Insights into Editorial: Agriculture a fertile ground for digitization
While agriculture’s share in India’s economy has progressively declined to less than 15% due to high growth rates of industrial and services sector, the sector’s importance in India’s social and economic fabric goes well beyond this indicator.
Why a strong agricultural sector is important for India’s growth?
- Nearly three-quarters of Indian families are directly or indirectly dependent on agriculture.
- Nearly 70% of India’s poor depend on rural income, especially on agriculture.
- To feed the currently undernourished population, India would require a 3-4% increase in food supply. With the population expected to grow even further, the strain on the sector is likely to grow more in the coming years.
- Also, it constitutes 10% of the overall exports.
- Besides, India’s food security also is dependent on agriculture.
Why India is called a global agricultural powerhouse?
India is the largest producer of milk in the world. It is one of the leading producers in pulses, spices and has world’s largest cattle herd. It has also largest area under wheat, rice and cotton. The country is amongst top producers in the production of rice, wheat, cotton, sugarcane, farmed fish, sheep & goat meat, fruit, vegetables and tea. The country has some 195 m ha under cultivation of which some 63% are rainfed (roughly 125m ha) while 37% are irrigated (70m ha).
Why the demand is increasing?
Driven by a growing population, in particular an expanding middle class with higher incomes, the sector has seen a sustained increase in demand. Also, rising incomes have lead to diet diversification—away from staple grains and towards higher-cost foods like poultry, fruits and vegetables, and dairy products.
Challenges faced by India’s agricultural sector:
- Key challenges faced by the Indian agriculture are the need to increase productivity by leveraging technology-especially for high yielding and resistant variety seeds and efficient utilization of water, adapt latest IT to increase resilience to nature by phasing sowing, watering and harvesting and to increase the price benefits to the farmer by providing timely market information.
- Also, rising incomes in the country have driven higher consumption of edible oil. While India is one of the largest producers of oilseeds in the world, it imports around 55-60% of domestic edible oil consumption requirements. This poses a major challenge as high import dependence means an uncertainty in supply and potential for significant variability in prices.
- At the same time, multiple other issues, such as double cropping, lack of crop rotation, lack of time for soil recreation, are putting further pressure on fertility and yields.
How technology can help here?
This is where the use of technology can be of immense help. Technologies such as automation, decision support system and agriculture robots are being widely adopted in the sector globally. Farmers are using the Internet of Things and smart sensors to get access to valuable information like soil moisture, nutrient levels, temperature of produce in storage and status of farming equipment. The sector is also ripe for the use of big data analytics and artificial intelligence, technologies that have been deployed successfully in various sectors across the globe.
What needs to be done now?
The digitization and use of technology in agriculture has, so far, been taking place in confined application fields. The logical step for the sector, especially in India, would be to build an all-inclusive digital platform.
- An inclusive platform will be able to provide end-to-end services for farmers—from selecting crops, optimising plantation timings, seeding and fertilization rates based on plants’ actual needs and regulatory requirements and limits.
- All the data collected during a crop’s cycle can be compared with other farmers who grow the same crop in similar conditions. Lessons learnt from one field can be applied automatically to another to maximize output.
- Such an approach can help to improve the yield of major broad-acre crops by between 20-30%.
Other benefits associated with such an inclusive digital platform:
Establishing such a digital platform will not only help improve yields and meet the growing demand, it will also be a game changer for the sector:
- Firstly, it will help to track produce from farm to the table. In the process, it will reduce wastage in the value chain—a huge issue in India currently—and improve food safety. Technology can help detect pathogens and allergens before they reach consumers.
- It can also help address the price discovery issue. The current wholesale market format suffers from a transparency challenge. With no data on volumes, prevailing prices or inventory levels, there is little information for buyers or sellers to make informed decisions. This information gap is a barrier to the entry of new players and, hence, increased competition and better price discovery.
- Finally, it can also help trigger an “uberization” of the sector by bringing farmers in touch with profitable customers and help build sustainable partnerships to improve farming productivity.
Therefore, a productive, competitive, diversified and sustainable agricultural sector will need to emerge at an accelerated pace for India’s growth. Policy makers will thus need to initiate and/or conclude policy actions and public programs to shift the sector away from the existing policy and institutional regime that appears to be no longer viable and build a solid foundation for a much more productive, internationally competitive, and diversified agricultural sector.