AgriTech - The time has come
Since I was born into a farming family and have watched my father and grandfather work in the fields for lengthy stretches, not much has changed. My father still uses traditional agricultural practises on the two acres of land he still owns because the majority of it was sold due to poor returns. He is forced to use traditional farming methods because to his limited access to information on what to produce when and his lack of access to current agricultural technology and practises.
Millions of farmers, like my father, experience a negative yield each harvest since there aren't any ways to increase agricultural output or handle supply logistics at the farm gate. Nearly 86.2% of all farmers in India are small and marginal farmers, meaning they have less than two hectares of land and still mostly rely on antiquated, unscientific farming practises. Despite more than $500 million in venture money being invested in Indian agriculture, technological adoption is still patchy, and the actual impact on marginal farmers is negligible. About $300 million, or about 57% of this capital, has gone to entrepreneurs in the supply chain or market linkages.
Precision agriculture, technology-led hardware models, and FaaS (farming as a service) solutions, which will eventually increase yields and produce actual data-based insights to improve crop and soil health, have received relatively little expansion funding and support.
India's agriculture yields still fall between 30 and 60% short of the highest sustainable crop yields possible in both industrialized and developing nations. The next ten years will be important for ensuring food security for 1.3 billion Indians and preserving our soil health, which is rapidly deteriorating.
Due to India's strict lockdown in March of last year, existing supply networks were disrupted and 130 million farmers and traders were forced to adjust their ways. Farmers began seeking for new ways to market their produce as a result of the temporary standstill in the existing links and services, which gave technology and e-commerce platforms in rural India a boost.
Given this tectonic shift, farmers began interacting online through WhatsApp groups, community pages, and seeking guidance from their local trust centers on how to improve yields and profits.
The farm industry, on the other hand, grew by 3.6% in the most recent fiscal year and is predicted to rise by more than three percent in 2021–2022. Adoption of sophisticated digital technology is required for India if it wants to boost the income of its farmers.
Technology is driving the fourth revolution in agriculture, not as a facilitator but as a disruptor. Market linkage and e-marketplace participants improve farmer pricing and address supply chain inefficiencies, yet they have effectively transformed into traditional logistics players. It is becoming more apparent that the player is wasting a lot of money in order to grow more quickly without significantly improving the farmer's life or wallet. Soon, these models will have to change to focus on operational profitability and data-driven pricing strategies.
In our perspective, as India recovers from a severe second round of COVID-19 and lockdowns, there are three important opportunities:
Increasing Technology Access
We firmly believe that the time is now right for players in precision agriculture to enter Indian villages and infuse our traditional farming practises with science and accuracy. We think that for farmers to quickly adopt plug-and-play hardware or software, they must see a financial gain from doing so. As a result, many players must provide a proof of concept with a powerful farmer which encourages adoption among the surrounding territories. Additionally, these hardware items and tools give access to international export markets, particularly those in Southeast Asia. Last but not least, in order to offer a nearly full stack solution to the farmer and utilise the data gathered at various phases of the crop cycle, it is crucial for these precision players to create a network of partners around their core product, such as output linkages, insurance, or inputs sale.
Investing in more intelligent value chains
We are aware that these models might be successful in a number of other nearby non-food crop supply chains, like those for cotton, hemp, or even tractors and equipment. Another sector that is vulnerable to disruption is food processing. It may be seen as a hub for developing rural jobs and exciting tech-enabled business models, so its benefits go beyond simply preserving the nutritional worth of foods and prolonging their shelf lives.
Greater working capital and loan access
In India, more than 36% of farmers use unofficial loan sources, while 33% have no access to credit at all. Farmers today are frequently disregarded and are far from being independent entrepreneurs, despite the fact that credit is a key enabler for every firm. The key to unlocking this market is held by agri-tech businesses that develop more user-friendly and farmer-focused methods of underwriting loans to farmers and establish robust produce-linked or quality-based collections. To efficiently support credit requirements, direct or indirect credit could be offered through input retailers, dealers, or using current ecosystem participants as anchors.
In addition to the above, data science will be crucial in addressing a number of difficulties in the agriculture sector. Informed decisions that increase profitability and reduce expenses can be made by farmers with the aid of data science.
Smart farming will be essential in assisting farmers in promptly taking corrective action. The current imperative is to automate and optimize processes while monitoring parameters using IOT-enabled technologies.
With the widespread use of smartphones, data is becoming more accessible and affordable. This digital revolution will also affect the agricultural industry, as we predict. The sector will experience significant change as Internet of Things, nanotechnology, and other technical advancements are introduced. In order to scale solutions, technology will be a crucial facilitator, and essential applications like pricing modelling, forecast optimization, and waste reduction will be the way to go.