Agriculture and Technology - a match made in India?
Date: Monday , February 09, 2015
Omnivore Partners is a venture fund investing in early stage agriculture & food technology companies in India.
Omnivore supports entrepreneurs who are developing solutions to improve farm productivity, increase agricultural sustainability, modernize agribusiness supply chains, and promote farm-sourced food products.
Omnivore seeks to transform Indian agriculture through technology innovation, impacting the lives of farmers and rural communities.
Can a nation of 1.2 billion people, a majority of which isagrarian and rural by disposition even today, be considered to be the hotbed for amalgamation of cutting edge technology applications with one of the oldest professions known to man agriculture??
Yes,most certainly yes.
Ag-tech in its new avatar
India today is moving beyond the green revolution (and thankfully so!) which spread through the country in the 1960\'s and 1970\'s and introduced to our farmers an intensive system of growing crops use of high yielding varieties, higher consumption of fertilizers and agro chemicals.
Farmers using and investing in new technology tools and techniques for farming is not an uncommon sight in hinterland India today. Rampant labour scarcity, shrinking per capita land holdings and the pressure to grow more from limited resources (land, water, nutrients) has made our growers more akin to realizing that the introduction of new technology for agriculture and food production is the only way for them to remain competitive and remunerative as a profession.
Agriculture Technology (or ag-tech) innovation in India, is a melting pot of cross functional talent being used to solve problems of farmers how to grow more from less. Be it pharmaceuticals, IT, robotics, sensors, mechanical engineering, electronics, software or biotechnology all these domains are adding their two cents to making food production much safer, abundant and efficient.
So, what\'s hot?
India will see a big surge in technology adoption for the agriand food sector in the coming 5-10 years. Some of the themes which we hope to see grow rapidly are things like:
a.specialized farm machinery and automation of farms
b.sensors and big data applications in farming, poultry, aquaculture and dairy
c.development of new molecules (including biotech) for agri inputs like seeds, crop nutrition and plant protection,which are more sustainable in nature
d.food processing technologies (for storage, grading, sorting, value addition, shelf life enhancement of produce and/or food products)
e.software for improving supply chain efficiency of produce/food products
f.information technology for improving profitability of farms, farmers and distributors (weather inputs, market information, traceability data etc.)
Case(s) in point
Let me be a bit selfish and give yousome examples from Omnivore\'s portfolio companies ?
Stellapps Technologies and Eruvaka Technologies provide growers in dairy and aquaculture, respectively, with cutting edge sensor embedded hardware along with live data, analytics made available on the cloud, so the user can monitor vital stats of their farms remotely.
Barrix Agro Science sprovides farmers with sustainable IPM (integrated pest management) species specific control based products (using pheromones, kairomones etc.) for reducing their dependence on chemical pesticides.
M.I.T.R.A. and Khedut Agro Engineering design and manufacture farm equipments suited for Indian horticulturists and farmers. Their products help farmers improve productivity and profitability of farming, while reducing dependence on farm labour. Skymet is India\'s largest private weather forecasting and agriculture risk solutions company, providing ag-insurance products and services which combine data from their own captive weather stations along with satellite data.
The next time you want a healthy snack, look out for the Ycook (Swayam Foods)brand of retort packed sweet corn. They use proprietary technology to process the farm sourced corn and use zero chemical additives while providing retailers and consumers a one year shelf life at ambient temperature no cold chain required!
Investments in ag-tech and food tech
Agriculture and food has emerged as an upcoming asset class for PE/VC investors across the globe and even in India. While a certain class of investors are sinking teeth into large scale farming operations in Canada and USA, there are others who are focused on scaling technology applications for this sector. India is seeing a spurt in both start-ups and large corporates warm up to the space.
Some basic reasons which make ag-tech and food tech a \'bankable bet\' in India are:
a.Growing demand for food (especially more F&V, proteins and dairy)
b.High food inflation (structurally high and will remain in the near short to medium term)
c.Rampant urbanization (more specialized, convenience foods being adopted)
d.Reducing resources (land, water, labour, nutrients, erratic weather patterns)
e.Availability of high quality cross functional talent pool to work on problems in ag/food
While agriculture and food production are generally not perceived as \'sexy\' sectors, India will see huge potential in this sector in the next decade. Given the resources and macro-economic factors at play, India can easily become the R&D laboratory for solutions for ag-tech and food-tech for small holder farm economies across the globe.As a result, investors are also bullish on the space and see it as a long term bet. Cheers to a long pending ag-tech revolution in India!