Various Investors along with the support of both the central and state governments have proactively driven and promoted the agritech ecosystem in India.
India’s digital penetration and
ecosystem is witnessing healthy tailwinds such as highly affordable and high
speed internet and maturing digital content ecosystem. The confluence of these
factors presents an exciting opportunity for innovation in agricultural
ecosystem, wherein market players can leverage next generation technology such
as data digitization and data platforms, data analytics, AI, ML, the IoT and
Software.
In conversation with Mr.
Anil Kumar SG, Founder and Group CEO, Samunnati, we attempted to seek
his expert views on the potential of AgFinTech sector and its impacts on the
agri and allied industry and the economy.
What are
your views about current trends in India’s agriculture sector, persisting
challenges and predictions for future?
When we look at agriculture,
India is one of the top producers of rice, wheat, pulses, and fruits &
vegetables in the world. India’s agriculture & allied sector contributes
nearly one-fifth to the country’s GDP and supports the livelihoods of nearly
two-thirds of the population. However, the industry continues to face chronic
problems such as low productivity, inefficient logistics, poor infrastructure
resulting in huge wastage as high as 40% in horticultural crops etc. About 86%
of the farmers in India are smallholders with a median land holding of 2 ha.
They are facing huge challenges including lack of access to quality inputs,
finance particularly, from formal institutional sources, lack of know-how etc.,
But there had been gradual and
steady progress made in the last few decades particularly, in the recent times,
agritech innovations such as digitization, IoT, AI, data analytics, drones and
so on are transforming India’s agrarian sector by addressing these chronic
issues. The policy environment too is conducive and is evolving in parallel to
suit the emerging needs. All these are placing India at a unique place where
its economy will not only be self-reliant, more resilient but also
self-sufficient in ensuring food and nutritional security for its 1.3 billion
population without compromising environmental sustainably obligations.
What are
your thoughts on farmer collectives and their potential impacts?
Of late, farmer collectivization
has become a key focus area for the Government particularly for the
smallholders. I mean the initiative of promoting 10000 FPOs or Farmer Producer
Organization. Farmer collectives are helpful in addressing many challenges
faced by an individual farmer through the power of aggregation. When coupled
with e-commerce B2B and B2C platforms at the front end, commodity supply chains
can transform into demand-driven and market-oriented value chains by
eliminating inefficient processes and intermediaries. Initiatives from the
Government like e-NAM are gaining momentum steadily. The ‘Agristack’
initiative, which aims to serve as the ‘comprehensive data backbone’ is set to
foster a complete digital transformation of India’s agricultural sector. New
age agtech companies support the FPOs to manage their business through
digitization of farmer member records. FPOs, as an asset class, are perfect
vehicles for investing for greater socio-economic impacts as they help farmers
achieve greater synergy and enhanced access to finance from formal sources at
affordable rates mainly for the smallholders.
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How are
AgriTech innovations transforming India’s agri and allied sector and what are
the key driving factors behind?
Many Indian agtech companies are
working on providing innovative solutions to address a variety of issues e.g.,
enhancing traceability, cutting wastage in the supply chain, real time weather
monitoring to provide actionable advice on pest and disease management etc.,
India’s unique strength lies in having an educated and skilled workforce and a
supportive tech-ecosystem. It is apt to say India has become a hotbed for
innovations.
Of late,
there is a huge buzz around financial inclusion particularly, for India’s
smallholder farmers. What are your views on it?
While financial inclusion in
India is a widely discussed issue since many decades, as a country, we have
made impressive progress. The Global Financial Inclusion Database (Global
Findex Report 2017) says 80% of Indian adults over the age of 15 have a bank
account today. India’s progress in ICT (Information Communication Technology)
is mind blowing as there are over 600 million smart phones. Better internet
connectivity even in remote rural areas is available at an affordable rate
today. Ever expanding tele-connectivity and futuristic innovations like 5G are
going to play a pivotal role in driving digital economy. On the policy front,
for example, the government is strongly encouraging use of the UPI (United
Payment Interface) to move towards a digital economy. We must acknowledge that
there are enormous issues such as low literacy levels, poor digital literacy,
poor communication infrastructure, lack of access to formal financial systems
and so on. But India made huge progress on all these fronts in the last few
decades. Farmers adopt those technologies or innovations that are simple to
understand, easy to use, and give demonstrable results on the field. I would
say, the Covid19 pandemic was helpful in a way to enable farmers move towards
‘digital advisory and e-commerce’ models.
What do you
think are the key drivers behind the ‘AgFinTech’ revolution in India?
Yes, the phrase ‘AgriFinTech’ has
become a popular one. To put simple in words, AgriFinTech works at the
confluence of three sectors – Agriculture, Finance and Technology. Enhanced
access to finance will help risk-averse farmers invest in better quality
inputs, and technologies, which will ultimately enhance their incomes. Most
importantly, vulnerable sections like smallholder farmers can be saved from
falling deep into debt traps at the hands of unscrupulous money lenders.
Working to enhance financial inclusion in the country, the tech-driven, new age
NBFCs like Samunnati are designing innovative products and services to suit
those segments who traditionally remained ‘unbankable’ for long. Aided by
end-to-end, digitally enabled, robust systems, these NBFCs are nimble yet
efficient. But synergistic partnerships with traditional financial
players and evolution of newer concepts like Co-lending arrangements are
critical for overall success. Recently, Samunnati entered into one such
partnership with India’s largest and reputed commercial bank State Bank of
India. These kinds of initiatives can lead to enhanced financial inclusion and
address many of the challenges with credit being the most important of all,
faced by farmers. It's just a matter of time before the underserved and the
unserved sections of the society like smallholder farmers, low and middle
income groups, MSMEs, people in the rural areas and tier 3, 4 cities, get their
fair share of benefits from the larger economic progress and digital
transformation.
For any
queries or feedback, reach out to the author at Namit@kenresearch.com
To Find More
on India Agritech Market Research Reports, refer to this link:-
https://www.kenresearch.com/agriculture-and-animal-care/farming/india-agritech-market-outlook-to-2025/434138-104.html
https://www.kenresearch.com/agriculture-and-animal-care/farming/indonesia-agritech-market-outlook-to-2026/536294-104.html
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