View: Era of modern farms and Agritechs in India

A plethora of technology start-ups emerged during COVID-19 to find solutions to intractable challenges across sectors. A significant portion of these tech startups have entered Indian agriculture to the aid of stressed farmers by providing them with low-cost effective farming solutions. The solutions provided by agritech startups have the potential to revolutionise the face of Indian agriculture from plough to plate.

Agritech startups are as keen as mustard to leverage technology in everything that falls under agriculture. Examples abound at different stages of the value chain: crop monitoring through drones and remote sensing; crop sensors for effective fertiliser and pesticides applications; providing advisories using decision-making tools, weather forecasting and live video interaction; traceability for streamlining the supply chain and providing information for consumers. In just a few years, agritech startups are rendering great milestones and showcasing promising results with the presence of over 700 agritech firms, which have raised over $2 billion in a decade. However, multiple impediments are restricting their stride to expand.

The first and foremost challenge is inconsistency in government data and its difficult access, including digital land records, farmer databases and other records. This has dissuaded many tech startups to enter the agriculture sector. Another issue is the absence of a validation mechanism for agritech start-ups. It is observed that some start-ups enter the industry only half-baked which often leads to early-stage failures that in turn reduces trust and receptivity among farmers for accepting technology start-ups.

Agriculture in India is not considered a commercial and viable business, rather a social responsibility. Hence, many agritech startups fail due to a lack of timely and adequate funding. Agripreneurs has time and again faced the challenge to raise funds for their organisations from VCs. The solutions offered by startups take a long lead time to develop, validate, demonstrate and scale, steering the investors away from agritech. The current scenario also shows that Agritechs in India find it easier to work and collaborate with private sector companies over the government to launch and scale their solutions. This is mainly because of better support and easy cash flow facilities offer by the private sector. Additionally, excessive licensing and confusing compliance requirement, especially for agri inputs start-ups restricts commercial viability and scaling up process.

The hiccups in the system demand creation of a holistic ecosystem that is strongly supported and regulated by the government. A “Build with Us” approach by the government can go a long way in promoting agritech startups and developing precise AI models. A strong foundation of an efficient AI model requires rigorous use of a database that has characteristics of Four V's — Volume, Velocity, Veracity and Variety. Startups need support to get access to these quality datasets such as weather data, soil health, moisture data, and irrigation data, etc under a single window to develop precise and accurate AI models. An easily accessible integrated database, available at minimum or no cost will be a game-changer for multiplying agritechs in India.

Another imperative necessity to boost the presence of agritech is of creation of a validation agency/institution by the government preferably by ICAR using AI. After stringent inspection, the successfully validated solutions may be reflected on the GeM portal. This will enable the smooth procurement of AI solutions in agriculture. In order to tackle the issue of compliance burden, a portal can be developed that lists out the entire licensing and compliance requirement for agritech start-ups such that the cost of doing business is reduced.

Similar to the Auto Expo, a public exhibition should be organized by the state government for showcasing technology solutions to farmers and agriculture experts. The technology trade shows will provide a platform for agritech startups to demonstrate their solutions and business model directly to the users of the technology. Government should provide more test farms to transfer solutions from lab to land. In parallel, aggregation of small farmers is the need of the hour for enhanced market linkages, economies of scale, and better prices for the farmers. Blockchain technology can be leveraged to aggregate small farmers by creating crop-specific collective on the network. The technology will bring transparency and accountability for the farmers, and smart contract functionality will enable efficient collaboration among all the value chain stakeholders.

The government needs to be lauded for their efforts and initiatives to ease some of the hurdles for scaling up of agritech in India. The recent liberalized regulations on geospatial data will boost innovative solutions in the agriculture sector. The regulations have eased the restrictions on approval, security clearance, license or any other restrictions on the “collection, generation, preparation, dissemination, storage, publication, updating and/or digitization" of geospatial data and maps. This will unleash new innovative solutions in precision agriculture, credit and insurance.

Similarly, the outcome of the scheme on the promotion of 10000 FPOs is also a favourable move for agritech start-ups since it will aggregate small farmers for scaling IT solutions. The recently announced India Digital Ecosystem of Agriculture (IDEA) project by the Ministry of Agriculture is another historic step. IDEA Project will facilitate the development of smart and well-organised agriculture by creating a digital repository of everything related to agriculture — including farmers’ database, land records and other data related to PM-KISAN, Soil Health Card and Crop Insurance Scheme.

Investment in agritech is crucial for achieving the aim of doubling farmer’s income and is a definitive way for building smart agriculture in India. The startups bring forth innovation and personalised solutions that will augment the productivity and profitability of the agriculture sector. It has huge untapped potential and awaits the right push and facilitation from the government to unleash manifold growth. With uncertainties and complexities rising each day in the agriculture sector, it is the right time for the government to invest in agritech start-ups and boost their confidence. A strong collaboration between governance and agritech startups is required such that together they can knit the gaps and resolve the long-standing issues in the agriculture sector.