When the first lockdown was announced, transportation was restricted, which led to severe disruption of the supply chain. Farmers were not even able to work as usual due to lack of essential inputs. The pandemic pushed the users, many startups and even investors to factor-in uncertainty in their plans.
Adoption of digital agri products by the users
Since access to on-ground advisory services took a hit, more farmers took to online portals to discuss their crop and cattle issues as they could not meet their peers in person. As a result, the number of crop and cattle related queries on agri-networking platforms increased by 30%.
Businesses like agri-retailers, small equipment manufacturers, who until then had mostly run their business using traditional methods, felt the crucial need for a business-farmer digital network to drive their transactions. Adoption of such practices increased significantly during Covid times.
Evolution of young agri-tech companies
The sudden strict lockdown brought untold uncertainty and it took some time for young companies to absorb the implications and rise to the challenge of the new normal. The companies now had to find ways to communicate virtually with the users; to inform and educate rural farmers about the advancements and usage of the technological innovations and their services as travelling physically was not possible.
With farmers finding it difficult to source inputs locally, an opportunity arose for companies dealing in agri-inputs to sell on online platforms (e-commerce). On the output side, since mandis were not operating normally, it created an opportunity for startups to build platforms for farmers to put their crop, tractors, and cattle for sale.
Evolution on investment front
As per Bain & Co, the agri-tech sector in India is expected to grow to a $30-35 billion market by 2025. Therefore, the agri-tech startup segment has been garnering investors’ attention for some time. But it was still difficult to predict how quickly the adoption of technologies like digitization, supply chain innovations, big data, machine learning, AI, data analytics, IoT and the likes would happen. The pandemic hastened the tech adoption process and made it very clear for the investors.
Ideas like business-farmer network, input e-commerce platform, agri marketplace, etc. got automatically validated due to the need of the hour and boosted the confidence of the investors. This is reflected in data from Venture Intelligence which states that the volume of venture capital and private equity deals doubled between 2018 to 2020 for this sector. 2021 has seen 21 deals so far valued at $190 million already as against 32 deals worth $163 million overall in 2020.
Impact on Indian agriculture
The Indian farmers have been using traditional methods for decades. Now, agri-tech companies have initiated technology disruption to facilitate the growth and improvement in farm output, supply chain interventions, reduction in wastage post-harvest and a host of other innovations. The pandemic pushed a large percentage of farmers to voluntarily turn to tech integrations.
Due to technological advancements, the supply chain is now much more efficient, irrespective of any situation. The input e-commerce lets the farmers choose from a variety of sellers and products, evaluate the available price options, the quality and variety and then arrive at a decision. On the other hand, the farmers who sell on such platforms get the best offer price for their produce.
Overall, the agri-tech companies accepted the challenges thrown by the pandemic and have been able to create need fulfilling tech products and services which has resulted in evolutionary opportunities for suddenly-open-to-tech Indian farmers. The Indian agriculture sector has, therefore, moved a step ahead to adopt and gain the most out of the challenging times.
(The writer is co-founder of Krishify)