Agriculture sector plays a formidable role in the sustainable growth and development of Indian economy. It provides for the food and nutrition requirements of 1.3 billion Indian people and creates employment opportunities through forward and backward linkages to support 60% of Indian population.
While it has achieved substantial progress over the years regarding food security, accessibility and affordability, the agriculture sector is still challenged by low productivity, low profitability, increase in input costs, wastage of crops due to lack of storage and supply chain management. These challenges present a host of opportunities for Agri-entrepreneurs.
Agri-entrepreneurship employs entrepreneurial skills, models and innovative ideas to economically solve problems in the agriculture sector and increase the profitability of the farming business.
Agri-entrepreneurship can play a significant role in solving the challenges related to information dissemination, farm management, capital availability, mechanization of farm and the agriculture supply chain.
Agri-startups in the overall startup ecosystem in India
The Indian startup ecosystem has shown tremendous growth in the past few years. India has emerged as one of the top three countries globally in term of the number of startups founded. However, a sector wise break up of India’s startup ecosystem presents a different picture for Agri – entrepreneurship.
According to data from Tracxn, a startup activity tracking platform, in 2015 out of $6 billion invested in an overall tech startup, the agriculture sector managed to attract less than 1% investment.
However, agri-tech startups received a renewed interest from investors in 2016. According to the latest Agtech investing report for 2016, a sum of $3.23 Bn was invested in agriculture sector worldwide, out of which 53 Indian agri-tech startups managed to raise $313 Mn.
Thus, Agri-entrepreneurship is slowly gaining a foothold in the Indian startup ecosystem.
Need for entrepreneurship in agriculture
In recent years, entrepreneurs have played a significant role in solving some of the pressing problems in the society by providing economical solutions, thereby converting the challenges into opportunities.
Education, Media, Entertainment, Transportation, e-commerce etc. are some of the sectors which have been revolutionized by entrepreneurship.
Similar challenges and opportunities are prevalent in the Indian agriculture landscape. The entrepreneurship can provide an innovative solution to some of the critical agricultural issues such as:
Crop productivity: Currently India produces 2.4 tons per hectare (t/ha) of rice and 3.15 (t/ha) of wheat, which is far below China’s yield of 4.7 (t/ha) for rice and 4.9 (t/ha) for wheat respectively. Entrepreneurs can use precision farming techniques to increase crops productivity.
Input cost for agriculture: Currently for an output of Rs. 100, the input cost is Rs. 64. Situations like these have made agriculture a low-profit enterprise and have led to an agrarian crisis in India. The input costs can be minimized by incorporating data-driven decision making and reducing the unnecessary use of input materials.
Wastage of crops: Due to the bottleneck in supply chain infrastructure and insufficient storage facility, crops worth $14 billion are wasted each year in India. Agri-Entrepreneurs can support the government in creating storage facilities and use information technology to manage the supply chain to reduce wastage of crops.
How can Technology be leveraged to overcome agricultural challenges?
Digital technologies such as Remote Sensing, Geographic Information System (GIS), Internet of Things (IoT), coupled with data-driven decision making and analytics, hold the key to improved farm productivity, minimized farm wastage and increased farmers income.
For example, Remote Sensing and GIS can be used to provide bio-geophysical data for agricultural crop monitoring and agromet-advisory services.
It can be further used to map the cropping pattern, cropping intensity, draught assessment and better understand the agronomics of crops etc. Satsure, an analytic startup founded in 2015, is utilizing remote sensing and GIS to help the farmers improve their incomes.
Internet of Things (IoT) can be used to enhance agriculture productivity by manifolds. IoT based smart farming is a system built for monitoring crop field with the help of sensors.
The sensors provide critical data like temperature, soil moisture, light, humidity etc. which can be used to monitor crop health and automating the irrigation system. CropIn an Indian startup is using smart farming technologies to improve decision making and bring consistency, dependability and sustainability to agri-businesses.
Thus, digital technologies together with data analytics can be used in every stage of the Agri-production life cycle, making farm activity more insight-driven and potentially more productive and efficient.
Opportunities created by Agri-Entrepreneurship
Challenges in the Indian agricultural landscape have created many opportunities, which have been tapped by various entrepreneurs.
In the past few years, some notable startups have come up in the agriculture sector and are disrupting the way Indian farmers have been interacting with their farms.
‘EM3 Agri’, a Noida based company, provides pay per use farm services for every stage of agri-production life cycle, including services related to land development, seeding, sowing plant, plant care, and post-harvest services, thereby maximising profit per unit of land for farmers.
‘Crofarm’ is another significant player which is providing the farmers with a better deal for their produce. It is a farm-to-business venture that uses a combination of smart logistics solutions to minimise post-harvest losses and help the farmers in better price discovery for their produce.
‘Gold Farm’ is a farm equipment aggregator, which partners with local entrepreneurs who can invest in farm equipment. These farm equipment, in turn, are rented in villages on an hourly basis. Thus, helping the farmers mechanise farming at nominal costs.
These agri – ventures have proved that if quality solutions are provided to the farmers, they are willing to pay for the services. At present, the market size of agri-tech ventures is quite small, and the services are available only in certain pockets.
There is a vast scope to scale up the solutions and increase the reach and benefits of agri-tech ventures to improve the capability of the Indian farmers.
What is in it for the entrepreneurs?
Agri-entrepreneurship in India is still an infant. However, entrepreneurs have been able to show the acceptability and viability of the services they provide, proving that the Indian Agriculture sector is ready to take a new leap forward in the coming years.
A report by Accenture estimates the digital agriculture services market will hit $4.55 Billion by 2020 globally, thus, pointing out to the fact that agri-tech startups in the world as well as India are bound to grow.
Globally, India has the second largest acreage of land under cultivation. Only a small percentage of the farmers in India have been able to utilise the available technology, mainly because of the high cost of services and the small size of farms.
Going forward, the entrepreneurs must ensure that they minimise the cost of their services by scaling up their businesses. This would enable the small and marginal farmers to effectively utilise the available services.
There is no dearth of opportunity for the entrepreneurs. Even if they minimize the ‘per unit’ profit for their services, they will still be able to rake in big profits. When combined with the enormous social dividend these entrepreneurs will create, will be the driving force for agri-entrepreneurship in India in years to come.
(Disclaimer: This is a guest post submitted on Techstory by the mentioned authors. All the contents and images in the article have been provided to Techstory by the authors of the article. Techstory is not responsible or liable for any content in this article.)
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About The Author:
Anish Passi is the Director at Neostencil, which is a unique platform for Test Preparation where you can access live classrooms of the best teachers in India, from the comfort of your home.
He is an Engineer from McMaster University, Canada and an MBA from IIM, Ahmedabad. He previously founded Testcafe and has extensive experience in the Education industry.