 right then. Okay. Very good evening to everybody out here in India who joined us for this webinar and thank you for Mark who's joined us today from the US at Omni War Winches. You know just to sort of put a perspective in place as I welcome everyone here today for this webinar is that agriculture today in India is really at crossroads. I mean you know on one side we have a population of about 1.3 billion people whom we have to feed and that probably needs another 50% of added productivity by agriculture in order to do it really efficiently and then in urban areas we are seeing a shift all together where people today want to look at organic food and they want fewer pesticides and fertilizers in their food products. I mean so this I think of course there's Prime Minister who said that we look as a country we should become self-dependent particularly when it comes to food that we consume. So this this means that a lot has to change and I mean agriculture itself needs to change a lot. So just to put a perspective in place today in India the agriculture land yield is about 2.4 tons per hectare. You know if you compare it with countries like China and Brazil you'll find it's about 4.7% 4.7 tons per hectare in China and 3.6 in Brazil which means that India is really behind when it comes to maximizing its productivity. Now if India were to through technology if India were to make this yield and the productivity on the land rise then we can probably only be able to produce the the kind of yield that we want particularly from our two main staple crops which is wheat and rice nearly 40% of the Indian land would actually become free. So that could be used for so many other things it could be used for things like organic agriculture or for growing other crops which India needs. So the answer probably today is that how are we going to put agritech into place in a way that we are able to make this difference or change to the Indian agriculture that we are really really looking at. So agritech is all it's not as if agritech is something new it's already happening in fact if my data is right in 2008 alone 18 sorry agritech received close to about 17 billion dollars of funding across various investments and then there are all the more new areas which are arising in agritech today which Mark is going to tell us about as he tells us about innovation and use of data and agriculture and of course how we can increase the digital infrastructure to improve the agriculture of agriculture. So welcome once again Mark we're so delighted to have you over today and we have got almost 50 people who've joined us here today and we're looking to have more as we go forward. It's evening out here close to dinner time but you know I'm glad we're having this conversation and of course it will be FP live for anybody who wants to comment or write anything on it. So Mark would love to for you to tell us you've got a diverse experience and you understand Indian agricultural market probably better than some of the people in India themselves. You've spent so much time over here and of course with your portfolio companies at Omnivore largely driving agricultural prosperity what is what are the trends that you see in agriculture or agritech that should be first implemented in India to achieve what we are looking to achieve which is higher crop yield. Sure so first I want to reframe the issue for a second. India doesn't really have a productivity problem to be clear. Our productivity levels in in most crops are lower than global norms but let's take a giant step back and think from a food security perspective okay. So one of the wonderful things one of the great achievements of India over the last five decades has been that India in 2020 is a food secure nation right. We are no longer dependent right on on grain imports as as was the case pre-green revolution where it was said that India had a ship-to-mouth existence dependent on US grain right because of low yields and bad harvests. So India today is largely food secure. We produce the second largest amount of rice in the world the second largest amount of wheat. We are number one in cotton production number two in sugar two in fruits two in vegetables one in milk one in pulses right. So for the most part India feeds itself. Now there are two exceptions to that one very glaring which is that two-thirds of our edible oil is imported and then one slightly minor which is that in any given year we might import some amount of pulses to fill the gap but there has been a surge in pulse production in the last few years and that's been coming down. So let's let's start from the perspective that we do not have a food security problem we should solve the edible oil problem but we don't have a food security problem. The second point to make to reframe the issue is that and I I'm sure that that viewers here would have heard these stories when there is a glut right a glut of potatoes or tomatoes or perishable produce what happens in India when prices when there's a glut and prices go down the answers that they get dumped wasted right farmers will literally as a as a demonstration throw potatoes on the highway right to make the point that they're not getting remunerative pricing. So the issue here is when we talk about Indian yields aren't high enough okay what if we doubled them overnight what would happen we would be drowning in food because we don't have the ability to process export store and manage it we don't have that the capability of managing a marketable surplus that is significantly higher than what it is currently so I would always suggest that we reframe the issue of agriculture in India around the farmer itself we have 13 crore farmers okay when you take their families into account that is 70 crore people that are that are dependent right on on agriculture right that live on farm right 700 million people live on farm and so the challenge is not how do we boost their yields because to be clear we will drown in all of those potatoes we can't eat them the question is how do we boost their incomes how do we make it so that farming is not synonymous with poverty right how do we make it so that farmers see higher incomes right and then then begins this this multi decade shift where there are fewer and fewer and fewer farmers as hopefully other elements of the economy services and manufacturing absorb the people that were previously to be blunt underemployed on farm and that's really the challenge and agri-tech you know so agri-tech is not just all about yields right it's really about solving three big problems and this is very fundamental to what we do at omnivore we say there are three things that need to change in Indian agriculture one is farm profitability needs to be radically higher and this is consistent with what the prime minister has been working on the last few years the Dalai report Dalai commission on doubling farmer profitability doubling farmer incomes the second is that Indian farmers need much higher resilience we need to make them more resilient against all of the challenges they face in climate change in weather right in in in labor in every you know in financial risk so we need to boost their incomes but we also need to make their incomes more steady because part of what makes farming miserable is the broom and bust nature of it right if you speak I remember once being at a farmer meeting in gun tour in in in Andhra okay and there were about a hundred farmers there and this was a this was an event uh that was put on by Coromando which which runs a network of of agri retailers or or did in those days and these were progressive Andhra farmers these were like zamandar landlord types okay guys you know people