Sansad TV: Agri Startups | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Introduction

• Startups in the agricultural technology industry in India have a lot of potential. According to a 2020 Ernst & Young study, the Indian agritech market could be worth $24 billion by 2025, but only 1% of this potential has been realized so far. The supply chain technology and output markets are the most promising segments, with a value of $12.1 billion.
• Currently, there are approximately 600 to 700 agritech startups in India operating at different levels of the agri-value chains. These startups use advanced technologies such as artificial intelligence, machine learning, and the internet of things to improve efficiency, transparency, and inclusivity in the agricultural sector. Examples of such startups include Ninjacart, Dehaat, and Crofarm (Otipy). 
• In addition to empowering farmers, these startups are also working with local grocery stores, small agrifood businesses, and other players in the agri-food ecosystem. This ecosystem expansion also allows startups to connect with bigger front-end players that demand bulk quality produce but have difficulty connecting with farmers directly.

Issues faced by the startups

• Although the government has made some changes in their policies related to agriculture, there is still a lot of work to be done. Although initiatives like Digital India, Make in India, Start-up India, and Skill in India have been launched, they have not yet had a significant impact at the farm level. Many agtech firms face their own challenges, including inflexible business models that are difficult to scale up and a lack of knowledge and expertise in the field.
• Farmers are often resistant to adopting technology, and since many farmers are small and subsistent, introducing technology to agriculture can be challenging. The supply chain management has significant gaps, and there is poor last-mile connectivity, particularly at the grassroots level. Additionally, there is a lack of investment to drive businesses. 
• Limited traceability and visibility also affect farming companies. Agri input companies struggle with inefficient field force management and operations, and the lack of a centralized database results in significant losses along the value chain. It is essential for the government, agritech businesses, and food supply chain companies to work together to address these issues and create a transparent system that benefits all stakeholders involved, including investors, in the long run.

Measures Needed

• The startup-FPO partnership can be further strengthened by incentivising the FPOs under the central government’s programme to add 10,000 new FPOs by 2024.
• Collaboration across sectors: The network of agritech start-ups, incubators, accelerators and investors need to work closely with policymakers, academia, think tanks, and government departments to develop a more nuanced understanding of the dynamics of the agrifood sector.
• This will also enable the government and policymakers to leverage the existing agritech pool and co-create solutions for shared value.
• If policies, institutions and partnerships can harness the current momentum, the startup ecosystem can be the next-generation technology revolution in the agrifood sector.
• Experts, agritech entrepreneurs and investors believe that new approaches and new institutions are required which can really pull farmers from lifelong penury. This can be achieved if both private and public companies work together in unison to boost the agriculture space in a massive way.
• Skilling farmers to infuse technology in agriculture will not only lead to better agri-incomes, it will also make agriculture more efficient. Government aids are available to buy machineries and these can be made available to ensure start-ups can scale their reach to farmers.

Conclusion

As of 2019, the Indian agriculture industry was valued at $39.1 billion and is expected to make a significant contribution to the global food trade. To help farmers increase crop yield and double their income, startups are essential in harnessing technology. The integration of technology into agriculture will result in significant growth and move the sector closer to Aatmanirbhar Bharat (self-reliant India).