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How has digitalized farming and innovation in agriculture saved farmers from poverty in India?

by: Sean Fong
This section provides a brief orientation to the document and shows how the findings may assist and support you in exploiting opportunities for business development pertaining to the innovative use of digital technologies that contributed to poverty mitigation among farmers in India.
 

Who is this document for?

 

This document provides an overview of how digitalized farming and innovation in agriculture have saved Indian farmers from poverty. This article is mainly aimed at:
  • EU investors who seek to improve their knowledge about the agricultural sector in India and other developing economies in the region
  • SMEs operating or with interest in the agricultural and digital technology sectors in India
  • Individuals and organizations aimed at engaging in poverty mitigation efforts through improvements in agricultural practices among farming communities in India
In subsequent levels, you will get a deeper understanding of opportunities for exploitation in the industry.
 

Why should I read this document?

 

Agriculture, defined as the science or practice of cultivating plants and livestock[1], is a key primary industry globally, accounting for 4% of the global Gross Domestic Product (GDP) in the year 2018[2] and as much as 25% of the GDP in some developing countries. Nevertheless, industrial yields are subject to significant vulnerabilities from natural hazards such as climate change and artificial crises such as poor farming techniques, putting at risk the lives of the majority of the world’s 1.2 billion people living in extreme poverty[3]. Despite the volatility, agriculture is still a ticket out of poverty to large communities around the world, especially in developing countries in regions such as South Asia and Sub-Saharan Africa.
 
At the same time, developments in digital technologies have presented a myriad of opportunities for the introduction of concepts such as precision and smart agriculture to the forefront, fusing ideas in remote monitoring, Internet of Things (IoT), and automation. These technological assets allow to generate innovative solutions and improve agricultural efficiency whilst offering methods for farmers, ranchers, and other agricultural professionals to achieve a better life for themselves and their families.
 

[1] Safety and health in agriculture (International Labour Organisation, 1999) p.77 ISBN 978-92-2-111517-5
[3] : Gunnarsson, A., & Wingborg, M. Reducing Poverty Through Agriculture (p. 7). Stockholm, Sweden: We Effect. Retrieved from https://weeffect.org/app/uploads/2018/12/we-effect-reducing-poverty-thro...

An Introduction to the Agricultural Sector in India

 

India has the world’s second-largest population and a workforce of more than 500 million, with close to half employed in agriculture, which accounts for 18% of the nation’s GDP. However, the productivity of the national agricultural sector lags behind many of its competitors. The majority of Indian farmers practice subsistence agriculture, many cultivating crops on privately-owned family farms averaging slightly more than a hectare in size and achieving yields ranging from 50% - 90% of those in Brazil, China, and other developing countries[1].  
 
One main reason is the lack of adoption of modern farming technologies among Indian farmers. Under 45% of Indian farms are mechanized, compared to its associates in BRICS China and Brazil, who achieved 57% and 75% respectively[2]. India’s National Bank for Agriculture and Rural Development (NABARD) attributes the relatively low mechanization rate to factors such as small landholdings, poor access to electricity, and government bureaucracy.
 
Another key reason attributing to the low agricultural productivity would be the lack of awareness of improved farming techniques such as crop rotation. The average head farmer of a household has about 4.7 years of schooling[3] which contributes to the lack of inherent knowledge, compounded by the fact that almost 60% of India’s population do not have an Internet subscription. The lack of access to relevant updates in agriculture not only subjects the farmers to significant losses in poor practices (improper storage and logistics can amount to incurred losses as high as $15 billion in 2013), but also to heavy costs imposed by middlemen within the national agricultural trading system, leaving them with insufficient incomes.
 

Developments in Digital Technologies targeting Farmers in India

 

The Indian government has introduced Digital India, a chief program to enhance the proliferation and uptake of digital technologies throughout the country. Its main feature is the introduction and provision of numerous services on telecommunication channels such as computers and smartphones. A key priority is the provision of government services to farmers in both rural and urban areas through multiple electronic channels, including Internet facilities (e.g. through applications such as eSagu which provides agricultural expert advice) and community radio stations. Agricultural economist Ashok Dalwai[4] has expressed that the Indian government is currently transforming the extension system by implementing information and communication technology (ICT) and improving the national market-led crop insurance system with digital innovations such as geotagging, satellite data, and drone technology to verify crop-cutting experiments.
 