that are farming serious tracks of land making north everyone in that room was probably making north of six to eight lack which were farmers pretty high and we I remember we were asking these questions how many of you want your children to be in agriculture and there was about a hundred farmers in the rooms you can say kind of as a percentage about three percent wanted their children to be in agriculture so when the richest farmers of India still want to push their kids out of the agricultural sector you have to ask why and we did and the answer was that they felt that a government job or a corporate job was guaranteed salary at the end of the month and in agriculture you are perpetually dependent on multiple risks you cannot possibly control and so the second challenge is the challenge of of resilience and the third challenge is sustainability right the biggest bottleneck on in on the future of Indian agriculture is water right but we're also using you know way too many toxic chemicals right we are draining natural resources to to run this and and it's illogical right you think about Indian agriculture why the hell are we growing rice right non basmati rice fine higher high prices and all of that but why are we growing right rice that is procured by the fci in Punjab and Haryana right water what places you know where we need to be very concerned about water why are we in Maharashtra which is drought prone growing so much sugarcane right there isn't there there's an element of of logic that is lacking in our cropping patterns and so these are the three elements that that we think about when we think about what transformation um i'm i'm getting a poll that is being sent to me here uh that just popped up from you guys um you know that's what when we think about transformation that's what we're looking at and in terms of what themes because i think you asked this what themes we find the most attractive right again focused on profitability resilience and sustainability i would say there are a couple of themes that that come out in a big way probably the biggest theme is digitization right how do we connect the farmer upstream midstream and downstream with the people they need to be working with with input suppliers with market linkages with advice and with finance and many many many of our investments are along this theme of digitization right so we we've made an investment in a company called Dehat in eastern India that works in UP Bihar Jharkhand and Orissa about four lakh farmers on the platform right now and they are doubling the profitability of those farmers because they get them inputs at fair prices they help sell their outputs at the best possible price low cost financing combined with advisory and and so if you look across the different you know i would say there's sort of three big themes in indian agri tech right now one is digitization right and and we think of that as as having sub themes right there's a rural fintech element to it there is a farmer platform element to it there are agri b2b market places and there are farm to consumer brands but all of these things essentially are about connecting the farmer and the agribusiness ecosystem through digital technologies right another set of of themes that we look at we consider to be deep tech right still digital but really focused on the application of sensors satellites drones big data algorithms machine learning to far upstream agriculture and to the entire value chain right we we've backed a company called entello labs that is using computer vision and machine learning to digitize what quality means and fresh produce because quality is subjective right right now it's subjective you go into a monday and you will be told something is this quality and you have no idea if that's true and by the way it's not just you reliance doesn't know if it's true amazon doesn't know if it's true right big food processing companies don't know if it's true because there's no standard and so entello labs is digitizing that standard but in a deep tech kind of way and then the third probably area of innovation and this is the least active of the three digitization massively active huge amounts of money pouring into that right players like de hot and ninja cart you know samonati grumb cover that's where most of the funding has been deep tech less of it right but starting to come up and then the third element is life sciences related to agriculture and food and that's that's sort of the dog that didn't bark in in india right it's um inexplicably low amounts of startup creation negligible amounts of pipeline and it's probably the space where where some sort of public private intervention is the most required i get in trouble for saying this but you can find more indian passport portholders running life sciences startups in one mile of boston than you can in all of india yeah well that's that's the dichotomy of the situation yeah but it used to be like that in tech right it used to be like that for for people in hardware and software and that's changed that brain drain is done right in fact now we have people coming back right thanks to to trump and global stupidity right and so in the digital space right good people don't leave anymore the way they used to and lots of nri's have returned home but in life sciences that hasn't happened and so you still have the best and brightest minds they see minds in life sciences in california in boston right in oxbridge right not returning home yet and that's something we need to fix sure now you mentioned a good point which is about profitability of startup profitability of the farmer really and the farm itself and then you also mentioned that a lot of people do not want to today become farmers they don't want the next generation of children actually getting into farming now do you feel robotics at some point of time we could have more robotic farming i mean we've seen the documentaries and videos in us and in european markets where you know big farms and much bigger farms than out there are in india the thing about india is that we have much smaller farms per household and therefore it's not profitable enough at times so do you feel that robotic technology at some point of time could cover the gap of people not wanting to be farmers in the coming times so let's let's make a distinction between mechanization automation robotics okay so so in general mechanization in india has been on the rise for the last 30 years and and crazily so in the last 10 right that's tractors right basically getting human labor to reduce on farm and unfortunately in india mechanization has only really been tractorization so far right so there's very little automatic spraying that is done via tractors right most automatic spraying in india is done with some dude and a backpack right and a backpack sprayer manually um really the only most seeding is still done manually right so really if you look at what tractors are used for for the most part right it's largely soil preparation right and then afterwards everything else is still fairly manual um and that's starting to change you know harvesters came in about 20 years ago that has picked up in a big way so let's think about this in sort of layers tractorization that's happened right about seven eight lakh tractors are sold every year in india that's advancing very nicely broader mechanization right is is taking place now more aggressively than it did before yeah automation right is also happening across the value chain all of that is is part of the robotics story robotics is like the last stage right so let's imagine let's let's imagine we're not in Punjab let's imagine we're in Iowa for a second okay in Iowa the farmer right