Despite being the bedrock of civilization, the agriculture sector has remained tech-agnostic for a long time. However, with the pandemic accelerating technology adoption in agriculture, agtech companies received a massive impetus to scale across food value chains. By harnessing new-age technologies, such as artificial intelligence, big data analytics, machine learning, cloud computing, blockchain, IoT, among others, agtech companies are plugging in structural gaps in the agriculture systems. Agtech companies that are working on post-harvest solutions use technological excellence to address food quality assessment issues, logistical challenges, create market linkages, institute traceability solutions, leverage data wealth for business intelligence, develop cold storage infrastructure, among others.
The year 2021 was a bumper one for the agtech sector and 2022 is slated to be bigger and bolder in comparison. As existing agtech players scale their businesses and new players enter the fray, let’s analyse the key factors which will pave the way for the growth of post-harvest agtech businesses.
Government-led agtech boost
With the recent announcement of the Union Budget 2022, the government has once again underlined an empowering vision for agriculture, and the agtech sector, with primary emphasis on increasing technological intervention across value chains. The agriculture sector has chaptered a resilient recovery process, growing at 3.9 per cent in FY 2021-22, an increase from 3.6 per cent last year.
The government’s commitment towards increasing investment in agriculture and the agtech sector will aid in all-inclusive and equitable development. Similarly, the proposed PPP (Public Private Partnership) model scheme for the provision of digital and hi-tech services across agriculture intersections will automatically generate greater collaboration between private agtech players and public research institutions. Financial support from the government will extend essential momentum to stimulate growth in the rural economy and multiply the export potential of the country’s countless agri-commodities.
Rise in investments
The year 2021 was a bountiful one for agtech investments. As per the data released by the Impact Investor Council, the year witnessed a steady infusion of capital worth over $515 million into this burgeoning sector until October alone. It is expected that these investment valuations will double in 2022. In the last two years, agtech start-ups have managed to provide healthy returns to their investors, which has duly incremented the value of this emerging sector by a considerable notch. In 2022, funding benchmarks will continue to evolve fervently with rising valuations to drive large-scale transformations.
Surge in R&D
According to some statistics, India’s total spending on agriculture R&D in the last two decades has been merely 0.3 – 0.5 per cent of the total agricultural GDP. In stark contrast, agtech leaders such as the US and China spend 2.8 per cent and 2.1 per cent, respectively. Without active investment in the R&D segment, both from the private sector and government institutions, the true potential of Indian agriculture will remain unfulfilled.
For instance, in post-harvest agricultural trade, quality is the most important value multiplier across food value chains. It lies at the core of every transaction, majorly defining the price realization. Yet the quality assessment remains subject to manual processes and errors that impact the value generated. With a considerable investment of time and resources, AgNext innovated AI-enabled technologies to bring rapid quality assessment solutions to every node of the food supply chain. With rapid quality assessment, we can root out inefficiencies in the food supply chain, reduce food wastage and improve profitability for all agriculture stakeholders.
Technological interventions and improvement in our R&D prowess have the capacity to circumvent the existing banalities in the agriculture system by boosting innovation capabilities and automating agricultural operations by leveraging deep-tech solutions.
B2B digital marketplaces for agri-trade
Digital B2B marketplaces have emerged as farm-to-business hotspots that could efficiently enable agriculture transactions with marked transparency and traceability. With established trust in the e-market linkages, there will be a substantial increase in agricultural marketplaces, driven by both the demand and supply side. Governmental interventions in digital marketplaces will also evolve, which will help to increase the awareness of this digital service and also provide added legitimacy to the online trade and commerce in the agricultural sector.
What the Future Holds
With the increasing proliferation and adoption of next-gen technologies and innovative solutions across the agriculture value chain, the agtech industry is on the brink of multi-billion dollar valuations, projected for the next few years. On the post-harvest frontier, the futuristic trends include but are not limited to, increased digitalization of data, logistics, transactions, quality assessments, processes, and all major metrics with real-time information to support critical business decisions.
(The author is CEO & Founder, AgNext Technologies)