The Digitalized Future of Agriculture

India needs another revolution in Agriculture- A Digital Revolution. A farmer needs to be provided with the knowledge and Technology of what to sow, based on Agro climatic study and looking at demand supply position for a particular crop, when to sow, when to harvest the crop, where to sell and at what prices. By doing this, productivity across crops and seasons will automatically adjust at optimal levels. 

I believe in a country like India the focus of Digitization should be on removing the inefficiencies in the Agriculture sector as any improvement in the same will positively impact the life of more than 50% of Indian population directly.

In the below article we will explore the present state of Indian Agriculture and how Digitization can revolutionize it.

The Scale of Indian Agriculture

 India has a high diversity of topography, climate and soil, so it is inherently a so-called multi-product agricultural powerhouse. The Indian Agriculture powerhouse facts:

• Total Area: 43% of India’s geographical area: 141 million hectares (Global average: 11% in 2016)
• GDP Contribution:15% (Global Average:3.5% in 2016)
• Employment: 55% of Indian Population(70% of Rural Households depend on agriculture as their principal means of livelihood, Global Average:26% in 2016)
• India’s cropping intensity :136%(Highest in the world)
• % Share of India Exports: 10%
• % Share of India Global Agriculture Exports:2.2%
• Largest producer of milk (6.6%), pulses (25%) and jute (50%)
• Second largest producer of rice (21%), wheat (15.36%), Fruit (10.9%),Vegetable (8.6%),sugarcane, groundnut, and cotton(25%)

The above figures can make someone believe that India is an Agricultural Powerhouse but in reality it suffers from a lot from inefficiencies the impact of which is given in brief below:

• India ranks 100 in the Global Hunger Index (GHI) — 2017 of 119 countries, where it has consistently ranked poor.
• Average annual earnings of 85 % of farmer households was Rs 79,779 in 2015-16.
• 41 % of rural households are indebted, of which majority (43 %) are agriculture households.
• Two out of three farm households are simply not able to make ends meet.

Current Problems 

1.     Fragmented Landholding:

Division of land by the virtue of inheritance has given rise to the problem. Irrigation and mechanized farming is next to impossible on such fragmented farms.India’s 85 % of landholdings are below 2 Ha and average size of 67 % of all landholding is 0.39 Ha.

2.     Income Inequality:

• The average annual earning of a small and marginal farmer household was Rs 79,779 in 2015-16 while that of large farmers having a landholding above 10 Ha was Rs 605,393 each year(7.5 times more). 
• 85% of farmer households earn 9 % of total income while the rest earn 91 %. If you compare this with overall inequality in India, it is far high.

3.     Indebtness:

• Out of the 41 % of indebted rural households, majority (43 %) are agriculture households.
• 60% of the agriculture rural households take loans from financial institutions while 40% take loan from non-financial institutions.
• Average amount of loan per household (Rs 63,645 ) from non-institutional sources is more than double than any financial institution (Rs 28, 207.)

4.    Low Productivity: Less Yield per acre

•  Rice: China produces roughly a third more rice than India but uses about two-thirds of India's land area. Consequently, China's rice productivity is close to 7 tonnes per hectare versus India's 4. Australia's is 10 tonnes per hectare, followed by Egypt and the US with 8.5.
•  Wheat: India's average yield is 3 tonnes per hectare versus China's 5. Namibia and Zambia get 7 tonnes per hectare, New Zealand 8, and the EU countries average 6 tonnes.

5.    Inefficient Irrigation: Over dependence on Monsoon

•  Approx 85.3% of the total water consumed is for agriculture
• Only 48.6% of India’s substantial 141 million hectares of farmland are irrigated.
•  More water, to produce less: Water footprint of rice production: the ratio of total volume of water used to quantity produced. It is 2,020 cu m per tonne in India, 970 in China, and the global average is 1,325.

6.   Post-Harvest Loses:

• 25 % to 30 % of vegetables and fruit are wasted due to inadequate logistical support, lack of refrigerated storage, supply chain bottlenecks, poor transport and underdeveloped marketing channels. The Food and Agriculture Organization puts this figure at around 40 per cent — worth around $8.3 billion.
• Wheat equal to the entire production of Australia is wasted in a year. 

