- Hemendra Mathur, Venture Partner with Bharat Innovation Fund
Indian agriculture continues to be one of the most climate-vulnerable sectors of the Indian economy with deteriorating soil health and increasing volatility in weather patterns. Both environmental sustainability and farm-income sustainability is at high risk. Climate risks need to be addressed with utmost urgency through a combination of policy, innovation and investments.
This article maps innovations in “resource conservation” and “post-harvest loss management”.
Resource conservation innovations can further be classified into categories – innovations for climate risk mitigation and climate adaptation:
Climate data is key to model the risk. Risk modeling is changing for good with improving hardware, the processing capacity of computers, access to cloud storage, and more importantly, the application of deep learning models.
Startups in this category are providing accurate and timely hyperlocal data and advisory directly to farmers or value chain members. Financial institutions lending to agriculture are early adopters of these solutions.
Startups like SatSure, CropIn, RMSI, Satyukt have developed (top-down) models for large tracts of farmland using satellite imagery and weather stations, whereas startups such as Soilsense, Bharat Agri, Frugal Labs, Plantix, Cultyvate, Yuktix, Fasal have gone granular (bottoms-up) with the use of sensors, IoT, and smart phones for delivering real-time and accurate farm advice on the use of water, fertilizers, crop health and preventive measures. The convergence of these two types of data models and approaches will further drive the accuracy and timeliness of climate risk predictions for the benefit of farmers and other value chain players.
The development of such models can be accelerated with participation from public institutions such as Indian Space Research Organisation (ISRO), Indian Council of Agricultural Research (ICAR), Indian Meteorological Department (IMD) and agricultural universities who have access to data and resources. Making data available to startups for training, standardization and testing their models– through public private partnerships -- is much needed for adoption of risk mitigation models.
These are the solutions for improving water use efficiency and soil conservation. Water use efficiency optimizes use of water for irrigation. Soil health solutions fix NPK ratio, deficiency of micronutrients such as Zinc, Copper, Manganese in soil and continuous decline in humus stock and soil fertility. The conservation of water and soil can further be complemented by optimizing pesticide usage -- about 60,000 tons per annum in India -- using data-driven models, drone application and replacement with bio-pesticides and use of integrated pest management, wherever possible. Some examples in this category are:
Majority of supply chain innovations seen in the post-harvest leg that we have seen in India in recent past in some way or other have contributed in making supply chain efficient and climate resilient thereby reducing food, wastage, losses and carbon footprints.
Farm-to-fork startups (such as WayCool, Ninjacart, Hesa, Agrowave, Farmlink, DeHaat) have brought energy efficiency through demand aggregation, scientific storage, temperature-controlled transportation and route optimization in the supply chain. Some of them are also working with farmers to help them adopt sustainable agriculture practices.
Post-harvest interventions through dehydration, cold chain, logistics solutions and farm level processing -- such as S4S Technologies, Our Food, Promethean, Inficold, Ecozen, Milklane, Tan90, RuKart etc. have also significantly reduced the post-harvest losses.
Though innovations play a key role in solving climate risks, we need a policy push to drive the climate agenda. Some of the key action points are as follows:
An important area of policy intervention should be to create awareness and sensitivity of climate risk among farming communities to improve adoption. This is possible through the continuous education of farmers about the subject. One way to achieve this is to start building a “Climate Risk Index” (CRI) of all 600,000-plus villages in India -- or at least start with CRI for all 15 agro-climatic zones.
CRI can be used for calibrating the farmer support programmes from the government, PSL lending rate, loan waiver management and insurance premiums. Fortunately, there is enough technology and data analytics (specifically from weather stations and satellite imagery) available to capture, analyze and build a robust CRI.
There is a need to create demand for resource efficient crops like millets and shift area under cultivation for water guzzling crops like sugarcane and paddy to other crops. This will not happen without creating economic incentives for farmers, which could be in the form of Minimum Support Price (MSP), market linkage support and preferential lending rates.
There is a huge opportunity waiting for investors to invest in business models solving climate risks and adoption in the agriculture sector. Climate capital is not necessarily different from other forms of capital since it will lead to resource optimization and productivity improvement, and in the process, generate value and returns for the investors. It is essentially about re-orienting investors’ mindset to drive twin objectives of climate resilience and unit economics. Government can create a catalytic pool of capital for these innovations to get validated and build initial traction.
Majority of farmers would need financial incentives for adopting climate resilient practices be it smart irrigation, soil and water conservation, building water ponds, sowing drought tolerant seeds, using integrated pest / nutrient management techniques. These incentives are required to bring a behavioral shift in the way farmers think about using natural resources such as water, soil and nutrients. These could be in the form of crop loans, insurance and post-harvest loans
To conclude, the combination of policy, capital and innovations has the potential to solve for climate challenges for agriculture. Policymakers, industry, investors and startups have to work in tandem to build long term and everlasting solutions to make Indian agriculture climate resilient and sustainable.
The views expressed in this article are personal
Hemendra Mathur is an investor, mentor and board member with many food, foodtech and agritech start-ups in India and overseas. He is working as a Venture Partner with Bharat Innovation Fund. He is also co-founder of ThinkAg – a platform for accelerating adoption of innovations in agriculture and food space. He is the chairman for FICCI task force on agri startups. He has over 25 years of experience in venture capital, private equity, management consulting and investment banking in India, South Asia, Europe and USA.
