What are the connected challenges beyond better inputs, smart irrigation, and going organic?
Technological innovations in Indian agriculture are on the rise, fuelled by existing and emerging challenges. Overtaking China, India has become the second best-funded market for agritech startups behind the US. In the last decade, the nature of agritech innovations has evolved, with entrepreneurs and investors now looking for solutions further up agricultural value chains and closer to farms. Sub-sectors with untapped opportunities and increased focus on climate action are the two factors that have primarily contributed to this shift.
India is among the top 10 countries that will be adversely affected by the deepening impact of climate change. With the responsibility of sustaining 17.7% of the global population, the country is facing the urgent task of addressing various agricultural value chain inefficiencies while tackling climate mitigation and adaptation. Over 80% of Indians live in climate-vulnerable districts. By 2030, close to 17 million people could potentially go hungry due to climate change-induced hunger. At the root of it lies crop health management, a sum of various factors and agricultural practices. In order to fortify this basic building block, let’s unpack a three-pronged approach, including scientific innovation, financial services, and policy support.
In Omnivore’s decade-long experience, more often than not agritech startups have built their innovations with an eye on reducing environmental stress. That said, two subcategories will directly help farmers manage crop health better — agrifood life sciences and precision agriculture. Though sluggish in growth so far, agrifood life sciences (AFLS) can be our strongest line of defence against climate change. Innovations in agrifood life sciences can play a critical role in tackling climate mitigation and climate adaptation/resilience. Aside from developing high-yielding varieties of seeds, biological solutions are one of the largest untapped opportunities in agrifood life sciences and an essential tool for sustainable agriculture. Currently, Indian farmers depend heavily upon chemical fertilizers and pesticides. Such inputs are expensive, cause environmental pollution, compromise soil health, and create natural resistance that forces farmers to resort to even more toxic approaches. Biologicals are crop protection or crop nutrition products derived from living organisms and can substitute or complement agrochemical products. BioPrime’s work with ag biologicals is doing just that. By engineering the diversity of plant microbiota, BioPrime’s biologicals can confer plants with acquired traits like drought tolerance, disease resistance, and enhanced yields without any harmful environmental side effects.
While no amount of technology will be able to replicate the complex decisions farmers make on a daily basis, data derived from precision agriculture technologies help make those decisions easier and faster. Fortunately, the rapid development of precision agritech solutions over the past few years is helping farmers reduce expenditures, solve the labour shortage, and navigate erratic climatic conditions. A case in point is the steady adoption of Fasal’s on-farm IoT technology that helps horticulture farmers tailor their cultivation plan around crop type, climate, and soil health. This tech-led approach achieves higher productivity, improved yield quality, and increased profitability. As for solving the labour shortage, Niqo Robotics has developed robots specifically designed for smallholder farms. These robots have proven to be effective in reducing chemical usage by up to 60 per cent, resulting in substantial cost savings and alleviating the burden of manual labour.
However, in order to diversify crops and invest in technology, farmers need adequate and affordable capital presently in short supply. Most Indian farmers are locked out of formal financial services owing to a system that has struggled to evolve and accommodate them. Common problems in agricultural credit are manifold, including insufficiency of well-designed products, inadequate loan amounts, and lack of smart metrics to establish creditworthiness. Naturally, farmers still depend on informal sources of credit with interest rates as high as 35–40% APR that inhibit their risk-taking ability.
Indian farmers are already struggling with plummeting water tables, depleting soil fertility, and erratic monsoons. But this is only the beginning of a complex web of challenges they will face in the next decade. Crop insurance has emerged as an effective financial tool providing financial protection against crop damage while encouraging proactive crop health management. Traditional crop insurance incentivizes farmers to prioritize crop health through good agricultural practices, potentially reducing losses and premiums. Non-traditional parametric crop insurance in particular is gaining popularity as it provides coverage for losses that are difficult to model & hence insure conventionally. Gramcover’s parametric insurance product offers farmers pre-specified payouts based on environmental trigger events ensuring a financial safety net and resilience in the face of economic shocks.
The landscape of Indian agriculture is undergoing rapid transformation, rendering traditional farming knowledge insufficient for farmers. It is especially true in remote rural areas with limited access to agricultural technology and scientific assistance. Monoculture poses a persistent challenge for farmers, while regions reliant on water-intensive crops face increasing water scarcity without the necessary guidance to transition to alternative crops. To address these issues, the government has implemented various schemes such as Paramparagat Krishi Vikas Yojana, Pradhan Mantri Krishi Sinchayee Yojana, and Soil Health Card Scheme, aimed at improving crop health and supporting farmers. However, raising awareness about these schemes and identifying beneficiaries has proven to be challenging. This is an area where public-private partnerships can be catalytic. NITI Aayog’s push for states to formulate their own agritech policies is a step in that direction. It aims to promote agritech startups, boost land records digitization, and ensure access to quality data and last-mile connectivity to startups so they can expand operations. Farmers will have access to innovative products and services while policymakers will have more granular data which should lead to better governance.
Despite the current global macroeconomic turmoil, all eyes are on the agritech ecosystem to make agriculture a source of sustainable growth, livelihoods, and remunerative jobs for tens of millions of Indians. Improving crop health is no longer about better inputs, more irrigation or going organic. To remain food secure, economically stable and environmentally sustainable, we need a more comprehensive approach that solves all the connected challenges.
Omnivore is an impact venture capital firm, based in India, which funds entrepreneurs building the future of agriculture and food systems. For more information, please visit: https://www.omnivore.vc/
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