Indian agriculture has been a key contributor to India’s growth story and continues to be one of biggest employers. The Gross Value Add (GVA) for agriculture sector was INR 17.67 trillion (USD 274 billion) in 2018, over a production base of 285 Million tons. The sector is likely to grow at an approximate rate of 2% on a year on year basis. Being a key economic driver, the sector needs to adapt to the challenges that it is facing today. Let us look at the five top trends which are expected to shape the industry in 2019.
- Digital innovation in agriculture is the thing to look out for. We are likely to see streamlining of the policies, creation of necessary infrastructure to test and commercialise the innovation and creating incentives for adoption of these innovation, which can boost the infusion of digital solutions in the conventional businesses. The digital innovation in agriculture has applicability in infrastructure development, supply chain management and technology enablement of areas such as quality, traceability, logistics and distribution and other areas of value chain.
- Climate change is high on the priority list. There is should be an effective climate risk mitigation strategy for effective water management, adopting to rising temperatures, facing drought situations. Solutions for early warning system can play a vital role in estimating and minimising the risk due to erratic climate change events. Water management and optimum utilisation of available water resources such as water user associations, water rationing etc will go a long way to benefit the agrarian society. This year, efforts to sensitise/incentivise adoption of climate change measures is a must to ensure long run benefits for the farming and trading community. Further, the regulators also needs to consolidate the existing efforts in this field.
- The focus on developing the startup ecosystem and creation of digital agriculture is likely to continue in the FY 19. We expect to see more incubation happening for developmental and early stage startups while more funding is likely to continue in mid stage startups. Support infrastructure needs to be developed by each state. Further, we need to address key issues such as collateral requirement for loans, availability of growth capital, taxation on angel investment, applicability to mainstream government schemes etc.
- Leveraging the Farmer Producer Organisations (FPOs): There is a huge potential in monetising the number of farmers getting connected through FPOs. The FPO structure is currently in need of support services to enable them to secure business acumen and market linkages. Other key issues such as better insurance terms, quality assessment infrastructure, precision agriculture solutions for better crop management, access to finance, IoT based applications etc. needs to be addressed for the success of the FPO’s
- Water management initiatives like watershed management, drip irrigation and water user association can play an important role in the strengthening the agricultural sector. Considering the scarcity of water, end users need to be aware and work towards conserving water. Farmers should be incentivised and measures like loan waivers to farmers who use water judiciously could be used. Government agencies, too need to be empowered to monitor water usage in agriculture. Apart from these, we hope to see some bold steps to mitigate farmer’s losses by expanding the insurance net, effective claim management, controlling distress sale and oversupply of agricultural commodities during the peak season. The Government bodies, private players and the growing agriculture start up community can together transform the sector’s outlook. This aided by the digital drive in the sector can start the new agri and technology revolution in the sector.