(GIST OF KURUKSHETRA) Scaling Agri - Startups and Enterprises

[August-2021]

Scaling Agri - Startups and Enterprises

Introduction:

Agri-Startups and Agri-business enterprises are emerging considerably across the country to support the ' agriculture value chain activities and also to deliver efficient, innovative technologies, products and services to the agricultural development stakeholders including farmers and consumers.
In the last few years, there has been an evident cultural shift towards entrepreneurship development especially in the form of Agri-Startups and enterprises.
Government of India's Startup India initiative; Agri-entrepreneurship and Innovation component of RKVY-RAFTAAR; Startup incubation and innovation funding support from DBT, DST, NABARD and NITI Aayog; are accelerating the scaling-up of Agri-Startups. Similarly, infrastructure development fund for Agriculture and Animal Husbandry, Fisheries (PM Matsya Sampada Yojana), Food Processing (PM Kisan Sampada Yojana) and Vocal for Local initiative of Ministry of Food Processing and Industries to promote micro food enterprises, are promoting agri-business eco-system and supporting Agri-business enterprises.

Startup India:

This Government of India initiative was the action plan of this initiative is focussing on three areas:
Simplification and Handholding,
Funding Support and Incentives, and
Industry-Academia Partnership and Incubation.

Rashtriya Krishi Vikas Yojana – Remunerative Approaches for Agricultural and Allied Sector Rejuvenation (RKVY-RAFTAAR):

In the year 2018, Department of Agriculture, Cooperation and Farmers Welfare (DACFW), Ministry of Agriculture and Farmers Welfare came up with Rashtriya Krishi Vikas Yojana - Remunerative Approaches for Agricultural and Allied Sector Rejuvenation (RKVY RAFTAAR) scheme under the component called "Innovation and Agri-Entrepreneurship Development". The scheme was launched for providing financial support and nurturing the incubation ecosystem.
It aims to encourage start-ups in agriculture and to contribute directly or indirectly to enhance the income of farmers by providing them with some new opportunities and providing employment to youth.
Under the scheme, 24 RKVY-RAFTAAR Agribusiness Incubation Centres were established across India and for their handholding, five Knowledge Partners are entrusted. National Institute of Agricultural Extension Management Hyderabad, National Institute of Agricultural Marketing (NIAM) Jaipur, Indian Agricultural Research Institute (IARI) New Delhi, University of Agriculture Science Dharwad, and Assam Agriculture University at Jorhat are the five Knowledge partners and they are also the Centre of Excellence in Agribusiness Incubation.

Department of Science and Technology (DST):

Under Department of Science and Technology, Science Technology and Entrepreneurship Park were already operating in India and supporting the aspiring entrepreneurs to set up businesses and scale up further. The emphasis of these institutions was primarily on businesses backed up by deeper technologies.
The National Science and Technology Entrepreneurship Development Board (NSTEDB), established in 1982 by the Government of India under the aegis of Department of Science and Technology, is an institutional mechanism to help promote knowledge driven and technology intensive enterprises.

Atal Innovation Mission (AIM):

Atal Innovation Mission (AIM) is Government of India's flagship initiative to create and promote a culture of innovation and entrepreneurship across the length and breadth of our country.
It is an initiative of NITI Aayog. AIM's objective is to develop new programmes and policies for fostering innovation in different sectors of the economy, provide platforms and collaboration opportunities for different stakeholders, and create an umbrella structure to oversee the innovation & entrepreneurship ecosystem of the country.

Ministry of Micro, Small & Medium Enterprises- ASPIRE:

A Scheme for Promotion of Innovation, Rural Industry & Entrepreneurship (ASPIRE) is curated by Ministry of MSME, Gol. Under the scheme, Livelihood business Incubator and Technology Business Incubators can be established (https://aspire,msme.gov.in/ASPIRE/AFHome.aspx).The startups can get funding of Rs 4 lakh at ideation stage and Rs 20 lakh at scale up stage.

Pradhan Mantri Mudra Yojana (PMMY):

PM launched Pradhan Mantri Mudra Yojana, wherein Micro Units Development and Refinance Agency Bank or MUDRA Banks provide loans at low rates to micro-finance institutions and non-banking financial institutions, who in turn provide low-interest loans to startups and MSMEs. Loans up to Rs 10 lakh can be availed under the MUDRA scheme. There are three categories of businesses, which can avail loans under MUDRA loan for

startups:

Shishu - For new businesses. Loans up to Rs. 50,000 can be availed

Kishor - For mid-aged business. Loans up to Rs. 5 lakh can be availed

Tarun - For an existing, experienced business. Loans up to Rs. 10 lakh can be availed.

