Agritech Schemes of 2022: How Fruitful Were They?

As per the recent market research reports, the global agritech market is projected to grow at a compound annual growth rate (CAGR) of 12% between 2020-27. India, too, is competing in this segment alongside China and the US

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The government is said to be looking at giving a boost to agriculture through agritech schemes that would assist in improving yield, efficiency and profitability of agriculture. Budget 2022-23 has seen numerous agritech schemes being launched. Here, let's ask the agritech founders themselves whether the government's agritech schemes of 2022 were fruitful or not.

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"The government policies around the agriculture sector have been beneficial in bringing a positive change in the overall agriculture value chain and have helped in boosting farmer incomes. The modern and effective use of technology and the work being done by agritech startups is helping in solving farmers problems. The government's focus on doubling the farmers' income is helping in overall expansion of industry and helping in overall industry growth," said Piyush Jindal, director of Safex Chemicals, while sharing an overview about the topic.

The government of India has implemented schemes and policies for millions of people who live in rural areas, ranging from education to financial literacy and agritech to skill development. Union agriculture minister Narendra Singh Tomar, in August 2020 had said that the government ensured the plans and programmes drawn up for the rural sector reach the people by plugging the leakage. In November 2022, the minister had also launched a portal on National Mission on Natural Farming (NMNF) with an aim to uplift the farming community.

"It is commendable to see the central and state governments working together to improve rural India. Connectivity and digital knowledge have improved the job market and given people a place to learn and build financial independence. The growth prospects of rural areas have been improved by increased innovation, and policymakers support reforms outside of subsidies and sector-specific strategies," said the founder and CEO of Hesa Technologies Pvt Ltd, Udayagiri.

He also added that, "Deen Dayal Upadhyaya Grameen Kaushalya Yojana and Prime Minister Rural Development Fellows Scheme helped our organisation to grow in various sectors by offering short-term assistance to the district administration in the less developed and distant sections of the nation. It also gives rural youngsters more job opportunities by providing possibilities to raise the income of rural families."

But Tharakeswar G, co-founder and interim CEO of Dvara E-Registry, referred to a different policy. In his words, "We have extensively benefited from the Central Sector Scheme Formation and Promotion of 10,000 new Farmer Producer Organizations (FPOs). We have promoted nearly 50 FPOs to reach small and marginal farmers to enable farmers to have better collective strength for better access to quality input and technology. We have effectively provided our services to small and marginal farmers through these FPOs."

It is already expected that 2022 will be much bigger than 2021 for agritech in terms of investments, innovation, growth and impact. The Indian agritech sector stands at the cusp of transformation in 2022, but to truly realize the growth potential of agriculture and agritech, policy-driven governmental support is critical, especially at the grassroots level. As an add on to this perspective, co-founder of Nutrifresh Farm Tech India Pvt Ltd, Sanket Mehta pointed out that, "The government of India has introduced several subsidies like Agricultural Infrastructure Fund (AIF), Package Scheme of Incentives (PSI - 2019), introduction of National Horticultural Board (NHB) and several others to help boost the agriculture eco- system. Unfortunately, Hydroponics have not been classified under Horticulture / Mainstream agriculture. We could not benefit from most policies introduced by the Govt. of India as yet. However, the government of India has assured us about classification of Hydroponics under Horticulture / Main stream agricultural sector soon."

"Our prime focus is on the Cluster Development Programme (CDP) initiated by the government of India in bringing together farmers thereby uplifting their livelihoods and enabling better income generation for them. However, it is currently focused on subsidies for a project of smaller scale; which would not tip the scale of profitability for a relatively larger organization like ours. However, if such subsidies are offered at a larger scale; it would make us more profitable; in which case we would be much more interested. We are hopeful in availing benefits from various schemes introduced by the government of India after this classification," Mehta added.

As per the latest report by Bain & Co, the agritech sector is poised to grow into a $30 to $35 billion market by 2025. These expectations reflect the increasing penetration of new-age technologies down the agri-food value chains, driven by digitalization of the agriculture sector. Speaking of the technological invasions in the agriculture sector, drone technology plays an inevitable role. Schemes like PLI only reaffirm the government's faith in the indigenous drone manufacturing community and that leads to investors and VC funds gaining confidence hence the Drone industry is very neatly poised for a huge boom in the next 3 years.

