellite imaging, IoT, nanotechnology, and other technical elements, the sector will witness massive disruption. Technology will be a key enabler in scaling solutions and key applications like price modeling, optimizing forecast and reducing wastage will be the way forward, the whitepaper suggests.