To promote investment and bring in efficiency in the value chain of agriculture and allied sectors, the government will soon launch a dedicated fund of Rs 750 crore to support and scale up operations of technology-driven agri-startups and rural enterprises.

Sources told FE that the agriculture ministry will roll out “blended capital support” involving the private sector to finance startups for agriculture and rural enterprises relevant for farm produce value chains, which will be managed by Nabventures, a wholly owned subsidiary of Nabard.

Out of the total Rs 750 crore corpus of the fund under the “Agri-SURE” scheme, Rs 250 crore each will be contributed by the agriculture ministry and Nabard. The remaining Rs 250 crore will be mobilised from institutions including private investors.

Sources said the fund aimed to help scale up operations of about 85 start-ups in the next five years with a variable ticket size upto Rs 25 crore each. A separate trust would be set up in Nabventures to register the fund with Securities and Exchange Board of India.

The target beneficiaries would cover those startups associated with sectors including agri-tech, food processing, animal husbandry, fisheries, supply chain management, farm mechanisation and bio-technology, according to officials. The modalities prior to launching of Agri-SURE is currently being worked out.

The aim of the fund would be to provide investments to start-ups unable to scale up their operations for want of access to equity and debt instruments to create new forward and backward linkages in the rural ecosystem.

Finance minister Nirmala Sitharaman in her budget for 2022-23 had announced a fund with blended capital, raised under the co-investment model, will be facilitated through Nabard. “This is to finance startups for agriculture and rural enterprise, relevant for farm produce value chain,” she had said.

Officials said that the aim of the fund is to promote investments in innovative, technology driven, high-risk, high-impact activities in agriculture and allied areas.”This would also provide funding support to start-ups engaged in infrastructure development and employment generation in rural areas,” a source said.

Currently, the agriculture ministry is also implementing ‘Innovation and Agri-Entrepreneurship Development’ programme under Rashtriya Krishi Vikas Yojana since 2018-19 with an objective to promote innovation and agri-entrepreneurship by providing financial and technical support for nurturing startups ecosystem in the country.

Under the programme, the financial assistance to Rs 5,00,000 is provided to agri-startups at the idea or pre-seed stage and up to Rs 2.5 million at the seed stage to launch their products, services, business platforms, etc into the market and facilitate them to scale up their products and operations.

According to an official note, 1554 agri-startups including 387 women led startups working in various fields of agriculture & allied sector have been supported with technical and financial assistance of Rs. 111 crore so far.