20-March-2024-Editorial

NABARD TO LAUNCH ₹1000-CRORE BLENDED FUND FOR AGRI-STARTUPS

The National Bank for Agriculture and Rural Development (NABARD) has announced plans to introduce a Rs. 1,000-crore fund to support technology-driven agricultural startups and rural enterprises.

This initiative highlights the importance of fostering innovation in the agricultural sector to address emerging challenges and enhance efficiency.

Agri Startups and Associated Challenges:

Agricultural startups, or agri startups, are young companies focusing on innovative solutions, technologies, or business models to improve efficiency and address challenges in the agricultural sector.

Services Offered by Agritech Startups:

• Smart Agriculture Promotion: Providing information on crop yields, rainfall patterns, pest infestation, and soil nutrition.
• Farming as a Service: Offering farming services and machinery rentals on a pay-for-use basis.
• Big Data Analytics: Developing farm-specific, data-driven diagnostics using technologies like Artificial Intelligence to enhance soil and crop health.

Challenges:

• Business Model: Agri startups often prioritize independent production and marketing, hindering scaling beyond initial success.
• Lack of Seed Fund: Startups require funding and mentorship to validate ideas and develop viable business plans, making small grant opportunities insufficient.
• Incubators’ Competence: Agribusiness incubators need a network of professionals with diverse expertise to support startups effectively.
• Limited Knowledge of Available Technology: Budding entrepreneurs lack awareness of commercially viable agricultural technologies offered by research organizations.

Other Initiatives by the Government:

• Digital Agriculture Mission (DAM), 2021: Aims to promote digital technologies in agriculture to enhance productivity and farmer income.
• Innovation and Agri-Entrepreneurship Development Programme: Under Rashtriya Krishi Vikas Yojana (RKVY), focuses on fostering innovation and entrepreneurship in agriculture.
• Priority Sector Lending for Agri-Startups: Provides financial support to startups in the agriculture sector.
• NIDHI Seed Support Program (NIDHI-SSP): Under the Department of Science & Technology (DST), supports startups in various sectors, including agriculture.

Nabventures: Fund for Rural Agriculture Startup

About:

• The government plans to launch a Rs. 750 crore Blended Capital fund to support agricultural startups and rural enterprises.
• Blended finance strategically utilizes development finance to mobilize additional resources towards sustainable development.

Objective:

• The fund aims to support pre-seed startups with unproven ideas or uncertain growth potential, particularly those hindered by insufficient equity for scaling.
• Startups in agritech, animal husbandry, fisheries, food processing, and biotechnology sectors will benefit from this initiative.

Supervision:

• The blended capital support will be managed by Nabventures, a wholly owned subsidiary of NABARD, to finance agri-based startups and rural enterprises.