AGROTECH: TRANSFORMING TRADITIONAL AGRICULTURE PRACTICES

Bangladesh is a country of which economy has been primarily reliant on agriculture for millennia. Agriculture is the largest sector when it comes to workforce employment. However, there is an apparent contradiction when workforce participation is compared to agriculture’s contribution to the gross domestic product (GDP) of Bangladesh. Undesirably, 41% of labour force is employed for just around 13% of the country’s GDP. Even if it seems late, changes are happening in this sector. And, agrotech is the main catalyst for revolutionizing the traditional agriculture practices.

Agrotech was not well-known in Bangladesh until recently. Agrotech simply means using technology in agriculture to improve yield, efficiency, and profitability. They can be products, services, or applications derived from agriculture to enhance various input and output processes. Today, in Bangladesh, a bunch of agrotech startups are trying to think beyond the traditional agriculture boundaries using the appropriate technologies and innovation. They have emerged concentrating on a distinct area. Additionally, enterprises in this industry provide various services to their customers, including demand-driven supply, digitalized ordering systems, network-based distribution, and new equipment.

Traditional Agricultural Landscape

Agriculture has historically been seen in Bangladesh as a labour-intensive industry. The farmers themselves developed most of the instruments which were used to cultivate the land. Depending on the environmental and cultivation requirements, the use of these tools used vary from time to time, locality to locality. Alongside, the use of organic fertilizer often resulted in unpredictability in production levels.

Until around a decade ago, most farming chores were done manually. Ploughing the land with cows or buffaloes used to be a common part of the farming process. Inadvertently, it required much time and effort for harrowing the soil. Again, hand spraying method was followed to disinfect the land which was inefficient for a large-scale operation. Also, it was difficult to keep track of the amount of pesticide being applied to each plant since a manual spray could not ensure an equal dispersion of insecticide.

Needless to say, the conventional method required much labour and was primarily concerned with harvesting. There was little or no evidence of agricultural innovation. Farmers were also totally unaware of doing the things in an efficient way. As a result, inefficiency prevailed throughout the industry necessitating significant modifications to maximize production capacity. This demand compelled nearly every element of the traditional agricultural production, storage, and distribution systems to be modified with modern methods and technologies. Modern farming also puts higher emphasis on crop diversification. Hence, monoculture is being phased out with the help of precision farming.

Current Practices in the Agricultural Sector- Emergence of Agrotech

Agrotech has emerged as a solution to multiple issues that encompassed the scope of replacing existing processes, methods, and tools in the agricultural sector. Apart from the direct uses of modern machineries and equipment, the agrotech also includes services such as providing consultancy to the farmers. The customization of services can be seen as one of the determinants of success of such agrotech firms.

According to Lighcastlebd, there are 5 different groups of agro-tech firms in Bangladesh. Informationbased, Market Linkage, Mechanization, Access to Finance and Advanced Farming Techniques Agro Tech firms. Each of these firms have specific core functions. Information-Based Agro Tech firms such as e-Farmers’ Hub, use information to leverage better production and prices at both farmer and consumer ends. Market Linkage firms such as Parmeeda, connect consumers to certified farms to provide better produce. Mechanization Firms make farming easier and labor intensive. Access to Finance firms makes funds available for farmers and transaction easier while Advanced Farming Techniques firms use new techniques to increase farm profitability.

While numerous innovative services are being offered, the growing number of companies in the agrotech sector is noteworthy. Based on the scopes and activities of the firms, the potential benefits of agrotech can be listed as follows.

Modernization

To maximize the agricultural output, there has been a significant change in the technologies used at different stages. ACI Agribusiness is one of the most dedicated firms operating with the aim to mechanize the agricultural activities. According to a survey conducted by Bangladesh Agricultural University, our country’s agricultural equipment industry is valued at USD 1.2 bln as of 2019. Modernization is likely to contribute to increased productivity while lowering costs.

Information

Sharing Maintenance of databases of the farmers enables the agrotech firms to infer an understanding of the farming conditions and possible solutions to the existing problems. The analysis of productionrelated data can enable informed and better decision-making. Insights from those analysis can be incorporated into the development of the agrotech products. Increased transparency and reduced ill- practices such as food adulteration can also be ensured with the help of that.

Market Setup

Numbers of agrotech firms have redesigned the supply chain to ensure efficiency in the production and distribution system. A direct relationship between the farmers and the customers is necessary to establish a fair pricing system. At the same time, the practice of demand-led production is needed in the agricultural sector. Thus, production wastage can be significantly reduced which in turn will result in higher profitability for the farmers.

