The next phase of India’s agri-tech growth will be driven by bio-stimulants: FSG
According to a report by the consulting firm FSG, the next phase of India’s agri-tech growth narrative will be driven by bio-stimulants, in-farm solutions, novel farming systems, and seed-to-fork traceability.
‘What’s next for Indian agri-tech?’ says the Agritech Report 2022. The next movement of agri-tech growth in India will emerge from technological innovations in, and increased user adoption of, sustainable inputs, in-farm solutions, novel farming systems, traceability, and agri-carbon, according to FSG’s report, ‘Emerging Opportunities and the Way Forward for India’s Agricultural Technology Sector.’
Also Read | Agro startups may play significant role in country’s growth – CM Bommai.
Each of these emerging categories has the potential for positive impact and is poised for growth in India, owing to a variety of socioeconomic, political, and environmental factors, allowing even traditional, risk-averse investors and large agricultural companies to enter the market and begin betting on innovations in these categories, according to the report.
In the short term, funding for early-stage, deep tech, and emerging agri-tech ideas is increasing. Recent positive improvements in this area are encouraging, but agri-tech businesses must also keep an eye out for more medium- and long-term trends in order to make educated business decisions, according to the report.
In the near term, Indian agri-tech may face a funding downturn as global investment activity slows, with mid-to-late stage start-ups already experiencing the effects. Agri-tech investments are predicted to fall by at least one-third globally by 2022.
In 2020-21, investments in India’s agri-tech start-ups increased to $323 million.
According to the report, the influx of capital over the years has resulted in the formation of 5-7 late-stage start-ups, each worth between $300 million and $800 million. These start-ups took advantage of early chances to disrupt the traditional supply chain by addressing input shortages, waste, and farmers’ poor share of the final sale price through technological and business model innovations.
It was observed that traditional agricultural enterprises lag behind in the majority of categories. In comparison to start-ups, large agrochemical firms benefit from in-house research and development as well as larger investment capacity. As a result, they are ahead in terms of creating, manufacturing, and marketing sustainable and specialized inputs such as bio-fertilizers and organic fertilizers.
However, they are focused on the upstream and midstream value chain, including in-farm mechanization solution providers, and lag behind start-ups in most other agri-tech innovation categories, according to the report, which added that the time has come for traditional agriculture enterprises to embrace technology.
The paper also discussed how agri-tech start-ups will need to focus on profitability and long-term growth in order to survive a growing war of platforms.
According to Rishi Agarwal, Managing Director, Head (Asia), FSG, new breakthroughs in engineering and technology are altering traditional farming practices. Agricultural technology innovations have the potential to increase not only agricultural production and the adoption of sustainable farming practices, but also farmers’ lives.
Also Read | Agritech startup, has raised $2 million to enable farmers access large inventory
To keep up with this quickly changing climate, legacy agriculture enterprises must make calculated and timely decisions. Whether they want to become a professional solution provider or expand geographically, they will need to employ data analytics and digital networks, among other things, according to Agarwal.
‘While recent good advances are encouraging, agri-tech firms should also pay attention to medium- to long-term trends in order to make informed business decisions. If appropriately utilized, India’s agri-tech developments give a wonderful chance for sustainable and fair growth that will not only secure agribusiness profitability but will also strengthen farmers’ livelihoods,’ he said.