Budget 2023: FM brings cheer for agritech start-ups with new fund; sector lauds govt's focus on agriculture

In a major boost for the country’s agriculture sector and agri-related industries, Finance Minister Nirmala Sitharaman today announced that a new ‘Agriculture Accelerator Fund’ would be set up to encourage agri start-ups founded by young entrepreneurs in rural areas. 

“The Fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. It will also bring in modern technologies to transform agricultural practices, increase productivity and profitability,” she said in her Budget Speech in the Parliament. 

The government also announced that the agricultural credit target will be increased to Rs 20 lakh crore with a focus on animal husbandry, dairy, and fisheries. 

Commenting on the potential impact of these initiatives, Mark Kahn, Managing Partner at Omnivore (an agri-focused VC fund), told Business Today, “With the Union Budget 2023, the Centre has continued its strong focus on improving farmer incomes. The concrete provisions for boosting high-value crops and allied sub-sectors with significant Budget outlay are most welcome. The increased agricultural credit target and the government's commitment to build storage facilities closer to the farm gate will also sustainably empower farmers. The agritech sector will benefit hugely from the promised Agricultural Accelerator Fund.”

Sector experts reckon the Fund will not only spring renewed interest in agritech among venture capitalists, but also push start-ups to scale up their unique solutions, fast-tracking innovation in the sector. “The provision for an agri accelerator will certainly help grow interest in investment in agritech and in general in agri-businesses. The accelerator will help working on innovative ideas and may help on packaged foods, which will not only help in increasing productivity but also farmer incomes,” said Anil Joshi, Managing Partner, Unicorn India Ventures.

Commending the government on the move, Ankur Bansal, Co-Founder & Director of BlackSoil, said, "This is an important push in the right and most required direction for agricultural sector growth. Technological enablement in terms of sourcing and provision of farming equipment, resources as well as agri-financing will both help to reach a wider audience and enable empowerment."

The Finance Minister further shared that the government plans to build a digital public infrastructure for agriculture. “This will enable 6 inclusive, farmer-centric solutions through relevant information services for crop planning and health, improved access to farm inputs, credit, and insurance, help for crop estimation, market intelligence, and support for growth of agritech industry and start-ups,” she explained.

Rajesh Ranjan, Co-Founder of Krishify (an agritech start-up), told Business Today, “The decision to build the digital public infra for agriculture as an open-source, interoperable public good will tremendously help in strengthening farmer-centric solutions by creating an ecosystem whereby information sharing will play a critical role in devising better accessibility to farm inputs, as well as drive financial inclusion within the farmer community."

In order to enhance the productivity of extra-long staple cotton, the government also looks to adopt a cluster-based and value chain approach through Public Private Partnerships (PPP). “This will mean collaboration between farmers, state and industry for input supplies, extension services, and market linkages,” the FM stated.

Batting for increased collaboration between farmers and other agri stakeholders, Vamsi Udayagiri, Founder & CEO, Hesa (an agri-fintech start-up), said, “With the Agri Accelerator Fund, we are happy to add value to this initiative as we have been interacting with farmers from across different states of India and helping them overcome their challenges related to Agri Value Chain by bringing carefully curated collaborations at their doorstep.”

Talking of the reduction in customs duty for active feed ingredients like Fish & Krill meal, and Fish oil,  Rajamanohar Somasundaram, Founder & CEO of Aquaconnect (an aquaculture start-up), told Business Today, "This is a welcome move. This will not only help lower production costs for farmers but also help our shrimp exports be at par with the international players."

He further said, "The current Budget also addresses a long pending item on the wish list, which is building a digital infrastructure for the agri ecosystem. This comes at an opportune time when the agritech industry is gaining strong momentum. Intelligent tech intervention will solve multiple use cases in the food production and consumption value chain leading to overall improved production efficiency, market linkage, and access to credit. We also look forward to the proposed sub-scheme announced under the Pradhan Mantri Matsya Sampada Yojana (PMMSY) as it will help shift the export dependency of the Indian seafood industry to domestic markets thereby stabilising seafood commodity prices."

The Modi-led government also plans to launch an Atmanirbhar Clean Plant Programme to boost the availability of disease-free, quality planting material for high value horticultural crops at an outlay of Rs 2,200 crore. 

Saket Chirania, Co-Founder of Agrizy (an agri supply chain start-up), shared, "Agriculture and allied industries are undoubtedly the backbone of India’s economy, since they collectively facilitate rural employment, development and food security. The government has continued to acknowledge this fact in its proposed budget this year as well, for which we must commend the Finance Minister. This year’s budget makes a sincere attempt to promote technology and innovation in agriculture to make the sector future-ready."

 

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