Financial Assistance

 Several agrotech firms are working persistently to provide financial aid to the farmers. The agriculture sector of Bangladesh is full of potential since our land is very fertile and the climate is favourable. Financial planning is the only way to ensure output at the desired level since it helps to optimize the process. While providing various financial planning services, the agrotech organizations are focused on delivering assurance for the optimum utilization of the production capacity.

Agrotech Startups in Bangladesh

With the usage of technology, multiple startups are trying to change the landscape of agriculture sector of Bangladesh. These technology-based firms are trying to bring a revolution in the country’s agricultural landscape using innovative business models.

iFarmer.asia: iFarmer.asia began its journey in the year 2008 with the aim to address the financial needs of the farmers. Later on, it offered a marketplace and developmental inputs to benefit the farmers. Currently, more than 63,000 farmers are registered with this agrotech startup. It has already facilitated a staggering financing amount of BDT 1,569 mln. iFarmer.asia has grown its business with the help of its innovative supply chain system which cuts out the middlemen so that the farmers and the customers can build a direct relationship and both the parties can be better off.

bhalo: bhalo is one of the leading farm inputs marketplaces and a social enterprise. With the help of digitally-equipped sales agents and retail outlets, it helps connect farmers to leading farm input suppliers and financial service providers. The firm helps increase production and income of smallholder farmers providing curated high-quality farm inputs and customized advisory services. As a result, sales and market share of partner businesses also increase. It has already partnered with 06 leading farm input companies and 03 financial institutions. It has served 4,000 farmers to date and reported 50% increase in production from livestock rearing. bhalo makes money from the commission earned on farm input sales and fees charged to farmers for providing advisory and financial services.

iPAGE Bangladesh: iPAGE Bangladesh has developed a platform for the improvement of the conditions of root-level farmers. It intends to disperse necessary agriculture-related information and introduce precision agriculture in Bangladesh. Precision agriculture is a kind of farm management that provides insights into crops and soil to maximize production. iPAGE Bangladesh provides agricultural efficiency strategies, crop scheduling, fertilizer scheduling, and other relevant services. The company has set up a supply chain management team to help farmers connect with the retailers and the customers.

Agroshift: Agroshift is a technology-enabled platform that aims to revolutionize the agricultural supply chain of Bangladesh. When farmers want to sell their goods, Agroshift helps them do so through a “phy-gital” business model that manages demand aggregation, purchasing, and delivery. The venture is now concentrating on two key sales channels, micro-retailers and factories. It is the goal of Agroshift to remove the intermediaries in the supply chain and offer consumers direct access to high-quality, safe, and inexpensive foods directly from the farmers.

Khamar-e: Khamar-e primarily operates in two segments, supply chain management and data-driven manufacturing facilities. The data-driven technology enables the firm to counsel farmers on dairy products, cattle farming, fishing, and mango production. It has created ties with numerous businesses to supply fresh and naturally produced products directly from the farms. Thus, Khamar-e has occupied a firm place in the agrotech sector by covering production solutions to sourcing.

Nagarkrishi: Unlike the other agrotech firms, Nagarkrishi has been operating with the purpose of providing urban farming consultancy since 2016. It has enabled urban dwellers to utilize their unused spaces. This organization provides specialized consultancy to plantation ventures to accelerate the pace of the green revolution. In 2018, Nagarkrishi was named the “Best Agricultural Business Entity” by Teer-Prothom Alo.

Challenges

 The agrotech industry has been confronted with numerous obstacles. Some of the difficulties have been summarized below.

Communication Gap

 The farmers of our country are scattered in the villages and remote areas. They usually do not have access to the telecommunications and the internet, hence they are not updated on the recent changes in the agriculture sector. The Global System for Mobile Communications Association (GSMA), based in London, thinks that about half of the Bangladesh’s population is not connected to a mobile network. Furthermore, when unique penetration is considered, just 31% of the population uses mobile internet services. So, it is still hard to get all the farmers to join the system.

Lower Earnings

Potential The income from farming activities is relatively low which is barely enough for most of the farmers to fulfil the basic needs. In such a circumstance, it is natural that they would be reluctant to pay an extra fee to avail agrotech services. As a result, revenues of the firms operating in this sector are in stake. Many attempts for agrotech solutions have been nipped in the bud, and the potential entrepreneurs are stepping back considering this as a threat.

Agricultural output has risen, even though agriculture’s proportion in the country’s GDP has decreased to less than 15%. Contributions of other sectors have expanded at a higher pace than that of agriculture sector. Agriculture sector of the country has gone through many changes because of the information technology revolution, adoption of new technologies in farming, private investments, government efforts to reinvigorate the cooperative movement, and so on, changing the way agriculture looks in Bangladesh. To prepare for the fourth industrial revolution and the country reaching highincome status by 2041, Bangladesh will need to adapt to fast-transformative developments in agriculture over the next decade, and surely agrotech startups will be at the forefront of this effort.