MANAGE Centre for Innovation and Agripreneurship (MANAGE-CIA)

The MANAGE Agribusiness Incubation centre, MANAGE-Centre for Innovation and Agripreneurship (CIA) is a Centre of Excellence (CoE) in Agribusiness Incubation and Knowledge Partner for strengthening, hand-holding and demonstrating best practices to the RKVY-RAFTAAR Agri-Business Incubators (R-ABIs) and also implementing Startup Agri-business Incubation and Agripreneurship Orientation Programmes of the RKVY-RAFTAAR (http://cia.manage.gov.in/).

Incubation Programme:

Center for Innovation and Agripreneurship (CIA)-MANAGE runs a regular Incubation Programme to facilitate early stage Agri Startups to scale up their business.

Membership Programme:

Any aspiring entrepreneur can apply for membership, at free of cost. The members are entitled to get multiple benefits such as access to the regular updates and activities of CIA, registration to paid events at a subsidised price, information on success stories besides networking with multiple stakeholders of the startup eco system.
Krishi Vikas- Search for Agri Innovations: Krishi Vikas is one of the flagship programmes of CIA-MANAGE, wherein grass root level innovations across the country are identified and facilitated.
Impulse- An Agribusiness Mentoring Platform: Impulse is another prestigious initiative of CIA-MANAGE, which facilitates in connecting aspiring entrepreneurs with Mentors. It addresses the crucial need of expert guidance to establish agribusinesses in rural India on a larger scale.
Aqua Clinics and Aquapreneurship Development Programme (AC&ADP): Since 2018, Aqua Clinics and Aquapreneurship Development Programme (AC&ADP), a 28-day free residential training program supported by the National Fisheries Development Board (NFDB), Hyderabad, is being implemented by the MANAGE in collaboration with the Fisheries Universities, colleges and institutions across India.
Aqua One Centres (AOC): Aqua One Centres provide aquaculture support service to the Fish Farmers, disseminate newer technologies and innovations, and facilitate their wider adoptions. Twenty AOCs in 10 States were established with the financial support from the National Fisheries Development Board (NFDB).

Scaling-up Startups; Funding Sources Bootstrapping/Self-financing: Bootstrapping a startup means growing your business with little or no venture capital or outside investment. It means relying on your own savings and revenue to operate and expand.
Friends and Family: This is also a commonly utilised channel funding by entrepreneurs still in the early stages.
Business Plan/Pitching Events: This is the prize money/grants/financing benefits that is provided by institutes in organisations that conduct business plan competitions and challenges.
Incubators: Incubators are organisations set-up with the specific goal of assisting entrepreneurs with building and launching their startups. Not or do incubators offer a lot of value-added service (office space, utilities, admin & legal assistance etc.), they often also make grants/debt/equity investments.
Government Loan Schemes: The government has initiated a few schemes to provide collateral-free debt aspiring entrepreneurs and help them gain access to low-cost capital. Some such schemes including CGTMSE, MUDRA, and Stand-up India.
Angel Investors: Angel investors are individuals who invested money into high potential startups in return for equity. One can reach out to angel networks such as Indian Angel Network, Mumbai Angels, Lead Angels, Chennai Angels, etc. or relevant industrialists.

Crowd funding: Crowd funding refers to raising money from many people who each contribute a relatively small amount. This is typically done via online crowd funding platforms.
Venture Capital Funds: Venture capital (VC) funds are professionally managed investment funds that invest exclusively in high growth startups. Each VC fund has its own investment thesis - preferred sectors, stage of startup, and funding amount - which should align with your startup. VCs take startup equity in return for their investments and actively engage in mentorship of their investee startups.
Banks/NBFCs: Formal debt can be raised from banks and NBFCs at this stage as the startup can show market traction and revenue to validate their ability to finance interest payment obligations. This is especially applicable for working capital.
Venture Debt Funds: Venture Debt funds are private investment funds that invest money in startups primarily in the form of debt. Debt funds typically invest along with an angel or VC round.
TReDs: To decrease the financing concerns faced by MSMEs in India, RBI introduced the concept of TReDS in 2014, an institutional mechanism for financing trade receivables on a secure digital platform. Trade Receivable Exchanges such as M1xchange, standardises the process of funding MSMEs via Invoice Discounting. TReDS addresses the gaps in MSME industry as enterprises face challenges in getting their payments on time, thus creating working capital discrepancies.

Conclusion:

Several interventions are being taken up by Central and State governments, Private Sector and
NGOs towards strengthening of the agri-startup ecosystem. The ecosystems stakeholders are working more cohesively like never before. The financial agencies are infusing handsome money in start-ups and helping them to scale up, reach wider geographies and penetrate deeper to reach maximum number of customers.
These start-ups are making significant impact on the lives of farming community. Simultaneously they are also creating employment opportunities. Initiatives like Startup India, Standup India, RKVY RAFTAAR, AC&ABC, etc. are shifting the mindset of youth and others towards entrepreneurship in agriculture and allied sectors. In a nutshell, the ecosystem is contributing profusely towards scaling up of the startups.