Post India’s economic liberalization in 1990s, a decline in agricultural incomes led to an exodus of rural youth towards other sectors like construction and allied sectors. Conventionally, agriculture has not been seen as a career choice and till date the agrarian economy is failing to attract youth due to the age old practices that are still rampant.
THE CHALLENGES AND OPPORTUNITIES IN THE AGRICULTURAL SUPPLY CHAIN
With the advent of new technologies and innovative solutions, Indian agriculture is changing. The slow-moving heuristic-based sector has the potential to transform into a scientific, data-driven process, because we now have the opportunity to build a low-cost digital infrastructure to process large volumes of data in real-time. Globally, the agricultural supply chain is seen as one of the critical areas that needs cutting-edge research and technological innovation.
Governments around the world are increasingly looking for long-term solutions to the twin dilemma of strengthening the value chain and dealing with climate crisis. Therefore, there is heightened interest in new technologies. In 2020, globally agritech entrepreneurs earned $26.1 billion in funding. This was a 35.4 percent increase from the previous year. Between 2020 and 2027, the global agritech industry is expected to grow at a compound annual growth rate (CAGR) of 12.1%.
Since 2015, the agriculture sector in India has been rising at 11 % CAGR. India’s food and agriculture ecosystem is on the verge of enormous disruption in the coming years. Multiple stakeholders are already transforming the value chain, and traditional agriculture will be replaced by new farming patterns, innovative agritech services, and food processing.
THE RISE OF AGRITECH
There is increasing use of hi-tech in agriculture – including artificial intelligence (AI), machine learning (ML), blockchain, internet of things (IoT) and drone technology. This is becoming a huge attraction for the youth of the country. India already has more than 1300 agriculture startups that are using these cutting-edge technologies to create innovations and improve efficiencies in the farm sector.
We are witnessing a big transformation – productivity levels are rising and creating employment opportunities in this process. The agritech ecosystem, which grew by 85% in 2019-20, is expected to cross US$24 billion by the year 2025. Private equity investments in agritech startups received INR 6600 Crores between 2017 and 2020.
THE INSTITUTIONAL BOOST TO AGRICULTURAL ECOSYSTEM
The Indian government is giving a big push to the agricultural and food industry. The Rashtriya Krishi Vikas Yojana (RKVY) is supporting such startups through grants under its Innovation and Agri-entrepreneurship Development Programme. RKVY has already funded 800 startups and it is looking at more startups in the fields of agriculture and allied sectors such as agro-processing, food processing, precision farming, online platforms, farm mechanisation, organic farming, natural resource management, renewable energy and many more.
Institutions are facilitating credit to support creation of community farming assets and post-harvest agriculture infrastructure through government programmes. For example, the Agriculture Infrastructure Fund makes debt financing easier for farmers, FPOs, and agribusinesses to develop warehouses, cold chains, and primary processing centers. Schemes such as PMMY have been established to fund manufacturing, trading, and service industries, as well as activities related to agriculture, in order to promote non-farm enterprises.
New financing models are emerging to make loans more accessible with the assurance that the principal is repaid. Samunnati, India’s largest agritech company, aids FPO development by providing technical and financial literacy training, bespoke finance solutions, and the facilitation of innovative techniques such as precision farming. Through relationships with businesses that sell to farmers (e.g., equipment providers) and those that buy from farmers (e.g., FPOs), Jai Kisan provides equipment, input, and other financial solutions.
THE ACCELERATED ADOPTION OF DIGITAL TECHNOLOGY IN RURAL INDIA
In the previous five years, rural India has become more digital friendly, with smartphone and internet usage expanding at a 30 percent+ CAGR. With a natural affinity for technology, youth will play an increasingly important role in adoption of high-tech in the agricultural value chain. The Prime Minister’s Wi-Fi Access Network Interface project is bringing broadband to rural areas, with a goal of 2 million public Wi-Fi access points by the end of 2021. Because they drove many new users to investigate sophisticated features, online classes during the epidemic were a crucial motivator for digital adoption among rural communities.
Financial inclusion initiatives from the government have further brought technology into day-to-day lives of agricultural communities. According to estimates from Bain-CII, around 30% of the rural ecosystem is using UPI apps to make digital payments and purchases. UPI now processes eight times more transaction value than credit cards, with the pandemic being a major catalyst.
The cost of technology adoption has also dropped significantly with the availability of lower-cost smartphone devices. In addition, over the last three years, data costs have dropped by 64% enabling easier access to technology.
These developments are helping accelerate the growth of agritech ecosystem and creating opportunities for the youth to explore new and exciting career paths around the application of high-tech skills in agriculture. The Union Budget 2022-23 announced the setting-up of the DESH-Stack e-portal, a Digital Ecosystem for Skilling and Livelihood to help people skill, reskill, or upskill through online training for different industries including agritech. This is very encouraging news for students, especially in rural areas, who faced educational breakdown during the pandemic.
THE OPPORTUNITY FOR THE YOUTH
The youth of the country, especially in Tier 2/3 cities, have huge potential and talent to take advantage of the new possibilities in the agricultural marketplace. So far, the Indian startup ecosystem has been centred around young entrepreneurs in Tier 1 cities. The enterprising brilliant minds in Tier 2/3 cities are now catching up. According to an Inc42 report, the total funding amount in early-stage investment to these locations was about $144 million in 2021. These cities also received $1.16 billion investment throughout the growth and late stages. Overall, these cities’ startups received a total of $1.304 billion in funding at various stages.
The agriculture sector can benefit from the energy and drive of young minds. The youth can be a valuable asset to the agriculture sector and can bring in new ideas to help improve productivity. Agritech can play a major role in creating jobs for youth in rural areas and help them achieve their career aspirations. By providing access to modern technology and innovative farming practices, agritech is bringing huge beneficial changes in the inefficient agriculture ecosystem and facilitating the creation of efficient and profitable businesses, providing a viable income source for young people. Additionally, agritech is a catalyst in enabling easier access to new technologies and products to rural communities, which can improve the quality of life for local residents.
Agritech offers a wide range of career options, from designing and developing new agricultural solutions, to creating platforms for marketing and selling of a wide range of agriculture products. There are also opportunities for youth to work on sustainable farming projects, helping to promote environmentally responsible practices. And with the rapid expansion of urban agriculture, there are now even more opportunities for young people to get involved in this growing industry.
More than farming, agriculture is a profession that can offer a stable lifetime career. By creating more jobs in agritech, we can make agricultural careers more attractive to young people. This will help ensure that the next generation is equipped with the skills and knowledge needed to maintain our food production systems.