AgTech is a nascent industry at the intersection of agriculture and technology. Agriculture is one of the main sectors where automation is becoming more prevalent. From driverless tractors to robotic strawberry harvesters, technology is changing farming. As the planet faces new challenges posed by extreme weather, climate change and a growing population, agtech will only continue to grow more popular. It also encompasses diverse solutions to steps within the food production process. This industry can be broken down into three subcategories, tech-assisted farming, new farming and revolutionary farming.
India precision agriculture market was valued at over $ 57 million in 2019 and is anticipated to grow at a CAGR of over 10% to reach $ 99 million on account of increasing awareness related to the applications of precision agriculture and surging need to ensure maximum yield from limited sized farms.
According to a September 2020 report by EY, India’s agritech market has the potential to reach $24 billion by 2025, although only 1% is addressed today. The largest opportunity ($12 billion) is in supply chain technology and output market linkages, with another $4.1 billion of potential in financial services for farmers, $3.4 billion in precision agriculture and farm management, $3.0 billion in quality management and traceability and $1.4 billion in optimising market linkages for farm inputs.
InfyU Labs a Gujarat-based startup specialises in creating portable devices that determine the internal quality of fresh fruits without cutting them open. InfyU uses its proprietary solution, Infyzer – a handheld device – that determines the internal quality parameters, such as TSS (BRIX), acidity, ripeness, shelf life, etc. within seconds. Further, the company provides an end-to-end IoT-based platform that allows the quality manager to quickly access the quality of incoming produce. It helps them to reduce perishable wastage, reduce logistic costs and optimise the storage time.
Agribazaar is another agtech startup founded in 2016 based in Delhi-NCR, that enables farmers to list their products and negotiate directly with buyers. Buyers place orders online and Agribazaar provides end-to-end logistics services from direct sourcing to timely delivery at distribution centres. Another firm, Crofarm founded in 2016 headquartered in Gurugram has a harvest-on-demand approach. From their Otipy app, they aggregate demand from consumers and businesses and then harvest from the farm accordingly, delivering the products within 12 hours.
Notable deals in 2019 and 2020 in the Agtech industry included Tiger Global investing $89 million in Ninjacart, Agrostar raising $27 million in funding led by Bertelsmann India, and fresh produce distribution startup WayCool receiving $17 million from LGT Impact, Caspian, and Northern Arc. In the latest funding round Agritech startup, InfyU Labs has raised Rs 1.8 crore in a seed round from IAN. The round was led by angel investors – K.R.S. Jamwal, Sanjay Bansal and Vishnuraj Kunjur. Previously, the company had raised a small pre-seed round from mentors Pranav Jha, RA Venkitachalam, Bhavesh Jha, and Shyaam Ramamurthy.
Though the industry is flourishing a few challenges still inhibits the growth of Indian agritech like:
- Lack of financial services: Adoption of financial services is limited in Indian agriculture. In its 2019 report, the RBI estimated that only about 40% of farmers have access to formal credit despite many initiatives to include farmers in the banking system.
- Limited digital infrastructure: The penetration of digital infrastructure and digital records in the Indian agriculture value chain is limited. Robust digital infrastructure in the country, consisting of satellite imaging, soil health information, land record, and cropping pattern and frequency, can help make the value chain more effective.
- Issues in market linkage: Today, 85% of Indian farmers get prices 40% of, or lower than, the minimum support price, with no access to buyers outside the mandis.
The government has announced a number of policy measures for the agriculture sector, and these steps are expected to strengthen infrastructure logistics and capacity building. It also paves the path for increased private sector participation across the farm-to-fork chain.