Dr. A.B. Joshi Memorial Lecture – Leveraging Agritech Startups in Indian Agriculture Innovation Ecosystem
I deem it a special privilege to deliver Dr. A.B. Joshi Memorial Lecture at the 14th Agriculture Science Congress.
I have been a great admirer of Dr. Joshi for his monumental role in transforming Indian agriculture, not only through his outstanding research, but also through his research leadership through the various high positions he held in IARI, ICAR and the agriculture university system.
I had the fortune to interact with him in Pune for several years. I was a witness to his great wit as well as wisdom. They say innovator is one, who sees what everyone else sees but thinks of what no one else thinks. I repeatedly saw this trait in him. His insights were very amazing. His penchant for innovation was such that he always brought an original new viewpoint on the table.
So in the spirit of what Dr. A.B. Joshi stood for, I wish to suggest something new today.
I am not an expert in agriculture but I was fortunate to get a rare insight into agricultural research, when I was the acting Director General of Council of Agricultural Research for a couple of months (ICAR) in late 2000. Further, in 2005, I had the privilege of chairing an Expert Committee constituted by the Hon’ble Agriculture Minister that looked at reforms in Indian Council of Agriculture Research (ICAR). Both were humbling learning experiences for me about our great agricultural innovations ecosystem.
At a global level there is a dream of 25 billion meals a day by 2025 with healthy nutritious, safe and diverse foods. But what is the Indian reality?
In India, we have daunting challenges in our agriculture system. They range from the need for substantial enhancement of our productivity to dealing with over dependency on monsoons, to managing dry land farming as also the small and fragmented land holdings to rapid elimination of poverty and malnourishment. Climate change poses some daunting challenges too. To deal with all these, India needs to take recourse to not only innovation but `disruptive game changing innovation’.
In building the new National Agricultural Innovation System, one of important measures is to fully develop and use `collective intelligence’ that involves several stake holders. Amongst this should be innovative youth, but not at the periphery but at the core.
Indeed motivating and attracting youth in agriculture (MAYA) was a great discussion forum held in August, 2018 in the NASC Complex. The focus was largely on rural youth. My focus is on giving a major role to youth, both urban and rural, who will fuel the movement on agritech start up and help creating a future ready agriculture innovation ecosystems.
Challenge of Change
The current best practices are shifting to future next practices. Examples are movement from traditional offline platforms to digital platforms, rural agriculture to urban agriculture, traditional farming to vertical farming, food as a product to food-as-a-service and life style based diets to DNA based diets.
Already we are seeing a change in effective food production system. These include precision agriculture for input and water use optimization, gene-editing for multi-trait improvements, biological based crop protection, micronutrients for soil management, microbiome technologies to enhance crop resilience, etc.
There are other changes, Food production is taking multiple innovation partners. First, indoor farming, which can produce high volumes of fresh produce without relying on herbicides, pesticides or the presence of the sun. Second is the pursuit of increased efficiency, which has led to agriculture robots, which cut down on operation costs and accomplish more with small workforce, a model that may not be advisable or applicable fully in India. The third pertains to new tools like CRISPR, a bold new territory used now by scientists that can create drought tolerant, disease proof, ultra high yields crops. And fourth are the totally disruptive technologies such lab grown meat alternatives that tests identical to the real thing, but does not require cultivation/slaughter of livestock.
Potential for new Technology in Indian Agriculture Innovation Ecosystem
Innovation through technology-enabled supply chain through the use of RFID, advanced GIS/GPS, tracing and traceability systems is already happening. We could get `more from less’ by reducing wastage and ensuring quality throughout the supply chain.
Precision agriculture could be achieved with the use of advanced GIS/GPS and sensors can guide planting/irrigation, monitor yields, fine tune inputs and achieve `more from less’ by improving yields as well as reduce the use of water and fertilizer.
Moderately skilled agricultural workers with access to smart apps using smartphones or tablets can benefit from digital farm extension and advisory services.
