Next Generation Digital Platforms for the Farming Sector

Introduction

The next generation of Digital platforms will make farming a technology driven, exciting and viable business. This article talks about how farming will be transformed by digital platforms. It explores transformation by crop phases – Crop Selection, Financing, Farm Operations and Marketing. This article would be incomplete without addressing how farmers will interact with the platform. The last section briefly touches upon User Experience.

Crop Selection

Farmers are acutely aware of risks in choosing a wrong crop. Farming is a long and intense activity that demands significant investment of time, attention, money and resources. If the crop’s yield cannot be sold for any reason, not considering extreme weather conditions, farmers incur significant losses for that season. The big question remains what data can help farmers choose a crop with a reasonable prediction of demand that will help maximize revenues and minimize losses.

Choice of crop depends on soil type, climatic conditions etc. but among the choices, what has been missing is a simple guide to demand for each crop that is communicated in a simple way to farmers. In order to get this information, we need a nation-wide Crop Grid that captures all crops being planned at a village level and aggregates supply trends. The grid will need to be built at a village level aggregating information at Taluka, District, and State levels. The grid would capture what crops are grown in what regions for commercial farming and expected minimum yield. This can be used to identify need for certain crops for domestic and expert consumption. Digital platforms will capture what is being grown in the current season across the country to then create a hyper local demand forecast based on past yield. The next time farmer wants to know what crops to grow, this platform should answer the question with choices of crops with a simplified ROI and risk assessment.

The Next Generation Digital Platforms will capture farm data on a nation-wide grid that will enable better planning and risk assessment.

Financing

Most farmers perform back of the envelope calculations on expenses based on expected yield before beginning their next season. They operate their farmlands preferably with their own money or by availing government schemes or loans from banks. There is an opportunity to bring sound financial management practices in easy chewable methods so the farmer can be well informed about choices. For e.g.

1. How much should I invest in this farmland?
2. Where can I find the best source of funds?
3. How can I minimize risk to my business?

The answer to the question how much should be invested will really depend on the size of the farmland, region, crop and average yields. It also depends on the risk appetite as in any other business. Hence there cannot be one answer but a range of options. For example, a small farmer may want to move to organic for higher income but may not know about the hidden expenses in alternatives for pesticides to prevent attacks. Consolidating all this information, grouping and presenting to the farmers to allow them to make informed choices would be of tremendous value.

The answer to the second question, where one can find the best source of funds can be addressed with a financial marketplace. Farmer financial marketplaces should be able to suggest the best option of funds for various activities. Traditionally farmers have taken bulk loans from the government for all farming activities. There is an opportunity to open the financial marketplace to the following new sources:

1. On demand, micro-finance options with smaller loan value ranging from 100 to 10,000.
2. Traditional sources from banks and other agricultural financing institutions
3. Crowd funding from anyone, anywhere in the country who wishes to participate

Imagine the power of this financial marketplace that connects the farmer to multiple sources of funding; qualifies the investors and facilitates legal and commercial transactions between the parties online.

The Next generation Digital Platforms will offer farmers with multiple choices for respectable funding.

Farm Operations

Imagine the farmer entering his budget on a digital platform and checking out a range of pricing options based on his spend limits. For e.g. he may wish to go for higher quality seeds or better farm mechanization implements or both. The platform should be able to suggest a package that fits his budget. This way, the farmer does not have to fret about what fits my budget and how does it impact my overall budgets. There is huge information asymmetry and that can be solved through the power of digital technologies.

The digital marketplace will aggregate various sellers and create price comparison matrix. This in turn can be integrated with auction platforms or demand side platforms biased for the farmer, to automatically bid on behalf of the farmers and find the best deals and savings.

Once the farmer starts farming, there are several more marketplaces that come to focus. They are:

1. Labour marketplace for hiring labour for sowing, harvesting, etc.
2. Agriculture inputs – fertilizers, seeds, pesticides marketplace
3. Soil testing service providers for conducting soil tests
4. Expert advisory marketplace
5. Farm mechanization rental marketplace
6. Sorters and graders marketplace
7. Harvester rental marketplace
8. Cold Storage marketplace
9. Packers and haulers marketplace
10. Sale of Produce marketplace
11. Labour upskilling marketplaces – for e.g. training for harvesters, drone pilots, RTP

Include financial marketplaces discussed above, and there are a total of 12 marketplaces.

The Next Generation Digital Platforms will integrate all marketplaces to enable On-demand Farming.

Farmers need not run from pillar to post anymore, instead may log on to their mobile app and get connected to their farming ecosystem online.