It is estimated that India’s newly digitizing sectors have immense potential to create substantial economic value, as much as $50 billion to $65 billion in agriculture by 2025, which reinforces the vast benefits that digital modernization of agriculture may bring. India has undertaken significant efforts in bringing more online users with cost-effective smartphones. Under the insurance scheme that Pradhan Mantri Fasal Bima Yojana launched for farmers in early 2016, farmers are encouraged to adopt the usage of modernized machinery such as tractors and automated irrigation systems to improve productivity and soil health while enjoying coverage against potential crop failure[5]. As the head of Asia at the Bill & Melinda Gates Foundation Purvi Mehta indicates, Indian agriculture has been moving from a production-centric infrastructure toward a more market-centric one. Significantly more opportunities have been given to include the smallest farm holders, enhancing their incomes in measures such as product sales through electronic trading platforms.
 
In addition, the Indian government is also taking advantage of the push for nationwide digitalization to enhance its innovation ecosystem. As such, under the Startup India programme, the Indian government is providing support to agritech startups, with more than $300 million[6] in investment raised globally by more than 350 budding startups. Non-Indian investment, including that from the European Union, accounted for 90% of the investment raised.
 

[1] Kaka, N., Madgavkar, A., Kshirsagar, A., Gupta, R., Manyika, J., Bahl, K., & Gupta, S. (2019). Digital India: Technology to transform a connected nation. McKinsey Digital. Retrieved from https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-india-technology-to-transform-a-connected-nation.
 
[2] Kant, A., Mothkoor, V., & Dhulipala, R. An opportune time to digitize agriculture – ICRISAT. Icrisat.org. Retrieved 30 April 2021, from https://www.icrisat.org/an-opportune-time-to-digitize-agriculture/
 
[3] Panda, S. (2015). Farmer education and household agricultural income in rural India. International Journal Of Social Economics, 42(6), 514-529. https://doi.org/10.1108/ijse-12-2013-0278
 
[4] Boettiger, S., & Sanghvi, S. (2019). How digital innovation is transforming agriculture: Lessons from India. McKinsey & Company. Retrieved 4 May 2021, from https://www.mckinsey.com/industries/agriculture/our-insights/how-digital...
[5] Kummari, M. (2021). It’s time for digitizing agriculture in India: Manoj Kummari. Grainews. Retrieved 30 April 2021, from http://news.agropages.com/News/NewsDetail---38625.htm
 
[6] Bhatia, R. (2018). Top 6 Indian AgriTech Startups That Are Revolutionising Agriculture. Analytics India Magazine. Retrieved 4 May 2021, from https://analyticsindiamag.com/top-6-indian-agritech-startups-that-are-revolutionising-agriculture/
 

Specific Solutions developed to Enhance Agriculture via Digitalization

 

Numerous applications have been developed by various government agencies as part of the Digital India program. In the sector of agriculture, the Agrimarket App has been developed by the Department of Agriculture & Cooperation to help farmers keep in line with the crop prices for minimization of distress sales, allowing such information transmission to farmers within 50 km of nearby markets in English and Hindi, two of India’s official languages[1]. The Farmer Portal provides all relevant and required information to the farming community as a one-stop-for-all access point.
 
Increased investment into enhancing the digitalization of agriculture has seen the rise of startups to meet the needs of farmers. For example, SatSure is a data analytics company integrating satellite, weather, and IoT analytics to help farmers’ financial security and crop insurance. The company has mobile apps for giving information on supply statistics of crops and crop stressing in their area. Currently, the startup’s solutions are used by the Andhra Pradesh State Government. Many banks and insurance firms in India are also leveraging SatSure’s solutions[2], providing end-to-end IoT solutions for fresh food management. Qzense, another startup is employing IoT to develop solutions for fast and precise grading of fresh food by capturing insights on spoilage, shelf life, and ripeness, thus helping farmers achieve higher margins from the same production.
 

Challenges Faced in Widening Agriculture Division

 

Despite the strides made to improve agricultural productivity and pulling millions of Indians out of poverty, major challenges still remain in India’s push to digitalize its agricultural sector.
 
Subsectors in the wider agricultural industry, such as the dairy sector[3], remain unorganized. According to analysts, the Indian dairy industry comprises 300 million herds of cattle spread across 75 million dairy farms. Smallholder dairy farmers experience a dearth of important resources such as veterinary support and access to optimal nutrition and animal health products while private dairy and dairy cooperatives struggle mostly with issues such as managing farmer payments and building traceable supply chains. This is where tech startups such as Country Delight and Stellapps have stepped in, employing IoT technologies and data analytics to boost production, ensure an improved quality of milk and widen the base of value-added dairy offerings such as cheese, butter, and ghee, helping farmers increase incomes and farm productivity.
 
