Editor’s note: Raghavan Sampathkumar is founder and principal of boutique research and consultancy firm SMARTAgBiz, based in Singapore. He has experience across different subsectors of food & agribusiness in Asia-Pacific countries. In previous roles he has worked for Canadian Pulse Growers Association and Promar Consulting in Japan. This is the second part of his article. All views expressed are his own.
Continuing on the prospects and challenges of agtech development in India, my concluding part discusses some of the realistic scenarios, key factors necessary for success, and possible recommendations, including policy measures required.
Examples of tech innovation in Indian agriculture
|Comments / Source
|Sourcing / Supply Chain
|Internet kiosk at villages
|One of the earliest technology interventions pioneered by ITC
|Mobile based (Whatsapp)
|Progressive Farmers Gujarat group
|Agronomy / Cultivation
|Commodity Price alerts
|Extension / Knowledge Transfer
|A detailed report on mobile applications in India by Saravanan Raj
|CCE by World Bank
|Crop Cutting Experiment supported by World Bank
|Supported by VodaFone Foundation under its Connected Farming initiative
|Weather advisory / Insurance
|Supported by Omnivore Parners
|Integrated Farm Management
|Mobile and cloud based decision support
|Eruvaka Technologies for aquacultureStellapps for Dairy farms
|Supported by Omnivore Partners
Challenges for agtech revolution in India
All the obvious issues that are discussed in part one affect directly or indirectly the farming industry, farmers’ profitability, rural & agrarian prosperity, and prospects of possible solutions to these problems. Though not directly relevant to the technological innovations that aim to help agriculture, the following challenges also ultimately impact how farming is practiced in the country and its future prospects.
Data? What is it?
Having worked in market research roles in the agribusiness industry in India, I have personally experienced several frustrating instances with data availability and reliability on any industry indicators. One of the possible reasons could be “lack of demand” from those who can and must use solid data to take decisions, be it the corporate world and/or Government.
While discussions in developed countries are moving towards ownership of data, and privacy issues, the situation here is quite the opposite. Those who understand the value of data would be terrified to find out about the reliability of even basic agricultural statistics available such as acres planted, production or yield, and farmers’ demographic profiles etc. Insiders will know these are best “guestimates” of the officials at the village level, which eventually get aggregated at the state levels and then at country level when they are reported to the public.
Similarly, the numbers from the household consumption surveys are to be taken with caution and there are hundreds of private firms selling demographic profiles based on geographical area (e.g. Metros, Tier1 and Tier 2 cities), socio-economic class (e.g. SEC – A segment in all metros) and the like.
Obviously, all these limit the possibility to take decisions based on solid data. Although India features among the pioneers in space science, mobile connectivity, and information technology, its agriculture sector still remains disconnected from these.
Policy hijack: Vested interests driven by votebank concerns
In India, it is quite common for agricultural policies to be hijacked by opponents with vested interests.
There is an inexplicable fervor for traditional or conventional farming partly perpetrated by some who possibly have no knowledge of agriculture. Any technology including mechanization is vehemently opposed without any rationale, particularly when there is high-level political support. Long-pending reforms in Agricultural Produce Marketing Committee Act (APMC) and the vehement opposition to contract farming in some states, are obvious examples of the greater lobbying power of the marketing intermediaries. These are also examples of the power of the middlemen community that hardly add any value but cost at multiple levels along the food chain to the consumer. Similarly, the cap on foreign direct investments in certain sectors, including modern food retail and restrictions on local procurement, storage and movement of commodities, particularly under the Essential Commodities Act, are other examples of how policies are influenced by different groups that have greater lobbying powers and specific interests.
Policy placebo: Really effective or not?
This happens when the beneficiaries and other stakeholders are made to believe the policies are working. For example, several schemes announced at various times are shown to be effective, especially when a debate arises on its effectiveness in the highest policy-making circles. But the truth on the ground may be quite different. There are several examples for ‘Policy Placebo” such as the MSP (Minimum Support Prices), produce marketing, and many farmers’ welfare schemes.
It is rather an open warning that any new innovative technology — if it does seem to potentially disrupt or impact the status quo of any group (having strong political influence and greater lobbying power) — may face huge resistance and may not even see the light of day. Disruptive innovations such as Uber and the strong opposition it is facing in the country, particularly from the political circles, stand as a testimony of vested interests hijacking otherwise good policies. When it comes to agriculture, the likelihood is clearly very high.
Intellectual Property Rights (IPR) regime: Time to plug the holes
Although being a signatory to the global IPR treaties, India needs to enhance and streamline its policy and legislative framework on protecting IP rights. Learning from the experiences in Bt Cotton, the only commercialized genetically modified (GM) crop in the country, there have been several instances of infringements of IP rights, to the extent that the spurious and unapproved hybrids could possibly have been sold in the market at least a year ahead of its formal approval in 2002, according to industry observers.
