(GIST OF KURUKSHETRA) Agri-startups and Enterprises

(GIST OF KURUKSHETRA) PM KUSUM — Agri-startups and Enterprises

Agri-startups are providing relevant and innovative solutions to a number of challenges faced all across the agricultural value chain. A new wave of budding entrepreneurs and emerging startups in the country is leading the way in disrupting the age old agriculture system with innovative ideas and affordable solutions.
These have become the missing link between the farmers, input dealers, wholesalers, retailers and consumers; connecting each of them and providing strong marketing linkages and quality produce on time.
These startups are not only creating new employment avenues but are also leaving a ripple effect on the socio-economic fabric of Indian demography in which they are operating.
Today, the era of social apps, digital media and pure internet companies which were part of first and second generation revolution are being taken over by sectors viz. FinTech, CleanTech, Cybersecurity, Blockchain etc. With this rise, India has become the third largest startup ecosystem hub. India is home to highest number of unicorn startups after US and China.

Apart from government initiatives, significant impact is being created by startups in the agritech space. Investors pumped in $ 500 million to Indian agritech deals in 2020. It is estimated that $10 billion will be invested in Indian agritech startups over the next 10 years.
Currently, 3.8 percent or 600+of the total recognised startups in the country are in this space as per the Economic Survey of 2019-20. Of these, 54 percent are classified as agritech while the rest are in the field of dairy farming, food processing and others.
India continues to be among the top six countries globally, with the highest number of deals in agricultural technology. (The US, Canada, the UK, Israel and France comprise the other five countries.) In 2016, within global investments, Indian agritech startup firms contributed around 9 percent, valued at $ 313 million.
In 2020 alone, over 20 agritech startups have together raised more than Rs. 920 crores across venture debt, equity and conventional debt rounds. According to a NASSCOM report, the Indian Government specifically supports agritech startups through its Startup India Program.

Startup India is a flagship initiative of the Government of India, intended to catalyse startup
culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India. The three pillars of this action plan are as follows.

These startup firms are making headway in the areas of farm management, field monitoring, crop monitoring, yield mapping, equipment guidance, precision farming and implementation of automation and electrification.
The combined revenue of all agritech startups in India is estimated to be less than $ 100 million, which is a drop in the ocean in a market worth more than $ 350 billion. Thus, the opportunity to scale and disrupt Is huge. The formidable challenges ahead are as follows.
Small and scattered landholdings of farmers reduce the scope of technology scale up, leading to poor cost effectiveness.
Rate of return on technology Investment has not proven very profitable in case of agritech startups as compared to other IT-based startups.
Agri startups and enterprises are finding it hard to retain technical talent working in this sector.
Technology adoption and penetration is a very slow process which certainly diminishes investors’ interest.
High-priced technology solutions are unaffordable for a large user group, i.e., small and marginal farmers.
Making farmers adaptive to the required skills for working on advanced technologies requires significant effort.
Most of the technology solutions available are not localised to emerging markets.
Regulations, though favourable, are complex in nature.
Facilitating adoption of proven technologies through subsidy is yet to gain momentum.

Moreover, banks and financial organisations also need to step up to the challenge and offer more creative models of financing for farmers, entrepreneurs, incubators, and accelerators.
We need to develop a new way for the farmer to buy products and get information as well as credit on one unified platform. Merely providing content on an app is not going to solve the issues of the farming community.
In addition, Agri-startups need to customise suitably before entering a market that has a very low technology adoption rate (due to limited budgets and inconvenience with usage) and re-orient their methods of selling, which essentially will be different from urban India and start-ups operating there.