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Indian farmers face the challenge of low productivity or stagnant productivity in most food crops and fiber crops (Figure 3). Commercial horticulture production, including fruit crops, is not the priority for crop nutrient suppliers. Planting materials for tree-borne fruit crops are sourced from unorganized nurseries. Except for wheat, the productivity in rice, millet, sorghum, and oilseeds such as groundnut, mustard, and soybean have been stagnant over the last decade. India is a net importer of protein-rich lentils with enlarging demand for consumption.

Figure 3 - Major crop productivity trend- India 2010-20 (‘000kg/ha)

Source - FAOSTAT

Indian enterprises have been forced to shun investments in genetic engineering of crops ever since the moratorium imposed on biotech improvement in India in 2010. The impediment has created severe stagnancy in the productivity of cotton, the only GM crop approved in India, with no new traits introduced in BT cotton in the last thirteen years. In crop protection products, regulatory challenges have grown over the decade with years of regulatory review for novel crop protection chemicals or any novel organism invented by homegrown companies before securing product registration.

Moreover, bio-property adopted in other countries is not easy to import with years of cumbersome pre-access quarantine for alien strains or biomolecules. In addition, the National Biodiversity Authority has imposed enormous control on exchanging biomaterials, which impairs collaborative research in crop improvement.

The result has been total dependence on indigenous genetics for breeding and conventional breeding and first-generation molecular breeding tools by public research systems and the seed industry. Access has been limited to generic chemicals and multinational company-owned proprietary molecules in the agrochemical realm due to crop protection companies’ lack of discovery investments in India.

Indian regulator has not approved any homegrown molecule in the last decade, with proprietary chemical molecules essentially remaining in multinational hands, some of which are brought to Indian territory after a lag of four to five years of introduction in regulated markets. In the crop nutrition realm, regulations deter wide-scale application of custom nutrition based on the soil profile of the farm. Custom fertilizers provide limited opportunity to apply site-specific crop nutrition due to subsidy influencing the compositions and the custom fertilizers needing pre-approved area-specific, soil-specific, and crop-specific grades. Advanced nutrient solutions derived from novel microbes, peptides, or microbe coatings are rarely applied due to the absence of approved products. Low-density conventional planting is adopted in 90% of the acreage in fruit crops, with traditional nurseries providing planting material. Indian productivity in citrus is about a third of China, and apple is a fifth of China and a tenth of New Zealand (Figure 4).

Figure 4 - Apple & Citrus yield trend India 2010-20(‘000kg/ha)

Source - Sathguru analysis based on industry sources

Fragmentation of Indian landholding

Indian landholding is fragmented, with the average holding remaining at about 1.08 hectares (Figure 5). The situation has not improved with any significant consolidation, as landholding is the livelihood for millions of families. In states that have witnessed economic transformation with a high level of industrialization (such as Tamil Nādu, Maharashtra, Gujarat), labor mobility has created informal consolidation with absentee landowners leaving their land for third party management. With small landholding, technology adoption has been a continuing challenge needing customization of innovations widely applied in large-scale farming systems.

Figure 5 - Average Agricultural Landholding Trend- India 1995-2016 (ha)

Source - Agriculture Census, Ministry of Agriculture and Farmers Welfare

Agriculture Research and Innovation in India

Fragmentation of Indian landholding

PE/VC Investments Outlook Across Indian Agtech Segments

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