Institutional innovation in value chain extension: The public–private partnership model of Saagu-Baagu (E-Mircha) in Telangana

Abstract

Agricultural value chains in developing economies continue to face structural inefficiencies, information asymmetries, and fragmented market systems that constrain smallholder incomes. Leveraging Fourth Industrial Revolution (4IR) technologies through public–private partnerships (PPPs) offers a promising pathway to address these systemic bottlenecks. This paper examines the design, implementation, and early outcomes of the Saagu Baagu (E-Mircha) project in Telangana, India, an innovative PPP-driven agritech initiative under the Artificial Intelligence for Agriculture Innovation (AI4AI) framework. The project integrates artificial intelligence-based advisories, rapid soil diagnostics, objective quality grading, and digital market platforms within the chilli value chain. Anchored by the Government of Telangana, implemented by Digital Green, and supported by a consortium of agritech startups (AgNext, KrishiTantra, and Kalgudi), the initiative aims to enhance productivity, transparency, and farmer incomes through data-enabled decision-making and ecosystem convergence. Methodologically, the study employs stakeholder-based thematic content analysis of responses from 20 key actors across six stakeholder groups, classified into an 18-code analytical framework. Quantitative frequency analysis was used to identify dominant themes regarding program rationale, institutional architecture, service delivery, socio-economic impact, challenges, and scalability. Findings indicate that income and price improvement emerged as the most frequently cited outcome (23 mentions), confirming that digital quality grading and e-commerce integration significantly reduced information asymmetry and improved price realization. Strong recognition of both government (20 mentions) and partner roles (19 mentions) validates the effectiveness of the PPP architecture. High mentions of farmer welfare and trust (20 mentions) further demonstrate that economic gains translated into social capital and behavioural adoption. However, challenges related to digital literacy, connectivity constraints, and behavioural resistance underscore the need for sustained investment in capacity building. The study concludes that the Saagu Baagu model represents a replicable blueprint for digitally enabled, inclusive agricultural transformation. By aligning institutional legitimacy with technological innovation, the initiative demonstrates how PPP-led agritech ecosystems can enhance smallholder resilience, income security, and value chain efficiency. The findings offer policy insights for scaling similar ecosystem-driven models across India and other developing agrarian economies.