Agritech start-ups are offering solutions across the supply chain to improve farm productivity and profitability using technology solutions
India is an agriculture economy, with 58 per cent of the population depending on it as its main source of livelihood. A Mordor Intelligence report suggests that the industry in India is expected to grow at a CAGR of 4.1 per cent from 2019-2024, up from USD 32.2 billion in 2018. Agriculture contributes around 16 per cent of the GDP, 13 per cent of India’s exports and 6 per cent of total industrial investment.
While this sounds like great news, it is not without caveats. Urbanization, demographic changes, climate change and globalization have impacted agriculture too, reducing arable land and water but increasing the demand for food. In 2020 alone, agricultural production will have to increase by 60 per cent to meet the demand. To top that, nearly 16 per cent of fruits and vegetables are wasted due to poor storage and transportation facilities.
Apart from increasing production, there is greater need to improve efficiencies, reduce costs and, thereby, increase profitability. Like in any manufacturing industry, here too the components that make up farming are many and diverse, and each requires a different set of solutions. Farmers ingrained in traditional practices and approach are, by and large, unable to revolutionise the way they work in the farm, which is leading to a rise in distress and difficulties.
Agritech is an emerging field that marries technology solutions with farming practices, covering the entire chain of activities, to help farmers overcome their problems and see profits.
WayCool, for instance, works hand in hand with over 35,000 farmers across the country at every level of the farming business with a desire to increase farmer welfare. Founded in July 2015 by Karthik Jayaraman and Sanjay Dasari, WayCool helps to organize the fragmented supply chain using operational excellence capabilities by deploying technology and automation.
It works through FPOs (Farmer Producer Organizations)/Companies, grouping 1,000+ farmers in a certain region to plan cultivation, negotiate prices, and share information easily. “We have signed MOUs with the National Agro Foundation, MS Swaminathan Foundation, Government of Andhra, and the Government of Maharashtra, specifically focused on the creation and sustenance of FPOs in various regions,” explains Dasari.
Apart from this, WayCool also runs rural collections centres that are operated by local farmer entrepreneurs and builds the farmer relationship at all levels. Lately, WayCool has launched a farmer advisory program called Outgrow to help in seed selection, market forecasts and liquidation plans.
Outgrow program uses proprietary demand forecasting and supply planning tech to guide farmers on how much to harvest right from how much to plant, when to plant, how to grow high quality products, and more.
Farmers also get advisory on better crop planning, improved produce quality and productivity, lower cultivation costs, assured returns, and fair pricing. Most importantly, they enjoy substantial increases in both yield per acre and product quality, increased income, faster payments. Overall, farmers are treated more as entrepreneurs and business owners while working with WayCool.
As of today, the reach is 35,000+ farmers spread across 51 regions in 10 states – Maharashtra, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Madhya Pradesh, Gujarat, Bihar, etc. This farmer base is across fruits, vegetables, rice, dal, wheat, etc. The farmers enjoy substantial increases in both yield per acre and product quality, increased income and faster payments (entirely online with zero cash involvement) due to WayCool’s deep backward integration. “Through this, we are able to hit our social impact goals as we contribute to the welfare of 35,000 farmers by paying them 100 per cent digitally within 3-5 days and bringing them at least a 20-45 per cent increase in returns,” Dasari notes with satisfaction.
The Tools for Success
KisanKraft Limited, incorporated in 2005, enables mechanization of small and marginal farm and alleviate labour shortage. “We do lot of innovations in product development keeping in mind the farming practices and patents for machinery,” explains Ravindra Agrawal, Founder. He was working in Microsoft, US, and visited his village after 25 years during a vacation. He saw that the farmers’ plot sizes had become smaller but the tools had remained the same. They could not afford tractors and other farm equipment, and urban migration of labour made farming challenging. “In my own yard, I had plenty of yard equipment like cultivators, chainsaw and what have you. I saw a match here and thought I could help the small farmers,” he says. He quit his job and moved back to India to mass produce machines, modify them for agriculture usage, keep the cost very low and make it available to the farmer. Today, farmers not only use his equipment on their farms but also rent it to other farmers, thus earning an additional income.
The company has around 4,000 dealers across India and provides timely after-sales service as that is very important for machinery business.
The company also started a seed division a couple of years ago that researches and develops new seeds. “We have developed a rice variety that will take less than half of the water consumed by regular rice. We improve the nutritional value of grains and improve the package of practices implemented by the farmer,” explains Ankit Chitalia, CEO, KisanKraft.
Package of practices refers to the various activities related to farming, which the two realized were outdated. Overuse of chemicals had led to the desertification of land and they tended to flood the fields even when not needed. Therefore, the company spends time educating farmers on how to prepare the soil, how to soak the seeds, how much water and fertilizer to use, when to use, all the intermittent steps, how to harvest, when to harvest and so on. “The biggest problem is that farmers don’t know and they have no inclination to change. It’s a huge challenge to change the mindset,” admits Agrawal.
Tracking the Milk Chain
Dairy is one of the most important crops of India, with largest number of dairy farmers – 76-80 million – and 300 million cattle, according to Aparna Divakar, Marketing Manager, Stellaps Technologies. Founded by Ranjith Mukundan (CEO), Ravishankar G. Shiroor (Business Development Head), Praveen Nale (Chief Technology Officer), Ramakrishna Adukuri (Head of Software Solutions) and Venkatesh Seshasayee (Head of Domain Solutions), the company offers end-to-end digital solutions for the dairy industry to digitize data at every point of the milk collection chain. Stellapps works with dairy companies and serve more than 170 customers including Karnataka Milk Federation, Aavin, Amul unions and so on in 23,000 villages, collecting seven million litres per day – which is six per cent of the whole milk market).
Its SmartFarms cloud-based farm and herd management system enables animal recording, productivity and peak-yield management, breeding, preventive health care, fodder management and veterinary care, powered by a powerful proactive analytics module. It has an Automatic Milk Collection Unit (AMCU) solution called smartAMCU that optimizes and simplifies milk procurement for dairy farmers, milk collection centres, and societies. Advanced analytics and seamless MIS integration enable real-time acquisition and dissemination of milk procurement data, thereby improving procurement efficiency.
Apart from this, it also offers a cold chain management application called ConTrak, a farmer wallet application called AgRupay and a cattle insurance application called MooKare.
The company already is present in Sri Lanka and has entered the European market as well. “Ensuring usability of the product and providing services in the local language are very important,” points out Divakar.
At the Policy Level
The sector is seeing much activity and saw $248 million funding as of June 2019, a 300 per cent increase from the previous year according to the IT-body NASSCOM. While individually companies are doing their best to solve problems, there are also policy-level changes that are needed to make the transformation more meaningful. For instance, the tender process is outdated, according to Divakar, when milk federations and cooperatives seek IT partners. “We are one of our kind as we provide end-to-end solutions. Therefore, the traditional tender process is not the right way to judge our capabilities,” she opines.
According to Agrawal of KisanKraft, the agriculture sector is overly regulated, needing approvals that take 14-18 months after application. “This discourages seed development. Permission for selling seeds also needs permission from every district and should instead be at the state or the national level,” he adds.
Dasari commends the government’s intention that takes cognizance of multiple angles and approaches. “From the centre and state, there are many new initiatives and schemes that people are proposing to help drive modernization and upskilling of this industry. The fact is that different policies will work for different states, given the lack of standardization in farming infrastructure, land holdings, and crop patters between states,” he points out. As there is no one solution possible, he suggests specific focus points on cleaning up of land records, agri value chain financing under priority sector lending, enforcing stronger food and safety regulations in the consumption markets, and driving more investment into startups engaged in this industry.