How technology is bringing transparency to agri sector and empowering farmers

Sohan, a smallholder farmer, is preparing to take his harvest to market. Though happy with his yield, he doesn’t know if he’ll come home with the money. He needs to support his family and prepare for the next growing season. He knows the current system is unfair to smallholder farmers, but he sees no other way. 

After risking his produce enroute to the market, Sohan must contend with a complex network of actors, all of whom are incentivised to pay the lowest amount of money for the best crops. One buyer may determine Sohan’s crops are of low quality, another may weigh his yield and tell him he has grown less than he thought, and the third might tell him the prevailing market price for his crops is far less than it is.

Since he lacks a reliable source for information regarding crop quality, quantity, and price comparison, Sohan has no bargaining power with the market actors and is, therefore, likely to accept lower compensation for his produce.

Sohan’s story is the story of hundreds of millions of smallholder farmers across India and over 500 million farmers around the world. According to the Food and Agriculture Association, over 80 percent of farmers in India are smallholders like Sohan.

What’s more, agriculture is the largest source of livelihood in India, with 70 percent of the rural population dependent on agriculture for their livelihoods. Yet, the system is stacked against these farmers, who are increasingly unable to sustainably support themselves and their families.

There is no panacea for the economic problems faced by our farmers -- the climate will continue to change. Policy initiatives will come and go and traders will try to increase their margins by paying farmers less than market value for their crops.

Despite the challenges, we can build tools that empower farmers with the information they need to demand the proceeds they deserve. Information is the most powerful tool we can offer them and we have the technology to do it.

This concept is so obvious, it is often overlooked. When buying or selling products, we rely on technology such as comparison sites, e-retailers and property sites, among others, to give us an indication of the broader market value of the said product. We are told, in our online research, the product quality, whether we are paying a reasonable price, and when we are being undercut on a sale.

To survive in an increasingly digital world, our farmers require the same access to reliable and relevant information. Without a digital marketplace model, they will never achieve the price transparency and fairness they need.

Unfortunately, designing and building technologies with farmers and agricultural systems in mind is still a revolutionary act, despite the clear moral and economic imperative to do so.

According to the Economic Survey 2020-21, technology offers huge potential to improve farmer incomes by driving overall value creation and increasing value captured by farmers. Integrated ecosystem solutions can improve value creation and capture at farmgate, potentially adding $76 billion annually to the ecosystem.

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The critical economic issues that basic digital marketplace technology can address include:

Quality Assessment

Traders often determine crop quality by the look and feel, rather than using available technologies to offer an objective assessment. Farmers like Sohan often have to make-do with whatever these traders offer.

Basic tools that provide accurate moisture readings can drastically reduce a trader's ability to cheat the farmer, particularly if information about the measurement is available to both the trader and the farmer.

Farmers can store, audit and compare quality, not to mention learn from season to season and improve their crop quality. The same concept applies to weights.

Price comparison

Basic software grant farmers the ability to compare prices across traders, markets, crops and regions. Price comparison will shift the power dynamic in favour of the farmers, creating a transparent competition and turning farmers from “price takers” into “price makers”.

Supply and demand analysis

Google offers an accurate view of how busy a business is, traffic apps tell you where congestion may appear, and ride-sharing apps surge price during times of high demand.

The basic principles of ‘supply and demand’ can provide farmers with information about the market and allow them to determine when, where, and who to sell their products to.

Weather and Climatic Information

Many crops drop in quality when transported in rain or humid weather, facing rot or damage. Conversely, many crops suffer in direct sunlight. This affects smallholder farmers who have no means of safeguarding these crops during transportation.

Simple weather applications, overlayed with agriculture-specific information, can decrease the risk of travel from farm to market.

Digital India means Digital Agriculture

Digital marketplaces, driven by farmer-focused applications, are an important step in reducing the economic stresses currently faced by the most vulnerable members of the agricultural industry - but that is just the beginning.

We have the technology to transform farmer lives and reimagine our agricultural systems from farm to fork, including logistics, supply chain, microfinance and agricultural advisory.

For the future of farming and our food supply, the basic technologies that the broader population relies on for commerce, banking, weather, search and countless other online services must be customised to empower our farmers. That drive must start with the provision of reliable, relevant information via farmer-focused technologies.

We have heard the call for a “Digital India”. India’s smartphone penetration is growing, having estimated to reach 820 million people in the next two years. The growth is highest among the rural population (35 percent year-on-year growth as of 2018).

Now is the time to introduce digital agricultural tools to the hundreds of millions of farmers suffering from a critical lack of basic information services. We must focus our digital initiatives around the farmers before it's too late.