Great boon. Reinventing Indian agriculture throught IoT and AI

Over the last decade, the Indian agri ecosystem has gone through a rapid transformation, made possible due to the emergence of agtech segment, which has created investment opportunities. It has resulted in production increasing and logistics turning efficient. Advances in agtech are hugely relevant to the country’s economy today. The agriculture sector, which is worth $370 billion, continues to remain the primary source of livelihood for more than 40 per cent of the population while contributing 19.9 per cent (FY 2021) to the national GDP. The agtech segment, in particular, has attracted a surge of start-ups that are offering technology-based solutions, thereby allowing large-scale traditional enterprises to focus on increasing operational efficiencies.  

Surge in funding 

As on March 2022, according to industry estimates, India is said to have over 1,000 agriculture start-ups in agtech, employing artificial intelligence (AI), machine learning (ML), internet of things (IoT), etc. India has received total funding of $1.6 billion in agtech startups till 2021, making it the third largest in the world with regard to such funding. The Confederation of Indian Industry (CII), in collaboration with Bain & Company, jointly prepared a report in March 2022 which indicates that private equity (PE) investments are primarily focused on systemic issues in agtech industry and its sustainable development. Private equity investments in agtech startups between 2017 and 2020 amounted to ₹66 billion, with a growth rate of over 50 per cent.  

While the Covid-19 pandemic hampered business dynamics across industries, the agriculture sector remained largely unaffected, rather putting them on an upwards growth trajectory. The consistently growing demand for food has further improved the potential for expanding market reach for farmers and agribusinesses in the country.  

Reforms and government initiatives 

Both Union and state governments are working in tandem to promote agtech in the country. The Digital India initiative has helped the rural economy connect globally. Various reform initiatives have been launched to boost farm revenue in the country, including National Agriculture Market (eNAM - a pan-India electronic trading platform); India Digital Ecosystem of Agriculture (IDEA - an Agristack system for growing farmer income); National Mission for Sustainable Agriculture (NMSA – aimed at increasing Agri output by integrating sustainable technologies) and National e-Governance Plan in Agriculture (NeGP A – for funding modern technologies including AI, ML, drones and Blockchain). 

Agritech Business Models  

Driven by increasing internet penetration in rural India, India stands at the forefront of changing methodologies in agriculture while transitioning from conventional business models to various innovative business models driven by agritech. Emerging business models across the agriculture value chain can be broadly classified into the following three categories.  

• Margin-based: Players create market linkage on inputs or output side, earn margins on buy or sell side 
• Subscription-based: Players offering a mix of hardware, software, and services to help farmers improve crop yield, and track the quality of produce while tracing the produce across the value chain 
• Transaction-based: Players charge on number of transactions served such as a loan and insurance policies 

Broad Categories of agtech applications  

Application of AI, ML, IoT and Blockchain in Indian agriculture may be classified into three broad categories: 

• Crop and soil health monitoring: Businesses that are leveraging sensors and various IoT-based technologies to monitor crop and soil health 
• Predictive analytics: Several AI and machine learning tools are used to predict the optimal time to sow seeds, get alerts on risks from pest attacks, etc.
• Supply chain efficiencies: Businesses that are using real-time data analytics from multiple sources to build an efficient and smart supply chain 

Smart application for better monitoring 

The use of smart applications in agriculture helps in the better utilisation of resources. With the use of applications, we can easily check the quality and quantity of the crops and enable Digital Professional Warehouse Management Solution with instant, transparent, and auditable agri quality as well as supply chain reports. In addition, data about crop health, including types and extents of disease manifestations, can also be tracked. A number of factors contribute to irrigation and fertilizer decisions. In this way, farmers can mitigate damage and subsequent costs in a timely manner.  

Starting point

Considering the impact of agtech and its tremendous growth potential in India’s overall economy, it can help further the development of farmers, consumers and enterprises. We are witnessing a huge surge in the emergence of agtech start-ups in India, driven by advanced technology penetration coupled with a conducive policy environment. This can only be seen as a starting point for the penetration of advanced technologies like AI, ML, IoT and Blockchain in the agriculture ecosystem. These collective technologies come as a great boon to the agricultural sector which is heavily reliant on unpredictable climatic conditions. More cases of AI, ML, IoT and Blockchain in agriculture are likely to show up in the coming decades due to their immense value addition.  

(The author is CEO, SLCM Group)