October 2, 2021
Hello and welcome to All Indians Matter. I am Ashraf Engineer.
We are seeing the increasing use of data across industries – from engineering to aviation and healthcare to marketing. So why not agriculture? To this end, the Indian government has signed agreements with technology giants Amazon, Microsoft and Cisco Systems to gather and crunch data on India’s agriculture industry. Reliance Industries’ Jio Platforms and tobacco-and-FMCG major ITC will make up the Indian component of the programme. The idea is to modernise the very traditional agriculture industry and ensure food security through digital tools that use information on crop output, land holdings and soil quality. The agriculture ecosystem certainly needs a transformation and the use of data can be a great accelerator. With this project, the government is seeking to usher in long-due reforms to modernise the $488 billion farm sector that employs half of the nation’s 1.3 billion people and accounts for 18% of its economy. However, it’s not all smooth sailing.
So, how will the initiative work? It’s a complex operation but, simply put, the technology giants will seed information such as crop patterns, soil health, insurance levels, credit and weather patterns into a single database and then analyse it using artificial intelligence and data analytics. That, the government hopes, will form the basis for targeted solutions for an industry facing huge obstacles such as dwindling yields, groundwater and soil degradation, and missing infrastructure such as temperature-controlled warehouses and refrigerated trucks.
Once the data is in place, companies can correlate it with the on-ground reality to improve projections and take better decisions around cropping or policy intervention.
Under the agreement, the companies will help the government develop farm-to-fork solutions that farmers can access where they are. In return, the firms would be able to sell the solutions either to the government or to the farmers. It’s the first significant shot the tech firms will have at India’s agri-tech industry, the potential for which Ernst & Young estimates at $24 billion by 2025. Currently, agri-tech penetration is only 1%.
If they work, the solutions will boost rural incomes, cut imports and reduce food wastage. The last point is important because the Food and Agricultural Organisation estimates that a staggering 40% of the food produced in India is wasted at least in part due to inefficient supply chains.
Also, there’s a reason why Amazon and Reliance are part of the effort. Both are trying to dominate the grocery segment for which they need a stable supply of produce. This is also why other local firms like ESRI India Technologies, Ninjacart, Star Agribazaar Technology and Patanjali Organic Research Institute have signed agreements with the government.
So far, the government has collected data on more than 5 crore of the 12 crore land-holding farmers and Microsoft has already selected 100 villages to deploy artificial intelligence and machine learning to build a platform. Amazon, meanwhile, has started offering real-time advice to farmers through a mobile app and is offering cloud services to solution providers.
A data-driven pilot was launched in Karnataka in 2020 and it is said to have improved delivery of government benefits. Some bank loans were also made to farmers using the data, and other services such as insurance and minimum support price verification were routed through the mechanism.
But, let’s be clear, success is far from guaranteed. India is witnessing massive protests against three new farm laws and critics say this is another move to allow large corporations to dominate the agriculture sector. Farmers don’t trust the government at the moment and the technology plan could be a real hardsell.
Among the objections raised by farmers is the possibility of arbitrage – hammering down produce prices on the basis of quality or sheer economic power in one place and then selling it at a higher price in another place.
There are concerns over data privacy too; the government doesn’t have a very good record on this front.
Lastly, there is scepticism about whether the ultimate aim of raising farmer incomes will actually be achieved.
It’s an untested approach in India and the rollout isn’t likely to be smooth, especially given the turmoil in the agriculture sector.
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