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Diversification Of Indian Agriculture Sector Amid The COVID-19 Pandemic

Consumers across the world are looking for plant-based healthy food that has generated a completely new demand in the sector.

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The unprecedented challenges posed by the pandemic has surrounded the world with uncertainty. From restricting the movement of people to goods, it has disrupted almost every business sector and agriculture is no exception. The disruption in the supply chain, growing demand, and low production capacities have impacted the sector like never before. Such common challenges have made new-age entrepreneurs make use of technology in an unparalleled manner and unleash the growth potential of the sector.

India’s 58% of the population is dependent on agriculture that suffered huge losses in the initial two months of the lockdown. This has given a significant rise in the number of agri-tech startups coming up with innovative solutions. According to industry estimates, the number of agri tech startups in the country has reached more than 1000 startups in 2020 from 43 startups in 2013. Furthermore, the industry data suggests – the Indian agri tech market is projected to cross $24.1 billion by 2025.

It is clearly visible that the sector’s growth is driven by increased penetration of the internet and smart devices in rural areas. Additionally, the emergence of tech-oriented startups in the domain have created a rippled effect that has helped in gaining resilience during the COVID crisis. Further, the Government of India also responded profoundly to help farmers navigate through the crisis. More innovative solutions were introduced in the country to drive the sector during and post COVID world.

Addressing supply chain challenges

Before the pandemic hit the country, the sector was facing challenges related to the availability of healthy land for farming, groundwater, and labour migration to urban areas. However, the sudden announcement of the lockdown and economic slowdown resulted in a radical shift towards addressing the challenges related to supply chain management. This has also allowed the agri tech startups to come up with innovative and personalized solutions that can tackle such challenges and reduce their impact.

The widespread adoption of new-age technologies is making the agriculture supply chain function efficiently. Additionally, the capabilities in data management and online trading of the farmers’ produce streamline inventory administration, and distribution to drive revenues. Through digitized solutions, the flow of not only the products but also information between the supply chain members can be optimized. The procurement of materials, production, and distribution to the end consumers was affected during the crisis. However, with an integrated supply chain solution, there is reduced inventory cost, time efficiency, transparency, and retention of consumers.

Automation in agriculture

The agri tech faced several challenges due to consumer preferences changing to healthy and immunity building food during the pandemic. Such challenges require an immediate solution to keep with the demand and make the supply on time. Consumers across the world are looking for plant-based healthy food that has generated a completely new demand in the sector. Additionally, there is a huge urban migration of labour from rural villages that have affected the production of local farms.

In such scenarios, automation in farming plays a crucial role that not only improves the production capacity but also increases the quality. The advancement in farming technology has revolutionized the sector through automated machines, AI-enabled seeding and weeding process, automated irrigation, and harvesting. Furthermore, the use of technology empowers farmers in practicing agriculture in a controlled environment. The use of drones in the monitoring and analyzing field also helps farmers in making informed decisions at right time.

Focusing on market linkages

The centuries-old agriculture sector in India had to undergo a dramatic transformation. During the onset of the pandemic, digital technology accelerated the transformation phase and empowered the whole farming community. The widespread adoption of technology focuses on linking the market through online platforms that connect the sellers i.e., the farmers with potential buyers. Considering the capabilities of technology, the sector is witnessing sustainable growth with easy linkage to the market.

Similarly, technological advancement is also making the use of data to help farmers know about consumer preferences and trends. It further assists them in reducing food wastage and losses incurred due to the lack of awareness.

The scale of technology adoption in India is expanding at an exponential rate. During the adversity, innovative agri-tech startups played a crucial role in increasing the farmers’ income and improving their crop yield. Though the agri tech startup ecosystem in India is at a nascent stage, it is still revolutionizing the way agriculture is practised in the country.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Munish Bhatia

General Manager & Partner India Accelerator

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