 7. Other Problems:

• Too many intermediaries, information asymmetry: Cost inflation of ~250% (over the cost of production)
• Lack of cold storage infrastructure: Barely sufficient for 10% of fruit and vegetables produced in the country. 
• Lack of collateral management options
• Lack of timely information and this results in either crop failure or lower productivity. 

The New Age Digital Agriculture:

1.     Farm Monitoring: Increasing Yield per acre

A digital map of the farm will be created. By continuously monitoring certain parameters such as soil moisture, temperature, humidity, leaf wetness and atmospheric pressure, the farmer can gain full control over the quality and productivity of your farm.

It will help farmers to make right decisions at the right time on crop patters and price.

2.     Smart Irrigation: Less water, to produce more

The irrigation system can be integrated with the Farm Monitoring system to set up an automated watering system based on the current climatic conditions, land/plant moisture, the crop type etc.

This will lead to increased yield as well as effective utilization of water.

3.     Smart Risk Assessment: Digital Financing

A risk profile of the farmers can be prepared based on the soil fertility, the type of crop grown, estimated yield and the financial history of the farmer. This information can help in getting easy loans and insurance.

4.     Livestock Monitoring:

The solution deliver an array of information, including news of pregnancy, vaccination reminders, and even diet-change recommendations. Dairy officials can access the records through their smartphones and act accordingly.

But the major concern is that 85% of land parcels (plots) are small, Farmers are poor and hence They cannot afford to invest in these digital solutions. Some other players in the agricultural value chain need to invest in these solutions exploring the ever growing digital business models.

  The Light Bearers for the new Digital Agricultural wave :

·    1.Insurance companies and Banks:

For Banks the digital solutions will solve the problem of defaults, loan diversion etc while for insurance companies claim assessment become easy and less costly.

The can invest in these solutions and can take a share of the increased yield of the farms in monetary terms.

·   2. Agri-Input: Fertilizer/Pesticide companies/Agri-NGOs:

The can invest in these solutions and provide inputs to the farmers in terms of the ideal method of cultivation, Fertilizer /Pesticide to be used etc. This will in turn help them in increasing their sales of their sales as well monitoring the effectiveness of their Fertilizer /Pesticide in real life scenario under different conditions

·   3. Banks + Agri-Input Companies

A partnership model can be explored in which banks provide the financing to the farmer , the partner agri-input company provide the knowledge inputs to the farms which regards to the Soil fertility ,ideal fertilizer/ pesticide, irrigation needs, Climatic conditions ,moisture etc and the insurance comp so as to increase the yield.

·   4 .Contract Farming Companies

In this Model, The Contract Company will act as lead and enter into partnerships with the Banks, Insurance companies, Agri-Input companies .This will insure that the company get the required quality yield for their further processing .A farm to fork model can be explored.

The Banking companies will be assured of the loan repayment since the Contract farming lead company will buy the produce at a predetermined rate.

5.Government: Ministry of Agriculture, NABARD and Agriculture Market committees.Government can be the prime initiator to digitize farming through its Networks of Agriculture Market Committees .Government can even give incentives to other private/public players who are helping in this initiative e.g There can be lower GST or a Tax rebate on items which are manufactured through the digitized contract farming model.

Also farmers, need to pool in their lands to increase their farm size to at least 100-200 acres and set up a farmer producer organizations so that the economies of scale can be achieved.

India is not an agricultural powerhouse as of now but with the right focus Digitization in Agriculture can make India An Agricultural Powerhouse

References:

• World bank Statistics
• Committee on Doubling of Farmers’ Income
• Union Agriculture Ministry statistics 
• A 2010 report (The Green, Blue and Grey Water Footprint of Rice From Both a Production and Consumption Perspective, goo.gl/4tCSGZ) by UNESCO-IHE Institute for Water Education (now, IHE Deft Institute for Water Education)