Moving Towards Inclusive
Growth And Sustainability In Indian Agriculture
Growth And Sustainability
Os Objectivos de Desenvolvimento Sustentável (ODS), tal como delineados pela Organização das Nações Unidas para a Alimentação e a Agricultura - desde acabar com a pobreza e a fome até à resposta às alterações climáticas e à sustentabilidade dos nossos recursos naturais - estão no centro da Agenda 2030. Isto representa uma enorme oportunidade para a Índia, dado que quase 60% da nossa população está envolvida na agricultura e actividades conexas. A capacidade e a vontade de transformar o sector podem ter um impacto de grande alcance numa grande parte da nossa população.
A agricultura e as actividades conexas contribuem com cerca de 20,2% para o nosso PIB (2020-21). Com o objetivo declarado do governo de duplicar o rendimento dos agricultores e de o alinhar com os ODS da agricultura sustentável, a agricultura indiana apresenta uma oportunidade muito atraente e enorme de se tornar globalmente competitiva.
Nos últimos 18-24 meses, tem-se assistido a uma concentração significativa neste sector. Parece que o sector está finalmente a tornar-se uma tendência dominante e que todas as partes interessadas - governo (central e estatal), empresas, instituições financeiras, ONG, grupos de reflexão - estão alinhadas para alcançar objectivos comuns.
The Challenge
Of the total number of small and marginal holding farmers globally (about 500m), a large chunk – almost 30% – reside in India. As per International standards, a 15–20-hectare land holding farmer in Africa or Southeast Asia is called a small farmer. The same small/marginal holding farmer in India is someone having less than 2 hectares of land. They constitute over 90% of the total farmer population of India. To impact this population alone and focus on doubling their income and bringing transformational changes would augment well for India in poverty alleviation.
At almost 120m, the small and marginal farmers present a very fragmented segment for the upstream part of agriculture. It leads to information asymmetry. This means that all stakeholders who engage with these farmers for their business don’t have access to real-time information or even reliable information—including the farmers themselves. This then leads to sub-optimal business decisions for various stakeholders.
To put things in perspective, India has the highest arable land; we enjoy sunshine throughout the year and hence can have 2-3 seasons. Yet, the yield per hectare is the lowest in the world (we could compare ourselves to some underdeveloped countries) as our dependence on farm labour is huge.
This is just one example of how sub-optimal we are in terms of our efforts to provide inputs. The fragmented land holding also poses a challenge in terms of our inability to access information or reliable data that can help the stakeholders to be proactive and provide optimal solutions at the input level—be it in the form of seeds, nutrients, crops to grow, soil quality, prediction of climatic conditions or even pesticides to spray to protect against attacks.
With doubling farmer income and moving towards sustainable agriculture as the pivot, various stakeholders have been deliberating on this challenging scenario. What seems to have come out is a consensus that digitalisation will help address and contribute to this cause and address other pain points in the entire ecosystem, especially at the farmer level.
Another challenge is water.
Indian agriculture is a big guzzler of fresh water. It uses up to a staggering 76% of all the fresh water available. We are in the red zone as far as water goes. This needs dire attention as water tables are going down dramatically in parts of India, along with challenges that climate change pose. Mechanisation of farms (which historically was linked to having a tractor in the farm which was primarily used for transportation purposes), crop diversification, driving efficient rice production system (biggest consumer of water), economically viable crop seeding are some things that India needs to push at a fast rate.
The Progress
The sector is seeing tremendous interest from Private Equity and Venture capital funds globally. There has been an inflow of USD 1.9b since 2010, benefitting around 14m farmers. The sector has witnessed a 48% growth in the last five years. The technology introduction and use, though, has to impact the entire value chain end to end. Currently, the input and output management supply chain is attracting most funds to build efficiencies and drive automation connecting farmers to input and output markets. The efficiency in production per se is yet to build up. This needs more focus and attention if we want to improve our yield per hectare and create impact at the farmer level and their incomes. Water management, soil evaluation, pest management are areas where technology can make a massive difference in driving efficiency in the production phase.
It is heartening to see that progress is already underway as far as digitalisation goes. This must happen in two ways.
The first is a one-time exercise to digitise the land records and farmer information.
About 8%-10% of farmers’ (10-12m) land records have already been digitised. States like Hyderabad and Telangana are leading the way in this initiative.
Second is the use of technology like satellite imagery and drones to map land parcels.
Satellite imagery can generate real-time data and information around what crops have been grown in what region and the farmers’ productivity—to name a few. Several such cycles that will be mapped will create reliable data that can be actioned and used by all the stakeholders – big and small.
Embracing and introducing smart digital tools that give real-time advice on planting cycle, soil sensors, product quality (at the input level) must be combined with modernising the system. An example would be bringing in technology used outside, like using drones for spraying crop protection products. This will enable a significant shift from the current scenario where no such data or technology is available both for the farmer and the various stakeholders.
A Collaborative Solution
There are technology players who are looking at this phase and coming up with a solution that will provide a platform for farmers to be able to have information across the entire value chain – right from input to bringing in price transparencies; to being able to assimilate demand and hence give inputs on what to grow per se; to the farmer being able to sell his produce at a higher realisation or price guarantees.
Much of this success, though, rests on farmer endorsements and adoption.
There is outstanding support and recognition from the local state government in this area as the objectives are aligned. The government has approved and launched the formation and promotion of 10,000 FPOs (Farmer Producer Organisation). Each of these FPOs will roughly touch between 500-1000 farmers. This will facilitate access to underserved farmers with better quality inputs, lower-cost financing, agronomy knowledge.
This collaborative ecosystem – between the government and the push of the digital infrastructure – will create a significant impact on the sector.
There is a definite shift in the corridors of power, and concrete steps are being taken to transform and support agriculture. There is an equal and important role that the industries and the broader stakeholders have to play in helping the Indian agriculture transition. This would require collaborative models which are end to end and an open architecture where all players – at any level of the entire value chain, small or big can plug in and become part of a cohesive delivery mechanism that is working towards a common goal of doubling farmer income and promoting sustainable agriculture.
