The company has also expanded to provide financing, advisory, and market services.

For example, UPL (traditionallyĪ core agrochemicals player) is providing mechanization services and agrochemicals to farmers through its nurture.farm digital platform.

Providers of farming supplies such as agrochemicals, fertilizers, and seeds are using technology to create direct-to-farmer sales channels that bypass middlemen and retailers.

Suppliers are becoming buyers, advisers are adding finance-any combination is possible and happening: Moreover, India’s regulatory environment is gradually evolving to facilitate the growth of digital technologies in agriculture.Īgtech in India continues to ramp up-from core companies in the value chain using digital technologies like “super apps” to innovations by start-ups, or “agrifintechs,” and large technology companies.įully nurtured, the agtech ecosystem has the potential to propel Indian farmers’ incomes to grow by 25 to 35 percent.Įxisting agriculture incumbents use digital technologies to either go direct to the farmer or to expand products and services across adjacencies. 3 Vaishnavi Dayalani, “The farming 3.0 opportunity: Inside India’s $24.1 bn agritech market,” Inc42, December 24, 2020. Agtech is already boosting Indian agricultureīetween 20, the agtech landscape in India grew from less than 50 start-ups to more than 1,000, fueled by increased farmer awareness, rising internet penetration in rural India, and the need for greater efficiency in the agriculture sector. Solutions have begun to be more farmer-centric: each part of the value chain that is digitizing, be it finance, inputs (products needed to grow crops such as seeds, agrochemicals, and fertilizers), or advisory-are directly targeting the farmer. The advent of digital technologies and the evolution of multiple agtechs have put the farmer right at the heart of the entire ecosystem.

Historically, the farmer was just one of the many stakeholders involved in a market that centered on mandis-the local markets where farmers sell their products at auction. Agtech can be a shot in the arm for India’s farmers, making them more profitable and boosting the contribution of agriculture to India’s economy. In this article, we examine agtech’s potential, how it is already improving outcomes, and what investors are looking for as rural India embraces modern farming. Those who can get credit often pay inflated interest of 10 to 25 percent above market rates. Simply put, India’s farmers are competing at a disadvantage: half lack basic farming equipment, three of every four farms are at risk of crop damage from pests and weather, and 50 percent of India’s farmers lack access to traditional financing sources. India lags behind developed farming nations in agtech. The key to expanding India’s transformation into a farming powerhouse is agricultural technology, or agtech.

But to get there, India must unlock growth and productivity for the sector. 2 Ministry of Statistics and Programme Implementation, Government of India, 2020. to India’s GDP-an increase of 50 percent over its contribution in 2020. By 2030, agriculture could contribute around $600 billion 1 India’s turning point: An economic agenda to spur growth and jobs, McKinsey Global Institute, August 2020. If solved, a flourishing agriculture industry could both boost the economy and significantly improve farmer livelihoods and income. This article is a collaborative effort by Namrata Dubashi, David Fiocco, Avinash Goyal, Ayush Gupta, Nitika Nathani, and Abhik Tandon, representing views from McKinsey’s Agriculture Practice.īut there are significant problems holding back the nation’s untapped potential.

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