The/Nudge Centre for Social Innovation presented an unmissable discussion on ‘Emerging Trends & Open Spaces in Agritech’ with an aim to spark farmer-centric innovation that improves the economic, social, and environmental outcomes and increase income of small and marginal farmers in Indian Agriculture. NewsX was joined by the expert panel which included Anil Kumar SG, Founder & CEO, Samunnati, Mark Kahn, Managing Partner, Omnivore and Sudha Srinivasan, CEO, The/Nudge Centre for Social Innovation. The event was moderated by Priya Sahgal, Senior Executive Editor at ITV Network.
In an attempt to build a better future for our farmers and focusing on especially the small, marginal and women farmer, Sudha Srinivasan, CEO, The/Nudge Centre for Social Innovation kickstarted the conversation and said “We started off with the mission to launch and nurture India’s top talent to solve our most critical developmental challenges. There are so many social problems that technology can disrupt in particular, standing out as that space where more than half of India’s poor are engaged in some form of agriculture. The pathways out of poverty see roadblocks in the form of social norms and technology has the potential to disrupt this. Technology can reduce the volume of inputs that go into the soil, which in turn, later translates to the ability of the farmer to sell, while meeting the standards of fuel density of pesticides, or whatever, that’s preventing them from accessing, the range of possibilities was very, very wide. But unfortunately, as you look at active investments in the last few years, a lot of it is customer and consumer proximity. This is almost a void in the farmer-centric space, that puts the farmer at the centre, making their livelihood important.”
Mark Kahn, Managing Partner, Omnivore expressed his views on trends in agri-tech both India and globally. “The amount of investment coming into agriculture annually, tech startups annually in India was $15 million a year. This past 12 month period, we’ve probably crossed $600 million. So it’s been up into the right over the course of the last decade, it is definitely better than it was earlier. When we talk about kind of the trends that we’re seeing globally and in India. What I would say is that the global agri-tech is very different from for an Indian agri-tech. I actually think Indian Agri tech is in some ways better positioned. The defining characteristic of Indian agriculture is the fact that you have 130 million farmers farming in an average landholding up just slightly more. No other nation in the world really has that. If you think about all the debates we’re having from a policy perspective, about our Mandi system, our dairy economy which instead of working with large dairy farms, like everywhere else in the world. The biggest trend that we see in Indian agriculture is digital outreach. We now have the ability to build a base layer to reach all of these disparate groups and that is not to say that every farmer has a smartphone they don’t. If we take one of our portfolio companies they have as an example and is reaching now about six lakh farmer. We at Omnivore say Profitability, sustainability and resilience are the three big challenges faced by Indian agriculture.”
Talking about how agri-tech is helping the small and marginal farmers and addressing the access to technology for the small farmers, Anil Kumar SG, Founder & CEO, Samunnati said “The moment one get into agriculture and talk about smallholder farmers the number one dimension is the smallholder which is where the rubber meets the road. The second dimension is the sector as a whole to the expanse of what agriculture is, as a sector. Now, making the horizontal and vertical is where the entire benefit to the smallholder farmer would have to operate. Before getting into how technology is going to help the farmer I’ll digress a little bit and also share what is declining. I completely agree with both Sudha and Mark and saying that things have changed significantly in the last few years, especially in the last five years. In addition to the capital inflows that Mark mentioned, the entire agriculture ecosystem is seeing the buoyancy: an ecosystem level, not only the entrepreneurial side that we are seeing but also the kind of enablers that the ecosystem is seeing has not been absorbed, because I have spent about 21 years of my professional experience in banking in the rural area. Things have changed significantly in the last five years in addition to the capital inflows. There is a lot of energy in the ecosystem. The moment you see this energy in the ecosystem, there are two dimensions. One is each one of us is several of the entities that are operating in this space and are looking at addressing one or two critical parts of this ecosystem agriculture. On the vertical capital, somebody is looking at satellite imagery in terms of monitoring and there are also entities which are looking at horizontally. How can we be aggregators of all of these individual interactions? The collaboration of this horizontal and vertical is what will bring technology on its way. You take the benefit of technology, the attribution and the result of the technology contributing 200 rupees in their pocket is an important message. How can technology translate into an upliftment in the livelihood is the single largest factor that will determine the adoption rates? The beauty of an ecosystem being active would also mean the smallholder farmer could adopt these technologies. There are players who can also play the role of making these technologies.”
Throwing light on funding and the early stages of the incubation and how they prove over the years, Anil Kumar SG said “The other way of looking at it is the number of integrations that have mushroomed. If you see the lifecycle of an entity, reaching up to a stage of being able to get seed funding, there is incubation and plan to touch the incubators. There is proof of concept and there is production capability and demonstrating a reasonable scale is when you get into the equity space. And the same thing CAG report also talks about more than 2000 startups in agriculture in various forms and shapes. From a banker point of view when there is some distance to cover and there is a significant gap that is actually not in the equity funding at the seed stage but it isn’t working capital. There are many entities which don’t need equity but need working capital to be able to deploy their solution product or technology to the intended users. Some of these entities really struggle because the way a debt fund that looks at is still very traditional and still very rudimentary. They would basically look at the percentage of the activity, financial returns and profitability, so on and so forth. But the technology and agriculture space itself is very young. You cannot expect a technology company in agriculture to have demonstrated a vintage of deploying their operations and showing sustainable financial records that’s not available yet.”
“Through our platform, Samaarambh launched on 15 Aug 2020 Samunnati helps Agri startups and Agtech enterprises boost and scale operations with the expertise of industry experts and mentors across the agricultural ecosystem,” added Anil.
