How agri-startups can be made more effective

PVS Suryakumar | Updated on June 23, 2021

Support at the ideation stage, using the services of business coaches and providing linkages to finance will help

A few statistics to set the context — India has 20 agro-climatic zones, cultivates 157 million hectares, produces about 303 million tonnes (mt) and 326 mt of foodgrains and fruits & vegetables respectively (FY2021 estimation), about 60 per cent of our rural households depend on agriculture for their livelihood and our food and grocery market is sixth largest in the world.

Agriculture has shone brightly amidst the pandemic and discerning consumers are now demanding safe and healthy food, to keep their immunity robust. There are around 750 startups in agriculture which received about $800 million in funding. A few of them are farmer facing and most consumer facing. Are these good enough numbers to address myriad issues of diverse Indian agriculture?

Prime Minister Narendra Modi gave a clarion call on February 28, 2016, for Doubling of Farmers Income (DFI). At the heart of DFI lies a simple, three-pronged principle. Farmers’ income increases when yields increase, cost of production reduces and farmers receive remunerative prices. Agri-startups can potentially play a role in DFI and many agencies are trying to promote startups. While there are successes, better coordination will help institutionalising successes.

How are startups borne? From, incubators? Accelerators? Or champions who have executable ideas with an intimate understanding of agriculture? The World Bank first began supporting incubators for agriculture. Later, many organisations began to support.

The Ministry of Agriculture and Farmers’ Welfare runs the Raftaar — Remunerative Approaches for Agriculture and Allied Sectors Rejuvenation — programme. The NITI Aayog runs a comprehensive Atal Innovation Mission. The DBT runs Biotech Parks and incubators programme. The CSIR, ICAR, State Agricultural Universities, public and private universities and private companies run their own versions.

Startup India of the Ministry of Commerce and Industry and AGNIi — Accelerating Growth of New India’s Innovations — under the Office of Principal Scientific Adviser are two powerful platforms, which help the innovation ecosystem through initiatives like award programmes, commercialisation, etc.

The Prime Minister, while reviewing the ICAR in July 2020, opined that startups may be selected through hackathons to solve identified problems and design tools and equipment that can reduce farmers’ drudgery. His intent is unwavering — farmers’ welfare is India’s welfare.

What then is the best route for fostering innovation and how can a million agri-startups flourish?

Incubators typically take this route — construct buildings and facilities, search for suitable CEO (who understands agriculture and has an eye for commercialisation), retain such CEOs who might hop for better remuneration or freedom, and search for grants. Many incubators close doors once funding runs out.

Identify champions

The route of identification of champions is a better option as primary focus is the idea and the person behind it. Creating an ecosystem around them and a long-term commitment will yield results. For that, a well-funded agency must be created, which will organise regional agricultural challenges at a given frequency and spot stars and put them through the required incubation or acceleration services based on the idea and champion. If lab work is required they can be seconded to selected partner laboratories.

The most important ingredient in this endeavour is a cohort of robust business coaches. Such people need not be tied down to a coaching job and be co-opted and organised into a guild. The Indian Society for Applied Behavioural Science, a voluntary society of behavioural scientists that organises personal growth labs through its members who are practising managers, is a good model which can be emulated.

Every selected champion obviously gets financial support as equity/flexible capital. If a champion couldn’t succeed in a given time period, the project gets dropped, and is eligible to participate again with no stigma. At present, capital at various stages of an idea is scarce. Very few agencies/people/angel networks support the ideation stage and even after graduation to venture stage there is stiff competition.

The following tenets will keep this mission on terra firma — identify startups and champions with potential, support best coaches, provide finance linkages, ensure farmer and industry connect to startups. Participation of public and private sectors and civil society will enrich this mission.

The writer is Deputy Managing Director, NABARD. Views are personal

Published on June 23, 2021

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