Budget 2021: Technology push to farming, increased credit on agritech startups’ agenda
Agriculture accounts for 15 percent of GDP but provides livelihood to more than half of India’s population. But it faces a long list of challenges. A bunch of entrepreneurs have a few ideas on how to fix the problems.
India’s agriculture sector, which has defied the overall economic slowdown this fiscal year, must enhance the use of newer technologies such as artificial intelligence to improve yields and farmers’ incomes, agritech entrepreneurs say.
The entrepreneurs also expect Finance Minister Nirmala Sitharaman to heavily focus on the agriculture sector in her upcoming Budget next week as she attempts to revive the fortunes of the struggling Indian economy.
They also urge the government to increase farm credit and repair the supply chains that broke down when India went under a lockdown in March last year to control the coronavirus pandemic.
To be sure, the farm sector has been the sole bright spot, recording a growth of 3.4 percent each in the April-June and July-September quarters of 2020-21 even as the broader economy entered a recession.
In the last year's Budget, Sitharaman had allocated Rs 2.83 trillion for agriculture and related sectors such as irrigation, and set a farm credit target of Rs 15 trillion. She had also announced 16 action points for farmers that were aimed at liberalising the farm markets.
Watch the YourStory Budget 2021 Roundtable on agritech sector expectations here:
“The government had unveiled several programmes last year, such as the [Krishi] Udaan scheme to improve logistics and an agriculture infrastructure fund. We expect a similar focus on agriculture this year,” said Shashank Kumar, Co-founder of DeHaat, at a panel discussion organised by YourStory ahead of the Budget.
Kumar said the Udaan scheme and farmer producer organisations not just benefit the farming sector also make it easier for agritech players such as DeHaat to connect with growers and help solve some of the sector’s problems.
Anil Kumar SG, Founder and CEO of farm-focused lender Samunnati Financial Intermediation & Services Pvt. Ltd, said the government should sharpen its focus on reaching the intended beneficiaries, especially smallholder farmers.
“A lot of schemes, products and structures often fail because the vehicle chosen to take those to the beneficiaries is not effective or efficient,” he said.
He said that banks have been the traditional vehicles the government has used to target farmers, but it should now “widen its horizon” and look at fintech and agritech startups and new type of lenders such as small finance banks and payment banks.
“The focus shouldn’t be just on making strategies but also on execution,” he added.
The Samunnati founder also said that, unlike popular perception, a lot of young entrepreneurs are coming forward to find innovative ways to tackle challenges such as access to capital and inefficiencies across the farm value chain.
CM Patil, CEO of Krishi Kalpa, a non-profit that aims to connect farmers, government organisations and private players, concurred with Kumar and added that the Budget should also focus on accelerators and incubators. “That will encourage more entrepreneurs,” he said.
Kunal Prasad, Co-founder and COO of agritech startup CropIn, said that agriculture was the only sector that was growing in the post-Covid era and that the government should step up its efforts to make India the “food bowl” of the world.
The government, he said, should strengthen the supply chain and farm infrastructure like storage facilities, provide capital to farmers to grow high-value crops, and increase market linkages.
“In recent years, the government’s focus has been on bringing technology directly to farmers. It has been talking about using AI to support the PM Fasal Bima Yojana and other technologies such as satellite imaging,” he said. “A lot of transformation will happen in the agriculture sector in the coming years.”
