Model Question and Answers for APSC | Discuss transformative potential of Agritech Startups and challenges that they are facing.
Ans : Agriculture has always been the backbone of our country. It is the primary source of livelihood for about 58 per cent of India’s population. Today, multiple startups are trying to change the landscape of agriculture in India with the use of technology. These firms are trying to break into the country’s agricultural landscape using newer business models. That will not only create a viable business model but will also improve the farmer’s income.
transformative potential of Agritech Startups:
1. Re-defining agri-food marketplace: Eg. Ninjacart, Dehaat, and Crofarm (Otipy). Eg. Dehaat is present in Bihar, WB, Odisha, and UP, working with 6,50,000 farmers.
2. Novelty of start-up-led value chain transformation, empowering farmers, groceries and small agri-food businesses as an integral part of agri-food ecosystem.
3. Building linkages: Start-up network able to leverage bigger front-end players who demand bulk quality produce and have challenges in directly linking with farmers.
4. Attracting investments to agri-tech sector: Recently, Dehaat has raised one of the biggest funding in agri-tech space in 2021.
5. Gender sensitive: Eg. Ninjacart produces fresh from farms and supplies to all and Otipy is currently works with 10,000- plus resellers and` about 70% of resellers are women.
6. Plugging wastages: Eg. Ninjacart reduced wastage to 4% compared to 25% in traditional chains through a demanddriven harvest schedule.
7. Logistics optimization enabled delivery in less than 12 hours at 1/3rd the cost in traditional chains.
8. Farmers’ net incomes increased by 20% post dealing with agri-start-ups. Dehaat has enabled a 50% increase in farmers’ income as a result of savings in input costs, increased farm productivity, and better price discovery.
9. Market driven: Agritech start-ups-led e-commerce platforms have the potential to steer the shift from government-controlled agricultural markets towards more demand-driven digital markets.
Challenges before Agri- tech Startups:
1. Sustainability and Scalability of Agri-tech start-ups over time is to be tested.
2. High risk dynamic sector: A lot of churning, with many ventures falling out, others consolidating through mergers and acquisitions
3. Complex laws with regards to farmer engagement · Lack of Financial services: Only 30% of the farmers get access to finance from formal sources, while about 50% of the small and marginal farmers are unable to borrow from any source.
4. Limited digital infrastructure data and digital records of transactions across the agriculture value chain
5. Mounting e-wastes: With smart technology coming, a new risk has cropped up in the form of electronic wastes.
6. Issues in market linkage: Farmers are unable to get fair prices due to limited sales channels.
7. Loss of manual employment: As IoT in agriculture becomes more and more mainstream and things become automated, the economy is not strong to absorb this workforce in other sectors
1. The startup-FPO partnership can be strengthened under the central government’s programme to add 10,000 new FPOs by 2024.
2. Towards integrated agri-food ecosystem: Network of agritech start-ups, incubators, accelerators and investors need to work closely with policymakers, academia, think tanks, and government to develop a more nuanced understanding of the dynamics of the agri-food sector.
3. Policies, institutions and partnerships shall harness the current momentum, so that the start-up ecosystem can be the next-generation technology revolution in the agri-food sector.