Research should be seen as productivity driver in agri-business experts

There is a need for products that lend farmers more control, they say.
Research should be seen as productivity driver in agri-business experts

With the Narendra Modi-led government spearheading the mantra of ‘more crop per drop’ it makes sense for the agri-business industry leaders to think of innovative technology and research as growth and productivity drivers.

At the recently concluded VCCircle Agri & Food Investment Summit 2014, panellists discussed the opportunities in the Indian agriculture sector, assessing the good and bad thoroughly. The panel, moderated by Girish Nadkarni, Partner, IDFC Private Equity, brought out some interesting aspects on where the agriculture sector is headed in India. Following are some of the forward-looking observations made by the panellists:

Girish Nadkarni, Partner, IDFC Private Equity, said, “India is the second largest producer of farm output. Having said that, the productivity in India is not so good. About 55 percent of the people work in agriculture sector to produce just 14 percent of the GDP compared to the US which is the largest producer of agriculture output and only 4 percent people are engaged. I believe this is one of the reasons when our prime minister took over recently, he spoke about agri productivity as imperative. Land and water availability is poorer than before.”

Mark Kahn, Founding Partner, Omnivore Partners, highlighted, “I think it is largely a function of platforms and time; there was the first platform that needed to roll out mobility and that had one of the most transformative impacts ever on rural India. The next platform that has largely rolled out is the availability of 3G, GPRS and internet connectivity through the mobile phone. Farmers upgrading themselves to better and better mobile phones. Now that these two platforms are there, you can see the development of connected devices which wasn’t really possible a few years ago. We have invested in companies that are essentially integrating software and hardware to bring information to farmers that they could never have previously.”

Peter Frykman, Founder & CEO, Driptech, stated, “The key is going to be making a product that gives farmers more control. The trick is to integrate knowledge and control. Technology has to be made available and accessible. So we should be able to demonstrate the products to them straight away. The first thing is to make an affordable product and then we can look at financing model, etc. In India, 80 percent of the food that is grown locally is consumed on small platforms. That is why, we are looking at improving efficiency and output on small platforms.”

Arvind Agrawal, Director, VNR Seeds, said, “Presently no approval is coming through for GM seeds. Recently, the government conducted field trials for BT Brinjal but still there are states like Gujarat that are restraining bringing in such vegetables. This is because of non-transparency issues. The fear among consumers is whether BT is suitable for human consumption or not. Also, farmers are not aware of changes and improvements in revenue generation that technology can offer. Research in seeds would be the growth and productivity driver.”

Shamender Sharma, Head Business Strategy, Khedut Agro Engineering, said, “The basic problem is that we do not have fresh seeds for the farmer which can directly impact our productivity. If we see the challenge in India, the big picture is that around 70 per cent farmers are cultivating around 32 per cent land. Standardisation in India takes so much time that the turnaround time in government sector to approve a product is a tedious task. NBFCs should go beyond crop loans. Agriculture growth has been around 15-18 per cent in last decade but agriculture growth driven by farm mechanisation is 1 per cent. Lots of initiatives are coming from the new government but more needs to come in.”

Vikram Puri, CEO, Mahindra Shubhlabh Services, said, “When we started this company, we found that there was a need for knowledge in various states. We were hesitant even go to Punjab thinking that there is a very advanced farmer and he doesn’t need any advice. But we were totally wrong because when we did go to Punjab and we engaged with the farmers there, we found out that the output was increased by 15-20 per cent after our help. In this forum, we should raise the opportunity to suggest that there is an initiative to encourage private companies engaged in agri-business to get a tax set off if they take the agriculture extension onto the field. This will be far more cost effective for us as a nation.”

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