Agricultural Sector Anticipates Incentives For Innovation

Agritech as an industry is anticipating a turbocharged growth from Union Budget 2023. Agritech was the only sector outshining in the pandemic and has accelerated digitisation among farmers making it ripe for innovation. Number of agritech startups has shot up 20x i.e. close to 2000 in the last 4-5 years. Agritech was first mentioned in the last year’s budget paving the way for startups to create dialogue and share their take on industry level problems.  

Agriculture has been highly a state subject and dominated by heavy licensing requirements. For the past few years anticipation has been to relax and ease operational level requirements. Compared to previous years, 2022 was affected by global macroeconomic headwinds owing to geopolitical issues, supply chain disruption and climate change. But India seemed to have delved into the opportunity given the export contribution from India which has been rising continuously and has broken records in FY22 with close to 50Bn$ in value. But still the production cost is high and unsustainable due to the cost of inputs and climate related uncertainties. 

With inflation looming over this year’s budget should incentivize technology instead of fertilisers to improve farm-level input usage because in the long run it can provide best RoI and a sustainable path. Subsidies need to trickle first at technology level especially for deep-tech startups e.g. Drone manufacturing or IoT can be provided an umbrella under PLI scheme then the next level of subsidy on farms to increase farmer adoption. Startups are also expecting that the Union budget creates better provisions for private sector investment and taxation/GST laws.

MSP policy has always been on charts of discussion but still needs to be oriented well if we want to diversify crops which have better margins especially fruits & vegetables. Startups have been able to create support systems both on input and output side in the form of better credit, logistic, storage and export facilities. At service-level the government can rely on these turnkey solutions and create regulatory frameworks. This will bring price stability and improve farmer’s income.

Research institutes have played an important role in developing technologies but a lot of them still need to see light outside the lab, big conglomerates still prefer to have in-house R&D and even outside the country. They are deterred on adopting these technologies and the same is the case in industry-startups collaboration which is still not prominent. Therefore a national level forum needs to be created to pave the path for greater innovation in upcoming years. 

Lastly, awareness to propagate policies, initiatives and technologies needs to have a significant budget. If the budget for the past two years has been presented in paperless form why rural areas still struggle on offline centres and paper mechanisms? With increased internet penetration information can travel much faster if structured well on government websites and portals. If farmers are offloaded with arrays of operational issues they will have better mental-health (which is not much talked about) and will be able to navigate and contribute better to the 5 Trillion Dollar dream.

(The author is Co-Founder, NEERX, a smart farming app)