The agriculture sector forms the backbone of the Indian economy. It contributes nearly 20% to the country’s GDP and registered immense resilience in the pandemic. With technology bringing a paradigm shift in every sector, developments in this area too aren’t untouched by it. The agritech startups, thanks to favourable government support and conducive business climate are supporting the tech revolution and bringing major improvements in areas such as local supply.
As per government data, post-harvest losses are highest in fruits and vegetable produce. Over 16% gets wasted due to a major reason behind this which is a broken, incapable supply chain, and is inefficient at handling modern demands. The shelf life of the products is very short and this coupled with volatile market behaviours coerces farmers to sell their products at a very low rate than what they actually deserve. Additionally, all players are supply-based and they get price and quantity from farmers without knowing the overall demand that exists, leading to huge losses. Here, it becomes crucial to better the supply chain and agritech startups help in bringing improvement in procurement, effectiveness, storage, connectivity, transfer and delivery for better market linkages.
Moreover, they also smoothen the processes especially where there is a need to deal with lakhs of farmers, traders and tons of quantity. Processes such as sorting, grading, packing, transporting and storage require an eye for detail and agritech players can refine the supply chain operations to prevent businesses from unnecessary expenditures. If the supply chain operations are not refined, businesses will face losses and will find it difficult to arrest unneeded costs.
During the pandemic, a major challenge the farmers faced was difficulty in selling their supplies locally. Here, agritech players helped them to go online and players were able to procure inputs hassle free and choose from a range of options and price ranges. Online platforms enabled them to sell their produce even remotely that otherwise would've been delayed, forcing the farmers to let them sell at a lower price.
Also, the growth of e-commerce, hyper delivery apps, has boosted demand for local supply. Agritech is helping to cater the demand by refining the supply chain, especially the inward supply chain which is often overlooked. This is essentially the journey of produce from farm to warehouse or traders’ warehouse and dark stores. This requires quality and quantity of experience to build on the process and refine it and the startups are efficiently handling this for delivery in record time. They are doing it with huge collection centers to procure fresh produce of fruits and vegetables and transport them to its warehouses for grading, labelling, packaging.
In metropolises, it is tougher for companies to find big warehouses in central locations and makes it difficult to deliver with speed. So, to optimize this, the advent of dark stores came in, where companies take small storage space within 3-4 kms range in a city. So essentially 10 dark stores across 40 kms so whenever an order comes, mapping it with the closest dark store and delivering it can take the product to the end customer in record time.
This has become the new way of optimizing the outward supply chain. Mapping dark stores in every location enhance speed and deeper interconnections. With this, e-commerce players have got companies completely taking care of their inward supply chain. Because of no middlemen and collection centers in villages, it also offers the best control over price and quantity and quality.
The agritech sector is growing rapidly in India and as per the NASSCOM report, it is reported to grow by 25% every year. India which is still an agrarian country can immensely benefit from the growth. The agritech startups are playing a major role in making operations more organized, smooth and efficient which have so far remained a major and valid concern especially for farmers.
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