Come 1st February, all eyes will be on India’s fiscal future, a welcome respite from COVID-dominated headlines. Last year’s budget had a clear focus on rural infrastructure creation. Key announcements for the agri sector included improving credit flow, especially to the allied sectors and the pan-India extension of the SVAMITVA Scheme. While the last budget did not directly focus on the agritech startup ecosystem, the Startup India and Stand Up India initiatives have certainly helped our sector begin growing aggressively.
Less than a week before the announcement, the fiscal plan for 2022–23 might already be locked and loaded. However, while we still have a little time to create a wishlist, here are a few of the critical areas in Indian agriculture where we hope the Centre will lend its vital support.
Farmer Producer Organizations (FPOs) are essential for achieving the goal of doubling farmers’ incomes. These nodal organizations connect with large networks of smallholders and facilitate faster percolation of information and technology. To make FPOs sustainable in the long-run, strategic government interventions are necessary. Capacity building for FPO management teams, facilitating intra-FPO learning and development, accelerating credit disbursement, and establishing post-harvest infrastructure are a few ways to create a more robust FPO ecosystem.
Recently, laws around agricultural drones in India received hearty support from the Centre. While it is a leap forward, India may be a few steps shy of ensuring widespread and hassle-free adoption. Under the Sub-Mission on Agricultural Mechanization (SMAM) program, a single Executive Committee at the central level for fund approvals will result in a time-consuming fund disbursement process, adversely impacting technology adoption. The funding shortfall in this program can be bridged by borrowing from the Agriculture Infrastructure Fund, which is disbursed through banks. However, the stringent lending norms might be an added impediment for FPOs and rural entrepreneurs. To facilitate maximum uptake within the stipulated length of this program, further streamlining of the process is necessary.
With the recent progress in digital technologies and the thrust on foundational ID, the status-quo in land digitization is ripe for long-overdue changes. We need the much-awaited AgriStack, a centralized multi-layer agricultural information system. Such a data source can magnify the impact of the agritech sector in India. Currently, agritech startups have to invest resources in creating agricultural data architecture but with AgriStack in place, they can concentrate on commercial activities and benefit more farmers in the process.
Given India’s acute vulnerability to climate change, the government must focus on accelerating innovations in agrifood life sciences. The public sector has already done much in this space, with DBT, BIRAC, C-CAMP, and NCL helping to support life sciences entrepreneurs in the absence of meaningful private investment. Despite this support, agrifood life sciences startups struggle terribly with the lack of wet laboratories and other critical infrastructure for synthetic biology. The Centre should launch a dedicated initiative to support life sciences startups working in food and agriculture, funding the infrastructure and consumables that are currently only available at public sector institutes and research universities.
A significant contributor to India’s GHG emissions is food waste. A massive amount of harvested crops are wasted every day due to rejection by potential buyers, as well as because of the opaque and inefficient distribution system. Unfortunately, the situation is made worse by a poor focus on value addition, lack of efficiency in processing, post-harvest losses, and multiple redundant stakeholders in the value chain. Processed agri commodities represent a USD 150 billion market. These commodities typically go through well-established clusters of processing units that control this high-value market. Decentralizing the food processing industry by establishing units closer to the farm gate will be a concrete step toward improving farmer profitability.
Finally, we come to the Pradhan Mantri Kisan Samman Nidhi (PM KISAN) scheme which aims to ease farmer liquidity needs by providing income support. The benefits of this scheme are not crop specific, making it simpler and more accessible. PM KISAN will soon cover all cultivators and the government can use this as a robust delivery system for more welfare initiatives.