On this matter, there comes a significant statement from the founder and CEO of Garuda Aerospace, Agnishwar Jayaprakash that, "The government liberalized drone laws as part of a policy change to facilitate the rapid transformation of the Indian drone ecosystem and India to become the world's drone capital in the coming years. Any financial benefits are most welcome, especially during the tumultuous market conditions that Indian companies as a whole are facing these days. The PLI scheme promises all service providers and student entrepreneurs who want to use drones to provide drone-based services to customers. The drones will become less expensive and equipped with far more quality as many drone manufacturers will compete to provide the best products."

In a recent development, the Ministry of Agriculture and Farmers Welfare (Department of Agriculture and Farmers Welfare), government of India, had issued a gazette notification which is an update to the Insecticides Rules, 1971. This amendment allows licensees and retailers to purchase and sell insecticides on e-commerce platforms, to the doorsteps of the farmers.

Shardul Sheth, co-founder and CEO of AgroStar shared his viewpoint that, "It is a big boost for the Agritech sector and for the Digital Bharat initiatives. This notification update removes ambiguity and essentially recognises that technology is becoming increasingly important and essential for Indian farmers to increase productivity and double their income."

Being an insect agri-biotechnology startup, Loopworm's co-founder Ankit Alok Bagaria also joined him asserting that, "Ours is a unique sector wherein we are into insect agriculture and processing. The industry is still niche and requires more players to enter for the government to make sector specific policies. However, we at Loopworm were supported and benefitted by government grants such as the RKVY RAFTAAR grant and BiRAC BIG grant."

Referring to the recent statistical trends, Saurabh Agarwal, founder of GrowiT, said that, "The Ministry of Agriculture has allocated INR 1,32,514 crore in FY 2022-23 for the welfare of farmers and the overall agricultural industry in the country. All other programmes of the Ministry, including interest subsidy and crop insurance, have been allocated INR 64,514 crore in 2022-23. The mentioned financial contributions by the government authorities have benefitted agriculture a lot in FY 2022."

From the viewpoint of a deep tech Ag biotech startup that works in making crops climate resilient, ensuring yields for farmers by discovering novel molecules and microbes, BioPrime Agrisolutions CEO and co-founder Renuka said that, "As you can imagine this requires capital intensive infrastructure. Early backing from the government through plug and play incubation systems, grant in aid for proof of concept, startup registrations and acceleration of patenting process have helped us immensely."

In the opening remark while presenting the Union Budget of 2022-23, the finance minister had said that the government will promote chemical-free natural farming across the country. Dr. Ezhil Subbian, co-founder and CEO of String Bio, has revealed that this was one of the policies that was relevant for them. In his words, "In this policy, as a first step, the focus has been taken up on a pilot basis in UP along the Ganges. Further, agricultural universities will be encouraged to revise their syllabi to include natural and organic farming, technology- based modern-day agriculture or precision farming, value addition, and management."

Subbian also mentioned the introduction of a domestic carbon market. He further added that, "India's Bureau of Energy Efficiency (BEE) presented a draft blueprint for the phased introduction of a national Cap-and-Trade system in India, providing for the introduction of a voluntary market in the first phase. Second, on 29 July 2022, the Indian Lower House of Parliament (Lok Sabha) adopted an amendment bill to the 2001 Energy Conservation Act that provides the legal basis for the establishment of a voluntary carbon credit trading scheme. While it is early to establish the benefit to our startup, these are important policy frameworks which we will benefit from as they are implemented broadly."

The Government intends to launch a scheme in the PPP (public-private partnership) model to deliver digital and hi-tech services to farmers, which will bring together public sector research and extension institutions, private agritech players, and stakeholders in the agri-value chain.

The Indian agriculture sector contributes nearly 18% of the gross domestic product (GDP) and 40 % of the total rural Net Domestic Product (NDP), as per reports. The agri startups in India are providing information, techniques, and efficiencies to farmers. As per the recent market research reports, the global agritech market is projected to grow at a compound annual growth rate (CAGR) of 12.% between 2020-27. India, too, is competing in this segment alongside China and the US.