Farmers can have real time market information by using mobile communications, voice based call centers and expert systems for real time price discovery, weather information and cultivation trends.
Again we can achieve `more from less’ by using leakage-free public distribution system, which uses computerized allocation of food grains, GPS/SMS monitoring, verifiable digital identify and web portal for public grievances
Finally, we can have technology enabled crop insurance, where use of real time data from weather stations could be used to predict the rainfall and calculate the insurance payouts, which can be automatically transformed to the farmers through mobile banking. These seamless transections can achieve `more from less’.
Getting Young Talent Involved
Our visionary Prime Minister launched the startup India initiative. It has moved so well that rather ambitious projections are being made for the year 2025. It is expected that India will become the second biggest startup nation, after USA rather than remaining a `starting up’ nation. We will then have 100,000 startups with 3.25 million employees, with a market value of USD 500 billion dollars. Youth are playing a major role in this start-up movement.
What’s so special about start-ups? The young uninhibited minds are free from legacy, their thinking is fresh and often disruptive. But we only hear about startups such as Ola, Flipkart, etc. Can we create a movement around agritech startups. The answer is yes, it is already happening around the world.
Let’s take some examples from abroad.
Consider food safety. A start-up Tellspec believes that consumers are most knowledgeable and engaged. Smart packaging solutions based on IoT, NFC & RFID technologies for food monitoring from field to fork robotics collect data to monitor food condition.
Innit wants to reduce maintenance costs, increases productivity transparently tracking the supply chain. Equipment with built-in sensors has been grouped into one network and a universal platform for all kitchen devices enables predictive maintenance.
Nutrifix is looking at the demand for food preferences varies widely between consumers. AI-based apps analyze nutritional information, suggesting meals and purchases are being provided. At-home (blood) tests connected with wearable/app interfaces for health monitoring are being provided with personalized nutrition and diet.
National Machines realizes that food preparation is difficult and time-consuming. So it is opting for 3-D food printing (Bio-printer). Here nutrients are added depending on gender, lifestyle, or medical condition. It has the promise to provide personalized, precise, and reproducible nutrition.
There are examples from abroad. What about India?
What are the prerequisites for India to become a startup nation? We must create right ambition and ambience. And for that, we have to get some fundamentals right. The rightful ambience is created through a powerful national innovation ecosystem. The essential elements of such a national ecosystem comprises physical, intellectual and cultural constructs. Beyond mere research labs, it includes idea incubators, technology parks, a conducive intellectual property rights regime, balanced regulatory systems, strategically designed standards, academics who believe in not just ‘publish or perish’, but ‘patent, publish and prosper’, scientists, who have the passion to become technopreneurs, potent inventor-investor engagement,
‘ad’ venture capital, and passionate innovation leaders.
Indian AgriTech Startups
In the Indian startup movement, one of the concerns is that most startups take the easy way out. They create clones of what has been done abroad, especially in e-commerce. But that’s not quite true. Here is what is happening in AgriTech.
Indian AgriTech have begun to leverage technology in the area of market linkages such as retail, B2C and B2B marketplaces and digital agronomy platforms.
The convergence of mobile networks, broadband internet, cloud platforms, IoT, AI and open data is creating transformative opportunities.
Here are some start-ups that are leading the change. They provide a representation of the larger trends being witnessed in the sector:
• BigHaat is a Bengaluru-based startup empowering farmers through an e-commerce platform, which lets them buy seeds, crop protection nutrients and solutions, and agro instruments online.
• Ravgo, a Punjab based startup is an agri-equipment rental marketplace, which aims to bring access to modern technology for small farmers who cannot afford ownership of expensive machinery.
• FlyBird Farm Innovations, a Bengaluru-based startup uses sensors in the soil to detect moisture content and control irrigation on need basis.
• Kamal Kisan a Bengaluru-based social enterprise is helping small and marginal farmers reduce labour costs with its innovative agri-equipment.
• Triton Foodworks is a Delhi based startup pioneering agriculture in a water-based, nutrient-rich medium, without the use of soil.