One of the key pain points in farming is getting access to authentic and trusted advisory at the right time. Augmented Reality based advisories are just around the corner. Every advisory may be viewed in Augmented Reality to drive better adoption of advisories.

Any platform definition is not complete without data. Data in farming is generated from tracking location of farm equipment and from sensors. Sensor data in farming is crucial in providing accurate advisories.

The Next generation Digital Platforms will package FARMING IN A BOX with a full stack of IOT Sensors.

A full stack of IOT sensors may include the following from deep in the soil to above the ground.

1. Soil moisture sensor
2. Crop growth monitoring sensors specific for each crop
3. Humidity sensor
4. Wind sensor
5. Temperature sensor

The depth and range of data coming from multiple sources including sensors and location tracking of goods and services will make farming completely technology driven operation.

Marketing

The farmer today is really in a weak spot to market his produce. The Government of India recently allowed farmers to sell across states and to any buyer. The government passed 3 ordinances in this direction:

• Amended Essential commodities act allowing more commodities as essentials
• Allowed barrier free trade and movement of farm produce across state lines
• Introduced a new model of contract farming assuring farmers of pre decided prices

The farmer is still befuddled with the following problems at the farm gate:

1. Lack of advertising know how to market his produce
2. Lack of farm gate infrastructure to sell produce at the farm gate.
3.  Lack of transportation and storage from the farm gate to the buyer’s location.
4. Lack of payment options at the farm gate – cash or digital payments that is tracked exclusively for farmers.
5. Lack of ability to track and maintain the following for transparency
6. Inability to capture source of goods – attributing produce to a particular farmland and farmer
7. Lack of backup options and suggestions for over supply situations - where to find buyers in case no one is showing up at the farm gate and there is lot of supply. Where to store them temporarily to time the market.

The Next Generation Digital Platforms will empower the farmer with marketing muscle.

Farmers don’t have access to sorters and graders – they are huge expensive machines. For e.g. potato grader costs Rs. 6 lakhs. Without sorting and grading they cannot create differentiated pricing plans and packages.

Farmers need to keep control of marketing their produce. Even then, with 145 Million farmers, it is impossible for any buyer to browse through the produce and buy without personally inspecting the goods. There are five strong capabilities that digital platforms need to support –

1.      Promote hyper local sale as much as possible encouraging local economies.

2.      Create demand and supply aggregator platforms so it becomes easier for either side to participate in bulk sale.

3.      Build verifiable measures of quality of produce through IOT and AI technologies.

4.      Give control of prices back to farmers with some guidance for quick sale. Enable advance bookings from any type of buyer with advance payments for guaranteed income.

5.      Build an ecosystem of packers, storage solution providers and haulers for delivery to buyer location. Tracking movement of vehicles, equipment and farm packages becomes essential with technology. Dynamic linkages to local or regional labour marketplaces reduce stress on meeting timely commitments. The need for cold storage companies is immense to ward of revenue loss. Large farmers try to time the market by storing in their own farmlands.

Trust and safety of farmers and buyers becomes very important for both buyers and sellers to qualify and comply with policies that doesn’t leave either party feel cheated. This is where Blockchain and GPS technology can play a major role. Analytics and AI also will be hugely influential in providing recommendations for the farmers in discovering profitable customers and locations. This information in turn feeds back to what should the farmer grow next season.

Integration with digital payment systems allowing buyers to pay against invoices will be key to bringing in honesty, transparency and speed. Price discovery of farm produce at the point of sale will be crucial for farmer prosperity.

The Next Generation Digital Platforms will advise farmers on price points based on differentiated value creation.

User Experience

Digital Platforms bring in the power of data and bridges information asymmetry at scale. But users are human beings that will need to interact with digital touch points. The intersection of digital and human interaction needs to be simplified, less intimidating and intuitive experience. These require very strong understanding of users on what jobs they are trying to do, understand mental models and enable them through digital interfaces.

The next generation digital platforms will enable voice, vernacular and video at scale.

Digital experiences need to be a lot more simpler, empowering and enjoyable for farmers. And behind that simplicity, will rest all the complexity of being able to interpret multiple languages and dialects and provide a conversational interface through voice and chat.

Ultimately the next generation digital platforms should bring in more prosperity to the farmers, save lives, drive agriculture GDP for the country and feed the planet in a sustainable way. I am sure there are many startups looking at several parts of this puzzle in exciting new ways. It will be exciting to see how this plays out in the next few years.

The views expressed in this article are personal.