sits in this massive massive tractor huge right larger than any tractor you can find in india and they plow their fields in it and they harvest their fields with harvesters and it's an air conditioned cab right so it's like it's like sitting in a car and they don't they don't steer themselves it is it is steered via satellite okay uh to make sure the steering is perfect straight line and there's all this data being collected and every function is automated it's not just soil preparation seeding is automated spraying is automated and harvesting is automated that whole element can go a lot further than it has in india before we start talking about taking the farmer out of the cab and that's really what robotics is is taking the farmer out of the cab and that in the us in europe the farmer is still sitting in the cab right that's starting to change there are a couple of of you know there are a couple of players in true farm robotics that are looking at getting the farmer out of the cab so it's totally automated but we have a long way to go right before that becomes the most critical thing with respect to to to farm automation that all of that said right there are some really interesting unique opportunities that work very well in india relating to small farm size where you can actually get the tractor out of the picture right the tractor is not a perfect instrument it's a it's a byproduct of our dependence on the internal combustion engine 50 or 60 years ago or 100 years ago or 150 years ago when tractors really started that was you know you needed a big internal combustion engine in order to bring any sort of power to the farm fast forward to 2020 we don't need that we have electric motors brushless motors right you don't need to drop a ton of metal in order to fulfill a task on farm and so the interesting thing about farm robotics is potentially you're looking at robots that will entirely replace the tractor with something that is much smaller that compacts the soil less that's more nimble and that you know is built from the very beginning without a farmer involved so we've backed a company called tartan sense which is Bangalore base the entire team comes from Carnegie Mellon so in that sense it looks like every other robotics startup that's been funded in the world we've done it together with bloom ventures and they are building tiny tiny robots right robots the size of you know a bread basket that can go through the fields monitor weeds and if they identify a weed destroy the weed right and that is entirely without a farmer being present in fact you know the goal right now it's it's semi-autonomous which means that you put it on a row it goes down the row identifies and kills right and then you move it somewhere else but eventually it's going to be fully autonomous and so you're going to have almost I don't know if you're familiar with this thing the Roomba right this little robot that that you know vacuums you're going to have almost a Roomba for weed control and that's where we're heading so and the nice thing about it is it's very low cost right so an individual farmer can afford it if they're large enough and if they're not we anticipate that in agri-robotics in India you're going to see models of service where a village-level entrepreneur buys it buys one and then services 10 or 20 farms with it right and that's very similar to how how harvesters have been introduced in India it's not that you know even the largest Punjabi farmer or farmers in Chattisgarh that have been able to aggregate large amounts of land even those tracks those 200 hectares are too small to justify the spend on a harvester so harvesters in India have become effectively it's almost like someone in the city buying a car to become an uber driver right it becomes a service business and then you sweat the asset and we anticipate that there will be agri-robotic cases in India which are based on a similar kind of entrepreneurial model sure I mean we're seeing the rise of farming as a service today more like SAS we have fast which is like as I said farming as a service and you mentioned about automation and you know because the farms are small so we don't necessarily need to buy all those equipment we can actually you know pull them together and yeah at the village at the village level at the Taluk level at the district level yeah absolutely so do you see more startups more tech startups who can facilitate this kind of automation first of course understanding the Indian automation and the the real need of automation over here and do you further see an opportunity for more such startups to come in which can help in automation so let me make a distinction between product companies and service companies right I think we need a lot more product companies with respect to automation we need a lot of people to look at robotics we need them to look at other right forms of automation we need to look at next generation farm machinery all of that with respect to services there were probably about 10 startups three years ago that were working in the farming as a service automation as a service machinery as a service Uber for tractors kind of place they're all but all but one is dead now yeah all but one and and the reality is it is very and this is a lesson that I learned a decade ago when I was at Goldridge okay it is very hard to compete with the informal economy it is very hard and and so when you start talking about tractors as a service harvesters as a service you have to remember that that's already happening right right that's already happening if you if you go right in in eastern Rajasthan okay and go to a village you will discover that there are tractor owners and they know their neighbors and they go out and service their neighbors farms you will see if you go if you go to um you know if you go to Jalandhar right and you have and Ludhiana and you have all of these harvester machine you know machinery companies up there that are making daisy harvesters not the fancy John Deere ones okay they get sold and then those harvesters spend eight months a year criss-crossing India going as far south as Tamil Nadu harvesting the whole country so and and those and those are not owned by corporates in fact when corporates have tried to take those businesses over it's heavy overheads right you know you just you can't break even it's very hard to compete with the cost structure of a village level Indian entrepreneur right we have HR departments they have their mother we have accounting and finance departments they have their cousin right so it's just their cost structure for what is to be clear a pretty thin margin business just makes them out compete any attempt from a corporate or a startup to organize that space it just hasn't worked yet sure and i mean given that you've said that you know that their whole working and their whole style of operations is very different than what a business would look like in an urban area how do you see the farmer being able to adopt somewhere midway between what the corporate is trying to give him and what is really what he's doing currently i mean you know what from what you've told me it seems that the answer is somewhere in the middle rather than really being at the corporate level or at the farmer's level itself look i mean i think the point is farmers that want automation right whether they buy it or whether they lease it it is available okay it can be made more affordable the tech the tech can be better the products can be better but but in general outside of you know some remote adavasi kind of place right you can pretty much get what you need what you want um i think there have been various you know attempts by players to say no