India Update
Ag Techs Bright Future
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By Shubhangi Bidwe
Contributor
A 2020 report by Ernst & Young predicts revenue from the Indian ag tech industry will grow to $204 billion by 2025. Another analysis by Bain & Company estimates this increase amounts to about $35 billion during the same period.
About 100 ag tech startups raised close to $1.33 billion across 139 deals between January 2020 and June 2022, according to the data tracking platform Fintrackr. This includes 37 deals worth $155 million in 2020, 58 deals worth $636 million in 2021, and 44 deals worth $539 million in 2022. India’s ever-increasing internet penetration and its evolving rural communities make it well-positioned to adapt to changing agricultural techniques and move to new business models.
Market Leaders
The biggest growing segments in the Indian ag tech industry are supply chain technology and output market. A report by Inventiva estimates the current market potential of these segments to be about $12.1 billion. These are followed by financial services, precision agriculture and farm management, quality management and traceability, and market linkages farm inputs.
In FY 2020, the supply chain technology and output market segment contributed the most to the ag tech industry’s revenue besides growing the fastest among all segments during the same year. Activities in this segment include collection, processing, storage, logistics, and distribution of agricultural produce from farmers to end customers or merchants. The segment is currently dominated by startups like Ninjacart, Waycool, and Samunnati.
The precision farming, analytics, and advisory segment grew by 17% during FY 2020. Companies in this segment mainly address structural difficulties caused by farmers’ lack of awareness about scientific farming practices. They employ IoT sensors or GIS technology to collect farm-specific data like soil, weather conditions, humidity, pests, and so on and then use their analytical capabilities to deliver timely insights to farmers. These firms are also developing quality evaluation and grading solutions for large agribusinesses and traders. In India, roughly 200 to 250 startups are providing similar services. Clover, Cropin, KhetiNext, and Zentron are among the notable startups.
According to the Inventiva report, more than 1,300 agriculture startups in India use artificial intelligence (AI), machine learning (ML), the internet of things (IoT), and other technologies to boost efficiency and productivity. Most ag tech startups in India are concentrated in Karnataka, Maharashtra, and the Delhi National Capital Region (NCR).
The following are some of the most well-known companies active in various ag tech segments:
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Fasa, Bitmantis, Agronxt, and Soilsens are examples of IoT-powered agriculture and drones.
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DeHaat, Ninjacart, Jumbotail, Bijak, Farmzen are marketplaces and e-distributors.
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DeHaat, AgriBegri, AgroStar, BigHaat, Gramophone are some farm inputs available.
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Cropin, FarmERP, AgNext, and BharatAgri Precision agriculture and farm management
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AgroStar, IFFCO Kisan, RML, Farmbee, and Fasal Salah are the farmers’ advisories.
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Aggois, Niruthi, Weather Risk, Jai Kisan, Aggois, Niruthi, Weather Risk, Jai Kisan, Aggois, Niruthi, Niruthi
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Equipment leasing companies include EM3, Agri Bolo, and Tractor Bazaar.
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Licious, Zappfresh, and Pesca are some of the meat delivery services available. To Your House, Fresh
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Nebulaa, AgricX, and Intello Labs are the companies that measure crop quality.
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Drip Tech, Netafim, Cultyvate, and Soilsens are examples of intelligent farm equipment.
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Mahyco, Nu-genes, and Nuziveedu seeds are hybrid seeds.
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Fresco, Triton Foodworks, and Junga are all hydroponics companies. Absolute Foods are fresh and green.
Services Provided
In India, major players AgroStar and BigHaat provide farmers with a missed call-based service for ordering inputs and equipment and a cash-on-delivery service. By collaborating directly with the producers, these companies have eliminated many intermediaries. As part of farming-as-a-service, several organizations provide services like on-demand machinery leasing, field levelling, and pesticide spraying.
Ag tech companies use technology like geotagging farmland and remote crop monitoring to create risk profiles for farmers and assess their creditworthiness. Ag tech companies work with banks, NBFCs, and input suppliers to give loans at lower interest rates than unorganized lenders.
Attracting Investors
Since 2015-2020, investments in Indian ag tech have increased by a factor of 10, with a total investment of $242 million in 2020 (through October). As per an India Briefing report, most of these investments were directed to the meat delivery segment of startups attracted the most funding in the ag tech industry in 2020, with $124 million, followed by the marketplace and e-distribution businesses ($83 million).
Ag tech companies are playing a critical role in cutting down the involvement of middlemen and streamlining the distribution of produce, making it easier for farmers to reach their full potential.
While the three farm bills that the ag tech industry praised are being rolled back this month due to concerns raised by non-corporate stakeholders, ag tech players in India will continue to push forward, aided by the pace of innovation and diverse funding, as technology solutions to long-standing challenges are urgently sought.
Government Initiatives
The Farmers’ Produce Trade and Commerce Bill, 2020: The Farmers Agreement of Price Assurance and Farm Services Bill, 2020; and The Essential Commodities Bill, 2020 are intended to help the Indian agriculture sector undergo structural change. As any Indian government will attest, policy changes with such broad repercussions necessitate long-term negotiation and co-opting of several parties. At times, political expediency can work in India, especially given Prime Minister Narender Modi’s BJP government’s large mandate. Still, farm reforms are an electoral wedge issue, and concerns about forthcoming state elections in Uttar Pradesh have stopped his ambitious program.
Here is a brief recap on those programs:
Digital Agriculture Mission (DAM) Initiative:
It was launched in September 2021 to help ag tech start-ups by leveraging advances in cloud computing, earth observation, remote sensing, data, and AI/ML models.
AgriStack
The Ministry of Agriculture and Farmers Welfare has planned on creating an “AgriStack” — a collection of technology-based interventions in agriculture.
Unified Farmer Service Platform (UFSP)
UFSP is a combination of core infrastructure, data, applications, and tools that enable seamless interoperability of various public and private IT systems in the agriculture ecosystem across the country.
Sub-Mission on Agricultural Mechanization (SMAM) scheme:
SMAM scheme was launched in 2014-15 with the objectives of increasing the reach of farm mechanization to small and marginal farmers and regions with low farm power availability.
The Road Ahead
However, the road ahead is not without its challenges. The government and new-age companies must work hand in hand to create awareness among ag tech entrepreneurs and highlight the benefits of adopting these robust technologies, including mechanization.
The coming generation has the opportunity to take a significant step toward this reality. The vision is to make India’s agriculture more structured and sustainable, with a focus on climate change and the adoption of best practices. While the future of ag tech in India looks promising, India needs to remain committed to its goals and ensure that it lays the foundation for a better future for Indian agriculture and ag tech entrepreneurs. •