The adoption rate in sustainable agricultural practices is still slow, at less than 4% among Indian farmers according to a study by India’s Council on Energy, Environment and Water[4]. With the emphasis on environmental conservation in contemporary times, there is a need to rethink cultural agricultural practices and focus on promoting sustainable agriculture, especially natural farming, as expressed by NITI-Aayog Vice-Chairman Rajiv Kumar. Policymakers would need to support long-term comparative assessments of sustainable practices, increasing budgetary allocation to practices that show the most potential. For example, organic farming has received significant budgetary support in recent years but it currently covers only 2% of India’s net sown area of 140 million hectares.
 

European Involvement in the Digitalization of the Indian Agricultural Sector

 

The European Union (EU) has extensive trade relations with India, accounting for €80 billion worth of trade in goods in 2019, 11.1% of the latter’s total trade[5]. Major European companies, such as Nestlé, have become established players.
 
Under the EU’s research and innovation programmes, numerous projects continue to be implemented, involving Indian partners in the research and development of solutions and strategies toward addressing key challenges such as sustainable growth and the transition to a digital economy. Currently, under the EU-funded project PRODIGEES[6], a transnational knowledge cooperation network has been implemented aimed at creating a deeper and more comprehensive understanding of the impact of digitalization across social, economic and environmental dimensions while engaging in staff exchange, cross-training, and a long-term platform of research institutions.
 
Companies have also taken advantage of the increased push for national digitalization to expand business operations and investments into India that may facilitate the transfer of smart practices and technological insights in agriculture to local farmers. German multinational Bayer Crop Science[7] has outlined its vision and plan for digitalized agriculture. It has launched its trademark product ‘FarmRise’ Mobile Farm Care, while its subsidiary, the Climate Corporation, made a commercial launch of its Climate ‘FieldView’ digital agriculture platform, which enables collection and visualisation of field data to analyse and evaluate crop performance - with plans to extend this to India. Also, Israeli irrigation equipment manufacturer Netafim[8] ventured into India and established irrigation systems spanning more than 18 lakh (1.8 million) acres of land and offered extensive agronomic designs and agricultural extension services to ensure sustainable prosperity for over 8.5 lakh (850,000) farmers and their families. They are also an active partner of several government projects including APMIP, GGRC and TANHODA, helping farmers achieve optimized results.
 

[1] Services | Digital India Programme | Ministry of Electronics & Information Technology (MeitY) Government of India. Digitalindia.gov.in. (n.d.). Retrieved 30 April 2021, from https://www.digitalindia.gov.in/services.
 
[2] Solomon, R. (2020). How IoT Solutions for Indian Agriculture Are Working Despite Unique Challenges. Precisionag.com. Retrieved 30 April 2021, from https://www.precisionag.com/digital-farming/how-iot-solutions-for-indian-agriculture-are-working-despite-unique-challenges/.
 
[3] Bhagwat, S. (2020). Indian startups initiate movement to digitize dairy farming. Business Upturn. Retrieved 30 April 2021, from https://www.businessupturn.com/companies/indian-startups-initiate-moveme....
[4] The Economic Times. (2021). Less than four percent Indian farmers adopted sustainable agricultural practices, says study. Retrieved 30 April 2021, from https://economictimes.indiatimes.com/news/economy/agriculture/less-than-four-percent-indian-farmers-adopted-sustainable-agricultural-practices-says-study/articleshow/82165017.cms.
 
[5] India - Trade - European Commission. Ec.europa.eu. (2021). Retrieved 30 April 2021, from https://ec.europa.eu/trade/policy/countries-and-regions/countries/india/.
 
[6] Promoting Research on Digitalisation in Emerging Powers and Europe Towards Sustainable Development (PRODIGEES). Die-gdi.de. (2021). Retrieved 4 May 2021, from https://www.die-gdi.de/en/research/description/details/promoting-research-on-digitalisation-in-emerging-powers-and-europe-towards-sustainable-development-prodigees-1/
 
[7] Bhayani, R. (2018). Bayer Crop Science brings high-tech digital tools to India's farms. Business Standard. Retrieved 4 May 2021, from https://www.business-standard.com/article/companies/bayer-crop-science-brings-high-tech-digital-tools-to-india-s-farms-118091800863_1.html
 
[8] Netafim irrigation company - by farmers, for farmers. Netafimindia.com. Retrieved 4 May 2021, from https://www.netafimindia.com/about-us/.
Last updated: 26.07.2021 - 20:05
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