How Are Indian Agritech and Agri-Fintech Startups De-Risking Agriculture For Farmers?

By Inc42

Digital technologies have made a massive impact on the agriculture sector globally, throughout the entire value chain, writes Raghavan Sampathkumar at Inc42. Innovations such as farm machinery automation, AI-powered grain sorting machines, online marketplaces, crop and soil sensors, and digitally-enabled logistics among others have helped farmers reduce losses and wastage.

The $370 Bn Indian agriculture sector has witnessed quite a digital revolution in the past decade. India has over 834 Mn internet subscribers as of September 2021 with the internet penetration rate at 61%. The issues of lag in information dissemination and ineffective market linkages could easily be solved by increased access to mobile network connectivity. In fact, private players are increasingly tapping into this potential through the power of mobile apps offering digital transactions.

In the last six years, agritech startups in India have witnessed unprecedented growth. Leveraging 4G connectivity and rising smartphone penetration, agritech entrepreneurs have built farmer platforms, B2B agri marketplaces, rural fintech businesses, and farm-to-consumer (F2C) brands. But this represented only a small part of Indian agriculture and reached less than 20% of Indian farmers.

I believe there is a dire need for farmers to shift towards a system where smallholders can freely practice digital agriculture practices without the fear of risks associated with farming. For instance, through digitalization, Farmer Producer Organizations (FPOs) can estimate the total volume of output from member farmers and identify potential buyers during or before the harvest season.