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News: The Agritech startup ecosystem can be the next-generation technology revolution in the agri-food sector.
Agritech Startups are raising large sums, despite many of them currently making losses. This is because they disrupt the traditional system of doing business and increase efficiency.
India witnessed an increase in funding from $619 million in H1 2020 to $2 billion in H1 2021.
Many of them use artificial intelligence (AI), machine learning (ML), internet of things (IoT), etc, to unlock the potential of big data for greater resource use efficiency, transparency and inclusiveness.
Currently, it is estimated that there are about 600 to 700 Agritech startups in India operating at different levels of agri-value chains.
How Agritech startups are empowering farmers?
Ninjacart, Dehaat, and Crofarm (Otipy) are a few of the many startups that are redefining the agri-food marketplace.
Ninjacart & Crofarm (Otipy): it sources fresh produce from farms and supplies to retailers, restaurants, grocery and kirana stores, and small businesses.
Dehaat: it is an online marketplace providing all the agricultural products and services to farmers.
These startups have had a demonstrated impact.
For instance, Ninjacart reduced wastage to 4% compared to up to 25% in traditional chains through demand-driven harvest schedule.
Logistics optimisation enabled delivery in less than 12 hours at one-third the cost in traditional chains.
Farmers’ net incomes are reported to have increased by 20%.
Dehaat has enabled up to 50% increase in farmers’ income as a result of savings in input costs, increased farm productivity, and better price discovery.
Agritech startups-led e-commerce platforms have the potential to steer the shift from government-controlled agricultural markets towards more demand-driven digital markets.
These startup network is able to leverage the bigger front-end players who demand bulk quality produce and have challenges in directly linking with farmers.
What are the associated challenges?
Sustainability and scalability: There are likely to be a lot of changes in Agritech startups in the future. Many ventures are falling out while others are consolidating through mergers and acquisitions. In India, the biggest challenge is to sustain and scale up the farmer outreach.
Underutilised potential: An Ernst & Young 2020 study pegs the Indian Agritech market potential at $24 billion by 2025, of which only 1% has been captured so far.
What is the way forward?
The startup-Farmer Producer Organisation partnership can be strengthened by incentivising the FPOs under the central government’s programme to add 10,000 new FPOs by 2024.
Working together: The network of Agritech startups, incubators, accelerators and investors need to work closely with policymakers, academia, think tanks, and government departments to understand the dynamics of the agri-food sector better. This will also enable the government and policymakers to leverage the existing Agritech pool and co-create solutions for shared value.
Source: This post is based on the article “Agritech startups have great potential in India” published on 8th November 2021 in Indian Express.