no no we're gonna aggregate all of it and get everyone on it and the answer is what's the exactly what's the benefit there right the business is is kind of going on you can make it slightly better but platforms haven't worked as well there i think there is much more space for platforms connecting input suppliers to farmers making sure farmers get fair prices but mechanization is one of these spaces that's probably a bit more modern than people realized and more efficient than people realized it's very easy sometimes especially when you have you know urban founders that have aspirations that that everything in Indian agriculture is backwards right and then they go discover that no it's it's kind of the way it is for a reason and probably a little bit less backwards than you expect sure no that that's that's a great observation and i mean this is particularly good to know that you know i mean they might have farmers might have their own ways of working but it really works for them that's why it works the whole system works like that but of course improvement is always something that can be done you know you've talked about mechanization and you've talked about yield so let's touch upon distribution which i think is a problem not just in India probably more in India but it's really a problem in the world where you know not even 90 percent i mean i don't know many countries who can say that even 90 percent of their entire production actually is utilized and only 10 percent is wasted i see i've seen numbers of different countries it's anywhere between 25 to 30 percent which gets wasted in india probably it's 50 percent or even more so how do you how do you see the distribution becoming more efficient through everything look i mean there there were pre-covid trends and post-covid trends right right so you know pre-covid trends over the course of the last five years you've seen the rise of various marketplaces that are focused on disintermediation of the farmer right so that is you know there you've seen ninja cart you've seen way cool right you've seen other specialty players we have a bet called farmly and very specialized crops but various startups started recognizing that all of these steps between the farmer and the consumer that needed to change right and so some of them had a b2b focus right so for example you know uran ninja cart right way cool they're largely buying from the farmer supplying the kirana okay then others or a food processor then others right recognize that there was the potential to build a direct farm to consumer connect right so you've seen that we have an investment y cook that has done that um you know country delight has done that in dairy fresh to home has done that in seafood licious has done that in meat right so there was we call those farm to consumer brands okay our investment clover is is doing that as well um so all of that together pre-covid was was happening i think what's interesting now is you know i think covid revealed for the first time just how fragile the system is and how overly dependent it is on mondays and the existing channels and so i think reforms right earlier this week the government tabled three major initiatives right one initiative around the essential commodities act a second initiative around apmcs and the monopoly that is the monday and trying to break that and the third initiative around contract farming and i think all of this is a recognition that this legacy system that was built right for our food scarcity era right that that the 1950s the 1960s the 1970s right where profit was a dirty word and everyone was fearing the speculator and the hoarder right fast forward to 2020 we are a food surplus nation we export rice okay we we are in you know we have huge exports in in certain categories and so i think there's a recognition that that these systems that perhaps had a logic at one point of time in trying to quote unquote protect the farmer have in fact become fairly compromised monopolies that that ensure a steady income to banyas and and you know and it's not even like if i wanted to be a trader and get an apmc license that i could get one right it's it's very much like taxi medallions were in the us in the pre uber era right these were protected monopolies of rent seeking and and to be clear traders have a purpose right they really do but what we did is we allowed them to exist without competition and i think what's happening now is a recognition that in order to make sure that the farmer is at the center of policy right in in their actual lives right we're moving away from this monopoly system to a system that says look farmers you have all the options if you want to sell to your artia in your you know in the apmc in the mondi go right ahead but if you want to sell directly to a food processing company you can if you want to sell to a digital platform you can however you want to sell what whoever gives you the best price that's what makes us happy and i think the government shifting to a position of neutrality rather than favoring right the existing monopoly structure is probably a good thing i don't think the traders are going anywhere i don't think the apmcs are going anywhere there's a lot of infrastructure there there are a lot of very sophisticated actors i think what you're going to see is a modernization of this whole space in a big way in the next few years and hopefully that will be very positive for indian agriculture sure absolutely you know we've got some questions really pouring in from our audience so i think it's time to actually start taking some of them so vinnia i think has a question can we give the audio to vinnia okay let me see so director vinnia kumar has like that more marginal and small farmers are facing issues of market bargaining ability what is your message to deal with this issue um so my message is give them the option right so so we need to create more options for for these players right for small and marginal farmers they need to be able to you know if you're selling something the more people you can sell to the better chance you have that you can identify a price that works for you or a price combined with a logistic solution or maybe a multi-year contract or maybe contract farming i think the whole point about market bargaining ability is to open up the options for those farmers right because some of them right for example you have farmed a consumer brands where they will sell directly to a company that in turn will deliver directly to a consumer and yes that company will take their cut but the way most of those companies are doing well right is paying the farmer more to make sure that product gets onto their platform and giving the consumer a fair price and so i think again it's it's about digitization it's about opening up the playing field from a regulatory perspective and allowing the market to work and you know i am not a market fundamentalist i don't you know i think the market failure is more common than people realize but i think in this case options will be a very positive thing and you have more and more capital coming into the space and you will start to see that farmers are able to find remunerative prices for themselves sure uh we have Birju Gariba next Birju if you can unmute unmute please unmute kindly before you ask the question can you hear me yeah hear you fine yeah so i my question is pertaining to farm to home distribution farm to fork directly how well do you think is the network established currently whether it's organic or non-organic and how much need do you see in today's day and age for that kind of a network given that government has opened up the whole neutralize the whole apmc network look it so how