Industry
Flying tractors can make money. Here’s the math
Summary
- Drones for agriculture are being pushed from all fronts—pesticide companies, drone manufacturers and the government, who view them as a tool to create rural entrepreneurs. It is early days but farmers who have used drone services appear happy. The economics work for now.
Kurukshetra, Haryana: Jatinder Singh is ready for the next phase of his professional career. A former agriculture development officer at a public sector bank, 37-year-old Singh is leaving a sought-after government job after nine years of service. Two years back, Singh, together with a friend set up an agritech service firm in Haryana’s Kurukshetra district, hoping to bring cutting edge technologies to farmers. Their first bet—offering spraying services using drones—made him believe that cutting edge technologies can be profitably deployed on the farm.
The company, GuruDrone Agritech, with a small office in a newly built shopping mall in the outskirts of Kurukshetra town, now provides drone-as-a-service to local farmers. Singh’s client list has seen a phenomenal growth, from less than ten farmers in 2022—most of whom had to be coaxed for trials—to over 1,000 farmers in the last Kharif crop season that began in June last year. That season Singh serviced over 10,000 acres of farm land, spread across crops like rice, sugarcane and vegetables.
Singh’s firm now owns 20 drones. At an average purchase cost of ₹7.5 lakh per drone, it is an investment of ₹1.5 crore.
A chunk of this capital investment was financed through the Agriculture Infrastructure Fund set up by the union government, which provides loans at concessional rates of 6% per year.
A year of awareness campaigns and demonstrations seem to have paid off. “The technology is so popular that we are often unable to service the demand during peak growing seasons. Farmers who have used drones vouch for its effectiveness," Singh claimed.
How are drones making a difference? Farmers usually spray pesticides or liquid nutrients using hired labour who carry 20 litre knapsack tanks on their back—a drudgery during scorching summer months. Manual spraying usually costs around ₹200 per acre in labour charges and takes between 30-45 minutes. In comparison, spraying by drones with a payload of 10 litre takes just 5-7 minutes for an acre.
Hiring a drone costs around ₹300-500 for an acre, higher than manual spraying. But the spraying is more uniform and effective as the thrust created by the drone’s wings spray chemicals evenly in a fine mist, down to the bottom of the plants.
This is also safer as manual spraying entails the risk of contamination for workers, and serious health hazards and deaths in some cases. Drones are more effective while spraying on tall crops like sugarcane which are over 10 ft high. Workers often find it difficult to spray on those crops. The other benefit is a significant reduction in use of water. Usually, 150-200 litres of water is used for manual spraying in an acre, compared to just 10 litres using drones.
As drones are remotely operated from the edge of the field there is no trampling and damage to crops while spraying. But for most farmers who have used drones the biggest benefit is on-time sprays as hired workers are often hard to arrange during the peak season.
Billions in the making
In the next few years, the drone-as-a-service market could be a big opportunity for rural entrepreneurs like Singh. A conservative, back of the envelope calculation by this writer shows that if a tenth of India’s total net sown area of 140 million hectares is sprayed using drones, four times every year (two sprays per season in a year), it will create a ₹5,600 crore business opportunity. This calculation assumes a cost of ₹400 per acre, per spray for farmers. A hectare equals 2.5 acres. Of course, startups have more aggressive projections, running into billions of dollars.
Add to this the market for drone manufacturing, and the overall industry bulks up quite a bit. A 2022 report by the Federation of Indian Chambers of Commerce & Industry, an industry lobby, and Ernst & Young, a consulting firm, estimated that India can unlock a ₹98,000 crore manufacturing potential in drones by 2030. Agriculture can contribute about a quarter of that market, which includes other commercial uses in retail and infrastructure in addition to defence and security.
Drone Didi
The recent push to use drones has emerged from all fronts—pesticide companies promoting its use for higher efficacy of their products leading to yield gains; drone manufacturers scoping out a new market; the government seeing it as a tool to empower women and create rural entrepreneurs.
