1. The farmer is not at the centre of innovations
Dilip Kulkarni, food division president at Jain Irrigation Systems said innovations are often not centred on the farmer. They are unable to choose and adopt technologies though they have deep knowledge of their farms and understand why they should stay invested. The farmer should be seen as a partner. Their condition should improve with the adoption of technology.
2. Disruption is not managed
Innovations might create disruption but these must be managed so they do not create resistance from who are affected. This was the view of Kunal Prasad, co-founder of Cropin Technologies, which uses analytics to increase value per acre. For example, there are technologies that do away with food preservation. This will have a radical impact on the food logistics industry. But the concerns of affected middlemen will have to be addressed. Farmers are looking for innovations and are willing to pay so long as they profit from them.
3. Not enough importance to logistics and last-mile service delivery
Rohtash Mal, CMD of EM3 Agriservices, a company that rents out farm equipment, said only ten percent of farmers in India can afford to own agricultural machinery. This can make most western innovations irrelevant for India. Breakthrough innovations in last-mile delivery are at a nascent stage and far from acquiring scale. Cold storages, remote sensing and digitized field-level data are not affordable for most Indian farmers. Jinesh Shah, partner at Omnivore, an agriculture technology fund, said there were not many businesses addressing those at the bottom of the heap. Backward integration of services in agriculture does not attract innovators and funds, as few want to get hands dirty.
4. Investors do not believe in patient capital
Investment in agriculture offers a decent return but takes a long time, longer than market expectations. Funding for agricultural start-ups is not enough; it declined from $123 million in 2014 to $56 million in 2015, according to Traxcn, a tracking agency. India is largely an agro-based economy; there is no dearth of opportunities. While weather risks cannot be avoided, government controls and whimsical policies aggravate the risk. Agtech start-ups in India needs patient capital and an ecosystem geared for scale and success, which is often missing.
5. No data use for decision making
Agricultural data collection in India is done by government and state academic institutions. The biggest challenge is to turn data generated by multiple sources into information which farmers, businesses and policy makers can use. There is little investment is data analytics. Deployment of technology is an area that needs attention.
(Nilotpal Pathak is with Intellecap Advisory Services and leads its agribusiness and debt advisory practices.
Shruti Goel is manager for India and South Asia at Sankalp Global Forum and works on identifying innovative businesses that can sustainably bring social and environmental change).
(Top photo: Mario D’ Alwis, founder Ma’s Foods, Sri Lanka (left), Nilotpal Pathak, Dilip Kulkarni, Rohtash Mal, Jinesh Shah, Kunal Prasad)