well established is it it's very nascent it's very urban right now right it's really only Bangalore Delhi to some extent Mumbai Pune Hyderabad um you know when you look at the players that have scaled there right it you you've had the most successful in the dairy space has been country delight in meat and it's licious in fish it's fresh to home um but all of this is very very early days and i anticipate you will see you know geo take a play there you will see um amazon take a play there right i flipkart take a play there others will will enter that space uh as well um what's my opinion about it i think it for certain products it it makes a tremendous amount of sense i you know as a consumer would like to know where my fish is coming from as a consumer i'd like to buy higher quality milk that i know is sourced directly from farms maybe not organic farms but but you know good clean sustainable farms and so i think you know this is obviously very focused on middle and upper class indian consumers for now but i think that kind of direct farm to home disintermediation is going to be a big trend uh because i think as as consumers become more particular about quality right the best way to understand quality right is to be in a very very short value chain where you have transparency on the back end and i think that's what these companies are trying to do but to be clear right now it's a drop in the bucket sure amazing thank you and may i just follow up with one small question you just mentioned about uh four large uh no giants of the nature of amazon and and likes do you think there's a scope for a small to mid-sized company as well or is it only great for these giants i think small to mid-sized companies are either going to get acquired or die um i think that's just the nature of you know maybe maybe they'll be able to become mid-sized on their own but you know if you think about um we you know this space three years ago there were a ton of small to mid-sized players in it right um daily ninja got acquired you know got acquired not on great terms um by by big basket i should include big basket alongside amazon and others right there was dudvala that we invested in that that you know largely shut down partially acquired um there were many many other place many many other players this is a space where size matters in a big way and and we're just having one niche offering probably isn't enough when you've got others that can provide everything so let's see how it plays out but i i think over time this space will be consolidated by essentially the delivery giants and there'll be opportunities but you look at these a-to-milk providers they're pretty regional in their entire approach and yet they're doing okay for the kind of market that they sell let me make a let me make a distinction that's a fair point um you can build a lifestyle business absolutely right if you have a very narrow amount of distribution yeah and a high value product yeah sure you can build a lifestyle business if you want to scale nationally right you're going to slant you're going to need a significant amount of investment and you're probably going to get choked off by one of these players so so honestly if i'm an a-two business okay and i want to build let's say a national a-two business i would focus on the product maybe in my early years i do a bit of regional local distribution but eventually i don't have an advantage in doing that distribution so i focus on the product itself and i get the product listed on milk basket i get the product listed on amazon i get the product listed on big basket rather than saying that i should have my own delivery voice sure our next question comes from Prabhat uh if uh Prabhat is he online okay please unmute Prabhat uh thanks Ritu uh can you hear me yes uh thank you thanks a lot mark my question to you is i'm currently researching the space for investments and uh i was looking at agri fintech so is agri fintech an attractive and sizable market opportunity for agri tech investors like yourself and do you think margins are you know attractive in this space or or at this moment more integrated full-stack models are something that you're more excited about so i think full-stack models the space of full-stack is getting very crowded right now um and some some winners are emerging that are going to kind of suck more and more and more of the cash being invested in that segment i think agri fintech is is a fascinating space we have an investment we have two investments in agri fintech we invested in grumb cover which is probably the the biggest insure tech space player in rural india and um we invested in aria which is a post harvest services platform where warehouse finance is a big part of that if i were if you're if you're asking me should you look at value chains versus agri fintech i actually think agri fintech is in its very early days you have very few players it's an interesting space and you should absolutely look at it thank you mark you're quite welcome there's arunesh for next uh go ahead arunesh for please unmute first sir good evening uh am i am i audible yes sir uh why there are many middlemen in the agriculture supply chains in india why are there many middlemen i mean i think two reasons one is the supply chains are quite fragmented you have many many many many farmers on one side 130 million and you have hundreds of millions of consumers on the other and as a result right for hundreds if not thousands of years if you had capital right you could make money buying from one and selling to the other yes right that's just you know that's i mean then to be clear it's not just an indian thing that was true everywhere in the world um you know traders have existed to to bridge right to bring the integration of you know to to link supply and demand and to overlay finance to make that all work so i think what happened in india is that while every other sector of the economy after 1991 was allowed to reform you know agriculture was quote unquote protected under the you know under the premise that farmers needed protecting in reality a lot of that was protecting middlemen and so i think that's what's starting to change thank you we're getting a question on facebook which is really from pinaki das who's asking how do you see north east india as part of the agritic industry so which opportunities do you see and could you see uh some investment money or towards sustainable business in agritic industry in that part of the country so i for a furan i know the northeast fairly well i made an invent i was the only vc who had a northeastern investment um that i know of we invested in a in a food processing business in gohatti in 2013 uh to be clear pretty tough experience um look the northeast is historically a laggard with respect to to agricultural development um because of everything that comes with the northeast you are you know things are more expensive there because you're cut off from the rest of india logistics are very difficult getting better to be clear but still quite hard right you've got a ship product right through borough land where frequently you will have demonstrations i remember um i almost once created like a spinning wheel of what was the problem in the northeast this time it was like okay is it be who is it demonstration is it bombs is it the boroughs have shut the border right you could like pick what was wrong with the company at any given moment um between all of these challenges to be clear the northeast has some wonderful advantages right it has amazing you know microclimates that you can grow things there you can't grow anywhere else in the country and i think that for example it's not technically one of the seven