In An Effort To Modernise Country's Ageing Agricultural Sector, Centre To Provide Farm Data To Tech Giants

International tech giants such as Amazon, Microsoft and Cisco are lining up to collect data from India's farmers as part of a central government-led productivity drive aimed at modernising the country's ageing agricultural sector.

Prime Minister Narendra Modi’s government, which is currently working to assure food security in a country with an almost 1.4 billion population, has signed preliminary agreements with three American companies and a slew of local enterprises to share farm data the government has gathered since taking office in 2014.

The government believes that the private sector can assist farmers in increasing yields by developing apps and tools based on data like crop output, soil condition and landholdings.

According to centre, local powerhouses such as Jio Platforms Ltd., the Indian technology company backed by billionaire Mukesh Ambani's Reliance Industries Ltd. and ITC Ltd, which is India’s Kolkata based tobacco behemoth, have signed up for the initiative.

PM hopes to implement long-overdue reforms in the $488 billion farm industry, which employs over half of the country's population and contributes to roughly 18 per cent of Asia's third-largest economy. With greater infrastructure, the government is seeking to boost rural incomes, cut imports, minimise some of the world's worst food wastes and eventually compete with exporters such as Brazil, the United States, and the European Union, reported Bloomberg.

In the case of international corporations, it's a chance to get a piece of India's agri-tech industry, which Ernst & Young estimates have the potential to generate $24 billion in revenue by 2025, despite a current penetration of only 1 per cent.

The report also noted that there is also an opportunity to use the products of technological advancements, such as networks, artificial intelligence (AI) and machine learning in a developing country while securing a steady supply of farm produce could help e-commerce companies like Amazon and Reliance crack a grocery market that accounts for well over half of Indians' $1 trillion in annual retail spending.

Ankur Pahwa, a partner at consultancy EY India said: “This is a high impact industry and private players are sensing the opportunity and want to be a large part of it India has a very high amount of food wastage because of lack of technology and infrastructure. So there’s a huge upside to the program.”

The process to transform an outmoded agricultural industry involves certain steps— all of the data, such as agricultural patterns, soil health, insurance, credit and weather patterns, should be seeded into a single database, which will then be analysed using AI and data analytics. The focus then is to create individualised services for a sector that faces numerous obstacles, including peaking yields, water stress, soil degradation and a lack of infrastructures, such as temperature-controlled warehouses and refrigerated trucks.

What is expected in the near future is that the tech companies will assist the government in building proofs-of-concept for farm-to-fork services that farmers will be able to use right at their doorstep under the terms of the deal between both sides. Firms would be able to sell the end product to the government as well as directly to growers if it was useful, and the solutions would be scaled up at a national level if it was beneficial, the Bloomberg report added.

Of the 120 million landholding producers recognised, the government has provided publicly available data for more than 50 million farmers. Star Agribazaar Technology, ESRI India Technologies, yoga guru Baba Ramdev's Patanjali Organic Research Institute and Ninjacart are among the local enterprises that have signed up.

Sanjay Mathur, who is the chief economist for Asean and India at Australia & New Zealand Banking Group Ltd,0 said: “A database would be useful for a variety of purposes — agri-marketing, targeting of subsidies. It does lead to a more efficient structure for the rural sector.”

However, aside from the tech behemoths, the initiative is expected to attract a large number of smaller businesses and startups. According to the government's consultation paper on digital agriculture, once completed, the project will serve as the backbone of a national digital agriculture ecosystem, assisting farmers in achieving better profitability through access to the right information at the right time and facilitating better policy planning and execution.

Challenges

From healthcare to the space program, it is a fact that the use of technological advancement helped several sectors to grow over the years. But in this case, some critics argue the plan to involve huge tech firms is another attempt by the government to give the private sector more clout, and it could harm small and vulnerable farmers.

As per the report, a farmer claimed that with this “this data”, companies will be able to identify areas where the product is not good, and they will be able to buy cheaply from farmers in those areas and resell it at extravagant prices elsewhere and added that “more than the farmers it is the consumers who will suffer”.

Apeksha Kaushik, who is the principal analyst at am American IT service management company Gartner, said that in India, technology adoption is still in its infancy. According to her, “Limited availability of technology infrastructure and recurring natural phenomena like floods, droughts have also worked against the deployment of digital solutions.”

Even though there are obstacles, some one-year pro gratis pilot programmes have already begun, which includes initiatives taken by American tech giants. While Microsoft has chosen 100 towns for AI and machine learning deployment, as well as platform development, the other tech behemoth Amazon is now selling cloud services to solution providers, having already begun to provide real-time guidance and information to farmers via a mobile app, noted the report.

According to New Delhi based online trading platform Star Agribazaar’s co-founder Amit Mundawala, the project will collect data on agricultural land profiling, crop estimation, soil deterioration and weather trends. Additionally, the IT company ESRI’s Managing Director Agendra Kumar said that his firm uses a geographic information system to gather data and develop applications.

P K Joshi, who is the former director for South Asia at International Food Policy Research Institute in Washington, said: “Once you have the data, you can correlate with on-ground reality and improve your projections, take informed decisions and see which regions need policy intervention.”

Furthermore, Rajeev Chawla, who is the Additional Chief Secretary of Karnataka, said that in 2020, a data-driven approach was deployed in the southern state of India that helped to improve the efficiency of government benefit delivery.

According to him, some bank loans to farmers have been made using the consolidated data, and all government programmes, insurance and loan verification, as well as minimum support price, are all channelled through the mechanism, fixing leaks and reducing frauds.

Also Read: Taking A Step Towards Digitalisation Of Agriculture Sector; Government Signs MoUs With Five Companies