The Indian agriculture sector is currently valued at US$ 370 billion and is likely to undergo a complete transformation in the coming years on the back of supportive government policies, significant technological advancements and behavioural changes across consumers and farmers. The exponential transformation the sector is expected to witness in the future has its marks for everyone to see.
The Mighty Indian Agriculture
The agricultural sector contributes ~20% to the national GDP. Agricultural product exports amounted to Rs. 2,84,000 crore (US$ 38.54 billion) in FY19-20. India is the largest producer, consumer and exporter of spices in the world. According to the Department for Promotion of Industry and Internal Trade (DPIIT), a cumulative Foreign Direct Investment (FDI) equity inflow of about Rs. 67,000 crore (US$ 9.08 billion) was achieved between April 2000 and March 2019 in the agriculture sector alone.
Agritech in India
The tech awareness among farmers is on the rise, driven by high internet penetration and mobile connectivity. This is one of the engines driving the sector ahead. The government is also playing an active role in sector development by creating incubators, awarding grants and focusing on public-private partnerships. Starting with 43 Agri-tech startups in 2013, India can now boast of more than 1,000 such startups, and many of them are on the path to becoming unicorns. According to a research report titled “Indian Agriculture: Ripe for Disruption”, the favourable impact of these initiatives is expected to peg the market valuation at US$ 30-35 billion by 2025.
India’s agritech start-ups have been growing at 25% YoY. The start-ups have raised more than Rs. 1,840 crore (US$ 250 million) in venture funding in 2019. This was three times the amount of funding raised in 2018. The sector is forecast to attract more than Rs. 3,680 crore (US$ 500 million) in the next few years.
The tech market for supplying farm inputs is alone expected to be as big as $1billion. Precision agriculture and farm management are expected to have a turnover of $3.4 billion. Similarly, quality management and traceability are expected to contribute a total of $3 billion. All these forecasts are true for 2025.
Other than the digital surge across the agricultural and agritech value chain, as the government’s BHARATNET project to enhance rural Internet penetration has played a key role in it, the Private Equity (PE) and Venture Capital (VC) investments are also accelerating in this space. India is the world’s third-largest recipient of agritech funding after the US and Germany and has the third-largest number of agritech start-ups after the US and the UK. In 2020, India received investments worth US$ 329 million from PE/VC firms and registered a staggering compound annual growth rate (CAGR) of ~53% from 2017 (US$ 91 million) to 2020 (US$ 329 million).
Besides the digital factor, the Nano-technology is also transforming Indian agriculture further and can make the Indian farmers as productive as those in some other parts of the world. Nano-technologies can also be used for the improvement of soil properties and the removal of toxins.
The positive stories for the Indian agriculture sector are pouring in uninterruptedly. Researchers from the Indian Institute of Technology (IIT) Kanpur have developed a biodegradable nanoparticle that can be used as an alternative to chemical-based pesticides and help farmers protect their crops from bacterial and fungal infection. What makes it better than the traditional chemical-based pesticides is that the nanoparticle can remain active at low concentration and can be as effective as pesticides without having any negative impact on soil and health of consumers. The invention of these novel nanoparticles would lessen the worries of crop infection and give a boost to crop yield.
It is called nanoparticle-based Biodegradable Carbonoid Metabolite (BioDCM), and according to IIT Kanpur, it acts fast as it is applied in bioactive form and can withstand even high temperatures. The team, led by Santosh K Misra, and Piyush Kumar from the department of biological sciences and bioengineering at IIT-Kanpur has developed this BioDCM. This team collaborated with researchers C Kannan and Divya Mishra from ICAR-Indian Institute of Rice Research, and R Balamurugan and Mou Mandal from the School of Chemistry, University of Hyderabad.
Government Schemes and Initiatives
The government has been a catalyst in the growth of the agritech sector. It has established the National Centre for Management and Agricultural Extension in Hyderabad (MANAGE).
The Department of Science and Technology, GOI, has organised a food and agri-business accelerator in association with a-IDEA, TBI of NAARM.
The Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) was also introduced and implemented recently, with a major focus on conserving water and increasing irrigation coverage in the country. Under this scheme, Rs. 56,340 crore (US$ 7.64 billion) has been allocated for investments in end-to-end solutions on source creation, distribution, management, field application and extension activities.
The government is also planning to grant Rs. 2,000 crore (US$ 270 million) for computerisation of the Primary Agricultural Credit Society (PACS), with the primary aim of benefitting cooperatives through digital technology.
The Indian government has lent a strong impetus to this sector and aims to double the income of farmers by 2022-23. Another initiative is the Agricultural Technology Management Agency (ATMA), which facilitates retrieval of data and data entry from web-based portals via a regular mobile phone (without using the Internet). They are operationalizing more than a dozen services of innovative technologies, such as USSD, for farmers and other stakeholders in the supply chain. In addition, there have been many favourable government policies and initiatives such as PM-KISAN, PM-AASHA and PM-KMY among others that are uplifting farmers and benefiting stakeholders across the value chain. It seems that agritech is now uniquely poised for disruption via technology.
