We talked with Mark Kahn, co-founder of Omnivore, about the challenges of India’s unique smallholder agriculture system and how the country could become a sustainable agricultural superpower.
Mark Kahn co-founded Omnivore, India’s largest, oldest, and most active agri-food investment group in 2010. But Kahn’s path toward India began much earlier when he fell in love with the culture as a child in Houston.
“I grew up next to a large, Indian immigrant neighborhood,” explains Kahn. “I was drawn to the culture at an early age. During college, I had a chance to backpack in India. Then, while in business school, I interned there for ITC, a large agribusiness company. My entire career has been in ag, including when I was at Syngenta in Switzerland, the world’s largest global inputs company. A friend of mine from Harvard pulled me into the turnaround of the agribusiness company of her family's 140-year-old conglomerate in India. I moved to India in early 2008 for what I thought would be five years. It's obviously been more than five years. We launched Omnivore with the support of that same Indian family.”
India is home to about 130 million farmers, together with their families this represents 600 million individuals. The scale of agriculture in India is immense, Kahn explains, even as the average farm size is just a single hectare.
“It's an insanely large and complicated agricultural ecosystem,” says Kahn. “India is self-sufficient in food, which is one of the great underappreciated miracles of the 20th century. When you look at agricultural production in India, they are top one, two, three in every category globally.”
Those commodity categories include expected products like rice, pulses, and spices, and a few that are surprising. India is the largest producer of milk in the world. The top rank also applies for cotton. India ranks second globally in production of wheat, sugarcane, and shrimp. Indian agriculture not only feeds its large population, but the country also feeds the world, totaling about $70 billion a year in exports. Another surprise? Beef.
“India is the third largest producer and exporter of beef in the world, which no one understands except it all comes from water buffaloes, says Kahn. “Think of the buffalo mozzarella that comes from an Asian water buffalo in Italy. India has 80 million of those buffalo. And unlike the cows, which are holy and protected, the buffalo are not holy, and not protected, and hence go to slaughter after their productive life. India exports most of the meat to the Middle East and Southeast Asia.”
As immense as India’s agricultural system is, it is comprised of smallholder farmers. Kahn stresses that these smallholder farms are not subsistence farmers, a common stereotype. The multitude of small farms produce surplus crops which are sold into a hyper-fragmented supply chain.
“Omnivore’s theory of change, our lens of looking at this world of challenges and opportunities, addresses two big socioeconomic challenges and two big environmental challenges,” says Kahn.
“Number one, farmers just don't make enough money. If the farm sizes are too small, the sources of all farm income aren't sufficient. The first order of business when you look at improving agriculture is figuring out how to make farmers more profitable.”
Kahn explains that Omnivore invests in solutions that increase profitability by addressing the amount of production, market access, price per unit, cost structure, input costs, and the cost of credit. Omnivore also focuses on farmer resilience.
“What we call farmer resilience is economic resilience,” says Kahn. “That means, how do you make credit more available? How do you make insurance and risk management more available? How do you connect farmers to processors, multinationals, and exporters where they can get a better price and more stable ways to market their surplus?”
Kahn notes that Omnivore’s theory of change also addresses sustainability and climate action. Omnivore’s focus on sustainability addresses water and fuel use, agricultural chemicals, and especially, wastage and spoilage.
“Wastage and spoilage in the United States or Europe is largely post-harvest, especially consumer-side spoilage because people bizarrely throw away perfectly good food,” says Kahn. “In India, wastage occurs post-harvest, but pre-consumption.”
Climate change is a significant concern in India, where more than 80 percent of the population lives in climate-vulnerable districts. Millions of Indians could face hunger in less than a decade. The three largest sources of greenhouse gas(GHG) emissions from India’s agriculture system are its cattle, rice production, and fertilizer use.
Kahn explains how different the cattle herd is in India. The country has 80 million dairy farmers, each with an average of three or four animals. In total, more than eight times the size of the U.S. dairy population. Comparatively, the U.S. has about two million dairy farms, half of which have 1000 or more cows. In a system characterized by such vast and minute scales at once, mitigating enteric methane emissions is a greater challenge.
While livestock are responsible for 48 percent of methane emissions in India’s agriculture sector, rice production accounts for 15 percent. Fertilizer use, especially inorganic nitrogen fertilizer, is a primary source of nitrous oxide ,or N2O, a GHG that has 273 times the global warming potential as carbon dioxide.
“India is one of the most climate vulnerable countries in the world,” says Kahn. “It's getting to be really hot out there in the summer. What used to be 95°F is now110°F. Rain is coming at the wrong time. The Climate Vulnerability Index is off the charts. There's work needed to move to a world where Indian agriculture, with all these abiotic stresses and co-morbid biotic stresses, can preserve its food security.”
As grave as the challenges are, Kahn is optimistic for the future of India. One reason for that optimism is the talent at Indian startups. India has a wealth of human capital including former engineers and Google employees, tech workers that returned home to India from the U.S. and Europe, and graduates from top universities in India. That talent, says Kahn, is solving challenges for India’s unique, smallholder agri-food system.
“A great example is DeHaat, which is the largest digital farmer platform in India, which helps millions of farmers access lower cost inputs with embedded crop advisory, helps create markets for their crops, and helps finance their operations,” says Kahn.
DeHaat also engages buyers and the entire value chain. Similarly, Omnivore has invested in a value chain solution, Aquaconnect, for India’s $20 billion aquaculture industry. Ominvore’s portfolio also includes deep tech deals, such as Pixxel, which is building a network of hyperspectral satellites, and Niqo Robotics. Niqo is building the lowest cost robotic system for agriculture in the world.
Where there are great challenges, there are also great opportunities. Kahn envisions how Omnivore can build a future where farms are more profitable and there is more gender equality.
It is a bright future, and it is closer than it may seem. Omnivore has already reached over 10 million Indian farmers with their solutions and support, nearly 10 percent of the nation’s farmers in just one decade. The future Kahn works toward will benefit not only India, but the world.
“Indian yields are half of what they should be, and in some cases just a third of their potential,” explains Kahn. “There is huge scope in India to meet global food requirements and in the process to create wealth in rural India. India can become a smallholder version of Brazil, an agricultural superpower, but one that is sustainable, without deforestation.”
You can learn more about Omnivore’s vision for agriculture in India and their impacts in their report, “India AgriFoodTech Investment Report 2024,” published in partnership with AgFunder. Or visit the Omnivore website.