A new crop of professionals with expertise in technology is taking to agriculture-related ventures in India and reaping the benefits of the move, bolstered by a rising appetite for quality fare and increased farm output.
These entrepreneurs are creating agri-distribution networks, developing technology-based solutions for farmers and, in some cases, taking to farming themselves.
“I always wondered whether a farmer can lead a decent life with a 5-acre holding,” said Shashi Kumar, 38, a graduate from the Illinois Institute of Technology in the United States. “It is possible, if it is run like a startup.”
The former Wipro employee has cofounded a co-operative dairy farming venture, Akshayakalpa Farms and Foods, along with GNS Reddy, a veterinarian. The three-year-old venture works with nearly 37 farmers across rural Karnataka.
Kumar has designed milking systems equipped with sensors that record a cow’s body temperature as well as the quantity and quality of milk. The data is analysed and farmers are alerted if modifications are required. Over the next five years, the firm aims to increase its revenue from Rs 3 crore to Rs 8 crore, reaching out to 300 farmers.
Experts said the $120 billion (about Rs 7.6 lakh crore) Indian agriculture and food industry is throwing up big opportunities for those who are able to offer innovative solutions.
“With growing awareness and increasing per capita incomes, today’s consumers are seeking better quality and more variety in their food products,” said S Sivakumar, group head of Agri & IT businesses at ITC, who estimates that the industry is growing at 8% annually.
The entry of such professionals into the sector is spurring interest from venture investors. Akshayakalpa, which began with a seed capital of Rs 3 crore from family and friends, received Rs 5.5 crore from a Hong Kong-based angel investor and a US-based venture dairy earlier this year.
“A few years ago, there were no startups in this space, but now there are around 25 to 30 startups cropping up every year,” said Mark Kahn, cofounder and partner at Omnivore Capital, a venture-funding firm that has backed agri-software developer FrontalRain Technologies.
The Bangalore-based venture, set up by three former executives of SAP, helps farmers plan their farming and harvesting using analytics. “If we start shying away from these challenges who will address them?” asked Jayaram Srinivasan, who cofounded the company with Sreekumar P and Ravi Mandayam in 2010.
The trio invested Rs 30 lakh initially and in 2012 raised funding of Rs 5 crore from Omnivore Capital. They expect to earn revenue of Rs 10 crore in fiscal 2014.
In Uttar Pradesh, Ashmeet Kapoor is helping farmers set up an efficient distribution chain. After a trip to the Deoria district in eastern UP, 28-year-old Kapoor, who has a degree in electrical engineering from the University of British Columbia, found that a major issue for farmers was distribution.
An average farmer in India travels 12 km to reach the market, much more than the 5km recommended by the National Farmers Commission. “I saw a profitable venture in addressing this gap and set up an online distribution chain for organic products,” said Kapoor.
Kapoor’s online distribution firm, I Say Organic, has brought the market to the farmers’ doorstep and pays them about 25% more than the local market. Launched in 2012, the firm has 500 customers and makes about 3,000 deliveries a month in North India. Kapoor hopes to touch revenue of about Rs 25 lakh a month by the end of fiscal 2014, from about Rs 10 lakh now.
“The shift in eating habits of the upper class is causing a huge demand for new products,” said JA Chowdary, chairman of the agriculture committee of FICCI and founder of food 360 foundation which is helping techies make the shift to agri-business.
Ravi Kukke, an education solution specialist at Microsoft, quit his job in 2009 and set up his farm in Urigam, Tamil Nadu, to grow bananas. Kukke had spent around Rs 15 lakh to set up the farm. In the first harvest, he earned about Rs 8 lakh.
“Other farmers in the village approached me for help,” said Kukke. “I would help them avail government facilities or set up their infrastructure. Today, there are four farmers who have also started banana plantations.”