Major Challenges faced by Agritech Start-ups

Agriculture has always been the backbone of our country. It is the primary source of livelihood for about 58 per cent of India’s population. Gross Value Added by agriculture, forestry and fishing is estimated at Rs 18.53 trillion (US$ 271.00 billion) in FY18. The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year due to its immense potential for value addition.

Today, multiple startups are trying to change the landscape of agriculture in India with the use of technology. These firms are trying to break into the country’s agricultural landscape using newer business models. That will not only create a viable business model but will also improve the farmer’s income. The Modi government, in its manifesto for the elections, promised to double farmer’s income by 2022. In the recent budget too, Finance Minister Nirmala Sitharaman emphasised on “gaon, garib aur kisan” being the government’s agenda.

Major problems faced by Agritech Start-ups:

• Information on sowing and pre-harvest activities: Large companies that depend on agricultural produce want information on sowing and pre-harvest activities up to harvest. They also need a model where farming communities can adopt technology to create sustainable benefits — such as weather alerts on phone, best practices on farming, and advice on taking care of pest attacks.
• Low productivity and lack of visibility: Low productivity and lack of visibility in Supply Chain is another factor that affect the agritech business. Many start-ups are taking help of Blockchain and Artificial Intelligence to solve these issues.
• Government policies: Although government has made a shift in their policies related to agriculture but we still have a long way to go. Today we have Digital India, Make in India, Start-up India, Skill in India but nothing converges at the farm level.
• Lack of commercial guidance: Many of the existing agri-enterprises, despite tasting initial success, are facing difficulties to expand their businesses beyond a point because of lack of commercial guidance. Such support is normally provided to the start-ups by the project incubators by helping them in capacity building, networking, accessing knowledge and resources, and other kinds of needed expertise. But, regrettably, not many of the existing 300-odd incubators and their advanced version called accelerators have the expertise and competence to guide the farm-oriented enterprises.
• Climate change, water availability and droughts: Trends shows that there is concern over disaster management in the country, especially when it comes to drought. Start-ups should focus more on new technology to handle these problems.
• Technology: With technology developing faster than ever, the skills needed to make use of this technology is essential. It also influences research and development. The Fourth Industrial Revolution is something to keep an eye on in agriculture and agro-processing.
• Energy: Energy security can be improved by renewable energy sources. Purchase gave an example of GWK in rural areas that are affected by electricity that is being cut off due to municipalities not paying Eskom. In some areas, water is also being cut off.
• Funding: Funding still lags the broader tech industry because the industries are geographically and conceptually outside areas flush with funding, this remains a challenge for upstart innovation programs. Many state governments are providing grants to push innovation forward but that is still very limited. This leaves agricultural start-ups in a tough position, they will have to find profitability sooner than most.
• Connectivity in rural areas: In many remote rural locations across the world strong, reliable internet connectivity is not available. That, in turn, preventing the attempts to apply smart agriculture techniques at such places.
• Mounting e-wastes: With smart technology coming, a new risk has cropped up in the form of electronic wastes. In 2013, the total volume of such wastes was in excess of 52 million metric tons – and the piles of discarded IoT tools and computers and outdated electronic devices are compounding this problem further. In a nutshell, the regular hardware upgrades are making the older units obsolete – and in many areas, dumping them is causing landfills. For things to be sustainable, proper arrangements for the disposal of e-waste have to be made.
• Barriers to entry for new firms: The big hardware/software manufacturers that entered this market at an early stage still have a definite ‘first-mover advantage’. The lowly competitiveness of the market can prevent new firms from entering in this domain. The resources and platforms provided by a big player in the agro-IoT sector might not be compatible with those provided by a smaller OEM – and that might prevent the latter from having enough clients.
• Loss of manual employment: As IoT in agriculture becomes more and more mainstream and things become automated – a large percentage of this agricultural labour will lose their jobs. The other sectors need to have the capacity to absorb this workforce and in many of the developing/underdeveloped countries, the economy is not strong enough for that to happen.