Agri-startups and rural enterprises are becoming increasingly vital for agricultural development in India by addressing critical challenges faced by the sector. These ventures bring in technological innovations such as precision farming, IoT-based monitoring systems, and data-driven decision-making tools that enhance productivity and resource efficiency.
By streamlining supply chains and creating direct market linkages, they ensure better pricing for farmers and reduce dependency on traditional intermediaries. Furthermore, these enterprises play a significant role in promoting sustainable farming practices, providing financial services, and creating employment opportunities in rural areas, thereby contributing to overall rural development and reducing migration to urban areas.
Policy and funding support for agri-startups and entrepreneurs
The government has demonstrated a continuous of policy and funding support for agri-startups and entrepreneurs through three key programs: RKVY-RAFTAAR, and the Agri-Infrastructure Fund (AIF) and Agri-SURE,
RKVY-RAFTAAR: This initiative is aimed at early-stage agri-startups and provides grants of up to ₹25 lakh. With a total allocation of ₹122.5 crore, it has supported 1,708 startups. RKVY-RAFTAAR emphasizes fostering innovation and entrepreneurship in agriculture.
Agri-Infrastructure Fund (AIF): Targeting mid-level startups that require infrastructure development, AIF offers loans of up to ₹2 crore with an interest subvention rate. Backed by a ₹10,000 crore subsidy, AIF has supported 1,726 projects. This program focuses on enhancing infrastructure essential for agricultural growth.
Agri-SURE: This programme is designed to support mature agri-startups with substantial capital needs, offering up to ₹25 crore per startup. The total fund allocated for this program is ₹750 crore, benefiting approximately 85 startups. Agri-SURE focuses on various advanced agricultural areas, such as precision farming and post-harvest management.
A strong financial foundation
The AgriSURE Scheme’s financial structure is meticulously designed to support startups at various stages of development. This scheme combines government contributions with private investments, ensuring a diversified and sustainable funding base.
Managed by NABVENTURES Ltd., a wholly-owned subsidiary of NABARD, the ₹750 crore fund is divided into two key components:
· Direct investment scheme: Allocating ₹300 crore for direct equity investments in early-stage startups, this component targets startups registered with the Department for Promotion of Industry and Internal Trade (DPIIT). The funding enables these startups to scale their innovations in agriculture, invest in modern equipment, adopt sustainable practices, and expand their market reach.
· Fund of Funds (FoF) Scheme: With a larger corpus of ₹450 crore, this component channels funds into other Indian Alternative Investment Funds (AIFs) focusing on agri-startups. Each AIF can receive up to ₹25 crore, or 5% of its total corpus, to invest in relevant startups. This structure not only supports individual startups but also strengthens the broader agricultural investment ecosystem.
Driving iInnovation and sustainability
The AgriSURE Scheme is projected to support around 85 startups by the end of its 10-year tenure. A core objective of the AgriSURE Scheme is to foster innovation in agriculture by encouraging the development of new technologies and solutions. This includes advancements in water-saving irrigation techniques, soil health monitoring, and IT-based farm management tools. The scheme also aims to create employment opportunities in rural areas, contributing to the economic upliftment of rural communities.
As Indian agriculture grapples with the challenges of climate change and resource constraints, the AgriSURE Scheme offers a pathway to more resilient and sustainable agricultural practices. By supporting startups that are at the forefront of climate-resilient innovations, the scheme is expected to leave a lasting impact on the agricultural sector. The fund may prioritize sustainable farming practices, supporting agri-startups that innovate in water and nutrient-efficient crop varieties, shorter growth cycles, and regenerative agriculture. Encouraging startups focused on waste-to-wealth management will also add significant value to agriculture.
Shaping the future of Indian agriculture
The AgriSURE Scheme represents a bold step toward transforming Indian agriculture. By providing critical financial support to agri-startups and rural enterprises, the scheme is expected to drive significant improvements in farm productivity, promote sustainable practices, and create new opportunities for farmers across the country. As India enters an era of agricultural innovation, AgriSURE stands as a beacon of hope for farmers, startups, and the entire rural economy, heralding a new chapter in the nation’s agricultural journey.
Rana is Joint Secretary (INM) at the Ministry of Agriculture and Farmers Welfare, Government of India, New Delhi, and Saravanan Raj is Director (Agricultural Extension) at the National Institute of Agricultural Extension Management (MANAGE), Hyderabad.