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Can e-commerce save the Indian farmer?

Can e-commerce save the Indian farmer?

Tuesday April 19, 2016 , 5 min Read

Till a generation ago, the word ‘agriculture’ evoked cinematic images of happy farmers, winnows in hand and waterpots on heads, joyously harvesting their wheat and sugarcane fields. Alas, no longer. Today, we live in an India where agriculture has become synonymous with farmer suicides, heartless lenders and capricious weather and price volatility, all loaded against the sons and daughters of the soil.

While there has been consistent reportage on farmer suicides and dying farmlands, particularly in Maharashtra, there are experts who believe that the sector can be uplifted with more visibility and technology.



On April 14, the day which marks the harvest celebration of Baishakhi (as also Bihu and Vishu) in India, PM Narendra Modi launched a new initiative – an online platform for farmers. Named eNAM (National Agriculture Market), it is a single-window service integrating mandis (agriculture markets) online so that farmers and traders can view all APMC (agriculture produce market committee)-related information and services. This includes commodity arrivals and prices, and buy and sell trade offers, thereby helping farmers bid for the best price across markets. For a start, eNAM is integrating 21 mandis in eight States – six in Uttar Pradesh, five in Telangana, three in Gujarat, two each in Haryana and Himachal Pradesh, and one each in Rajasthan, Madhya Pradesh and Jharkhand. The mission is to link 585 mandis to the portal by March 2018.

A long haul

But will e-commerce be able to bring about meaningful change for the farmer in India? Transformation of agriculture sector via the online medium will not happen overnight. Similar initiatives were announced earlier, but their implementation has been tardy – including that of eNAM.

Hitherto, agmarkets’s online presence had been limited to providing basic data such as listing mandis across the country, and information on services, incoming produce and markets for them, and about administration and bureaucrats.

Direct sourcing

However, eNAM hopes to go beyond the perfunctory, connecting mandis, enabling farmers provide information on what they want to sell, thereby eliminating middlemen. Hemendra Mathur, agriculture industry expert and investor, observes that ecommerce will give a platform for supply chain members to source directly from farmers, who otherwise have to go through multiple agents.

However, Madhuchandan C., founder of Mandya Organic Farmers Cooperative Society, is more cautious, pointing out that poor internet penetration will be a dampener for rural farmers. He apprehends that small farmers may not take to ecommerce platforms unless the government educates them on digital media.

Vikas Goyal, founder of Agroman, an agriculture product and price discovery platform providing agro-services, is more upbeat. As he puts it, “When Ola and Uber happened, drivers adapted to technology easily. Economics drives this behaviour – farmers will take effort to acquire knowledge even for small benefits, especially if they can eliminate middlemen.”

Lack of uniformity in taxes

It is not just middlemen farmers have to negotiate with. Another hurdle has been lack of uniformity in quality and taxes among States. Two years ago, APMC rules were amended to eliminate the rash of taxes levied by States so as to bring down the prices for agricultural produces and let farmers sell outside local mandis. In this respect, an online platform could provide a wider customer base for them.

Other serious issues farmers have to contend with are infrastructural inadequacies in inter-State transactions and poor warehousing and cold storage facilities for their produce. Whimsical functioning of procurement centres also compounds their woes.

However the government alone cannot help in payments and warehousing. Vikas of Agroman believes that if we instil entrepreneurship in farmers so that they start looking at agriculture as a business, things can improve. “Farmers should focus on increasing their productivity rather than look to the government for everything. They should adapt the best technologies for higher production,” he says.

What the sector needs

In this scenario, a note of caution comes from stakeholders in farmer welfare because, in ecommerce, what you see online and what is happening on the ground are often markedly different. Anurag Awasthi, founder, Save Indian, points out the necessity for an independent third party agency to verify the claims made by farmers and sellers. “Since these are perishable commodities in massive volumes, it is essential to have an accredited agency with no vested interest with that particular manufacturer,” he reasons.

For instance, in the US, an independent agency called Rainforest Alliance, a not-for-profit organisation working towards biodiversity and sustainable livelihoods, grades commodities. Brazil also follows a similar system so that its horticultural produces get acceptability in Europe and America. “In India, each State has different laws; so there is no common platform to decide quality or price. We need an independent agency with uniform standards across the States,” Anurag points out.

Building new milestones

Every step in agricultural innovation is an effort for sustainability, which has to come with quality. Dr. Vijayaraghavan Vishwanathan, CERN scientist and agri-entrepreneur, believes credibility increases when the buyer has information on how and where the farm produce were sourced. “Precision agriculture will work here. Farmers can keep track and provide information to the consumer online,” he says, adding that eNAM can encourage terrace gardening too to encourage non-professionals to come on board.

With India facing unprecedented agri-crisis, the recently amended crop insurance scheme and zero balance bank accounts for farmers are among efforts to help build its agrarian economy all over again. Stakeholders are hoping government regulations will be relaxed to let more private funding flow into the sector. Once the red tape is replaced by total commitment, who knows, perhaps a time will come when the romantic pastoral ideal – the happiness of those who nourish us -- will actually come to fruition.