In November last year, the government approved a new ‘Namo Drone Didi’ scheme to provide drones to 15,000 women self-help groups (SHGs). The scheme has a financial outlay of ₹1,261 crore for the next two years, 2024-25 and 2025-26. Under this scheme, women groups are eligible for 80% subsidy, up to ₹8 lakh per drone.
A qualified woman member will receive two-week training to become a certified drone pilot after which the group can offer rental services to farmers. The government expects each SHG to earn about ₹1 lakh per year.
At an event on 11 March, Prime Minister Narendra Modi handed 1,000 drones to rural women, marking the launch of the ‘Drone Sister’ scheme. India has the highest number of women commercial pilots globally, and now her daughters will be pioneering a new technology which will revolutionize agriculture, Modi said at the event.
Other than women groups, rural youth running custom hiring centers, farmer producer companies and individual farmers are also eligible for 40-50% subsidy for purchasing drones.
Rise of DaaS
Currently, a handful of manufactures are offering drone variants approved by the Director General of Civil Aviation (DGCA). Spread across the country, the list includes Gurugram-based IoTechWorld, Chennai-based Garuda Aerospace, Hyderabad-based Marut Dronetech, Bengaluru-based General Aeronautics, and Chennai-based Dhaksha Unmanned Systems, which was acquired by Coromandel International, a leading manufacturer of fertilizers and pesticides.
While most of these firms are now making drones for spraying, the technology is likely to see an upgrade in future. High-end multispectral cameras attached to drones can provide early warnings on diseases and pest attacks, perform soil tests, and monitor and record crop yields.
Our goal is to bridge the technology gap in Indian agriculture, said Deepak Bhardwaj, co-founder and director at IoTechWorld which began operations in 2017. “For several years now, countries like China and Japan have been using drones extensively. Indian soils are in a poor state due to improper and overuse of chemicals. Drones can not only restore soil health but also improve crop yields," Bhardwaj added.
“We do not think subsidies are required to promote drones as it can paralyze the system. Even at current costs, drones can deliver value to farmers. They can get additional two-three quintals of yields and a better-quality harvest. The higher prices and returns per unit of land will drive future demand," Bhardwaj said.
It was not an easy ride, explained Bhardwaj. Aerial spraying of crop protection chemicals was a taboo after the endosulfan tragedy in Kerala. The tragedy, which took place in Kasaragod district of the state, is considered one of the worst pesticide disasters globally. It started with the use of endosulfan, a pesticide, in a populated, waterbody rich area where it was aerially sprayed on cashew plantations for 20 years. It led to cases of congenital anomalies, delayed puberty, mental retardation, abortions, and even cancer. Following court cases and public protests, Kerala banned the sale and use of endosulfan in 2003.
For the past six years, drone manufacturers worked closely with government departments and agricultural research organizations. In April 2023, the agriculture ministry released the standard operating procedure (SOP)—a manual for application of pesticides and crop nutrients using drones.
According to the SOP, manual or tractor-mounted spraying leads to overuse of chemicals and water while drones can lower use of these inputs and reduce human exposure to hazardous chemicals. For now, 477 chemicals have been provisionally approved for drone spraying for two years. During this period pesticide manufacturers are expected to generate safety and efficacy data.
Following the approval for commercial use in agriculture, IoTechWorld has sold 2,000 drones. To propagate use of drones it now works with twenty drone-as-a-service or DaaS partners—in this model, local entrepreneurs provide rental services to farmers. In 2021, Dhanuka Agritech, a leading pesticide manufacturer invested ₹30 crore in the startup.
Indian farmers need to adopt precision farming techniques to bridge the yield gaps to match global averages, said R.G. Agarwal, group chairman at Dhanuka. “Farmers will only be able to invest more when they earn more per acre of land. Alongside pesticides, drones can effectively solve the micronutrient deficiencies in Indian soils," he added.
Yield gains
Back in Kurukshetra, an upbeat Jatinder Singh is banking on the growing demand. After a year of out-of-pocket spending to demonstrate the effectiveness of drones, Singh is estimating a turnover of ₹1 crore in the financial year ending March. He has already hired 25 certified drone pilots who receive a salary of ₹20,000 per month along with accommodation.
