India is predominantly an agrarian economy. Farming contributes about 17% to India’s GDP, and about 60% of the country’s rural households depend on agriculture and its associated industries. Despite having the second-largest arable land parcel—its 160 million hectares make it second only to the US—India is way behind some developed, as well as developing, countries in terms of productivity.
Low productivity in the sector is the result of various structural challenges, including heavy dependence on rainwater for irrigation, small-farm land holdings and lack of access to technology and real-time information.
Around 70% of the agricultural households in India (mostly small farmers with average land holdings of less than one hectare) struggle to make ends meet and depend on loans for their farming activities.
The demand for food in India is growing. That trend is likely to continue as disposable incomes increase and changes in consumption patterns favour value-added foods. However, supply is constrained by marginal productivity gains in a majority of crops, the shrinking amount of arable land, erratic monsoon patterns, climate change effects and inherent supply chain inefficiencies that lead to waste. And the reduction of available labour in the agricultural field makes the situation worse.
Given the importance of agriculture in India, both the government and private players are working to improve the efficiency and productivity of Indian agriculture and exploring how Farming as a Service (FaaS) solutions can play a role. FaaS seeks to provide affordable technology solutions for efficient farming. It converts fixed costs into variable costs for farmers, thus making the techniques more affordable for a majority of small farmers. Its services are available on a subscription or pay-per-use basis in three broad categories, which are crucial across the agriculture value chain.
Farm management solutions: Information sharing, analytics and precision farming tools
Production assistance: On-site resources to aid production, such as equipment rentals
Access to markets: Virtual platforms that connect farmers with suppliers of seeds, fertilisers and other agrochemicals, as well as consumers of their produce