2023: Bringing The Business Aspect To Agribusinesses To challenge the current status quo, the sector needs a complete makeover with tech at the forefront of innovation
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The Indian agricultural industry, even though one of the biggest employers in India, has been functioning with obsolete data and practices for a really long time now. To challenge the current status quo, the sector needs a complete makeover with tech at the forefront of innovation. This innovation is required not just in terms of the practices employed for agriculture but also the mindset and ecosystem of the business aspect of it.
Agriculture is the highest contributor to India's annual gross domestic product at 18-20 per cent. Even then it is still facing on-ground challenges, slow growth rate, visibility issues, supply chain issues, etc. This is where technology steps in. Agritech start-ups are pivoting the way the agricultural industry operates. Fortified with digitisation, AI-powered tools and a zest for streamlining operations and profit, agritech is set to reform obsolete ways.
Currently the crop selection and rotation in India is based on obsolete data. This anecdotal data about the crop yield in local farming seasons have failed to accommodate the changing weather patterns, soil quality and climate change adversaries over the years.
Agritech companies are now working towards accumulating and analysing current data with the use of tech-powered tools such as satellite imagery, drones, soil condition, sensors, weather pattern, water patterns, etc., to understand and forecast the yield holistically. This farm-level data helps in streamlining variables such as insecticide requirement, seed quality, irrigation, crop rotation, fertilisation, etc. Replacing guestimate data with advanced analytics based on current variables will help farmers and other stakeholders make informed decisions and invest in agricultural practices that have already started bearing fruits.
One of the key challenges in the agri industry, farmers are not well-versed with the latest technology, however, the roles multiple stakeholders are playing is changing the ecosystem and making it more conducive. Indian farmers often do not operate with a business mindset because of multiple reasons such as low-landholding size, lesser risk appetite, and looking at earning marginal profits that help them sustain their families and buy enough to invest in the next set of crops. Emerging business model of agritech start-ups in the context of running a business will help farming businesses be more efficient and data driven. This is changing the psychology of rural value chain players, and a new generation of farming families are taking this as a business and talking about profits. It will bring the 'dhanda' mindset to agribusinesses to help them let go of the traditional beliefs and the sense of helplessness when it comes to overriding the roadblocks.
Agritech communities have been empowering the rural audiences with the technology, finance and support to improve the topline by producing more, cut unnecessary expenses and find the right buyers at the right time to engage in the farming activity as a business. This will prevent wrong crop selection and panicked liquidation thus, promoting a profit mindset.
In addition to the core farming business silos, segments such as renting tractors witnessing optimization with the help of deep-tech IoT platform. If you look at a tractor rental business, "25 nahi hai bhai, lagbhag 20 bigha maan lo aur bhaada le lo" (not 25 but assume 20 bigahs of land and lease it), is a very common conversation to settle the rent to be paid for tractor mechanisation. This is where technology can change the game for agri and related businesses in India. The same analogy is true for almost everything related to farming as well.
This problem is currently being solved by India's largest IOT platform company, who clearly targeted rental entrepreneurs to be a point of engagement and helping this specific set of communities. Rental entrepreneurs have been earning their livelihood by renting their tractors. Around 6 million rental entrepreneurs in India are involved in rental businesses and helping farmers to mechanise their farmlands; we often overlook these entrepreneurs as value chain actors, but they are critically important in pre- and post-harvest activities, and studies have shown significant results in soil quality and yield. Devoid of the relevant knowledge about managing their diesel expenditures, precision area measurement, drivers work, and account management, these rental entrepreneurs were guesstimating and losing significant earning potential.
A lot of innovations around the multi-touch-point of these data pointers will further help in assessing cash flows and farm reports more accurately, and the company has initiated a few of the tech pilots in these areas. Understanding the needs of different community at the grass-root level and channelizing the right solutions would be the key in times to come.