• vDrone uses drones for extracting thermal images which are then analysed used to help farmer increase yield.
• Ninjacart a Bengaluru-based startup which uses technologically driven supply chain and price discovery platforms enabling retailers and merchants to source fruits and vegetables directly from farmers.
Government Initiatives on startups
And one must commend the Indian Government as well as State governments for creating a conducive environment for young start-ups.
Among the key initiatives are a compliance regime based on self-certification to reduce the regulatory burden on startups, creation of a startups India hub as a single point of contact for entire startup ecosystem to enable knowledge exchange and access to funding, simplifying the startup process, fast tracing patent examination at lower costs, exception from capital gains tax, income tax exemption, creation of large number of incubators and also a fund of funds.
Action on all this has started in a vigorous way. Just take one example of Fund of Funds.
Start-up India Fund has been created, which is a Fund of Funds for start-ups managed by Small Industries Development Bank of India (SIDBI). The fund size is INR 10,000 crore to be built over the 14th and 15th Finance Commission cycles (2015 to 2025). As per data provided by Chairman & MD, SIDBI – INR 1900 crore (19% of fund size) have been committed to VCs by the end of December 2018, which is expected to go up to 33% by the end of this fiscal year.
Government Support Ecosystem for Agriculture Innovation and Entrepreneurship
Government of India is catalysing agri- entrepreneurship with programmes like the Agri-Udaan Accelerator and the Agri Grand Challenge.
Government-backed funding agencies like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is incentivising banks to lend at highly affordable rates to start-ups.
Villgro, a-IDEA, ABI-ICRISAT, Start-up Oasis, IIMC Innovation Park, IIT Kanpur SIIC, KIIT TBI, and CIIE, IIMA are some of the incubators, which are providing mentorship and connects to farmer cooperatives, NGOs, channel partners, and individual farmers in some cases.
I co-chair the Maharashtra State Innovation Society. Maharashtra has launched an aggressive startup policy. Agri-tech has been given a prominence in this policy.
Karnataka has formalised an agri-startup fund in 2017 through K-BITS with a corpus of Rs 10 crore, with an additional Rs 8 crore planned for agri-startups.
Also, schemes like the government’s Start-up Agri India scheme, the Digi Gaon (Digital Village) initiative, and Bharat Net project can all work together towards making tech-enabled agriculture a reality.
While the facilities and technology platforms are growing for farmers the outreach needs to be improved substantially. As an ecosystem approach we need to smoothen the journey from mind to market.
The journey of mind to field to market place is a very difficult one. How do we ensure that the technology developed by startups reduces the farmers in an assured way. And to achieve this assured success in innovation, I propose an ASSURED Innovation matrix.
A (Affordability) is required to create access for everyone across the economic pyramid, especially at the bottom.
S (Scalability) is required to make real impact by reaching out to every individual in the society, not just a privileged few.
S (Sustainability) is required in three contexts; environmental, economic and societal.
Environmental, since `green’ products and processes will only be acceptable to the society.
Economic, since there must be a robust business and revenue model. Just depending on government subsidies and props will not work.
Societal, since society must find the technology acceptable.
U (Universal) implies user-friendliness, so the innovation can be used irrespective of the skill levels of an individual. Innovation has to be designed around deep appreciation of human needs.
R (Rapid) refers to speed. The speed of our action matching the speed of our innovative thoughts!
E (Excellence) in technology, product quality, and service quality is required, not just for the elite few but for everyone in the society, since the rising aspirations of resource-poor people also must to be fulfilled.
D (Distinctive) innovation is required because there is no use of creating me too’ products and services.
In recent times, India has witnessed two ASSURED innovations that have been truly game changing.
JAM – J (Pradhan Mantri Jan Dhan Yojna), A (Aaadhar identification and authentication) and M (mobile telecommunications) created the fastest and largest financial inclusion in the world, with 360 million plus bank accounts opening up in record time.
