This is expected to accelerate even further as companies serving this market show resilience and increased demand amid the Covid-19 pandemic.
The disruptions caused by the virus outbreak and India’s strict lockdown hurt the status quo of 130 million farmers as well as millions of agricultural traders and small and medium enterprises.
As existing supply chains were shut down and reopened only gradually, farmers found themselves struggling to purchase inputs, access finance, and find markets for their crops.
Investments in the agri-tech sector shot up to $430.6 billion till March from $45.8 billion five years ago, according to the joint report by venture capital investors Accel Partners and Omnivore.
“Agri-tech startups, which for years had co-existed with the traditional ecosystem, suddenly discovered that they were essential. Ultimately, the pandemic helped catalyse a shift across the agricultural economy, away from traditional, informal, and analogue markets towards innovative, formal, and digital ones,” the report – Post-Covid Agritech Landscape – said.
The next 12 months will accelerate the emergence of farmer marketplaces, farm-to-consumer brands and the adoption of precision agriculture on the back of entrepreneurs and VCs moving their focus beyond serving just the top 50 million consumers to focus on the agriculture sector, it said.
The need for reliable food supply and quality product are set to increase, it added.
“The new government reforms coupled with the disruption of market linkages due to the pandemic has also accelerated the creation of inter-state e-markets involving farmers, traders and buyers,” it said.
Prior to the pandemic, most participants in the agri supply chain – farmers to retailers – were not comfortable with using web-based applications to do business. However, the outbreak has created a sharp shift, allowing platforms such as NinjaCart, Agrostar and DeHaat to achieve rapid scale due to adoption of their digital solutions.
A poll of 24 agri marketplaces showed that 80% of them were expecting revenues to grow by at least 20% in the current fiscal year compared to last year.
The other major driver of use of technology in agriculture has been the use of efficient supply chains, just-in-time farming and growth of farm to consumer brands.
Farm-to-consumer brands saw good growth during the Covid-19 induced lockdowns, with volumes growing by 110% and customer acquisition costs reducing by 10%.
Milk and dairy brand Country Delight, which counts over 200,000 households as its customers in cities like Delhi, Mumbai, Bengaluru and Pune, said it has witnessed a 30%-35% surge in orders amid the outbreak.