Digitisation among farmers has increased manifold in the last 2-3 years with prices of data dropping and this has resulted in growers willing to go beyond traditional means of agriculture, according to Jinesh Shah, Managing Partner of India’s leading agri-tech venture capital firm Omnivore.
This has the “potential to disrupt a few major challenges such as labour, employment and climate change”, Shah told BusinessLine in an interview.
In the past year, due to the Covid-19 crisis, the amount of digitisation witnessed has not been seen in the last 4-5 years, he said.
Omnivore, which has pioneered investments in agri-tech over the past decade, is witnessing more capital coming into the sunrise sector than it had seen during the first five years of its existence.
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Shah said that in the last 2-3 years, they had to put in only 20 per cent of efforts they had made earlier to make farmers adopt technology.
“Initially, we had to go to farmers to talk about technology. But today, excess information is available to them. The ease at which tech solutions or apps can be made has increased,” he said.
Time for pilots down
If it took nearly two years to launch a pilot project in 2012-13 for someone like Omnivore, today that time has decreased by half. “There is significant improvement in farmers adapting to technology. There is no actual data to talk about the percentage but the willingness among farmers to adopt new technology has increased,” the Omnivore Managing Partner said.
Stating that farmers led a simple life with 30-odd interactions with the outside world for inputs, credits, selling the produce at right prices and support for cultivation, Shah said that they were now looking for digital and Internet of Things (IOT) solutions that help to solve these issues.
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“Some are looking for solutions for value-addition and storage, pest attacks, platforms for sale, derive expertise knowledge and get advice rather than believe arthiyas (commission agents) and do what the latter tell them,” he said.
Farmers now get feedback, talk to agronomists, agriculture officials to improve technology, including flying drones. “In the last 12-15 months, the farmer may not have talked directly to the customer but because of the app he uses, the start-ups tell what the consumer wants. The farmers meet the demand and make extra bucks by doing what is required,” he said.
More value for crops
Stating that farmers are increasingly aware of value-addition, Shah said that they are getting more value for their crops. “Farmers are getting more options for their produce. They also get feedback on what to do or whether they are doing it in the right manner or not.
“They also get feedback from customers on better nutrition products such as organic and natural items. Farmers are getting chances to interact with those raising such demands and adapt to the needs of the consumer,” said the official of Omnivore, which has funded 30-odd start-ups in the past decade with 20-plus still active.
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Supply chain response
“If information is available, then farmers are smart to adapt to the developing conditions and make necessary changes. Today, the supply chain response of farmers is good. If onion prices are high, they respond with higher production in three months,” Shah said.
Though Omnivore has been in the field of agri-tech for almost a decade, agriculture has not seen the “real increase in income” for farmers.
“We as a fund come out with technology or get entrepreneurs who can try to optimise farmers’ profitability. Farmers get low prices and have no bargaining power. Technology has to be used to improve the lot of farmers,” he said.
In particular, farmers should understand that only 2-3 crops are grown a year with paddy, maize or wheat getting below ₹20 a kg. “Technology should be used to diversify into poultry or dairy or other value-addition. There is potential to look at these options and go beyond growing crops.” the Omnivore official said.
‘ Improving glamour’
Value-addition can happen in aquaculture, poultry, dairy, rearing silkworms, with focus on value chains. It can help in earning more than in the past. “We want to work around these and find out how farmers can get more,” Shah added.
The venture capital firm’s growth has been in phases with the early days spent only in trying to invest in agriculture. For 4-5 years, it was trying to improve the sector’s glamour and get more investors and investments.
The last 2-3 years have witnessed a sea change with more investors making investments and more entrepreneurs getting involved in the sector making new innovations. “There is more capital now in the agri-tech sector than what we saw in our first five years,” according to Shah.
“Things are becoming better, we are getting more investors who are willing to put in money with portfolio companies. The companies are growing at a faster scale with faster digitisation in the past 2-3 years,” the managing partner of Omnivore said.
Need resilience
Dwelling on the venture capital firm’s role, Shah said that Omnivore was trying to make agriculture more sustainable by “using maximum resources to increase production, resilience of the agriculture sector”.
“The agriculture sector has quite a few issues such as climate change. We need more resilience in the sector. Farmers are not liking what is happening in the sector because they are not sure of the consistency in their income,” he said.
The problem is that farmers’ income is good for one or two years and hence, they are unable to plan their production process. “We would like to increase their resilience and also make them climate-friendly since agriculture contributes 20 per cent of greenhouse gas emissions. If we can help tackle these, we can help climate change and agriculture itself,” the Omnivore Managing Partner said.
Inefficiencies
Agriculture, which offers 40-45 per cent employment in the country, has inefficiencies across the sector despite contributing nearly 20 per cent of the GDP. Omnivore wants entrepreneurs to work on specific or entire value chains and make agri-tech as an influence in the sector.
This will help improve farmers’ income levels and “agriculture will become more interesting as an asset class”, he said, adding that more global investors are looking at the sector that is getting support from all political parties.
“Similarly, large companies are willing to work with start-ups, though not all tech work are done by them,” Shah said, adding that agri-tech now offers chances to investors to recover their returns.
“If time is given, everyone has a chance to make money if they think in the right way. Give some time to the agriculture sector, then farmers to investors can all make money,” he said.
On the farm regulations, the Omnivore Managing Partner said that the Centre had made an attempt to do something different to the agriculture sector after it had not seen any reform over the last few decades.
“In a country like India, opinions are different. All the stakeholders need to talk among themselves and figure out what should be done so that the sector will benefit,” Shah said.