Supporting agripreneurs

New fund should support innovation

To support innovation in agriculture, the government is planning to launch an “Agri Fund for Startups & Rural Entrepreneurs” (AgriSure) with an initial corpus of Rs 750 crore in Category-II alternative investment fund. Funded by the Ministry of Agriculture, National Bank for Agriculture and Rural Development (Nabard), and other financial institutions, AgriSure will aim to provide comprehensive support to agripreneurs by setting up an ecosystem for better financing and offering both equity and debt support options. This public-private collaboration, with the fund managed by NABVENTURES, a wholly owned investment subsidiary of Nabard, is designed to foster innovation and implement information technology-based solutions in the agricultural sector. Its primary objectives include enhancing the farm produce value chain, creating rural infrastructure, generating employment, and supporting farmers producer organisations. Given that India’s agriculture is increasingly susceptible to the impacts of climate change and severe weather conditions, the establishment of this fund is a timely initiative.
 

The fund must prioritise supporting startups focused on developing crop varieties with enhanced tolerance of extreme weather conditions such as drought, untimely rain, and heatwaves, as well as agricultural practices that improve water- and nutrient-use efficiency. The importance of this development was underscored by a recent paper from the Indian Council for Research on International Economic Relations. Titled “Saving Punjab and Haryana from Ecological Disaster”, the paper highlighted the ecological stress faced by these states as they strive to produce a surplus of the paddy crop for the rest of the country. These states are experiencing significant ecological strain, including soil degradation and water depletion, as a result of their efforts to meet the food demand of the nation. It notes that the anaerobic decomposition of organic matter in flooded rice fields produces methane, a greenhouse gas significantly more potent than carbon dioxide in contributing to high temperatures over a long period.
 

Developing crop varieties for staple crops, primarily paddy and wheat, that are less water-intensive and have shorter growth cycles, can significantly improve outcomes in the agriculture sector. Furthermore, this initiative is also imperative, given that, being the largest source of employment in the country, agriculture has the lowest labour productivity. The disparity was highlighted in the recent data released by the Reserve Bank of India and the Ministry of Statistics and Programme Implementation. Implementing information-technology-based solutions in the sector will not only enhance labour productivity but also increase income and profitability for the small and marginal farmers, who constitute 85 per cent of the farming population.
 

Despite the government’s numerous efforts to promote agri-startups in the past, securing financing for these ventures remains a significant challenge. It is concerning that, despite having over 40-plus universities dedicated to agriculture and allied sectors according to the National Institutional Ranking Framework, the Indian agriculture sector has not been able to indigenously develop the necessary technology to address its critical issues. This initiative is thus a welcome development. It is to be hoped that support to startups and agripreneurs will help resolve some of the problems in the agriculture sector. Further, given that the headline inflation rate has been driven largely by food prices for quite some time, improving productivity in the agriculture sector will help improve the availability of food items at reasonable prices and ease pressure in macroeconomic management.