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5 Agricultural Challenges Retailers Face In Emerging Markets There is a need to adopt a sustainable way of agriculture to meet the growing demand for food with the increasing population worldwide

By Amit Sinha

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Emerging markets will change the global economy and politics. India is one of the biggest emerging markets globally, and it is among the top four food-producing countries in the world. However, the emerging markets are plagued with agricultural challenges faced by retailers.

There is a need to adopt a sustainable way of agriculture to meet the growing demand for food with the increasing population worldwide. According to United Nations, the projected increase in the world population is 9.7 billion by 2050. And as per the World Bank, the demand for food will increase by 70 per cent by 2050. It also suggests that agriculture finance will empower poor farmers to increase wealth and food production to feed around 9 billion people by 2050.

This brings us to an important cog in the overall agricultural ecosystem: agri retailers. Agricultural retailers supply farmers with products and services such as seeds, nutrients, equipment, technology, and crop protection products. Challenges faced by the retailers affect the overall production of food and farmers' incomes. They act as a point of contact for all the requirements of farmers and play a pivotal role in the agricultural value chain.

It is of utmost importance to understand the role of retailers as they also act as sources of financial support to farmers. Therefore, handling the challenges efficiently will play a more significant role in farmers' development and growth.

Retailers encounter supply chain integration dearth

There is an increased demand from consumers for high-quality food and its safety, posing many challenges and immense pressure on the agri-supply chain. The technological infrastructure, budget, storage facilities, logistics, organisational capabilities and efficiencies, and environmental factors play a critical role in the success of an efficient flow of processes in the supply chain.

The primary purpose of the supply chain integration is to bring all the links in the chain closer to having excellent working relationships for success. The supply chain integration helps in improving response time and production time, reducing wastage and costs. According to United Nations Food and Agriculture Organization (FAO), more than 40% of food produced is wasted in India, and it costs US$ 14 billion every year. And the primary reason for wastage is the lack of proper supply chain integration. There is a lack of storage space, improper care, post-harvest management, and poor transportation facilities.

Inadequate funding for business operations

Lack of finances acts as a constraint to retailers from providing required agri-inputs to the markets limiting their business capabilities. Due to inadequate funding, retailers' face challenges of investing massive amounts leading to their inability to stock their shelves and shops adequately and miss providing farmers with appropriate inputs. According to the World Bank, as the demand for food increases by 2050, the annual investments needed should be around $80 billion to feed the growing population.

Insufficient market information, absence of product and crop knowledge

Inefficient and inadequate market information have significant impact as the retailers need to keep themselves updated with current market information in order to be able to identify and understand the demand. Therefore, having understanding of markets and knowledge around agricultural best practices, and crops and products: choosing the right quantity of resources to use, choosing the right crop to grow, information on nutritional content of soil, etc., is beneficial for retailers. It also helps in distributing the demanded products to the urban areas. Without sufficient knowledge or information about the market and product, their reach becomes smaller.

Limited use of technology and lack of use of modern business tools

It is essential for retailers to have know-how and understand the usage of modern business tools. The retailers should be aware of their products and the technology to boost crop production. Technology in agriculture plays a vital role, from the use of fertilisers to pesticides and seeds. With the proper help of technology and tools, farmers can produce sufficient and high-quality produce in less time that would be well received in the markets increasing their overall profitability.

Inefficiency in digitising customer behaviours, aligning more farmers towards growth

The retailers also fall short of understanding customer behaviours and patterns. Hence, they have a hard time targeting the right consumers with the appropriate products as per the market demands. The mechanism to track consumer preferences, collect information on their behavior, and access to insights is not fully utilised by retailers. Use of digital tools and data will help them identify their potential buyers and markets, products in demand, and key driving forces.

End word

Now is the time to deal with existing and arising agricultural challenges with a one-stop solution. There could be no better solution than fintech-powered digital farming companies offering end-to-end support for agri-retailers. These companies are technologically sound and help agriculture retailers navigate every aspect of their business smoothly and increase income. Agri-tech companies follow data-driven strategies and handhold industry players from working capital to tech integration throughout the value chain. Such platforms are helping agriculture retailers overcome the prevailing challenges and maximize their contribution to the country's vast and growing food system.

Amit Sinha

Co-Founder, Unnati

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