Can Agri-Startups Solve The Problems Of Farmers In The Country?

Agriculture in India has shown an increase in its average agricultural output (per hectare), in the last 60 years. This is in addition to the growth in total output.

This increase in agricultural productivity is directly related to India’s green revolution mission, developed infrastructure of road and power generation, management of agri-inputs and supply chain, knowledge of agri-processes and other reforms.

As per the Food and Agriculture Organisation of the United Nations (2013), India is among the top few producers of rare agricultural produce.

Interestingly, the quality of agri-produce is better because of a wide diversity of soils and climate in the country, across three seasons. Despite these recent happenings, crop yields in the country are still just 30 to 60 percent of the best sustainable crop yields achievable in the farms of developed and other developing countries.

Additionally, losses after harvest happen due to poor storage infrastructure and unorganised retail. Recent observations show that in spite of logistic support and incentives by State governments, Indian farmers still face difficulties like low price of farm produce, uncertain weather, low rainfall, inappropriate storage facility, absence of skilled labour workforce, lack of agri-services and want of technology.

After Independence, the government laid major emphasis on achieving self-sufficiency in food production. Even though Central and State governments have initiated several agricultural development programmes for this sector’s development, there is a huge gap to be filled by young minds.

There is a strong need to incorporate local knowledge, indigenous wisdom and skill of farmers into modern farm technologies being developed by scientists. The difficulty in building extension contact with farmers lies in the fact that, generally, an extension agency does not have a sound understanding of all the farmers as their clients. There is also a gap in the working knowledge of their perceptions and tendencies, needs and interests or their strengths and weaknesses.

In view these facts, there is a need for business startups in technology, IT, online retail, online bookings, home deliveries and supply and distribution business. Agriculture and its allied activities could be sought after as business opportunities for start-ups.

According to studies, it is also evident that agricultural problems can be solved by small ticket investments and business models.

This article suggests some of the probable business opportunities where startups can be launched to attain growth and agricultural development and how the farmer, rural Indian citizen, agricultural labourer and society could be benefited too.

It is critical for farmers to use high-quality inputs, fertilisers and agro-chemicals to improve productivity and yield. This would be the major focus area. Observing the scenario, business startups could be planned to procure and arrange agri-inputs at the desired end user of this sector. Research shows that farmers are still not able to get agricultural inputs on time like seeds, pesticides, fertilisers and agro-chemicals.

Hence, there is scope for agri-market environment analysis, segmentation of agricultural inputs, positioning of agri-products, designing of distribution channels and many other opportunities for startups. Agriculture science, biotech and agriculture engineering students could be motivated to lend their support to launch startups. 

Agri-business counselling and guidance are envisaged to provide expert services and advice to farmers on cropping practices, technology dissemination, crop protection from pests & diseases, market trends, prices of various crops in the markets and also clinical services for animal health, which would enhance productivity of both crops and animals.

Agri-business counselling and guidance startups are equipped to provide information and guidance on availability of input and its supply, availability of farm equipment on hire and other services.

Currently, Krishi Vigyan Kendras (KVKs) provide counselling and guidance at the farm level but the varieties and set of information required every day is difficult to come in the existing system.

Students with an education in agronomy, plant breeding, post-harvest technology, horticulture, agri-extension & communication and animal husbandry could be trained with ICT knowledge and be motivated to start counselling and guidance centres at village, block or district levels. Later, these centres could also provide services like soil testing, compost making and plant nursery.  

The agri-business sector’s supply and value chain spans over input management, farmers, agri-produce traders, food processing units and retailers; all of whom must ultimately satisfy the varying demands of the customer in a workable manner.

This sector encompasses huge diversity and variety at each stage, from research and development-based agri-business companies to common manufacturers, from subsistence farmers to high technology agro -holdings and from biotech boutiques and small and medium-sized enterprises to multinational corporations. Today, building a suitable value chain is a need for the development of agriculture, farmers and every other stakeholder.