Another game-changing innovation is Reliance Jio, which has catapulted India from the 155th rank in mobile data transmission globally to the 1st rank today! But importantly it has moved India from a jugaad ‘missed call’ innovation to ‘free voice call’ innovations.
We need such game changing ASSURED innovations in the field of Agriculture. I will just pick up two issues, namely public procurement policy and conducive policy on patens.
Designing Indian Innovative Public Procurement Policy: Some Fundamentals
We need aggressive demand side initiatives. With large procurement budgets, the Indian government can not only be the biggest, but also the most influential and demanding customer.
The government approach could be based on three pillars.
First, government could act as the `first buyer’ and an ‘early user’ for small, innovative firms and manage the consequent risk thus providing the initial revenue and customer feedback they need to survive and refine their products and services so that they can later compete effectively in the global marketplace. (Interestingly, based on a survey of 1,100 innovative firms in Germany, it was found that public procurement is especially effective for smaller firms in regions under economic stress, a helpful lesson for India.)
Second, government can set up regulations that can successfully drive innovation either indirectly through altering market structure and affecting the funds available for investment, or directly through boosting or limiting demand for particular products and services.
Third, government can set standards that can create market power by creating demand for innovation. Agreed standards will ensure that the risk taken by both early adopters and innovators is lower, thus increasing investment in innovation. The standards should be set at a demanding level of functionality without specifying which solution must be followed. By not prescribing a specific route, innovation is bound to flourish.
Roadmap for Creating Innovative Public Procurement Policy and its Execution
The following five point action agenda is suggested.
1. India has progressed from a science policy resolution (1957) to Technology Policy Statement (1983) to Science & Technology Policy (2003) to Science, Technology & Innovation Policy (2013). It is time that we sets up a fully integrated National Innovation Policy; integrated, since beyond technology innovation, non-technological innovations such as social, business model, work flow, system delivery, process and policy innovations play a critical role. The policy should be such that it should propel India@75 to be among the very top innovative nations.
2. An important component of the National Innovation Policy should be innovation oriented public procurement policy, which should be `for’ innovation as well as `of’ innovation, thus catalyzing both demand and supply side of the innovation equation. Public procurement of innovative goods and services can induce innovation by specifying levels of performance or functionality that are not achievable with ‘off-the-shelf’ products, because such exacting demand can be only met by innovation
3. The policy in (2) above should be based on 3 pillars of talent, technology and trust. Transparency is a prerequisite to trust. To achieve this, a legal framework will have to be designed, which should include easily understandable definitions, guidelines and templates based on the ASSURED principles highlighted earlier. This will facilitate smooth and speedy implementation.
4. Procurement agencies from ministries should be given specific targets for innovation procurement. (Maharashtra State has shown the way by mandating that 10% of the public procurement should be from start-ups. This can be done nationwide). Provision of annual budgets, dedicated funds and stimulating financial incentives, especially for public-private partnerships, will have to be a key part of the execution plan.
5. For speedy implementation, an ‘Innovation Procurement Platform’ as an online hub should be created. It will help procurers, policy makers, government authorities, innovators, and other stakeholders to fully utilize the power of public procurement of innovation. The platform could comprise a website, a procurement forum and a knowledge resource centre. The procurement forum should provide a space for procurers and related stakeholders to share, connect and interact. The resource centre should have central databases and documents on all aspects of public procurement policy of and for innovation.
The IPR Challenge-especially Patents
Let me just take another issue, namely IPR, specifically patents, as they pertain to startups. We must recognize that patents are valuable for startups. The 2008 Berkeley Study titled ‘Patenting by Entrepreneurship: An Empirical Study’ found that 67% of venture backed start-ups reported that patents had been vital for them in securing investment. While 40% of all the start-up held patents, 80% of those receiving venture capital investments owned patents.
