Written By Ashutosh Singh:
At the heart of India’s economic and cultural landscape lies its agriculture sector, a cornerstone that sustains the livelihoods of millions within the country and is a crucial contributor to global food security. With a heritage deeply intertwined with diverse agricultural practices, India’s farming traditions have played a pivotal role in shaping the nation’s socio-economic dynamics and fostering rural prosperity.
As one of the world’s largest food producers, India boasts the second-largest expanse of cultivable land, underpinning a robust agricultural sector. Accounting for over 18.3 per cent of the nation’s GDP and providing employment to over 158 million individuals, the Indian agriculture industry stands poised at the intersection of scale and opportunity. This advantageous position signifies its potential for domestic growth and favours its establishment of a solid presence in global markets.
Despite its promising growth potential, India’s agriculture industry grapples with numerous challenges. Climate change, for instance, has intensified extreme weather events, leading to unpredictable patterns and subsequently impacting crop yields, soil fertility, farmers’ income, etc. Additionally, fragmented land holdings, limited access to credit, outdated irrigation infrastructure, and declining soil quality further hinder the sector’s advancement.
In the face of these adversities, India’s agritech firms have emerged as bellwethers for the sector, leveraging the power of technology across the agricultural value chain from production to consumption. An industry that has been traditionally low-tech for ages is now getting an extreme makeover with tech-enabled products and services. From ‘Farm to Plate’, agritechs are leaving their marks on every stage, from the supply of agricultural inputs to the production, market linkages, transformation of agricultural products, and their distribution to final consumers.
With on-farm practices like precision agriculture and digital farm management solutions, these Agri-techs are nurturing a new era of agriculture practices that optimise the farming process with actionable information. The data-driven insights into soil health, moisture levels, and crop conditions empower them to make informed decisions that maximise yields while minimising input costs.
Imagine a farmer is using an AI drone for his farm. With unmatched accuracy, these cutting-edge machines are revolutionising essential farming tasks, from seeding and controlled irrigation as per prevalent moisture levels and spraying to harvesting. Tireless operations eliminate the need for breaks or rest, substantially reducing labour costs while accelerating work speed. Farmers can unlock many benefits by embracing automation, including enhanced productivity, optimised resource allocation, and streamlined operations.
Furthermore, these drones, IOT-based HD cameras, and various soil sensors assess soil fertility, pH levels, and temperature, enabling farmers to respond effectively to unforeseen developments. This integration of technology enhances pest management and empowers farmers with proactive insights for better crop management.
Another key pain point across the agricultural value chain that agri-tech innovation addresses is the lack of financial solutions and timely availability of credit. Many smallholder farmers and farmer-producer organisations (FPOs) still struggle to access formal financial services due to a lack of collateral or credit history. Supplemented by the rapid digitisation of the country’s financial infrastructure, these agri-tech firms are bridging this gap by offering financial services tailored to the needs of farmers as well as FPOs. Farmers can access loans, insurance, and other financial products through these platforms with simplified application processes and flexible repayment options.
Through platforms like supply chain finance and direct market linkages, agri-tech firms are democratising credit access, enabling farmers and FPOs to secure loans at fair interest rates. Financial solutions like embedded supply chain finance are emerging as a game changer in providing transaction-based credit for the short term. Even the smallest transaction in selling the aggregated produce or purchasing the input leveraged by supply chain finance creates a credit history for the FPOs, thereby contributing towards their creditworthiness.
Timely and fair market linkages, along with technology, are also altering how they distribute and sell their produce across geographically widespread markets and buyers.
These firms are bridging the gap between FPOs and a large network of buyers spread beyond their region through online platforms and digital marketplace. Access to a broader customer base increases their bargaining power for better price realisation and enhances profitability. The output market linkages embedded with finance eliminate the inefficiencies across the value chain and ensure that the farmer gets the right price for their produce at the right time at the farm gate.
Like any change, the adoption of new technology is also witnessing a reluctance among the agricultural communities. Deep-rooted conventional practices are making the Indian Farmer Producer Organizations (FPOs) hesitant to embrace new farming techniques and technologies like digital finance as well as the digital marketplace. However, agri-tech startups are playing a pivotal role in shifting this narrative by empowering farmers to recognise their businesses’ potential through innovative methods.
Moreover, innovative platforms and apps introduced by agri-tech players are enabling FPOs to run their daily operations and business transactions efficiently and effortlessly making it easier for FPOs to onboard new farmers and providing them training in trading practices, harvesting techniques, equipping them with knowledge on quality control standards according to buyers’ specification to ensure maximum profitability and enhanced crop yield. The unique collaboration of agri-techs and FPOs has further augmented the actual power of collectives through innovative techniques of estimating produce to make output aggregation and trade agreements, consolidating the land holding and leveraging the farm mechanisation services on a large scale are few of them.
Undoubtedly, the emergence of agri-tech firms in India has sparked a transformative shift in the “Farm-to-Plate” process, ushering in an era of sustainable growth. Through the adept utilisation of cutting-edge technologies such as Artificial Intelligence, IoT, and blockchain, these firms are revolutionising farming practices and tackling longstanding challenges faced by FPOs.
Owing to the technology in agriculture, the sector is witnessing a reverse migration. This revolution is attracting younger talent, who view it as a promising career trajectory, and garnering support from the Indian government. As the agri-tech revolution blazes a trail, these firms stand as guiding lights, steering the Indian agriculture industry towards profound and impactful growth.
(The author is co-founder and COO of Ayekart)
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