Among them is 22-year-old Salita, who is pursuing a graduate degree. The daughter of a small farmer from Kaithal in Haryana, Salita received her pilot training in July last year. In a nearby farmers’ field, she demonstrated the workings of a drone which weighs 25kg (with a 10 litre payload), flying it adeptly over the wheat crop.
“After I gather enough experience, I want to purchase a drone and offer services to farmers in my village," Salita said. How long will it take her to recover the capital expenses of purchasing a drone? Less than a year, explained Singh. A drone can easily cover 20 acres in a day and 400 acres in a month. If used for eight months in a year, a service provider can earn ₹16 lakh (assuming a service charge of ₹500 per acre).
Singh added that associated costs are likely to reduce in the future as the market picks up. For instance, currently it costs over ₹35,000 a year to insure a drone. It will also become easier to transport drones to remote fields, Singh said, showing new models in his stock (manufactured by IoTechWorld) which can be neatly packed on the back of a bike.
The farmers in the field where Salita did a trial demonstration appeared happy. “My pesticide costs are 10% lower and yields are higher by three quintals per acre for wheat and over five quintals in rice," said Gurvinder Singh, who farms on 20 acres in Rajgarh village. The higher yields means an additional income of ₹6,000 to ₹10,000 per acre.
Gurvinder added that after seeing the results, 15 farmers from the village are now regularly using drones for spraying pesticides and micronutrients.
Results from a research trial published by the Telangana state agriculture university, published in December 2022, lends credence to Gurvinder’s experience. The study recorded an incremental yield of 12 quintals per hectare in paddy (or about 5 quintals in an acre) on pesticide application through drones, when compared with manual spraying.
A flying tractor
With an expanding market, drone manufacturers are gearing up to produce more. For instance, Dhaksha Unmanned Systems, which has sold over 1,000 drones so far, is expanding its capacity to produce 800-1,000 units per month. “Most domestic manufacturers use 65% local materials while critical parts like propeller motors, cameras and transmitter devices are imported," said Ramanathan Narayanan, managing director and chief executive officer (CEO) at Dhaksha. The company has trained 200 women and 20 transgender drone pilots so far. “With government subsidies, we foresee increased adoption and reduced costs of hiring for farmers," Narayanan added.
Manufacturers of crop protection chemicals and seeds are also at the forefront of promoting drones. For instance, Syngenta India has so far used drone sprays in over 100,000 acres spread across 15 states. “We have been aggressive in demonstrating the utility of this technology for farmers. But the ecosystem is not ready yet. While manufacturers are ready with drones, there is a shortage of service providers, maintenance personnel and drone pilots," said Susheel Kumar, country head for Syngenta. “Cutting edge technologies like drones are critical to retain youth in agriculture.
In future, drones can transform into an aerial tractor performing multiple operations, said Prem Kumar Vislawath, founder and chief innovator at Marut Dronetech. These include transplantation of seedlings, pollination and monitoring of fields, in addition to spraying of nutrients and crop protection chemicals.
Since December 2022, Marut has sold over 600 drones which are priced upwards of ₹6.75 lakh per unit. The company has worked with five stakeholders in the ecosystem to expand the market which include drone-as-a-service entrepreneurs, farm machinery dealers, chemical companies, contract farmers (growing commercial crops like tobacco), and agriculture universities.
In its early years, Marut used drones to control the spread of mosquito borne diseases like dengue and malaria. It entered the agriculture space in 2018. “In the past, we have seen several deaths due to pesticide poisoning (in Yavatmal, Maharashtra, 2017) and we also know about the train carrying cancer patients from Punjab to Rajasthan," Vislawath said.
A train from Bhatinda in Punjab to Bikaner in Rajasthan used to carry several cancer patients daily till a few years back—before treatment facilities opened locally. In parts of Punjab, the cradle of green revolution, indiscriminate use of fertilisers and pesticides is considered to be a probable reason behind high incidence of cancer.
“Controlled and effective spraying is the answer to the damaging practices around pesticides application," Vislawath added.
