Are India's Agri-Tech Startups Helping Or Harming Farmers?

From farmer to subzi mandi to kirana store to our kitchens: this age-old link has been the basis of India's agricultural supply chain for decades. Now, new agri-tech startups are attempting to disrupt this route. "We have farmers on one end, and retailers or hospitality partners on the other," explains Varun Khurana, co-founder of the agri-tech supply chain startup Crofarm that is cutting out the subji mandi between farmers and retailers. Their on-ground sales agents have brought nearly 3,000 farmers on board through FPO networks in Sonipath, Panipath and Hapur. Other players such as Farmily, e-Kutir and Auxin are also trying to alter this agricultural supply chain. However, some say these startups are simply replacing one middle man with another.

"We're happy with a middle man who wears a tie who comes in a Maruti or a Toyota. This is the new breed of middle men who are replacing the ones we're used to, who wears dhoti kurta or pyjamas," says agricultural expert Devinder Sharma.

Apart from supply chains, agri-tech startups are entering the sector with weather risk management, innovative food processing and packaging, renting equipment to small-holder farmers and so on. However, Devinder claims these could be doing more harm than good. "There is such a thing as 'too much technology'. Why are farmers in Punjab with small acre farms made to use tractors when it is unnecessary and just increases their input costs? Similarly technology startups here can be too much technology," he says.

Another breed of agri-tech startups are financial ones focused on banking, insurance and loans for farmers in rural areas. Others help ascertain crop health for banks to settle insurance claims, such as the weather monitoring startup Skymet. However, farmers say they hardly see the benefits of any of these services. "No farmer ever benefits from crop insurance. We mortgage our land to pay premiums and never see any claim money," says Vinod, a farmer from Yamunanagar. "They say we'll get our claims, but we never do," adds farmer Chaudhary Bhoop Singh from Sirsa.

According to the State of India's Environment 2017 study, under the two Union government farm insurance schemes PMFBY & PWBCIS, banks have collected a total of Rs. 3,610 crores across India. 77 per cent of claims have not been paid to farmers.

As agri-tech players across the country continue to grow, experts in the field continue to question their impact on farmers, while others say that the focus of agri-tech startups can be expanded. Mark Kahn, founder of the agriculture and food tech investor firm Omnivore, explains "We need startups to begin working on water, water and water."