Commercialization: The next mountain for AgBioTech in India
AGBIOLOGICALS
From an adoptability perspective, farmers’ view on biologicals is somewhere between ‘could have’ and ‘should have’, they have not yet made it to the point where a farmer sees it as ‘must have’.
Aman Dayal, Executive Director, Dayal Group
There is a question of quality because today, there are mushrooming supplies of agriculture products. This is where I think regulation will [need to] play an important role, so farmers don’t get too many products which won’t given them any advantage, to use on their crops.
Krishnan G S, Independent Advisor, Novozymes South Asia
In comparison to the global landscape, the AgBiologicals market in India is a modest USD 25 – 60 million, compared to the global market estimated to be USD 3 – 5 billion – i.e. about 0.5% to 2%. The profile of products in demand are distinct as well. Globally, the largest AgBiologicals segment is microbials, followed by bio-fertilizers and tailed by bio-stimulants. In India, this list is exactly the opposite, with biostimulants being the most dominant segment. This is likely driven by the significant adverse climate impacts farmers are already experiencing. Bio-stimulants’ ability to boost crops’ resilience in the face of abiotic stressors provides a crucial counter to that. Smallholder farmers, who face losing upto 70% of their annual incomes in the event of a crop failure, readily understand this threat and are willing to pay for products that will insulate them from it.
Compared to the global adoption [of AgBiologicals], we are 5 – 10 years behind. There was a time when even in the global market, bio-stimulants and bio-fertilizers were larger markets. What is lacking in the Indian ecosystem as compared to the global ecosystem is, science driven products in the plant protection segment. As the market and products [in India] mature, we will see more bio-protectant products [emerge] as well.
Dr. Renuka Diwan, Co-founder and CEO, BioPrime Agrisolutions
Tie ups with multinationals happen on the basis that we can provide good quality products at much lower costs.
Dr. Venktesh Devanur, Managing Director, AgriLife
In this context, India’s challenging regulatory environment can counterintuitively also be an asset for emerging AgBioTech enterprises. They pose a high barrier to entry for global players to come in and navigate – thus providing Indian AgBioTech startups a competitive advantage to leverage.
“[It was mentioned,] how it is difficult to get approvals from National Biodiversity Authority but it kind of works in our favour as well because it means that the global partners have to look for Indian partners to take products from here so it kind of helpful for small companies, gives us the opportunity to leverage associations with global MNCs.
Dr. Renuka Diwan, Co-founder and CEO, BioPrime Agrisolutions
Barrier moving from innovation to commercialization
The product development process can be segmented into 3 main phases, beginning with the proof-of-concept (POC) stage. The lack of ecosystem support for enterprises at this stage used to be the early and primary barrier for the absence of AgBiologicals innovation emerging from India. However, the landscape has come a long way – driven by support, in terms of investment and shared infrastructure, from government entities and incubation organizations that have emerged to build foundational support for AgBioTech entrepreneurs.
The support that the government has put in has been absolutely instrumental and crucial. We are a product of several government programs and schemes. Starting with the Department of BioTechnology that has laid out a separate program that gives proof-of-concept funding for transformative technologies and their commercialization. Incubators [too] have gave us access to access to a lot of infrastructure on a pay-per-use basis [that helps by] de-risking [product] development.
Dr. Renuka Diwan, Co-founder and CEO, BioPrime Agrisolutions
At the other end of the pipeline, for solutions that have been identified as having a commercially viable product, there are many sources of private growth capital available. However, the in-between stage of taking a product from lab (POC) scale to a commercially viable product is where support is most lacking, marking it as the ‘valley of death’ for many AgBioTech enterprises. Investors, most of whom possess limited knowledge on and experience with AgBiologicals, find themselves unable to accurately assess the potential of a particular solution, or assist and guide entrepreneurs at this stage and so, are reluctant to channel capital in the space. This phase can also stretch over an extended period of years, clashing with investors’ expected time horizon to receive returns on their capital.
There are not a lot of AgBioTech folks in the investment community who understand and appreciate the risks and rewards and take a calculated call. We are a 9-year-old company. It has taken us 9 years to build and validate our products, scale our platform, and go through regulatory requirements. However, since funds generally have 10-year fund lifecycles, unless they catch you early in the journey, they will find it logistically hard to make an investment.
Prasad Nair, Head – Strategic Partnerships & Alliances, String Bio
Apart from sluggish investment support during their commercialization phase, AgBiological startups also often face a not-yet-robust ecosystem for taking their products to market.
Our expectation from our partners is that they value our innovation – that forms a basis for shared excitement about the products, the ability to compromise to ensure that the right products are reaching the farmer. The second aspect is about an equitable share of risk – we have spent 9 years building these products, and are also putting up a large plant, so we have the capacity to service millions of acres. If we add inventory risk, credit risk on top of that, it doesn’t become equitable. The third aspect is, we are always looking for partners who want to think outside the box, do things differently, have an alternate way of doing things which could give us some breakthrough revenue.
