WHAT

Agritech startups or Agricultural technology involves environmentally sound and sustainable farming methods, implemented widely in agriculture industry in order to attain profitability and efficiency, both. Argitech is a value innovation as Agriculture and India has a unique bond

ROLE IN AGRICULTURE

• Help farmers are supplement their income with farm diversification
• Empowering farmers to integrate livestock rearing and aquaculture into their existing operations with micro-farm installation requiring minimum space and labour
• Non-crop diversification is helping farmers increase and earn round-the-year income, improve productivity and profitability and adopt sustainable farming systems
• Increasing awareness among the farming communities and connecting them to a network of traders, retailers and exporters willing to buy their produce at higher prices
• Results in the supply of high-quality live input materials to farmers engaged in livestock rearing and aquaculture
• With the emergence of Fintech and AgriTech startups, the lending landscape of the country is changing
• Previously underserved small and marginal farmers can now secure loans from formal institutions at low-interest rates
• A plethora of easy financing options and government initiatives have alleviated the burden of interest on farmers

INITIATIVES LAUNCHED FOR AGRI-STARTUPS

• In 2020, the Reserve Bank of India directed banks to treat loans up to ₹50 crore to agri-startups under priority sector lending.
• In the Budget 2022, the Finance Minister of India also announced a fund for agri-startups and rural enterprises. The exclusive fund will be launched through NABARD in order to give a fillip to the farm produce value chain.
• The International Crops Research Institute for Semi-Arid Tropics (ICRISAT) has called for applications from agritech start-ups under the NIDHI-Seed Support Scheme (NIDHI-SSS).
• The selected start-ups will receive funding up to ₹50 lakh. The seed fund will enable them to accelerate their commercialisation activities.

ISSUES

• Less share of initial public offerings (IPO) by agri-startups
• Skewed in favour of services — Big Data, Edtech, fintech, logistics and supply chain activities
• Duehigh to less attractive growth potential and their ability to make quick profits, agri-startups have been lagging in attracting funds.
• Lack scale due to the very high costs of serving smallholding farmers and building their own distribution system.
• While start-ups have good expertise in emerging technologies, they often lack the application-level domain expertise.

WAY FORWARD

• Seed capital from the banks and hand-holding of agri-startups by institutions such as NABARD
• Government should ensure ‘ease of funding’ for agri- entrepreneurs to attain the intended objectives.
• A dedicated exchange for agri-startups may be established
• Collaboration with Field Experts
• Agri-entrepreneurs should be imparted with financial literacy and education as the startup world is full of domain professionals and engineers, who hardly know anything about finance and investors