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Emmanuel Murray has 40 years of rich and diverse experience in agriculture and rural credit and microenterprise finance.
He has been a juror in several agritech hackathons across the country, and is also a mentor at a Technology Business Incubator of Indian Council for Agriculture Research at NAARM.
Now, as Investment Director at Caspian, Murray is actively working to build the food and agri startup ecosystem in India. Caspian is the first Indian impact investing firm to be granted a BCorp certification. B Corps are for-profit companies that use the power of business to solve social and environmental problems in an ethical and transparent manner.
Murray spoke to indianexpress.com on the trends to look out for in agritech in India, the challenges that agritech startups face, the opportunities in the sector, and the technologies that could have an significant social impact. Edited excerpts:
Venkatesh Kannaiah: What are the top tech themes/trends which have an impact on the agritech space in India?
Emmanuel Murray: We must understand that the tech around satellite imagery is developing very fast. This has led to new insights on crop information, detailed data on yields and potential yields, predicting and mitigating localised weather conditions and the like.
Secondly, we see that soil testing, moisture management and automation of irrigation systems and practices is one area where there is a lot of progress and impact.
The third would be what I would call the input and output sector at farming, which looks at two aspects. One would be on tech and startups which collect large amounts of data of inputs that go into agriculture like pesticides, fertilisers, water, labour, and try to work on such processes to reduce the input costs or increase their use efficiency. This is of immense use to players in the ecosystem like insurance companies who need such data to assess potential insurance needs, and it is where startups look to monetise the data, albeit in an aggregated manner.
The output part of the story would be when startups and tech look at bypassing intermediaries in the sale of agricultural produce to provide for better return for farmers. We must understand there is a huge information asymmetry in the agri sector and tech plays a role in ironing out these differences.
There is also work on biologicals. For example, growing microorganisms to substitute chemical inputs, and pest and disease management in the agriculture sector. Apart from this there is tech on building up plant-based meat and alternate proteins industry.
Venkatesh Kannaiah: What are the areas that Indian agritech startups focus on and what are the challenges?
Emmanuel Murray: In India, the focus of agritech startups is on impacting the processes and opportunities around input delivery and output marketing. There is a focus on improving logistics, cold storage, and startups work on efficient transportation and reduction of post harvest losses.
The biggest challenge is the inability of small and medium farmers to pay for tech-related services. For example, there is a lot of useful satellite data which can be curated and provided to farmers, but since landholding is small in India and uneconomical, farmers are unable to pay.
The other challenges include increasing cost of inputs and decreasing availability of labour for agricultural operations. This puts a huge strain on farmers. We must also understand that 80 per cent of landholdings in India will be very small by international standards, and large-scale tech interventions with the farmers paying for the same will be small. They cannot also contribute much to the market, since they are mostly into subsistence farming for their families and communities.
However, it is the 10-20 per cent of what I would call as the next-gen farmers who are capable of absorbing tech, are savvy, and also produce with an eye on the market. This is the segment which tech startups need to focus on.
Venkatesh Kannaiah: Tech adoption in the agri sector seems to be slow. What are the opportunities?
Emmanuel Murray: We find that there is advanced tech to predict production of crops using satellite technology. Now, the resolution of this satellite imagery has increased multifold making it easier for predicting production or even crop losses. Over a period of time the costs have dropped. The small farmer might still not be able to pay, but there are a lot of other ecosystem intermediaries like banks, financial institutions, insurance companies and logistics companies which should be able to pay for these services and the data. Startups have an opportunity.
Drones in agriculture is one area where there is a lot of buzz, but from my experience, on the ground it is not huge right now. But input startups are very optimistic and are seeing an opportunity. There is a huge potential for a service-driven model.
Increasing drone usage could resolve a lot of issues in agriculture, ranging from covering large areas without manpower, reducing water use in large farms, and reducing use of chemicals in farms. Startups are also seeing potential for reduction of human intervention in the spraying of harmful chemicals. All of these have a wide-ranging impact.
Venkatesh Kannaiah: Has Caspian Investments in agritech paid off? Can you tell us about some of your investee companies which had a significant impact.
Emmanuel Murray: At Caspian, we focus on both debt and equity funding. We work on logistics, cold storage, and output-based marketing.
One of our investee companies, Ecozen Solutions, is into modular solar powered cold storage. Ecozen provides solar-based irrigation solutions and solar-based cold storage systems for agricultural usage. It helps farmers reduce their costs of running fossil fuel based pumpsets. Its cold storage solutions help in reducing the post-harvest losses for the farmers.
Another of our investee companies, Stellapps, is a dairy value chain, tracking milk from the cow to the end consumer, avoiding pilferage across the way, and providing quality and traceability to the milk products. It is almost like an ERP product for the dairy industry. It is very relevant in the emerging markets where the yield per animal is low, traceability is inadequate, and quality is not up to the mark.
Venkatesh Kannaiah: How do investors view agritech in India, and what are the challenges that funders and startups face?
Emmanuel Murray: You must understand that there are around 3,000-odd agritech startups in India, of which only around 250 have got funded, which is quite a low number. There is a feeling in the venture capital community that agritech is not providing returns compared to other sectors, and perhaps that is one of the reasons for the low funding.
However, apart from impact investors, general investors do get in with an subject matter impact partner in the lead.
Some of the solutions that agritech startups have come up with include areas like increasing the shelf life of agri products and, in some cases, increasing the quality of the produce. What I hear from startups is that there is a resistance from end consumers to pay more for quality and hence intermediaries are not yet ready to use such technologies.
A lot of startups are also in the traceability segment. It can provide evidence of farms for organic food production and for controlling pesticide use. But these do not have enough takers, as these are seen to be expensive. The Indian consumer is not keen to pay a premium.