Prasad Nair, Head – Strategic Partnerships & Alliances, String Bio
Partnerships with entities that can help facilitate cost-effective access to farmers, take on a fair share of risk and, enable value capture for AgBioTech innovators, are crucial but still challenging to come by.
SEED SOLUTIONS
Seed solutions have long been identified as one of the most impactful interventions that can be made in any agriculture ecosystem to bring us closer to both, climate resilience as well as nutrition security. Seed research on aspects such as tolerance to drought, submergence, diseases, insects and well as nutrition enhancement will play a critical role in this.
Evolution in innovation ecosystem
Historically, research and new product development in this space has been extremely time and capital intensive, and so been gradual and undertaken only by large companies. This has however, shifted in recent decades with the emergence of more sophisticated technologies such as molecular markers, precision phenotyping, speed breeding, high throughput capacity for genotyping, and most recently, gene-editing.
These developments have had a two-fold impact on the nature of this innovation ecosystem, namely: significant abatement of the timeline required for R&D and product validation as well as newly emergent opportunities for smaller enterprises like startups to contribute to seed research by providing specific solutions as a service.
Genomic information, computational capacity, and phenotyping capability, all have to merge together to accelerate [seed product development] further. There are some large companies that are doing this in-house but there are also companies providing these as a service – genotyping services, computational services. Phenotyping is still largely being done by seed companies. But precision phenotyping is another related area where there is scope for companies to provide as a service.
Dr. Paresh Verma, Executive Director – Bioseed, South East Asia & Research Director – BRI
Gene-editing technology, in particular, presents immense possibilities for seed innovation. Today, with the availability of genomic sequencing for most major crops as well as, AI models and supporting computational capacity to identify which genes need to be engineered – gene-editing can shorten the breeding lifecycle substantively.
It also presents a large and promising opportunity for smaller enterprises like AgBioTech startups to participate in seed innovation. Its technological predecessor – genetic modification (GM) – required a lot of financial resources to execute and so globally, GM innovation and development was dominated by large MNCs. With gene-editing having a much lower cost barrier, the opportunity is immense for startups to develop gene-edited seed products themselves or provide parts of the process as a service to then be aggregate by a seed company.
Globally 90% of GM[genetically modified] products have come from large MNCs. On the other hand, only 10% of gene-edited products that are either commercialized or in development have come from large companies – so there is a lot of opportunities for smaller ventures to pitch in.
Dr. Paresh Verma, Executive Director – Bioseed, South East Asia & Research Director – BRI
The government has created an enabling environment by taking a historic decision in March 2022 when it declared that product coming out of 2 [gene-editing] methods – SDN1 and SDN2 will be cleared at an institutional level by IBSC (Institutional Biosafety Committee) and not need to be cleared by other regulatory authorities.
Prof Ashwani Pareek, Executive Director, National Agri-Food BioTechnology Institute (NABI)
Commercialization: The next mountain
With this significant expansion of the technology toolkit available for seed product development, innovators are now closer to being in the position to (relatively) rapidly conceptualize and create new products by leveraging accessible tools and spending many fewer years on trials for validation. However, the commercialization process that includes regulatory frameworks but also importantly, mechanisms for value capture for the innovator are yet to be in place in India.
I think the bottleneck has shifted from discovery and R&D to commercialization. Non-technological barriers which may include commercialization, value-sharing protocols, regulatory protocols – have been barriers to speedy deployment of technology. We need to think out of the box, especially for India, to [find] ways we can work with value chain partners to create value capture for the R&D scientist or come together as an industry to make deployment much easier.
Ravishankar Cherukuri, APAC Digital Strategy & Enablement Lead, Bayer CropScience
For instance, in the case of gene-edited seeds, they are not hybrids so value capture mechanisms established for it will not work. So the question of how an gene-edited seed innovator can get rewarded for their time and capital investment remains. Globally, this has been dealt with through collaborations that seed companies forge with value chain partners like procurement companies.
The development of such an ecosystem, with buy-in from the breadth of stakeholders in the sector and with the support of appropriate policy building blocks will be critical for AgBioTech innovations to climb this hurdle and move with agility towards deployment and disruption.
- Aman Dayal, Executive Director, Dayal Group
- Dr. Renuka Diwan, Co-founder and CEO, BioPrime Agrisolutions
- Dr. Raman Ramachandran. Dean, Faculty Management Studies, Somaiya Vidyavihar University
- Dr. Venktesh Devanur, Managing Director, AgriLife
- Krishnan G S, Independent Advisor, Novozymes South Asia
- Prasad Nair, Head - Strategic Partnerships & Alliances, String Bio
- Dr. Paresh Verma, Executive Director – Bioseed, South-East Asia & Research Director – BRI
- Prof Ashwani Pareek, Executive Director, National Agri-Food BioTechnology Institute (NABI)
- Ravishankar Cherukuri, APAC Digital Strategy & Enablement Lead, Bayer CropScience
- Venkata Subbarao Kolli, Founder, Plowlab Ventures