Indian agriculture has the potential to become “the food bowl of the world” if the country emphasises on building efficiencies into the agricultural produce trade; can integrate quality standards as part of trade practices and optimise production costs for price competitiveness.

“Technology-led innovations supported by investments can bring India on par with its global peers. The focus needs to be on the 3Is, which include innovation, infrastructure, and investment,” said a report put out by the consultancy firm Arthur D Little (ADL).

There is a considerable disparity in the adoption of digital agriculture technologies between global companies and those at the local or community scale in the country. There is a need for innovative business models that provide viable digital solutions for small-scale farmers, it said. Developing disruptive agritech business solutions would require more capital and the ability to link them with the market and consumer.

Watch | A $35 billion Indian agritech industry by 2025: hope or hype?

“Forming innovation clusters in regionally contiguous zones can enable a wider ecosystem for innovation by driving inter-firm linkages, collaboration, and networks. With heightened economic activity and technology advancements, the clusters provide a budding platform to technology start-ups. To raise productivity, ensure food security, and become a net exporter of food products and intellectual property, India needs to promote innovation clusters with goal-oriented efforts,” the report said.

The country further requires large-scale investments in post-harvest infrastructure, including near-farm warehouses and captive cold chains, to reduce waste. This apart, the supply chains between farmers and consumers need to be transformed and post-consumer waste should be avoided, the report said. Enabling digital technologies could help improve traceability, reduce waste and operational delays for supply chain players.

Indian agritech market

Indian agriculture has come a long way from being State-focused in ensuring food security to becoming a major producer in the world. While the Covid-19 pandemic has disrupted businesses across many sectors globally, including India, however, the recent growth of the agritech market in the country reflects its enormous unrealised potential.

“Increased rural Internet penetration and the greater affordability of digital technologies assisted by rising investor interest have led to the ongoing digital transformation of the farming ecosystem,” the report pointed out.

Agriculture is the primary source of livelihood for about 58 per cent of the country’s population. Agri and allied sectors accounted for 17.8 per cent of gross value added in India (at current prices) in FY21. While Covid-induced lockdowns took a toll on industry and services, agriculture remained buoyant and helped sustain consumer demand.

Also read: Agtech investments plunged 35% last year

The country also enjoyed significant growth in agriculture exports during the last fiscal. According to the Ministry of Commerce & Industry, the export of agriculture and allied products grew by 17 per cent to $41.25 billion in 2020-2021 after being stagnant for the past three years. The momentum is expected to sustain in the coming years with new businesses entering and converting challenges into opportunities.

“But several challenges have beset Indian agriculture for a long time, and solving them is vital to the growth of agritech and to overall development and rural prosperity. Challenges include low farm productivity, fragmented land holdings, lack of storage infrastructure, and high indebtedness – all which contribute to persistent agrarian distress. The fragmentation of holdings, where over 80 per cent of Indian farmers till less than five hectares of land each, results in low economies of scale, limited access to technology, high marketing costs, and low productivity,” the report noted.

Technology advances in recent years have been re-engineering the value chain to solve both demand and supply-side issues in the agri sector.

Also read: Indian agri on the cusp of disruption, says Bain research report

New age technologies such as artificial intelligence, the Internet of Things (IoT), machine learning, big data, and blockchain are expected to transform the sector by enabling higher productivity, superior quality, traceability and real-time visibility while reducing the carbon footprint and increasing profits.

An enhanced focus on cost, quality, and reliability would be critical drivers of the increased adoption of precision agricultural technologies and in automation, the report said.

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