Startups Can Help Solve For Two Major Pain Points In The Sector Including Large Yield Gaps And Inefficiencies In Supply Chain Management
The agriculture sector is the largest employer in Indian economy. India ranks second worldwide in farm output. The sector accounts for 18% of India’s Gross Domestic Product (GDP) and provides employment to more than 50% population of India.
Still, farming is not a fruitful proposition. Two major pain points in the sector are large yield gaps and inefficiencies in supply chain management.
There are multiple reasons for yield gaps. Farmers are resource-poor and fragmentation of land over last few decades has resulted in reduced viability of the farming. Total number of operational holdings in India stands at 138.35 Mn, with an average size of 1.15 hectares. Of the total holdings, 85% are in marginal and small farm categories of less than two hectares. Other challenges include changing the climatic pattern and increased competition due to globalisation.
Poor post-harvest management techniques also have bearing on the income level of farmers. Post-harvest losses in semi-perishables and livestock products range 10-25%; whereas in case of perishables, losses are as high as 30-40%.
Poor Farmers Cannot Afford Technology Tools Due To Limited Resources
The government is trying to address the current challenge through collectivisation by means of creating farmers’ institutions. These producer companies can serve as nodal points to foster technology to small farmers.
Agriculture by and large is the virgin territory for technology-based solutions in India. The problem of missing intelligence in conventional farming can probably be plugged by inducing artificial intelligence (AI) through precision farming techniques.
Startups, today, are exploring solutions in robotics, big data, smart equipments, sensors and farm management software; or in new production and business models such as indoor or controlled environment agriculture, cellular agriculture. The startups are also leveraging technology in the area of market linkages such as retail, B2C and B2B marketplaces and digital agronomy platforms
In India, there are more than 300 agritech startups striving to address current anomalies in the agriculture supply chain management. As Internet penetration increases and more and more farmers take to the Internet to improve farming practices, this number is expected to go up further.
How The Crusade Of AgriTech Startups Is Supporting The Government’s Mission To Double Farmers’ Income By 2022
Real-Time Solutions To Farmers
Mobile-based advisory on plant protection aspects by startups like Innosapien Agro is likely to help in controlling pre-harvest losses due to disease/pest infestation in a timely and economic manner.
Precision agriculture solutions offered by startups like Aibono have potential to optimise input resources and maximising yields. Farm ERP solution of Cropin enables farmers to do connected and data-driven farming. The company harnesses cutting-edge technologies – big data analytics, artificial intelligence, geo-tagging & satellite monitoring to revolutionise the agro-ecosystem.
Then there is Pune-based AgroStar, which is an mcommerce platform for agriculture and has built a technology platform that uses data analytics and agronomy expertise to provide real-time solutions to farmers in India. It is a direct-to-farmer digital platform where farmers can procure quality agri inputs at fair price just by using a mobile phone.
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Since longer gestation periods are a typical feature of this sector, buying modern expensive equipment is a burden for the farmer as well as remains a worry for investors who want to invest in agritech. Thus agri-renting can take off the burden of input costs for a farmer. Now startups are fighting this by offering renting service. This is where startups like FarMart and EM3 Agri, which provides pay-per-use farm services for every step of the cultivation process, including land development, land preparation, seeding, sowing, planting, crop care, harvesting and post-harvest field management, come in.
Then, there are companies like Gold Farm that are helping farmers to optimise the farm machineries available in their areas, which all farmers cannot afford to buy. By leveraging IoT for demand generation and tracking, Gold Farm endeavours to make farm mechanisation equipment more accessible to farmers across all village districts in Karnataka.
There also exist startups like New Leaf Dynamic Technologies that offers GreenCHILL chillers which is a sustainable storage system for farmers and FPOs across India. Since the product does not need the electricity grid, New Leaf Dynamic hopes to plug gaps in the country’s cold chain infrastructure in places where power supply is patchy. Their system relies on unconventional source of energy like cow dung, rice husk etc, which for sure are not scarce in rural areas. These kind of solutions will certainly help in cutting post harvest losses in coming years.
Data is important in the agricultural industry to root out inefficiencies. The development of farm specific, data-driven diagnostics to determine soil health is a big opportunity area. Accenture estimates the digital agriculture services market to hit $4.55 Bn by 2020, thus pointing out the ample scope of growth as far as the use of data in agriculture is concerned. Real-time data and insight from farms (an accurate view of their operation throughout the growing season) will help to improve financial, operational, and agronomy aspects.
To address the problem of conflicts on quality issues in the market, Intellolabs offers an AI-based solution for determining quality of the produce. Path breaking invention of an artificial intelligence (AI) based commodity testing app and equipment of Intellolab is certainly going to disrupt and revolutionise the way commodities are tested by processors, exporters, traders and retailers.
IoT: Internet of Things
Along with Big Data, IoT is the next big thing disrupting agriculture. Just like Intellolabs utilises AI, Stellapps leverages Internet of Things (IoT), Big Data, cloud, mobility, and data analytics to improve agri-supply chain parameters, including milk production, milk procurement, cold chain, animal insurance and farmer payments.
Its SmartMoo IoT router and in-premise IoT Controller acquire data via sensors that are embedded in milking systems, animal wearables, milk chilling equipment and milk procurement Peripherals. They transmit the same to the Stellapps SmartMoo Big Data Cloud Service Delivery Platform (SDP). The SmartMoo suite of applications then analyses and crunches the received data before disseminating the analytics and data science outcome to various stakeholders over low-end and smart mobile devices.
Leveraging IoT for precision agriculture are also drone startups like Aarav Unmanned Systems, which provides high-value engineering solutions to enterprises across GIS (geographic information system) surveying/mapping, industrial inspection and precision agriculture.
This can transform and change the way decisions are made in agriculture through its solutions to optimise irrigation, fertilisation, pesticide distribution and early failure warnings.
Marketplaces help farmers to create standards in produce. They buy the produce from the farmers and assure them of market prices before they sell the produce to large corporates. For instance there is Merakisan, which offers fresh food and goods sourced from local farmers to the consumers directly.
Also due to marginal farming, poor logistics and zero market information, a number of middlemen get involved in sourcing the produce from farmers to markets. As a result, the farmer gets only one-fourth of what the consumer pays and also there is much wastage in the supply chain. Startups like Ninjacart address these problems by cutting out the middlemen from the supply chain. Initially, it worked as an on-demand grocery delivery company and later pivoted to an end-to-end B2B agri marketing platform.
On similar lines is Better and Boon’s, an end to end fresh fruits and vegetables supply chain company with a vision to “create wealth and opportunity to the farmers of India”. The company showcases farmers produce in their retail stores and sells these farmers product at a premium on a profit sharing basis thereby famers get higher margins and the customers get a better product. Also the customer gets product traceability
So, there are good reasons for optimism. Innovative solutions offered by these Indian agritech startups hold a good potential in mending current deficiencies in the supply chain system with a fairly transparent mechanism. In the current ecosystem, if adequate incubation support is extended to these startups and FPOs, the government’s mission of doubling the farmers’ income will no longer be a pipeline dream.