sisters but sikkim has shown that you can build a very interesting ecosystem around organic right because you have a manageable amount of farmers and you know and you can enforce the system to focus on you know really really really tasty clean um and and high value crops i think there are some really interesting opportunities in the northeast i think there's a lot of potential for small businesses that can be quite successful is it a priority for for most agri tech startups if they're not in t probably not because for the most part there's lower hanging fruit to be found in the west and the south and the north i think some of these agri tech platforms will come to the northeast i'm sure of it um but i think it's it's it's just a it's on average a more difficult region to operate in and i say that not from ignorance but from brutal experience sure um you know uh while we're talking about uh different markets another you know farming today urban farming is becoming another new phenomena that we're seeing whether it is organic farming or whether microgreen farming it's something which is really on the rise now what opportunity do you see in this and i mean you know obviously there's a trend towards healthier eating which is where people look for these smaller farms which are doing organic products i mean do you really see this as a scalable business model or as like you said for a two milk it's going to be a very small regionalized distribution and therefore should not be thought of as bigger so let me make a distinction between protected agriculture as a theme and urban agriculture and microgreens okay protected agriculture means poly houses and net houses and there are only about 50 000 acres of in in india that are under protected agriculture and there is huge scope for more right we should have you know a tremendous amount of our horticultural production under protected agriculture in poly houses and in net houses okay um and we've made a bet in that space clover which is essentially dark farms that aggregate these greenhouses and then market the produce the high quality produce under b2b and b2c brands and i think there's massive massive scope for that now what is urban agriculture urban agriculture is largely right um well it's largely a western phenomenon right now and it's basically how do we use urban space to grow okay now why do you need to do that you need to do that because you know in urban america where this is taken off farms are very very very far away from the cities right so you're shipping fresh produce from california to new york so that someone can have a lettuce right in uh in december that is not the case with indian cities right you get in mumbai and you drive right an hour and a half outside and the farms start immediately right and those farms are where most horticulture that is coming into the cities are being grown we're not shipping balak from one side of india to the other every city is growing balak outside of it for its own domestic consumption in x urban peri urban right kind of two hours maybe three hours away from the city so the need for quote unquote urban agriculture in india is a bit less the other thing to remember is that we have quite a bit of land and we have a lot of sun right so it's not like you know new york in you one of the biggest players in the u.s is aero farms right and their facilities are in warehouses in buildings and they use led lighting so that they can have 12 month a year growing we anyway have 12 month a year growing in india so the need for urban agriculture is a bit different we need much more polyhouses we need more protected cultivation but this kind of led centric urban agriculture in india i i'm not sure that that's required the same way as a result when people are doing those kinds of projects right if you have an entrepreneur in the city they're going to go towards the most high value added expensive products imaginable and hence you bring up microgreens let's be very blunt only people who watch webinars like this eat microgreens okay if we go to your your nana nani doesn't they don't know what microgreens are okay i i have there's a term that i i think bloom came up with where they they call it avocado startups and it means startups that are relevant for people who eat avocados okay the top five to 10 million indian consumers so yeah i believe you can you can do interesting urban agriculture products and in mumbai you know bandra juhu right south bombay colaba these are all places where you'll find consumers who want to buy that stuff but when we're really talking about stuff that moves the needle on indian agriculture these are much more niche consumer plays and i think you know we we bet on clover versus some of these other things because we think you know what we're really talking about is moving towards protected climate resilient agriculture and not necessarily very niche solutions focused on the top half of one percent of indian consumers sure a lot of people out here are asking about hydroponics farming as well i mean what opportunities do you see do you see hydroponic is between these two points right so plenty of um it just really depends on what you're growing right so if you're growing lettuces right and you want to sell them to subway or to a local restaurant then hydroponics is very nice because you know you don't have soil that's tied up that that's caught up in the lettuce you don't have dirt that you have to clean and remove right and and in general right you have a lot of control in terms of crop nutrients and other things um but hydroponics is is one type of solution associated with protected agriculture it doesn't necessarily need to be urban farming right you can go out three hours outside of bangalore and you will find protect greenhouses that are operating hydroponically right where where there's no where there's no soil so it's just a technology that sort of spreads across this spectrum from more generic polyhouses to more specific right niche urban farming operations someone's also asking do you think it makes sense to do organic farming for india or better to export it look i i think india has a proclivity for organic that is ahead of where you would expect the country to be in terms of in terms of incomes and and the analogy that i always share with people is you know fab india is kind of the case study here right so for for decades right indian consumers have been buying you know organic cotton curtas at fab india um because and and fab india has built sort of an organic brand they also have an organic food brand and i think there is you know india is a very diet conscious culture right it has to be religiously you have people that are you know you have shrubbin you have i don't eat meat on tuesdays right you have notions of satvic and purity and all of these things that are just not there in most of the world right so i think indians are a little hardwired you know you have ayurveda you you're a little hardwired to like organic relative to other cultures i think because of these food traditions so i think there is a play in organic in india i think there's also a play outside right so mentor does huge exports of organic materials organic crops outside of india i think organic is a good solution i don't think it's a panacea i don't think it's a panacea for the land i don't think it's a panacea for farmers but there's definitely an opportunity there and it's worth exploring you just have to think very hard about the value chain you're playing sure and so there's one question coming from rahul kumar if we can give him the audio and i think this is probably the last question we're almost uh uh there on time but we have a lot of