Mark Kahn added to this and said “My general reaction to all of this one should see what 2012 looked like, or 2016, or 2018. It is far, far easier today for an agrotech startup to get funded than it has ever been in the history of funding Agri tech startups. A lot of the money that is going into space is for the ones but that by definition, right, given the sort of logarithmic nature of funding is going to be how that plays out right when your typical seed check is $2 million. t I still think that means not just the volume of funding it’s also the count the number of teams.”
Sudha who comes from the field of socio-entrepreneur said “One thing to note is the changing demographic of rural India. There’s a generational shift, far more farmers today are digitally illiterate have aspirations beyond doing what their parents did. The pandemic also showed us the exodus from the urban centres back to the villages, I think, although a lot of them might come back. We still need to look at India’s development in a more distributed manner that reduces the dependence on the urban centres and revitalizes rural economies. Agriculture already is the labour of the sector. Right. For me, the single biggest whitespace is the opportunity in near farm industries, something that goes beyond the activity of sowing tilling reaping harvesting and kind of get beyond that to expand additional revenue streams for the farming communities. Being agency in a manner where the transfer of ownership from the farmer to the next player in the value chain can happen at a later stage and that’s how you capture the value that one saves by eliminating the middle layers between farm and consumer. And a lot of that is about building capacity building skills, particularly entrepreneurial skills on the government side of things, a lot of rural livelihood missions have put in place structure but then also village-level organizations and institutional structures beyond that roll up all the way to the SRLM, which is a wonderful vehicle to build this capacity. Transformation overall beyond a change in agriculture as a sector is poised for some very radical shifts and innovations, I think, active entrepreneurs have an amazing role to play, to bring to fructify that and make this whole thing, respond to the calls of a triple bottom line, where one, of course, see huge economic returns but also see positive social outcomes and long term environmental outcomes.”
Responding to what else can be done to encourage farmer-centric startups financially, Anil Kumar said “Before getting into how we can encourage financially I also we want to bring in the demand now the transitory role that technology can bring to it is changing the visual of what agriculture would mean. The moment you say a farmer, and agriculture, we get the visual that of drudgery and impoverished farming family, not making much end, not getting a fair deal of what they’re producing and at the receiving end of everything. How can we make technology drive the youngsters into agriculture and can we transition this visual to young generation working with the gadgets? In his farm, happy children running around, they know, life around and mechanization happening, and making a productive yield out of agriculture. And the bridge to these two worlds is technology, and this technology would also be the incentive and could also be the catalyst for youngsters to move from a physical directory which is what agriculture is in an actual sense to a high tech farming, which is where our country is moving on.”
In terms of the labour, there is the looming fear of layoffs with the coming of more technology and in the rural area is a much more viable concern. Sudha addressing said “Drudgery reduction should not be seen as layoffs. For the simple reason that one wouldn’t say that if we were talking about manual scavenging. Mass entrepreneurship across the country in every sector and particularly in the agricultural sector is really promising to be the ground up stimulus that one needs.”
On a concluding note the three experts mentioned their priotity list and the role that they see different stakeholders playing in order to make agriculture more innovative get a better ecosystem in place. Mark Kahn said ” I would like the government to create a standard set of rules that they stick with inorder to stabilize and allow an enabling environment that lets people make long term investments and decisions. I would like Indian agri corporates to behave as partnersand not predators and actually work with startups, rather than trying to get them or copy them. I would like universities to recognize that agriculture is not just say, 15% of the GDP but when we take all of the agribusiness associated with agriculture or we take all of the food processing, the logistics, the financing, the insurance, everything that goes along with it, we’re talking about a quarter of our economy and half our population and appropriately focus on that, with respect to the directions that they’re pushing young people because honestly, if we don’t get this right, India doesn’t have the future. Also I would like venture capitals which I increasingly believe is happening to see the opportunity in this space and support it.”
Anil Kumar focusin on innovation and tech said “I would say, many more integrative approaches and models that integrate wonderful work that is happening. I would also see some shining examples of farmer collectives if one or more can inspire this country for the good. The potential in this particular form of farmer collectives represents is a significant opportunity that we have on how do we harness this opportunity, how do we harvest this opportunity is an important. Well functioning cooperatives, is an important dimension, and a lot of policy focus would also mean many support structures coming in. How do we as private sector players participate, and how do we as private sector players get equal opportunity from the policymakers to participate to be an important dimension, because we have to appreciate that. Now, it’s just not that the state or the public sector, private sector also can play a significant role in making these services reach the smallholder farmer.”
Focusing on betterment of lives and equality, Sudha said “The principles of free markets have helped every other sector. And agriculture almost feels like a sector that has been kept away ferom. And I’m hoping you know that will change soon and enable a certain vibrancy to come from large numbers of players committing to look at the livelihood of farming and enhancing it. The second thing I have on my wish list is for entrepreneurs to peel the onion in agriculture a lot more. I think intuitively sitting in a relatively privileged cozy urban environments where a lot of flattened innovation particularly happens with entrepreneurs that have solved problems in other sectors and are starting to look at agriculture. You intuitively think it’s about market linkages or just getting a better price for the farmer, removing the middleman right and you kind of start peeling the onion a little bit and hit very foundational bottlenecks in terms of land use patterns. Mark mentioned the small land holding itself being a barrier tenancy and the problems that come with it, the dependence on informal loans. That in turn later downstream you to the informal money lender, in terms of where your produce goes, access to other markets being cut out because of that. Gender issues as well come into play as so much of farming is done by women. but so little ownership of property and land is with them. Foundational issues that keep the cycle of poverty perpetuating even though opportunities open up are important to solve as well. In the medium term at least if not in the immediate future I hope some of the innovation could be directed to these. And that could kind of script a very equitable pathway to prosperity and kind of reduce the inequalities we are seeing across the country.”
Watch the entire telecast here: