Innovation and Digitalisation in Agtech
Building Prolific Entrepreneurship Ecosystems: Shared Lessons from India and ASEAN.
Executive Summary -
This policy brief is part of a study that CIIE.CO, the Innovation Continuum, and Economic Research Institute of ASEAN and East Asia (ERIA) are conducting to encourage collaboration and peer learning between India and Association of Southeast Asian Nations (ASEAN) Member States and to share knowledge and tools relevant to entrepreneurship ecosystems in South Asia. It examines the evolution of the agriculture technology (i.e. agtech) start-up ecosystems in India and the ASEAN region and compares associated major policies. This policy brief is based on a roundtable held by CIIE.CO and ERIA on Innovation and Digitalisation in Agtech, as well as previous research by both organisations on agtech start-ups.
There is an overlap between innovation and digitisation in India, as 90% of agtech in India is digital. In the last 5 years, the food supply chain has become more digitised. Digitisation is making supply chains more demand-driven and transparent as well as farmers’ marketing linkages more efficient. The Soil Health Card app, Krishi Vigyan Kendra knowledge networks, and agriculture technology management agencies are some programmes advocating digitisation in India.
Venkatachalam Anbumozhi, director of research, strategy, and innovation, ERIA pointed out that the ASEAN economic community has adopted a long-term circular economy framework with objectives to bring resource efficiency to the farms, add resilience to the value chain, and amplify competitiveness across sectors. Such a circular economy aims to maintain utility components and to retain value along the value chain. There is policy impetus for more localisation of production, however. The Government of Singapore’s target of ‘30 by 30’ (i.e. 30% of consumption to be sourced locally by 2030) is an example. Such localisation can complement regional – as well as global – value chains.
In India, personalisation is a key aspect of advisory services provided by BharatAgri, an Indian agtech start-up. Adopting Indic languages has helped many start-ups in agtech and personalised advisory services with reaching and engaging farmers across various regions in India.
Moreover, there is increasing feminisation of agriculture, especially in sectors like dairy, vegetables, and horticulture; going forward, even cereal crops – which typically need masculine labour – could also become more feminised. Therefore, the customer persona of a farmer has to be redesigned to consider and focus on women.
The Government of India has initiated a direct benefit system through Pradhan Mantri Jan-Dhan Yojana (PMJDY), Aadhaar, and Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) to develop supply- side delivery mechanisms. This has created an opportunity for fintech start-ups to digitise payments made by farmers and to create credit profiles that enable better inclusion of farmers in the formal financing ecosystem. This digitisation also has the potential to streamline agriculture value chains, contributing to the optimisation of intermediaries.