Patents can ensure a startup’s freedom to operate. Google is an industry heavyweight that complains about patents today. But as a startup, back in 1998, Google deemed its seminal PageRank patent No. 6,285,999 so vital that it filed for it before it had a business plan, venture funding, or even a domain name—and then paid Stanford University, to which it had been assigned the patent, $336 million in shares to exclusively license it. As one analyst said that without the patents “Google would have been trampled by copycat search engine offerings from Yahoo, Microsoft, and other big players, who once dominated the market.”
Patents can help startups form joint ventures and R&D partnerships. According to a 2014 National Science Foundation backed study, 49% of manufacturing and service firms used inventions obtained from external sources to develop their most important new products and services. Patents on those startups inventions serve as legal scaffolding around which joint venture and R&D partnerships are constructed.
Patents can help a startup defend itself against attacks by incumbent rivals. Patents can help a startup stop the theft of its innovations by larger rivals. Further patents can help a startup rapidly increase its market share. Patents enhance the chance of a startup getting acquired and they can also help a startup get ready for an IPO.
Indian AgriTech Start-ups & Patents
Once again, Trust for Advancement of Agriculture Sciences (TAAS) had taken a lead and organized a brainstorming meeting on harnessing intellectual property to stimulate agricultural growth. Strengthening IPR system in ICAR was a subject that was extensively discussed in the Mashelkar Committee ICAR report (2005) too. Strong patenting culture and its leveraging through a modern IPR policy with incentivisation was the recommendation.
Section 3 (j) of the Patents Act, as correctly pointed out by TAAS, presently excludes plants and animals in whole or any part thereof other than microorganisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals from patenting. This Section seems to have been introduced in 2002 as an amendment in the Patents Act of 1970, as a consequence of harmonisation for protection provided to plant varieties under the PPV&FRA, which got enacted in 2001.
In view of this, TAAS has emphasized the need for a clarity as to how the Breeders’ Rights granted under PPV&FRA for new varieties developed through plant breeding can co-exist with Patent Rights granted under Patents Act for biotechnological innovations, including incorporation and expression of novel gene sequences in plants and their products, in a transgenic variety developed through plant breeding.
Biotechnological innovations, requiring huge development and commercialization costs, have to generate proportionate financial returns. The development and introduction of desirable traits and new varieties using modern biotechnology needs incentives through protection under both Patents Act and PPV&FRA.
Hence, as concluded by TAAS, it is recommended that Section 3(j) of Patent Act be revisited and its coverage clarified on scientific and logical grounds with the objective of protecting the interest of innovators relating to genetic modifications and concerned varietal developments. It is important to note that similar biotechnological processes and products thereof (e.g. insulin, antibiotics, etc.) are given patents in pharmaceutical industry. Innovations of similar kind in agricultural biotechnology should be considered on par, especially when the gene expression is manifested after the incorporation in a plant/variety.
This is emphasized because it is the patent from of IPR, which forms the incapable asset that helps startups to get all the benefits that we have outlined in the previous section. So the need for revisiting is urgent.
Let’s not forget that patents can help a startup launch a billion-dollar empire. Let’s take examples from non-agricultural field. As IP folio chief executive Rupert Mayer recently observed, patents have helped at least 10 major startups launch billion-dollar empires. These include Dropbox’s network folder synchronization patent, Zynga’s asynchronous challenge gaming patent, Square’s patented system and method for decoding swipe card signals, GoPro’s patented harness system for attaching a camera to a user, and of course Google’s breathtakingly valuable original PageRank patent.
We see no reason why we should not create multi-billion dollar agri-tech startups, not just limited to Flipkarts of this world.
In this Dr. A.B. Joshi Memorial Lecture, I have tried to dwell on a subject, which was close to Dr. Joshi’s heart. And that was to encourage the young with out-of-box thinking. Young Indian Agritech Startups are emerging, but somewhat slowly. If the current Agriculture Innovation Ecosystem can leverage the Agritech startups by bringing them from periphery to the core then not only we provide an opportunity for the youth to contribute to the greatest public good, namely agriculture, but we can also accelerate the disruptive innovation led agriculture based inclusive growth. As an eternal optimist, I believe this can be achieved within a decade.