IoT and AI are going to revolutionise agriculture in India.
Thanks to the development of the Agritech sector over the past decade, the Indian agricultural ecosystem has undergone a dramatic change, with new avenues for investment and improved production and distribution capabilities. Agritech innovations are critically important to India's economy right now.
Emergence & Growth of Agritech in India
In the past ten years, the agricultural ecosystem in India has seen a rapid transition that has been made possible by the emergence of the agritech sector. This has been accomplished by expanding the number of investment options as well as the production and logistics efficiencies. Recent developments in agriculture technology have a significant impact on India's economy. More than forty percent of the population relies on agriculture as their primary source of income, and the agricultural industry will continue to contribute 19.9 percent (FY 2021) to the GDP of the nation. The agriculture industry is currently valued at 370 billion US dollars. Large-scale traditional businesses are now able to concentrate on improving their operational efficacy thanks to the proliferation of startups in the agritech sector, which in particular has seen an uptick in the number of companies offering technology-based solutions.
Surge in Agritech Funding
Artificial intelligence (AI), machine learning (ML), internet of things (IoT), and other technologies are being utilised by more than one thousand agriculture companies (Agritech) in India, as of March 2022, according to estimations provided by the industry. It is estimated that India would receive a total of $ 1.6 billion in funding for agritech businesses through 2021+, which will place it as the third largest country in the world in terms of agritech funding. Another research was created in March 2022 by the Confederation of Indian Industry (CII), in partnership with Bain & Company. This analysis reveals that private equity (PE) investments are mostly focused on systemic difficulties in the agritech industry and its sustainable development. With a growth rate of over 50 percent, private equity investments in agritech firms are expected to amount to 66 billion Indian Rupees (INR) between 2017 and 2020.
While the COVID-19 pandemic disrupted economic dynamics across businesses, the agriculture sector remained mostly unscathed, which actually put them on an upwards growth trend. Farmers and agribusinesses around the country now have an even better opportunity to broaden their market reach because to the persistently rising demand for food.
Reforms & Government Initiatives
The federal government and individual state governments are cooperating to advance agricultural technology throughout the nation. The Digital India programme has made it easier for rural economies to connect with the rest of the world. In order to increase farm income across the nation, a number of different reform projects have been begun. The National Agriculture Market (eNAM), which is a pan-India electronic trading platform; the India Digital Ecosystem of Agriculture (IDEA), which is an Agristack system for increasing farmer income; the National Mission for Sustainable Agriculture (NMSA), which aims to increase agricultural output by integrating sustainable technologies; and the National e-Governance Plan in Agriculture are the most prominent initiatives (NeGP A – for funding modern technologies including AI, ML, drones and Blockchain).
Agritech Business Models
India is at the forefront of changing agricultural practises as the country transitions from traditional business models to a variety of creative business models powered by agritech. This change is being driven by the increasing penetration of the internet in rural areas of India. The following three categories are broad classifications that can be applied to emerging business models that are found across the agriculture value chain.
- Players create market linkage on inputs or output side, earn margins on buy or sell side - Players offering a mix of hardware, software, and services to help farmers improve crop yield, and track the quality of produce while tracing the produce across the value chain - Based on margin: Players create market linkage on inputs or output side, earn margins on buy or sell side
- Based on subscription: Players create market linkage on inputs or output side, earn margins on buy or sell side -
- Players base their fees on the amount of transactions they complete, such as loans and insurance policies.
Broad Categories of Agritech Applications in India
It is possible to divide the applications of AI, ML, IoT, and blockchain technology in Indian agriculture into three main categories:
- Crop and Soil Health Monitoring: Companies that are utilising sensors and various Internet of Things-based technologies to monitor the health of their crops and soil
- Predictive Analytics: A collection of artificial intelligence (AI) and machine learning tools that can, among other things, determine when the best time is to plant seeds, warn of potential damage from pests, and so on.
- Supply Chain Efficiencies Businesses that are using real-time data analytics from numerous sources to develop an efficient and smart supply chain are referred to as "supply chain efficiencies."
Smart Application for better monitoring
The application of artificial intelligence in agricultural settings enables more efficient use of available resources. We are able to simply monitor the quantity and quality of the crops by utilising software such as "AgriReach." These applications also provide digital professional warehouse management solutions with instant, transparent, and auditable agri quality reports and supply chain reports. In addition, it is possible to track data regarding the health of the crop, including the various indications of disease and their extents. The decisions about irrigation and fertiliser are influenced by a number of different circumstances. Farmers will be able to limit damage and consequent costs in a timely manner if they do it this way.
Taking into consideration the influence of agritech and the immense growth potential of agriculture in India's entire economy up to this point, it possesses a huge potential to significantly improve the end-user experience for farmers, consumers, and businesses. We are observing a significant increase in the number of agritech firms in India, which is being driven by the widespread adoption of cutting-edge technology in conjunction with a legislative climate that is encouraging. This can only be viewed as a starting point for the infiltration of modern technologies such as artificial intelligence, machine learning, internet of things, and blockchain into the agricultural ecosystem of India. The agricultural industry, which is highly dependent on the unpredictability of the weather, stands to benefit tremendously from the collective application of these technologies. Because of the tremendous value they provide, it is likely that we will see an increase in the number of use cases including AI, ML, IoT, and Blockchain in agriculture over the next few decades.
Written by the CEO of SLCM Group, Sandeep Sabharwal