Budget wishlist: Here are the key challenges in agriculture sector

Indian agriculture has shown unusually high resilience during pandemic years. Despite supply chain disruption, labour migration, and market uncertainty, it has been top-performing sector in one of the toughest times for the Indian economy. Upstream start-ups, which include farm-linked and supply chain-linked ventures, continue to see an acceleration of investor interest.

 

Key challenges

• Access to finance: Despite increased agricultural growth, only 30% of farmers borrow from formal sources, while 50% seek financing from other sources
• Research & development: India invest around 0.4% of agricultural GDP in R&D activities as compared to 1% in developed countries. Although there has been efforts to increase R&D spent in agriculture, there is a strong need to create a better framework for mass adoption of R&D innovations to tackle challenges of climate change, productivity, resource efficiency, and other critical areas 
• Agro logistics: Logistics account for around 10-25% of the value of commodity, but inadequate logistics and storage facility is accounting for 20-40% of losses across agri supply chains 
• Commodity prices:  Although MSP has been used as a price stabilisation tool, multiple other factors such as product supply, global prices, climatic factors, consumer preferences, and imports needs to be integrated for better price stabilisation  
• Data integration: Data sources are frequently disaggregated. A lack of data sharing is slowing the country’s digital initiatives’ adoption and scale-up

Industry ask

• Making open data available for the industry and start-up ecosystem for further innovation to solve issues like near real-time and transparent view of the vast and intricate food and agri supply chain is essential.
• Government needs to play a proactive role in enabling a business-as-a-service (BaaS) platform to promote innovation 
• Deeper penetration of financial services/fintech services can act as an enabler for accelerating growth of trade and transactions