However, the causes or sources of such infringements still remain at large and, unlike in western countries, there is probably no way to pursue a legal course, particularly if it involves farmers. It would simply be suicidal for any company and also time-taking and cumbersome in many ways. Issues like these are going to be very important in future and will impact the emergence of technological innovations that may cost billions to develop. Lack of sufficient and strong protection of the intellectual property may thwart further investments into any innovative technologies into the sector in future.
Scale & potential users – Individual farmers vs Collective farms / Cooperatives
One of the key determinants of propensity to use technology in agriculture is per-capita land holdings. Average land-holding in India more than halved over the last four decades to little over a hectare (1.16 ha to be precise) and these small and marginal holdings (1 to 2 ha) constitute about 85 percent of the total agricultural land in the country. This means a really huge number of fragmented small farmers are living mostly on a hand-to-mouth subsistence agrarian situation. There is a vast difference between states, however. Average holdings in Punjab (3.77 ha) are nearly ten times as that of Bihar (0.39 ha), one of the least developed states. It is not an exaggeration to say some areas in the country are much worse than Somalia when it comes to food security.
From a techpreneur’s point of view, it may be difficult to consider these small & marginal farmers as potential users of innovative technologies, when they do not even have access to the most fundamental pre-requisites for successful farming such as quality seeds, fertilizers, chemicals, finance, infrastructure and marketing opportunities.
However, the solution to this issue lies in collective or cooperative farming. Adoption of any new technology is possible when farmers get aggregated as producer groups and the Government seems to have realised this in recent years. There are several initiatives that are supported, namely NABARD (National Bank for Agriculture and Rural Development) that encourages farmers to form FPOs (Farmer Producer Organizations) and the idea seems to be gaining steam in the recent years. Delta Mart, an initiative by the farmers of the Cauvery delta area in Tamil Nadu is one such example. One may logically think it is only a matter of time for the farmers to realize the importance of economies of scale (Integrated Farming by Delta Mart) and mechanization in primary production and that can open up huge prospects for use of technologies that aim to enhance efficiency in primary production.
Critical Success Factors
Novelty, relevance and value under realistic on-ground conditions
A simple Google search brings up hundreds of different technologies currently being pursued in India in the agriculture sector. But the key to succeed in the long term would be a unique and novel offering (product or service): something that the farmers can use without much complicated technology, gadgetry or investments.
There are a huge number of innovative technologies focusing on improving efficiency such as saving labor, time and costs of doing cultural operations, fertilization, water use etc. While these are very important and useful from the perspective of resource use efficiency and sustainability, one needs to consider ground reality and ask whether these offer real value to the users.
On relevance, I wonder how many farmers would really be interested in for example, a gadget that senses soil moisture levels and alerts the farmer to irrigate (or not) his crops. If water is completely free for the farmers, where is the incentive to save water? Unless there is potential scarcity or a drought-like condition prevailing, no farmer would take pain to use this technology. Similar would be the case for a technology that can detect fertilizer deficiencies and recommend soil nutrient management, unless the farmer is really caring about environment, pollution, soil health or undertaking any certification schemes. Urea is the cheapest available fertilizer and a vast majority of the farmers simply dump urea and do not care about balanced nutrition simply because the prices of phosphates and potash have risen more than three times.
Know your (potential) customers
India is a vast and perhaps one of the most diverse countries in the world, with eight agro-climatic zones, a vast number of different crops grown — from rice, wheat, soybean to vegetables and fruits — at least six different major soil types, 23 languages and 30 states with different administrative ideologies and political affiliations. Hence, the most critical factor for success here would be not falling for the “one-size fits all” strategy to targeting and segmenting potential users based on their demographic, land-holding, crops grown, inclination to use new technologies and socio-economic status for developing solutions that add value on the ground. Another critical factor for maximizing the adoption of technologies in agriculture would be to focus on user-friendliness and customization according to the local conditions. Language is another issue as India has more than 300 dialects and when considering this along with low literacy rates, the problem compounds. However, the situation is changing as literacy rates have improved significantly in the last few decades.
Let the innovations trickle-down
Referring again to the Bt Cotton example, adoption of new technologies can vary depending upon the products or services offered. For example, a simple Whatsapp group created for marketing in some states such as Gujarat and Maharashtra has become an overnight hit among farmers, while some online web-based marketing platforms are taking their time to reach many users. However, in all the cases, the natural trickle-down phenomenon must be taken into account as each technology will take its own course and time to get adopted. The innovators and early adopters must be treated differently when it comes to testing new technologies on the ground and they serve as key informants and a source of knowledge for neighboring farmers in the area.
In summary, given the country’s current agrarian situation, there is virtually unlimited potential for advancing the use of agtech in India. But there are significant hurdles to overcome. A conducive policy environment is the need of the hour to encourage the start-up ecosystem for agribusiness. It is heartening that there is no dearth of availability of creative engineering minds in the country with better ICT knowledge, skills and capabilities.
In my opinion, it might still take a few decades to see the average Indian farmer with a gadget in his or her hand, and managing operations in a tech-enabled farm. But signs of progress are encouraging and it all depends on the quality and pace of reforms that are long overdue.
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