The advent of technology has played an essential role in shaping the development of all the sectors of the economy comprehensively. It is an irrefutable fact that technological gadgets have assisted primary, secondary, and tertiary sectors of the economic environment of not only developed but also, developing countries. This article discusses the impact of this advancement on the Agricultural environment and industries and elaborates the future prospect of these.
The usage of new methods in the field of agriculture In order to incline the yield quality, quantity, efficiency, and profitability of the crops is known as AgriTech innovation. The enhanced use of technology integrated with modern-day programming and artificial intelligence (AI) has made faster growth and plant diversification possible. The agricultural domain has undergone so many changes in the past few decades and hence, the term AgriTech has been coined. As discussed above, AgriTech refers to the manipulation of modern tools of science such as water pumps, tanks, filters, etc. to increase the levels of production and is also linked with the digital aspect of making transactions, connecting with the wide consumer base for the purpose of making a sale or bridging with the intermediaries such as government or middlemen for facilitating and ensuring smooth procurement of crops.
The focus of the central authorities towards this side has given a boost to innumerable new corporates and startups diversifying in the field of agriculture with technology. It helps them to gather institutional support in the form of easy accessibility of startup funds etc. The unpredictability of this sector has motivated many firms to tackle the issue and make the whole process digital and unreliable on weather or climatic apparatus. A lot of Angel investment and Venture Capital is also looking at this sector. Now, we will take this concept with specificity to the Indian Economy.
Agriculture is the life of the Indian economy. It contributes to 16% of India’s gross domestic product (GDP) and employs 43% of the Indian workforce. Several industries such as consumer packaged goods, retail, chemicals, and e-commerce are heavily dependent on the output produced through agriculture, thereby magnifying the impact of agriculture on the country’s economy. Farmers in India are still dependent on input-intensive methods of production which is a serious hindrance to the yield of crops. Hence, the steps taken by both the Indian government and private players in this field are quite noteworthy and effective and they depict that Indian AgriTech firms hold a prospective and promising future ahead. Following are the steps:
- The policies of the center are helping the farmers to exploit the benefits of modern incentives. According to a report, the government is helping to set up 10,000 FPOs (Farmers Producers Organization) to boost farmers’ incomes. Moreover, it has established 713 Krishi Vigyan Kendra and 684 Agricultural Technology Management Agencies for distributing technologies among farmers.
- With the utilization of mechanized means, agriculture-based startups are providing better doorstep amenities to the farmers.
- The internet penetration is increasing in rural India with ~57% of rural users accessing the internet for 15 to 30 minutes daily17 With this, farmers are getting timely weather alerts along with historical data about crop diseases, standard best practices, and output forecasts.
- MoooFarm, a Gurugram based start-up collaborated with Microsoft to tackle mastitis using ML and help farmers save US$500 million per year.
- The Indian Budget of 2022-23 has stressed the usage of ‘Kisan Drones’ to promote crop assessment, digitization of land records, and a spray of insecticides and nutrients.
In accordance with a “The Hindu” article on Budget Analysis, the Finance Minister announced high levels of payment for procurement of rice and paddy at the minimum support price (MSP) and focused on agricultural technology and start-ups that enthused the nascent industry. R.G Agarwal, the chairman of Dhanuka AgriTech Group welcomed the Indian government’s focus on infrastructure and promotion of technology in the primary sector of the economy. D. Narain, Bayer’s South Asia president argued the imperativeness of strengthening the delivery of digital and hi-tech services to farmers through the public-private partnership model that will go a long way in helping Indian farmers. Furthermore, this aspect can escalate a vast multitude of angel investors and venture capitalists to invest in agri-tech projects heavily as this industry holds severely acknowledging prospects in the upcoming time.
Moving further, the Indian Budget stressed on PPP (Public-Private Partnership) mode to assist digitization for sectoral development. These steps have a direct implication on the upcoming functionality of industries in farming technology. Following are the points in favor:
- Raising a Blended capital fund under a co-investment model would be facilitated by NABARD (National Bank for Agricultural and Rural Development), says the Budget. This will help in financing the startups for agriculture and rural enterprise. This will include support for FPOs, machinery for farmers on a rental basis, and technology, including IT-based support. As a result, industries in the field of AgriTech will ultimately get a boost. They will be demanded to produce tech gadgets like machinery and equipment required to fulfill the steps enclosed by the budget.
- The Finance Minister has focused on the usage of drone technology for crop assessment, digitization of land records, a spray of fertilizers, etc. on the fields. They are primarily addressed as ‘Kisan Drones’. Consequently, this will support the riches of drone manufacturing firms. This will not only raise the demand for their product but, will motivate them to induce new features in their final output so as to make it more efficient and effective for usage.
- Clearly, with all these points the industry is expected to witness huge profits not only in the form of finances but also in employment and comprehensive growth.
In addition to the funding environment, the overall growth of agricultural set up in India is expected due to a multiplier effect of initial central and private investment. To cite a pertinent situation, suppose the government injects liquidity into the economy by funding foundational corporates or by providing them funds at cheaper rates of interest. The money will be used in making investments in the new projects and therefore, increasing the level of employment. Inclined employment will improve the living condition of workers and will further promote investments either in the form of fixed deposits or savings deposits or many more. This cycle will continue and the economy as a whole will get an initial boost to grow.
Summing up, the path for farming technology giants seems very smooth and assisted but there can be some obstacles in their way. The most common hindrance that Indian processes face is regarding transparency especially, when it comes to funds. The untimely availability of funds and other facilities will antagonize the future of these firms. With the assumption of the plan being followed well, it holds promising days for firms, industries, farmers, common people, and hence for the government.