Will Agri-Techs Curtail The Food Catastrophe?

The war is battering a global food shortage which has been crippled by the pandemic, climate change, inflation, and a jump in global crude oil. 

The World Health Organisation (WHO) report states that in 2021, 828 million people were affected by hunger globally, and 150 million of those were hit hard by the Covid-19 under the agenda for Sustainable Development, the WHO has projected a target to end hunger, food insecurity, and malnutrition by 2030.

The war in Russia and Ukraine has also caused an increase in food prices, which has contributed to the global food shortage. Due to the Russian-Ukrainian war that has been raging since February, developing countries across the globe are experiencing severe food shortages.

Before the war, India was a major exporter of tea, marine products, coffee, fresh fruits, buffalo meat, guar gum meal, rice, etc. Along with that, in minor exports, India traded processed fruits and juices, tobacco, sesame seeds, spices, etc. On the other hand, the imports from Russia included pulses, vegetable oils, spices, alcoholic beverages, marine products etc.

It is estimated that Russia and Ukraine export nearly all of the world's wheat and barley, as well as more than 70 per cent of the sunflower oil, and are also one of the biggest suppliers of corn. Russia is the leading exporter of fertilisers for agricultural practices. 

The United States Food and Agriculture Organisation states that nearly 400 million people are reliant on Ukrainian food supplies. Nearly 181 million people in 41 countries have been the victims of the food crisis.

The International Food Policy Research Institute has cautioned that in the future, if food shortages increase as the war continues, it would lead to more restrictions on exports and cause greater inflation.

Rise of Agri-Techs

The Covid-19 has been a stumbling block, affecting the supply and demand factors of the agriculture value chain and increasing the issues that are related to food security. Arif Husain, chief economist, said in the World Food Programme (WFP) report that millions of people depend upon the flow of trade and in every way, commercial trade should take place as the interruption may have a negative impact on people's food security, which is highly concerning. He added that there is a slight decrease in purchasing power in poor countries as they do not have the financial liquidity. 

But the pandemic has been a blessing in disguise as digital technology and innovative solutions were adopted, which gave rise to the agri-tech models. New tech business models, such as E-Commerce platforms, are undoubtedly assisting smallholder farmers in increasing their income by directly connecting them to customers. The advances in the agricultural sector have definitely increased access to data for all the stakeholders, which increases transparency in communication among the value chain players. It also helps them to practise sustainable farming.

On A Path Of Resilience: Agri-Techs in India

In recent times, agritech innovations such as digitization, IoT, AI, data analytics, drones, and so on are transforming India’s agrarian sector by addressing the chronic issues. The policy environment is also conducive and is evolving in parallel to suit the emerging needs. All these are placing India in a unique position where its economy will not only be self-reliant, more resilient but also self-sufficient in ensuring food and nutritional security for its 1.3 billion population sustainably, "asserted Raghavan Sampathkumar, Policy Advocacy and External Affairs, Samunnati (agri enterprise).

According to the Federation of Indian Chambers of Commerce and Industry (FICCI), agri startups in India are growing at a rate of 25 per cent, and they offer tech solutions to help Indian farmers stay on track in the supply chain.The study also stated that the agri-startups helped in providing aggregation and the distribution of farm produce from the farms to the consumers.

Funding has never been an issue for agritech as India ranks third, right after the United States and China. Jitendra Singh, Union Minister of State for the Ministry of Science and Technology, said that Indian agriculture has immense potential for technology adoption, conceding the size of the country's population. He added that with the adoption of modern technology, the sector will be able to enhance its production efficiency and revenue.

The minister also emphasised on 'Tech Bharat' and transforming India's food take on the agronomic landscape, which is one of the important pioneers of the Indian economy. The entrepreneurs and startups are acting as a bridge between the farmers, input dealers, wholesalers, and retailers who are providing them with a quality product on time.

Under the Ministry of Agriculture and Farmers' Welfare, the government has set up the top National Agriculture Market (e-NAM) scheme with the objective of providing a transparent and competitive building system to help farmers with remunerative prices for their crops. Still, some of the old mandis are currently providing online trading facilities to the farmers, and nearly 2 lakh traders have registered on the e-NAM platform.

The National Bank for Agriculture and Rural Development (NABARD) has managed to accomplish the milestones in 2021-22 through its initiative as a concessional refinance of Rs15,000 crore has been disbursed to the regional rural banks to help the capital formation in agriculture. Till now it has promoted 6,395 farmers' producer organisations (FPO) by providing a grant of Rs 947 crore. It has provided Rs 100 crore in capital funds to help 28 agri-techs. Girivasan Iyengar, Senior Vice President at Armgate Technologies Private Limited and Honorary Member of the National Logistics Committee, FICCI said, "The government is moving in the right direction by providing funds for FPO for creating infra. In the long run, this will change the agricultural landscape of our country. If implemented properly, FPOs can play a significant role.

Hurdles in the way..

Due to the pandemic and other disruptions, there are many obstacles that may arise in the development of the agri-tecs in the country. Getting insights on how well today’s farmers are equipped with technology, Aruneshwar MGB, Founder & CEO of Grow Your Farms Private Limited, said, "Yes, Indian farmers lack behind in adopting new technologies. Many policy decisions fail irrespective of following a bottom-to-top approach because, 90 per cent of the time, bottom-level agriculture department officials do paperwork in the office rather than going to the field and knowing what the farmer wants."

Sampathkumar also commented on this issue that scale-neutrality is another important factor that is vital for enhanced adoption of technologies, particularly digital ones, by farmers. At the production end, several agtech companies are providing real-time, highly accurate, reliable weather forecasts and pest and disease alerts.

Another hurdle which may cause a barrier is the growing inflation. "The production costs of farmers can be lowered  when they are able to  access good agronomic advisory services and agricultural inputs and the inflation of raw materials will not bother them.Another issue is the non-availability of labour. By adopting improved machinery and equipment for farming operations, farmers can save a lot of money on labour and unnecessary inputs,” Aruneshwar MGB commented.

The agri-tech experts added that India still loses close to 40 per cent of its horticultural production, mainly due to poor post-harvest management, lack of processing facilities, lack of connectivity via roads, lack of scientific storage during distribution, and so on. Farmers lack access to timely information and actionable advice, and price signals do not reach them in time. Hence, the agri-commodity supply chains in general are operating at sub-optimal capacities. Many agritech start-ups are working on this major issue, including the extension of the shelf life of fresh produce, solar cooling, processing, and value addition such as 

solar drying, and enhancing traceability in the commodity value chains. Moreover, agritech startups eliminate the commission the agents receive by procuring directly from farmers and reduce losses that happen during the transportation of commodities from hand to hand, unlike the ‘Agri Output Supply Chain’, where farmers are generally forced to sell to local middlemen.

The combination of agritech, fintech, and rural tech sectors benefits the country, and the easy access to finance will aid the  risk-averse farmers, so they can invest in quality inputs, and technologies, which will ultimately enhance their incomes. 

To curb the issue of global food shortages, it is necessary that the Indian agri-techs are marked on the global charts. "Many innovative Indian companies and start-ups have successfully expanded their footprints into other regions where the agrarian economy and socio-economic profiles are similar to that of India," Sampathkumar said.