other questions mark so if you know he's gonna take me it's okay i i i've got i've got a i've got five minutes is rahul kumar doing yes yes am i audible yeah like no i even actually know my next call is not for i i have time so if you want to run it a couple minutes later okay so i hope i'm audible yeah i can can i ask the question yeah yeah so mark uh so my question is basically uh from technology side uh i follow agriculture technology uh you know uh i i am tacking this from last five years i'm working as an undist so basically you know when you talk about agriculture technology then we have seen that tremendous adoption in in those countries which have larger farms like you know us canada brazil argentina even in european countries but india we have uh you know the most of the farms are less than two hectares in fact 90 percent of the farms are grow two hectares so what is your view on adoption of uh technology basically which are used in precision agriculture and uh technology like vrt guidance remote sensing so what is your view when we will have a scalability for this kind of technology in india so it's already happening let's let's let's make a distinction between because i i think as as people who are sort of veterans of agribusiness right there's a tendency to think that things are moving very very slowly because we've all been working to try to map modernize indian agriculture i i you know i started my first job in indian ag was i interned for itc in 2005 okay so i've spent a lot of my life working in the space and it's very easy to get you know kind of cynical and say oh nothing's happening oh it's very slow but let's remember something a lot of a lot of agri tech is premised on information and until very recently your average indian farmer did not have a smartphone right so i think with the rise of 4g and with the rise of geo and with the rise of low cost android handsets which are to be clear it's really the last five years and if you look at the acceleration the dramatic accelerations in the last 24 months the the necessary technology base technology platform technology to facilitate agri technology wasn't there and so i think what we're seeing right now is a massive pickup in the ability of agri tech startups to to scale and reach farmers when we started omnivore in 2011 and for our first few years most of the startups that we backed were really b2b startups focused on the agribusiness ecosystem because you couldn't get direct access to farmers there was no way to reach them today you have whatsapp you have facebook right you have the geo platform they're all of these ways to actually reach farmers directly and onboard them that was never possible before so i think in that sense that's a major change when you ask about you know the issue of land as i spoke to earlier when we were discussing automation right just because right your average farmer has 1.2 hectares right under that logic no one would own a tractor no one would own a harvester but we all know they're attractors and we all know they're harvesters so the point at which agri tech intersects with the agribusiness ecosystem may also facilitate that kind of modernization and the adoption of precision so for example you know if you look at at Mahindra Mahindra is working with startups to get precision agriculture technologies embedded in their tractors so when their tractors are sold regardless of whether it's used by a farmer or a village level entrepreneur or some like small company that owns 20 tractors and runs a service business right in all of those cases the precision agriculture solution will be there so i think we and then finally the last point that i would make is and i like i said i i get in trouble for saying these things sometimes right people are always like you know why isn't your why aren't your companies focused on marginal farmers and i'm like okay when xiaomi started selling mobile phones in india do they walk into the ravi and start selling them or do they start selling them to rich people right you you don't necessarily start at the absolute bottom of the pyramid you have to remember that about 15 percent of indian farmers own approximately 48 percent of the land in india right india everything in india is stratified everything is is hierarchical the average there is no average indian farmer right and so it shouldn't be a surprise that most agri tech startups are focused on the half of the land that's owned by 15 percent of the population that are the larger and more progressive farmers that's not to say you know our portfolio company the hot is working with marginal farmers in behar but if you're starting you can't see 130 million farmers as a homogenous mass you have to figure out what value chains what segments what land holdings what crops you want to participate in and disaggregate that and identify the opportunities and so i think the last thing to understand is i do expect that agri tech will accelerate much more in the top you know top 20 percent of indian farmers than in the bottom 80 for the next few years and then it will go down to the next 20 percent and then the next 20 percent and from there do you wish do you see yourself i mean you said that 48 to 15 15 percent and do you i mean would you want to see an india where there would be 30 percent owning about 70 percent do you think that would help solving the agriculture problem i only want to see that if the other people have jobs right the reality is agriculture is like a a sponge right for the underemployed and we're seeing that like look look at what's happening right now we have 13 you know we have about 100 million migrants that have returned back to villages i don't think to be clear i think they're going to struggle but i don't think they're going to starve because agriculture is the sponge for labor right it mops up the excess right and a lot of people in in agriculture are underemployed right which is why farmers push their children into government jobs into cities into private jobs even being a peon right in an office over being underemployed on farm i think in general what i would like to see over time right is not the concentration of land from an ownership perspective like because i think land is a very valuable asset but i i would like to see a world where farmers can safely legally lease land to other farmers right and have those farmers right manage in an in a in larger and larger and larger operating holdings right that bring efficiencies without necessarily seeing the hyper concentration in land which i to be clear think would be a terrible thing sure we have another question from venote you have another five minutes mark yeah i'm good okay so we have another question from venote dogney if he's around yes uh go ahead we can hang hi mark hi so my question was about how is the future that you're looking at right now for a ready to eat food processing industry which completely rely on the agriculture business which is a backbone for the food processing industry like ready to eat foods so i think there are certainly opportunities in in food processing i think it's a great space for for SMEs in particular right you know i think i think there's huge scope there i think the one thing that we have to remember is that um indian food habits are not that flexible right and and this is a country where people in general want homemade fresh food and in fact have migrated from homemade fresh food to homemade to to cloud kitchen made delivery food that is hot and have bypassed a lot of processed food so if i look at the kind of when i was a kid growing up in the states i had a ton of frozen food i had a ton of canned food there was all of this there were all of these