While India is eager to move forward in terms of technological development, it is essential to take into account the complexities of small farms and the need for easy scalability across 16 agro-climatic zones, diverse regions and demographics.
“Everything can wait except agriculture,” Nehru said. India suffered from severe food shortages shortly after independence. The Green Revolution was a watershed moment that allowed us to become self-sufficient in food grains. In 1950-51, the government recorded India’s food production at 50.82 million tons. Food grain production increased to 314.51 million tonnes in 2021-22. For 2022-23, we have set our sights on a target of 328 million tonnes. Having said that, this has also caused the indiscriminate use of fertilizers and pesticides, causing soil erosion, greenhouse gas emission effects, increased soil salinity and water scarcity.
Although India has been an agrarian country and its core competence lies in agriculture, we have not been able to fully utilize the agricultural potential. While we have substantially increased food production of both grains and fruits and vegetables in recent decades from where we were, our productivity levels in most crops are far from the best.
Fragmented land tenures and the lack of integrated value chains have been acting as dangers generating many inefficiencies throughout the sector. On top of that, without production planning, the farmer is mostly left in a bind, with underproduction or overproduction, causing uncertainties in prices and income. While MSP has played a predominant role in protecting farmers’ income, even this has been heavily skewed for certain geographies and crops.
At the heart of farm mechanization is farm equipment, which is capital intensive, making it a significant investment and almost out of reach for small and marginal farmers. Since the towns are far from the point of sale, the quality of after-sales service is another concern due to insufficient proper maintenance in remote rural regions. Thus leaving small and marginal farmers out of reach of the benefits of agricultural mechanization.
Then there is the problem of food waste. About 40 percent of all food produced is lost or wasted. Scientific storage solutions close to the farm are essential to ensure better yields for the grower. Rural credit plays an important role here.
With the advancement of technology and the rapid adoption of digital technologies at the farm level, there is immense scope to address the issues and they could become potential changes in the way farming is done and farm production planning at farm level. of farm and country as a whole.
Technological advances have already increased the general public’s awareness of the quality of food produced and consumed. It also ensures transparency in what we consume and traceability in what we offer.
Disruption in agriculture will require eliminating inefficiencies in the supply chain. As more technology becomes scalable and affordable, we have the power to improve efficiency and close existing gaps by helping farmers access credit and crop insurance, engage in predictive analytics to improve agricultural productivity, and create a smooth path towards precision agriculture.
The need to build sustainable and resilient agri-food systems globally
While India is eager to move forward in terms of technological development, it is essential to take into account the complexities of small farms and the need for easy scalability across 16 agro-climatic zones, diverse regions and demographics. We need to identify the risks, build climate-proof agricultural infrastructure and develop contingency plans to deal with climate change, soil erosion and biodiversity loss occurring at an alarming rate. We need to build resilient agricultural ecosystems that save our limited resources through better land and resource management, more thoughtful use of agrochemicals, data-driven decisions, and automation.
With the ability to track, analyze and understand food systems, improve crop quality and reduce food waste, we can drive efficiencies and improve productivity. We are already looking to reduce crop damage, chemical and water use, and reduce GHG emissions through climate-smart agricultural tools. New age technological tools and practices such as IoT, biotechnology and genetic engineering have helped us achieve pest resistance and higher agricultural yields. Data analytics and AI have ensured better quality of crops, making them profitable for farmers and producing better products. Climate-smart agriculture is relevant to the challenges of food security and climate change, and technology has allowed us to reinvent the agricultural ecosystem with smart and sustainable solutions.
Challenges in Agrofinance and Rural Credit
Historically, financial inclusion and financial education have been a challenge for the small and marginal farmer. Constraints in institutional design and delivery mechanisms contribute greatly to the absence of sustainable rural financial institutions and markets. This is fundamentally due to a gap between institutionalized banks, farmers and people involved in the ecosystem, especially in rural India.
While banks and NBFCs require a formal credit history before lending, new-age agritech companies provide farmers with small-amount farm loans against collateral, triggering demands for financing in near-market markets. farm gate.
Adopting FinTech at the grassroots allows you to tackle the complexities of agricultural finance. The growth of the cashless economy and fintech spawns new ways of targeting and securing credit, proper pricing, and risk management. Blockchain-backed mobile money, a better user interface, and easy access to financial products inject much-needed financial inclusion into the country, even though it is a nascent stage.
The goal of Fintech start-ups should be and is to connect the disintegrated agricultural ecosystem, especially marginalized and small farmers, with the entire ecosystem, from supply chains to credit, warehousing and easier access to financial products. . They can bring much-needed transparency to the value chain. In this context, the association of fintech companies with Peasant Producer Organizations also becomes critical, considering that more than 84% of land holdings are with small and marginal farmers.
Innovation for efficiency and scale
Innovation is a critical component of contemporary agriculture, enabling the formalization of the industry. The digitization of its spaces, basic products, financing and processes throughout the value chain and precision agriculture have allowed efficiency and productivity in a fragmented market. Technology has enabled traceability, transparency, quality and payment guarantees for commodity trading without interruption today.
A digital platform connects a wider audience of buyers and sellers, ensuring faster and smoother trade and helping farmers find the best price for their crops. Along with this, smart farming induced by farm automation, precision farming, blockchain, and artificial intelligence are helping farmers achieve better decision-making and thus better harvests. AI/ML will analyze the statistical data of the farms and keep getting better at predicting various outcomes.
the way to follow
The multidimensional focus on quality production, improving supply chain efficiency, financial inclusion of small farmers, and enabling digital adoption at the grassroots is vital to growing the economy and making growth be more inclusive and competitive around the world.
The way forward is to mobilize resources from a macro level to improve agricultural productivity per hectare. The technology-driven equipment is in line with driving agriculture towards better productivity.
Precision agriculture uses modern technologies such as field mapping and satellite imagery to improve crop quality and crop planning.
Agritech start-ups are trying to solve the problem of supply and demand. It intends to integrate supply and demand through financial forecasting and stakeholder aggregation through digital platforms, transforming the nation’s production-driven supply chain into a demand-driven value chain.
Agricultural production is expected to increase due to disruptive technologies such as smart sensors that collect data on soil and crop development. Technology-driven equipment is in sync with better productivity. Precision agriculture improves the quality of crops through the use of cutting-edge technologies such as field mapping, satellite photography, and the effective use of drones for monitoring and farming operations.
The advent of technology in agriculture gives a glimpse of a promising future for agriculture. However, more than 70 percent of India’s population lives in rural areas, several of which still continue to practice outright manual farming. Success would be to allow emerging technologies in the agricultural space to build a robust system that effectively integrates smaller farmers into formal value chains.
(Given article is attributed to Chattanathan Devarajan, Co-Founder, Arya.ag)