The Indian agritech has demonstrated benefits to farmers and value chain players, however, the penetration of agritech solutions remains below 10 per cent with about 14 million farmers adopting available agritech solutions. It is high time to democratize agritech solutions among larger farmer community with enabling policy framework to make Indian agriculture sustainable, market driven, climate resilient and efficient. Here is a 10-point policy prescription for Indian agritech:
- Build sandbox for agri-fintech solutions:
The cost of capital in Indian agriculture is prohibitively high. This high cost of capital makes farming and value chain businesses unviable. Digitization of agriculture and food supply can make the data available to bankers, which can reduce their risk and cost of capital. Many agritech and fintech start-ups are working in this sector. We need a dedicated sandbox where both public and private sector banks can be incentivized to work with start-ups for building and piloting innovative agri-fintech solutions to scale them faster.
- Develop climate-finance products:
India is amongst the most water stressed and climate vulnerable countries in the world. Indian agri tech community in last few years are trying to address climate change risks including building climate-predictive data-driven models, solutions for resource conservation and reducing carbon footprints. However, the big question is why farmer would adapt these practices. One option is to build credit and insurance products which incentivizes farmers to adapt climate resilient solutions. Regulators need to work with banks, insurance companies and start-ups to conceive such products.
- Dedicated cell for Agri start-ups:
A dedicated cell at the state level would go a long way in facilitating continuous dialogue between the state government and the start-ups. Three such areas where dedicated cell can work are:
- State governments through state agricultural universities and research centres can support start-ups for pilots and validation of technology.
- State governments can also play an important role in training and capacity building of village level entrepreneurs who can act as channel partners for agritech start-ups to make their innovations accessible to farmers.
- Building high quality research papers related to innovations by Agri Start-ups.
- Centre of excellence for data science applications in agriculture:
The secret of data centric models in agritech lies in building machine learning and artificial intelligence (AI) models that can predict events in advance with more accuracy. One of the biggest challenges in scaling AI models is lack of access to good quality data. Most start-ups spend disproportionate effort and time on data collection rather than on the effort needed for data modeling. The government can attempt to build a public data repository by collating already existing datasets that is with government departments, research institutions and universities.
- Piloting Agristack:
Agristack is conceptualized as a public digital platform for ready, authenticated and almost instant access to farmers. This platform can be the hotbed for driving disruptive innovations and can optimize time and cost. Building AgriStack must be a collaborative effort including governments (both federal and state) along with innovators.
- Building incubation support for rural India
It is now time to build rural incubators to motivate and support rural youth to build their own entrepreneurial models. The state agricultural universities and Krishi Vigyan Kendras can be roped in to build such incubators.
- Catalytic funding for young agritech start-ups
Though Government of India is already investing into multiple start-ups through government supported incubators, we still need a high velocity catalytic fund for investments at the seed stage. There is enough depth in the ecosystem to absorb seed funding in the tune of INR 100 crores per annum, supporting about 50 to 100 start-ups.
- Incorporating agri entrepreneurship courses in agricultural education
There is need for nurturing talent at the college and university level. This can be made possible by incorporating courses on entrepreneurship in all agricultural streams. Internship with agritech start-ups could be another way to familiarize young graduates with the start-up culture.
- Platform for start-up – FPO – MSME connect
Start-ups are best placed to build tailor-made solutions for FPOs in several areas. The lead institutions like NABARD, SFAC can take the lead for coordinating partnership between start-ups and FPOs. Likewise, there is hardly any interface between MSMEs and start-ups. Many MSMEs can optimize their cost of sourcing and improve value addition in partnership with agritech start-ups. Governments can facilitate dialogues and partnerships between FPOs, MSMEs and start-ups.
- Tech integration in export linked supply chains
For India to meet its export target of USD 100 bn, it needs to integrate technologies for building access and trust among importers. There are enough tech solutions developed by start-ups that can solve challenges faced by the exporters. Agencies like APEDA can facilitate continuous interactions, dialogue and pilots between the start-ups and exporter of food products.
To conclude, the above ten-point policy prescription can be a game changer for Indian agritech, which in turn can benefit millions of farmers. It also complements government’s Agri reform agenda.
The author is Chairman, FICCI Task Force on Agri Start-ups