In this context, startups could think of having an inclusive market system development approach focused on building capacity and resilience of the local market and business scenario, leveraging incentives and resources of the farmers and agri-businesses, ensuring beneficial inclusion of the small farmers and stimulating change and innovation that continues to grow.

Startups could also provide services like farmer’s landholdings and cropping patterns (which are useful for processors), types and quality of farm produce and timeline of quantity production, customer satisfaction or dissatisfaction in the case of new products and suitable supply chain management from farm to retail store.

Warehousing in India is linked to food security and agricultural growth. Three public sector agencies are involved in building large-scale storage and warehousing capacities in the country. These are the Food Corporation of India (FCI), Central Warehousing Corporation (CWC) and 17 State Warehousing Corporations (SWCs).

Currently, the country has a total agricultural warehousing capacity of around 91 million metric tonnes, to store and conserve large quantities with state agencies. They own 41 percent of the capacity and the balance distributed among private entrepreneurs, cooperative societies, farmers etc. Despite public sector warehousing and private players, including cold chains, millions in farm produce goes to waste every year.

To prevent perishability, there is a strong need for startups at the local level to manage farm produce. Over the last two decades, the need for warehousing has also been felt in sectors other than agriculture, such as retail commerce.

Warehousing is now seen as an integral part of the supply chain where goods are not only stored for safekeeping but also where other value processes are implemented, thereby, minimising wastage and costs. In fact, warehousing in agriculture is part of the larger agricultural ecosystem.

However, just like agriculture, the warehousing market is local, unorganised and fragmented. Many small and medium landholding farmers use the services of public warehouses, also known as third party logistic companies. These warehouses help farmers by storing and, sometimes, in packing and shipping produce.

Warehousing and cold chain co-operatives at the village level; cleaning, processing and packaging of vegetable and fruit by village women at the village level; collection, processing and packaging of milk in different quantities at the local level and building warehouses in co-operation with villagers can be developed within a public-private partnership model.

It is not surprising that tourism has been recognised as one of the major sectors for providing employment opportunities to the less developed or developing countries. Several countries across the globe plan their tourist spots to attract millions of tourist every year and the whole economy runs on revenue earned from the tourism sector. One of the newest and popular tourism segments today is agri-tourism or eco-tourism. However, Indian agriculture is still far away from its tourism exposure.

Agri-tourism captures multiple other business opportunities viz. handicrafts, food processing, hospitality and can have significant benefits for local rural areas. Few states in India like Rajasthan, Assam, Haryana, Uttar-Pradesh and Kerala have been trying to attract tourists to their villages and agri-farms but there is still a lack of new entrants as business startups.

Developing agri-tourism entrepreneurship in our country may improve economic backwardness in rural and agri-dominated areas. Future agri-tourism startups could provide customers with the opportunity to pick their own farm produce at a savings, to both the customer and the farmer who would normally have to pay for the labour involved. At the same time, this kind of start-up can offer visitors an education in agriculture including how crops are grown and which crops thrive the best in a given climate.

Experiencing different seasonal events such as Lohadi, Sankranti, Holi, Deepawali, Navaratra, Navakalever, Bihu, Pongal and Dussera could be planned in villages. Educational tours could be a part of brand building and will educate visitors about Indian culture, tradition and farming. In some countries, the practice of hosting overnight guests, for them to get a traditional taste of the great outdoors, could also be thought of.

An increasing number of business startups are much needed to help farmers, across the agricultural cycle. The current union budget has very significant allocation of funds to develop the agriculture and allied sector.

The fund allocation for agriculture and farmer welfare is about Rs 35,000 crore and, to recharge the ground water, Rs 60,000 crore is allocated to focus on drought hit areas and cluster development for water conservation.

Observing the situation, one can sense that there are several opportunities available for entrants to start a business for the welfare of farmers and development of agriculture sector.

College graduates, especially those in agriculture science, agriculture technology, animal husbandry, post-harvest technology, biotechnology and agri-business management could explore business ideas that can be further developed as business models, aimed for the betterment of the agriculture sector in India.