Farmers have been either ignored or underestimated on their ability and intent to use of digital tools, but they are ready to embrace them and now is the time to act.
India is witnessing an agritech revolution spurred by a bunch of about 300 entrepreneurs who are trying to disrupt the agricultural supply chain with their innovations. A majority of them are trying to make intervention to make supply chain efficient, transparent, market-driven and traceable. Technology is at the core of most new-age innovations that are enabling access of high-quality inputs to farmers, farmers’ linkages to the market, reduction of post-harvest losses and addition of the extra dose of nutrition in the food we eat.
Two key beneficiaries of agritech revolution are farmers and consumers. Farmers benefit through improved farm economics with improved yield, reduced cost of inputs and ability to de-risk against commodity price fluctuations, monsoon failures etc. Consumers also benefit with improved access to safe, nutritious and affordable food. Industry and government also gain with access to reliable, timely and accurate data for decision-making.
The big question is how to make innovations accessible and affordable to a large section of Indian farming community whose average annual income is close to $1,000 with limited savings and appetite to experiment. My experience of working with farming communities is that they are willing to embrace and pay for innovation as long as it de-risk farming and improve farm economics. Affordability for innovations can be further improved through use of pay-per-use business models as we have seen in many tractor Uberisation startups.
If the affordability is addressable through business model re-engineering, then the challenge is to make innovations accessible to about 120 million farmers. Most agritech startups I work with find it a daunting task to reach out to even thousands of farmers for lack of information and a platform to enable quick access to farmers. In many cases, startups end up investing a considerable and disproportionate amount of time and capital to build farmer database themselves.
As such, most agritech startups are severely constrained by a lack of capital. As per my estimate, the quantum of capital infused in agritech over last four years across about 60-plus deals is mere $110 million. For a sector that is behind $350 billion food economy and source of livelihood for half of India's population, it is just a drop in the ocean. Most of the investments into the sector have come from impact funds and a few from agri-dedicated funds in India. The reason that mainstream VC funds have stayed away from the sector is primarily for lack of visibility of scale. A majority of them want to see innovations touching at least a few million farmers for them to get interested to evaluate the deals in this space.
The question is, do we have an existing business model to reach out to millions of farmers in super quick time? The answer is no. Is there a possibility to create a model that farmers can access? The answer is yes.
The solution lies in building an AGRISTACK – a public digital platform for ready and almost instant access to farmers. This platform can be the hotbed for driving innovations in the agricultural sector. I will propose an architecture involving three essential building blocks as a starting point for building India AgriStack including: farmerStack, farmStack and cropStack.
FarmerStack: This is essentially to determine who the farmer is, whom we want to reach out to. The data can be derived from JAM trinity. JAM refers to the Government of India initiative started with an objective to plug the leakages of government subsidies. ‘J’ stands for Jandhan that is the bank account number. ‘A’ is for Aadhaar, which is the unique identity number given by the government. ‘M’ is for mobile number. There is a good chance that the farmer will have at least one the above which can establish his identity.
FarmStack: This would include the location and dimensions of farm size. This is important to estimate farming needs and the income potential from the farm. This data exists in parts as few states in India have progressed with digitisation of farms. The records available with local governing bodies like panchayats could be one source for this data. The actual GPS coordinates of the farm can be further validated with satellite imagery. Farmer and Farm stacks combined establishes who the farmer is, where is he located, what is his input needs and how much he can potentially earn from his farm.
CropStack: This would include data on the number of crops and type of crops which farmer is growing. Data about cropping pattern is integral to potential interventions, innovations can make. For example, the needs of a farmer growing vegetables is very different from one growing paddy. This data can also be captured through records available with local government bodies, nearest market yards and use of technology including satellite imagery and drones.
I believe that Agristack with eight to 10 field string created around farm, farmer and crop stack can be a potent tool for innovators to figure out relevant innovations and target farmer segments. This platform can cut short time for innovations to reach farmers by a few months or years. This will enable almost an instant and targeted access to millions of farmers. The ecosystem will be able to talk directly to farmers with no filtering and delay of information. For example, for a startup trying to sell seeds of horticultural crops can use Agristack to identify, target and reach specific farmers in a given geography. Similarly, a startup renting harvester can identify which crops and which farms to reach out to.
Agristack can also be used by banks and MFIs to assess credit worthiness of farmers and then tailor-make products for each one of them. It can also help insurance companies to understand farmer and farm risk profile needed in deciding the premium. Corporates selling to or buying from farmers can also benefit immensely with direct and targeted access to farmers. Government can use Agristack for designing and implementing schemes for farmer welfare.
In addition to the above three essential components, an additional voluntary stack can also be attached to the mandatory string of data fields as discussed above. The voluntary stack can have further detail and granularity in information such as tractor and livestock ownership, soil health, access to micro irrigation, bank finance etc.
One can question why a farmer will share this data. The answer is that the farmer will share data as long as he benefits from doing this. This platform can help farmer reduce cost of inputs, find buyers and enable his access to finance, market and insurance in efficient way.
If the farmer is concerned about data privacy and integrity, a consent layer on the lines of IndiaStack can be created where farmer can share the information by giving permission selectively.
The question is who and how one can build AgriStack. My guess is it has to be a collaborative effort including governments (both federal and State) along with industry and innovators. Use of technology in developing Agristack can optimise time and cost involved. There is clearly one-time investment in building this and then there will be recurring cost to maintain and continuously update it. This is worth the effort for the quantum of benefits this platform can offer.
What is a good time to implement it? The time is clearly now. With the impending need to tackle problems of food security and nutritional requirement of the growing population and need to make farming remunerative to farmers in a highly volatile environment, we need this platform more than ever before. I guess it is high time to discuss, design, finetune and pilot Agristack at least in a few villages to begin with and then roll out nationwide for creating direct access to farmers.
To conclude, the digital economy cannot be made inclusive without integrating farmers into it and without democratising access of innovations to Indian farming community. Farmers have been either ignored or underestimated on their ability and intent to use of digital tools. In my experience, they are ready to embrace it and a platform like AgriStack can catalyse the integration of farm and digital economy, much needed for Indian agriculture to leapfrog into a new era.
The author works as Venture Partner with Bharat Innovations Fund. The views expressed are personal.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)