Farmers may be up in arms against India's recent agri-laws, but technological and regulatory changes in the farm sector is likely to create a $30 billion to $35 billion of value pool in agri-logistics, offtake, and agri-input delivery by 2025, estimates global consultancy Bain & Company.
In a just released report, Bain considers setting up integrated agritech platforms, creation of incubation wings for new business models, and reinvention of current businesses as key for agri-tech companies to leverage these opportunities.
The report, ‘Indian agriculture: ripe for disruption’, said the idea of doubling farmer incomes in the next few years is likely to become a reality based on the technological and regulatory changes in this sector. It also points out that agritech and agri-ecosystem sectors have seen significant interest from the investor community over the past few years. "India is the third-largest nation in terms of funding received and start-ups in the agritech space. We believe there will be significant value creation in the agricultural value chain across the entire ecosystem over the next two decades, which will fundamentally change the way we produce and consume food in India and globally," it said.
Between 2017 and 2020, India received about $1 billion in agritech funding. The top deals in agriculture were investments into companies like Ninjacart, AgroStar, Mahyco Grow, Husk, WayCool Foods and Products, Jumbotail, Vahdam, and DeHaat (Green AgRevolution), the report pointed out.
The report foresees precision agriculture, agritech services, biotech, marketplaces, farmer services platforms, monitoring and analytics, farm management to disrupt traditional agriculture. Similarly, vertical farming/controlled environment agriculture, regenerative agriculture, sustainability services, carbon trading have been projected as new sustainable farming models. New food products and uses like alternative proteins, alternative feed, ocean farming, cell-based food/ingredients, green ammonia/hydrogen have been projected as emerging opportunities.
"There are three key ways for firms across sectors to capitalise on the opportunity to reinvent Indian agriculture by leveraging the technology ecosystem: Companies in the agriculture sector could build an integrated agritech platform; Companies in the agriculture sector could digitally transform internal business processes to adapt to regulatory and technological changes; Companies in other sectors could exploit the rapidly developing agritech ecosystem through a corporate venture capital centre of excellence (CoE),” the report said.
Lauding the three farm laws against which hundreds of farmer organisations have been protesting for months, Bain said those laws are intended to encourage investment in direct farmer purchase by corporates (without APMC tax), free movement of food items from production to consumption centres, and private investment in storage. "When the above three reforms come into operation, there will be a host of new business opportunities", the report said.
According to the Bain report, firms can save 5 to 10 per cent or more on procurement costs of food items through a concerted national strategy. "The Agriculture Produce Marketing Committee reforms will enable corporates to buy directly from the farmer. The Essential Commodity Act reform incentivises investment in storage and transportation infrastructure, resulting in supply chain efficiencies. We are at the cusp of a massive disruption in the food and agriculture ecosystem over the next few years -- despite the fact that Indian agriculture is one of the least digitised industries today," it said.
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