Agritech stakeholders ask for easier credit, digital public solutions in Budget
From cold warehousing solutions and market access platforms to high-speed internet and accessible credit, stakeholders in the agritech sector have many expectations from the Union Budget 2024.
According to the Observer Research Foundation, the Indian agriculture market accounts for 18.3% of the country’s gross domestic product (GDP) and employed nearly 158 million people in 2022-23.
The Union Budget 2024 holds critical importance in addressing challenges related to agritech in the country. Stakeholders are hoping for solutions to navigate issues related to insufficient credit, lack of digital public infrastructure supporting agriculture and robust market access systems.
However, the government’s strides leave much to be desired. Agritech stakeholders have voiced a need for government support in helping startups get traction, stay afloat, and tap into public infrastructure for digital penetration in the Union Budget set to be unveiled on July 23.
Expanding credit
Founders, investors, and other stakeholders in the agritech sector are looking at tying up current credit schemes with the adoption of agritech practices to generate more demand.
“The Rs 6,000 per year provided under this (Pradhan Mantri Kisan Samman Nidhi Yojana ) scheme could be tied to farmers implementing new, more productive, and climate-smart agricultural technologies,” says Anand Chandra, Co-founder and Executive Director at Arya.AG.
Rishabh Singh, Managing Partner at Aeravati Ventures, agrees, saying, “There is a strong expectation for an increase in the agricultural credit target, potentially to Rs 22-25 lakh crore, to ensure that every eligible farmer has access to formal credit.”
Just a week ago, the National Bank for Agriculture and Rural Development (NABARD), along with the Ministry of Agriculture, announced the Agri SURE fund of Rs 750 crore through its NABVENTURES unit to bring technological advancement to the agriculture sector that accounts for over 20% of India’s income.
Support for agritech startups
Founders and investors are also looking at the government to introduce tax breaks, financial assistance, and credits to agritech startups for innovation.
Rohit Bajaj, Co-founder of Balwaan Krishi, goes as far as to ask for “a 10-year tax holiday for startups and small businesses engaged in developing and implementing agritech solutions.”
Singh suggests, “Encouraging public-private partnerships to drive innovation and providing grants to agritech startups” to foster a dynamic and resilient agricultural sector.
Need for agriculture-centric DPI
Multiple founders voiced a need for creating agriculture-centric digital public infrastructure and setting up infrastructure that allows farmers to access these digital tools.
Arya AG’s Chandra suggests the creation of an Open Network for Digital Commerce, especially catering to the agritech logistics sector, hoping that the “platform would allow various agritech players to connect and streamline processes related to input delivery, output collection, and distribution.”
He adds, “It could also facilitate the integration of individual truck movement platforms.”
Sat Kumar Tomer, Founder and CEO of Satyukt Analytics, hopes for digital payments to facilitate online transactions among farmers and the development of data analytics systems that provide insights for better decision-making in farming practices, crop management, and supply chain logistics.
Development of smart warehousing
Satyajit Hange, Co-founder of Two Brothers Organic Farms, highlights the importance of “implementing smart warehousing in key agri clusters”, as inadequate refrigeration forces farmers to sell their produce in a specific area.
Swarup Bose, Founder and CEO of Celsius Logistics, says it would also support the growth of quick commerce by adopting advanced technologies like automation, AI-powered analytics, and blockchain, besides a focus on environmentally conscious practices and regulatory compliance.
“Strengthening the supply chain with advanced technology will facilitate real-time tracking of goods in transit and help manage temperature-sensitive products,” he says, adding that a more streamlined regulatory and compliance process would attract not only domestic but global investment as well.
“Enhancing warehousing facilities and promoting the use of electronic Negotiable Warehouse Receipts (eNWRs) could significantly reduce wastage and improve access to finance,” adds Singh of Aeravati Ventures.
Challenges with market access
The regulatory landscape of the agritech sector is inconsistent across Indian states, creating uncertainty for a business introducing new products across the country.
Bajaj of Balwaan Krishi points out that “the approval process for agritech technologies can be lengthy and cumbersome, requiring multiple clearances from different government agencies.”
On a similar note, Hange says, “Infrastructure deficits for storage transport and broader market access are key barriers hampering the growth of the agritech sector.”
Arya AG’s Chandra calls for government support in “organising or sponsoring high-level delegations and events to promote Indian agritech products internationally on a revenue-sharing model.”
Tomer points out the need for developing “online platforms that connect farmers with buyers, suppliers, and other stakeholders, enhancing market access and transparency, and finally high-speed internet to access all these DPI systems.”
Improving connectivity
Besides creating digital public infrastructure, it is important to set up systems in rural India to access these technologies effectively.
One of the key bottlenecks with the adoption of technologies in the agriculture sector is the lack of awareness and knowledge about upcoming technologies, available schemes, and potential benefits.
Hange highlights that only 30% of rural India has access to high-speed internet.
On a similar note, Tomer calls for “improving digital literacy among farmers, ensuring reliable internet connectivity in rural areas, and integrating more regional markets into the platform.”
Singh adds, “Key areas of focus should include the expansion of high-speed internet in rural areas to facilitate the use of digital tools and platforms by farmers.”
Edited by Suman Singh
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