Digital Disruption In Indian Agriculture

Agri-tech is clearly the next big thing in digital. As per NASSCOM, the global agri-tech investment in 2016 was US$ 3.2 bn and in the same period India got about US$ 320 mn funding for 50+ start-ups.

- Girija Shankar

Over the last few decades, India has made great strides in services and manufacturing – yet, agriculture remains one of our biggest value creators. not only does agriculture contribute to 17% of India’s GDP, it provides a livelihood for 50% of our population and constitutes about 400B US$ of economic value. Yet the agri economy remains under stress. While digital forces are reshaping industries ranging from retail to telecom to entertainment, the value chain in agriculture has remained rather untouched.

Despite being among the top global producer of pulses, rice, milk, jute etc., our agri value chain is widely acknowledged to be among the most broken and inefficient globally. For example – the rice yields in India are 40% of US levels and lower than many other emerging nations; worse, the Gross Value Addition (GVA) growth per agriculture worker is less than half of global averages. There are three primary issues here

One, the level of farm mechanisation is about 35% to 40% in India while most developed countries have over 90% mechanisation. Second, farmer value realisation is between 20 % to 30% versus the global benchmark of 50% to 60%. Third, food processing is still less than 15% in India compared to global averages of 30% to 40%.

Each of these underlying factors are about to change and as it happens, it could create a strong impetus to India’s overall economy. A combination of factors is at work: Rise of the Indian Consumer; Emergence of AgriTech; Data Revolution in Rural India and lastly Govt of India Vision to Double Farm Income by 2022!

RISING INDIAN CONSUMER