India’s agricultural sector has long waited for innovation to challenge the current status quo. Agriculture is the highest contributor to India’s annual GDP at 18% to 20%. Yet, it continues to be heavily impacted by unique challenges in the field, slow growth rate, mobility, and supply chain issues, among others. Sector reform is key, and this is where technology has played a central role. Armed with high-tech digital tools and knowledge of complex systems, agri-tech is poised to reform old ways. According to a report, the agri-tech sector can touch $24 billion in valuation by 2025. Although technological interventions are already changing the landscape, there is still much to unlock.
Growth of agri-tech
According to the IBEF, 58% of our population depends on agriculture to earn a living. Farmers continue to be the heart and pride of our country. However, there is a huge mismatch between the resources our farmers need and the resources they have access to. For a long time, the sector has operated successfully with traditional wisdom passed down from generation to generation. But today, this knowledge and these processes are on the verge of becoming obsolete. We are witnessing the worst of climate change and the best of technological advancement. If we want our lands to be full of crops and our markets to be full of vegetables and fruits, technology and agriculture must work together.
Over the past few years, several agritech startups have set up operations to solve problems and increase productivity. The year-over-year growth of these startups is a clear indication of the amazing work they do. As a result, venture capital investments have flowed into the agri-tech sector. Startups in the agritech space have seen their total funding increase by 300%, from $155 million in 2020 to $636 million last year. Many startups have gained attention for coming up with innovative solutions to take on the responsibilities of the agricultural sector in India. They have evolved into multifunctional platforms that provide advice, credit products and real-time assistance through online and offline channels.
It is a fact that Indian farmers do not operate like the rest of the world. They are marginalized; constantly at risk; burdened with costs; operating with limited resources and cut off from traditional banking services. Although factors such as soil, climate, water availability, etc. cannot be controlled, they can be manipulated by leveraging technology to achieve better yields. Accessing the right information at the right time can be crucial for the harvest. Advanced systems powered by drones, cloud, big data, blockchain, IoT, machine learning and AI have proven invaluable to farmers. Startups offer services such as soil mapping, micro-irrigation technologies, supply chain management systems, yield forecasting systems and many more. They have been able to easily roll out these services due to the recent boom in rural internet penetration in India. One in two households now owns a smartphone, facilitating the growing relationship between technology and agriculture.
The farmers’ ecosystem, however, is a web of complications. Not only do they need adequate resources to maximize their profits and returns, but they also need learning resources to adapt and properly use these technology-driven services. The political support of recent times has provided the much-needed impetus to support the growth of agri-tech. Multiple initiatives have been put in place to promote investments and policies. The Union Budget 2022-2023 set out a clear policy vision for the delivery of digital and high-tech services to farmers with the involvement of public sector research and extension institutions as well as private technology players agriculture and agricultural value chain stakeholders.
What does the future hold?
The Indian agricultural technology market is resilient and leading a movement of change. In addition to the existing conveniences currently offered by agro-tech startups, several unconquered horizons must be captured. Segments like FaaS (Farming-as-a-Service), indoor farming, hydroponic farms and others have great potential. In addition, there is still a lot of work to be done so that farmers can improve yields and the health of soils and crops. We still need to improve and introduce various systems such as precision farming, plug-and-play software and hardware, value chain working capital, and improved access to credit.
Food security is a global concern and a vast nation like India needs self-sustaining systems in place before time runs out. There are century-old issues that have affected farmers. It is a fact that emerging technologies and digitization have improved traceability, transparency and connectivity, but there is a long way to go. Witnessing the upward growth of agri-tech, it’s safe to say that these startups will boost the ecosystem of farmers, one field at a time. This emerging relationship between technology and agriculture should undoubtedly fuel the ecosystem of farmers.
The opinions expressed above are those of the author.
END OF ARTICLE