kind of meal kits that you know things like you probably never heard of it hamburger helper rice oroni all of this stuff that existed that that helped speed up meal prep times like for small income families in the u.s and none of that is there in india and india has largely bypassed a lot of that um and i think there's a lot of interesting reasons for it but rte has not for the most part been very successful right you know in reality most rte in india is bought and then put into the luggage of students going to study abroad right so they can have chana masala when they're when they're living in you know when they're studying at iowa state right it's not really consumed very much in india and so i think you just have to be very aware of if you're going to do something in rte that there's probably a reason it hasn't taken off in in the way in the way people expected it to 10 or 20 years ago and just choose accordingly sure the next is from amish moody amish abinod can you please mute yourself yeah hi um hi uh wonderful talk i just wanted to understand what what do you think the near-term future of organic uh producers and the challenge we face is people's skepticism towards it you know whether it's actually organic or it's white washed organic so how does a retailer you know tackle that look i think you need to have organic product companies that can prove their product is organic because the reality is for three lack and you know you can buy any organic certificate you want right and so and i think i think consumers realize that um and hence there is a bit of skepticism around you know organic that's that's sold domestically i think over time as digitization facilitates direct farmer connect right you're going to be able to show your consumers right this is farmer you know ram in telangana right and here is you know and we have a qr code and you know it came from this farm and here is the soil sample from this farm that shows that there's nothing wrong in the soil and you'll be able to kind of build and and some people are looking at blockchain for this um you'll be able to kind of prove that no it's actually organic um but the other thing is that we have to remember that organic is is not a panacea it's it can be good for farmers right if it gets them paid more but if their yields are terrible because organic is hard and people are not giving them the price that they deserve then it can be worse and so i i think you know i think it's also important to understand what categories work well with organic and what categories work less well i don't think you know i think there is definitely scope for more humanely raised non veg right more you know quote unquote organic dairy a to dairy or otherwise um i think in a lot of other categories the consumer is more indifferent uh domestically and and and sometimes it's also a function you know with Indian consumers it's really all about taste so if you're charging someone more for something that is ostensibly organic but it doesn't taste better i don't think the consumer's going to stick with it sure thank you uh we'll take one final question from dn data um is he online please unmute dn we'll we need to unmute before you ask the question hello so i see the question which is what's the scope of inland aquaculture yeah yeah so i i actually think the scope in inland aquaculture is massive aquaculture is one of the brightest spots in the indian agricultural economy in the shrimp sector you have literally 50 000 farmers and five billion dollars of exports on the other side of it right um the fish sector has been much less developed but in general i think it's a very i think there is huge scope for growth indian exports are being able to prove themselves to be very high quality you find them in supermarkets in you know in the us in a big way um scope in china there's scope in japan there's scope in europe but there's also a lot of domestic scope right almost no shrimp that has grown in india stays in india it's almost all exported so there's definitely scope to develop better value chains direct to consumer in in seafood you know in in both shrimp and fish and in general aquaculture the the you know what's called the fcr the conversion of feed into meat in aquaculture is very very high you know high better even better than chickens which itself is very efficient so when we're looking at trying to find low-cost sources of protein for for indian consumers aquaculture is a very good bet so i i mean we we have two investments there we have eruvaka which is an iot company uh in partnership now with nutraiko and we have aqua connect which is building the largest uh platform for aquaculture farmers in india so yeah there's there's quite a bit of scope sure thanks very much mark and as we uh all the close would love to hear from you as to if the next three sectors i mean as you said about aquaculture maybe what are the next three sectors or trends that you see where you would you would bet your dollar on so i think the alternative protein space is very interesting very nascent um but india is a massive global producer of of mill of millets and pulses and even if alternative protein is not domestically interesting uh in india as a consumer play i think as a as a production supply play it's quite interesting um i would definitely endorse what i said earlier and say that that agri fintech is a space that's barely been explored and it's certainly a space that we're keen on on more opportunities and then um i really want to see more life sciences deals i i think that you know people are not global companies are not focused on india with respect to life science technologies um and and solving the problems faced by indian farmers at indian price points and so we need domestic entrepreneurs to do that and they're not right now barely so we would like to see a lot more in that space and bet more heavily in that space sure and hopefully you know i mean you you have such vision of agriculture all across across the spectrum of the country and also about rural as well as though but i mean we would love to have people like you in the government sitting in the ministry of agriculture and actually advising the government about how they can fix the problems let's give the minister let's give the ministry their due um they have done more in the last month from a reform perspective than it has been done in in 15 or 20 years i i am a critic when i need to be a critic and i will praise when i should praise and i think this is one of the moments where there has been some very farsighted uh activity that hopefully will translate into a a big bang moment in in indian agriculture um that that makes everyone better off and sure need more agriculture technology would only facilitate it for them thank you very much for joining us mark this talk will be live on uh facebook so if anybody has more questions please keep on asking over there we would ask probably mark or his team to maybe if they can take a wild to answer some of the questions which are there on our social networks very happy to is it going up on youtube as well it will go on youtube but right now it's on facebook uh if you go up on youtube it might tomorrow maybe so happy to answer more questions and also personally you can reach out to me on linkedin or any other channel and if you have some ideas or some areas on which you would like us to do more webinars or some subjects you would like to discuss we're always happy to look at them and facilitate them further and also get experts who can talk to you about them thank you very much everyone see you bye bye mark thank you and thank you to all the attendees thanks for the questions cheers thanks to you too thank you