Advent of e-agriculture in India

Addressing agrarian distress

Business

Business & Politics

December 7, 2017

/ By / Kolkata

E-agriculture: Changing the face of agriculture?

E-agriculture: Changing the face of agriculture?

At a time when farmer suicides are plaguing the country, agri-tech revolution seems to be a probable beacon of hope.

In an agriculture based country like India, the happy images of smiling farmers, toiling in the fields are replaced by agrarian distress. In 2017, the country observed severe agrarian distress owing to low growth, poor earnings and distress behaviour such as large-scale internal migration and disproportionately high suicides. Farmer suicides are on an alarming rise in the country mostly owing to reformed government laws and unprecedented natural factors.

For example, on June 24, Maharashtra Chief Minister, Devendra Fadnavis, in a bid to address the issue of agrarian distress in the state announced a farm loan waiver. The waiver was aimed to relieve indebted farmers. As of November, after an INR 340.22 billion farm loan waiver, farmers continue to take their lives in Maharashtra. As per the data reported by the six divisional commissioners across the state, 2,414 farmer suicides were reported in the state between January 1 and October 31.

In yet another case of suicide, farmers in Odisha committed suicide by consuming pesticides due to crop failure. On November 20, it was reported that a farmer allegedly committed suicide in Balasore district, with his family due to crop loss caused by unseasonal rains. The suicide is the 10th such case reported since October in Odisha. The state government has promised early compensation to farmers who have suffered a crop failure.

The incidents highlight that despite a waiver or compensation, problems such as lack of better remunerative prices, timely access to formal credit, protection against risks and price crashes, and social and financial security to cover for medical expenses continue to be unaddressed in the country.

As agricultural dissents continue in the country, it was only two days back that senior BJP leader and former Union Minister, Yashwant Sinha, along with 250 farmers, re-launched a protest against the Maharashtra government for its ‘apathy’ towards soybean and cotton farmers in the Vidarbha region of the state in Akola police ground post his arrest on Sunday. The farmers led by Sinha are demanding compensation for damage crops. Sinha stated, “We have decided to continue with our protest in the police ground till our demands are met.”

As such, entrepreneurs in the country are trying to come up with a probable solution by means of taking a digital step towards agriculture, to address the elephant in the room. Even though e-commerce has altered the way buyers and sellers connect, it is yet to gain a prominent foothold in the agricultural sector, especially with reference to India.

Citing N Jamaluddin, his paper on ‘Adoption of E-Commerce Practices among the Indian Farmers, A Survey of Trichy District in the State of Tamilnadu, India’ states, “The Internet plays a role in agribusiness both as a new marketplace and as an information resource. Numerous applications have been developed by different interest groups. Applications in the marketplace can be categorized from a farmer’s viewpoint, including services, outputs, factors of production and inputs. Services, inputs, and production factors are generally purchased via the Internet at a fixed price, whereas outputs are generally traded through at auction. This is perhaps because many of the outputs are perishable and therefore the market price is more sensitive to supply and demand. Participation in e-commerce requires that both buyers and sellers have access to the Internet and that they are able to use the required hardware and software effectively. In agriculture, the B2B and B2C categories of transactions have used the Internet in Agriculture, Remote service, and Maintenance referred to as agribusiness –to–agribusiness (A2A) and agribusiness-to-grower (A2G). The development of e-commerce in agriculture is of course strictly linked with the adoption of the Internet mainly by the farmers.”

On the government front, National Agriculture Market (NAM), for example, is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities. A spokesperson of NAM clarifies, “NAM basically increases the choice of the farmer when he brings his produce to the mandi for sale. Local traders can bid for the produce, as also traders on the electronic platform sitting in other States. The farmer may choose to accept either the local offer or the online offer. In either case, the transaction will be on the books of the local mandi and they will continue to earn the transaction fee. In fact, the volume of business will significantly increase as there will be greater competition for specific produce, resulting in higher transaction fees for the mandi.”

Talking to Bengaluru based NinjaCart, a premium agri-marketing platform in the private sector, Vasudevan Chinnathambi, one of the owners, states, “Currently Ninjacart sources from 2000 plus farmers and serves 800 plus customers currently. The aim is to utilize state of the art infrastructure to forge a smart supply chain and reduce food wastage while absorbing farmers in the process. Ninjacart started in 2015 as an on-demand grocery delivery company but soon realized that the back-end supply chain of fruits and vegetables is highly inefficient and broken. In the process, farmers used to get low prices for their produce and middlemen were taking advantage of the distribution inefficiency and information barriers. To solve this bigger problem, it pivoted to an end-to-end B2B agri-marketing platform.”

The start-up sends its vehicles along with crates to the farmer’s location to bring goods to their collection centres, free of cost. All of the farmer transactions are cashless and they get their payment in their bank accounts within three days of procurement.

States Vasudevan, “In another 12 months, we will expand our presence to Chennai and other major cities of South India which will enable farmers across south India to earn better. By 2022, we aim to be present across India in more than 20 cities handling a daily volume of 3000 tonnes a day. This would mean that we will source from 0.2 million (2 lakh) farmers regularly and serve 25,000 customers a day. This will help us achieve annual revenue of around 2500 crores.

We would also explore newer business opportunities in improving the vegetables and fruits retailing in India and also improving the farmer income by enabling him with cheaper capital and inputs and empowering him with modern farming technology.”

Talking about the obstacles faced along the path, Vasudevan adds, “Ninjacart is dealing in a very unorganised market space. We empower the farmers within our network to avoid the middlemen and mandis/local markets which gives them unjust prices for their produce and no security whatsoever. The aim is to aid the farmers, by means of integrating them in a tech-enabled environment. For an instance, one of the major problems affecting farmers was lack of access to information. Our mobile app and mobile communications which include calls and SMS are our primary touch-points with the farmers.”

He further adds, “We realised farmers are more comfortable talking to someone than accessing messages. For this, with the help of a major telecom partner, we devised a voice portal. Each farmer can be identified with a unique code (the mobile number). Farmers can dial into a toll-free number with IVR in their local language to indicate the quantity and date of availability of produce. This information can be passed on to a logistics team to help plan routes.”

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