INNOVATION AND AGRIBUSINESS

INNOVATION AND AGRIBUSINESS

Incubation of technologically and socially innovative Agribusiness start ups

Agriculture scenario in India

Needless to say that agriculture is the spine of the Indian economy. Despite this, the stark reality is this that agriculture still remains the bottom of the pyramid with smallholder farmer constituting the major chunk of its population. The figures show that GDP of agriculture and allied sectors are increasing, but still the yield per hectare is much less compared to other countries. But if the production-led-extension (increasing yield per hectare) were the solution to the problem, then farmers would not be required to dump their agriculture produce at throw away prices. And if market-led-extension is the solution, how it has to be achieved and is this the only solution? Though the government has been offering lots of sops to the farmers and processing units right from subsidized to free seeds, fertilizers, pesticides (agri input), free soil test, MSP, agriculture extension, other capital subsidies and many others, but the increasing farmers agitation and suicides show that this is not enough. Then what are the issues.

Issues in agriculture

 The problems in agriculture sector in India are :

• Small and fragmented landholdings
• Insufficient and Poor quality of agri inputs (Seeds, fertilizers, pesticides including bio fertilizers and bio pesticides, credit (finance), etc)
• Insufficient extension- Lack of knowledge and latest development in agriculture technologies
• Rainfed farming (Insufficient water resources and irrigation technologies)
• Insufficient post harvest facilities.
• Lack of mechanization
• Soil erosion
• Scarcity of capital
• Inadequate transport infrastructure
• Poor ICT facilities and connects
• Lack of sufficient agriculture marketing facilities/market linkages
• Insufficient insurance cover, etc
• No or Less value addition

Are Subsidies and waiving off of the loans solution?

The above issues need to be addressed with a holistic and innovative approach to make it self-sustainable. The waiving off of the agriculture loans and increased subsidies are not the solution to the increasing issues of agriculture and these are rather making stakeholders handicapped. 

Then what is the solution?

Innovation is the key

To make the agriculture sector, a profitable business, we need out of box thinking which combines technological and social innovations to address the gaps in the agriculture sector and make the stakeholders self-reliant.

Technological Innovations: The scientific and technological innovations are well understood by all and this breakthrough technologies in input varieties, mechanization, extension, IT is the need of the time to address the issues of the agriculture

Social Innovations: Social innovations are new strategies, concepts, ideas and organizations that meet the social needs of different elements which can be from working conditions and education to community development and health — they extend and strengthen civil society. IN simple language, ‘Social Innovations” are innovations in process rather in technology. Social innovation with focus on rural innovation is much needed to address the gaps of agriculture and agri business

Incubation, innovation and agribusiness start up:

Understanding the need of innovation in agribusiness to address the issues of agriculture, the concept of Incubation of agribusiness start ups has been launched.

In simple language, Incubation is- Nurturing Enterprises by providing support resources & services like physical space, funds, legal, marketing & IT services, periodic mentoring & counselling for innovative and scalable start ups

Definition and eligibility of “Start Up”

 Startup means an entity:

• If it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India
• • Up to ten years from the date of its incorporation/registration
• • If its turnover for any of the financial years since incorporation/registration has not
• exceeded INR 100 Crore.
• • If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation. 

• Provided that such entity is not formed by splitting up, or reconstruction, of a business already in existence. 

Another important feature of “Start Up” is

• An innovative product or technology, beyond the idea stage, solving at least one industrial or social challenge.
• The potential to commercialise within 2-3 years.
• 
  

Benefits of Start up:

• Self certification and compliance under 9 environmental & labour laws
• STARTUP PATENT APPLICATION- fast track & up to 80% rebate in filling patents
• PUBLIC PROCUREMENT- fast track under the criteria of "prior experience/turnover" for startups in all Central Government ministries/departments
• WINDING UP COMPANY- in 90 days under insolvency & Bankruptcy code 2016
• INR 10,000 CRORE FUND- of funds for investment into startups through Alternate Investment Funds
• INR 2,000 CRORE CREDIT- guarantee fund for startups through National Credit Guarantee Trust Company / SIDBI over 4 years
• TAX EXEMPTIONS- on Income tax for 3 years
• TAX EXEMPTIONS- on capital gains & on Investments above Fair Market Value

Challenges in Incubation:

• Motivation:
• Knowledge
• Skills
• Market development
• Finance and risk mitigation
• Regulatory issues
• Business environment

Way forward

A baseline survey at grassroot level to understand the problems of agri business and addressing the gaps through social and technological innovations is the only possible way to make agribusiness a profitable, sustainable and self reliant business.