Transforming Indian Agriculture @ 2.0

By Mridul Dhanuka, Director, Dhanuka AgritechHolding a Post Graduate Diploma in Industrial Management from National Institute of Industrial Engineering, Mridul, prior to Dhanuka Agritech, was the Director at Dhanuka Laboratories, where he was responsible for the Procurement, Supply Chain, ERP system, and Export Markets of South and South-East Asia.

Indian Agriculture offers huge opportunity, as the country needs to feed more than 130 crore population, which is growing, and at the same time, the rise in income and purchasing power of populace will further increase the demand for food. This could become a big challenge if the sustainability of the sector is ignored and the growth in production is not kept aligned with the demand. With the growing urban area and expansion of cities, the area under cultivation is also decreasing. There has been a daunting task of making Indian agriculture economically sustainable by provisioning remunerative prices for producers. It requires visionary and radical change by repealing draconian rules like APMC, Essential Commodities Act and fast introduction of Blockchain technology in agriculture. The agriculture marketing system is outdated and needs overhaul to keep itself up-to-date, and it should also promote ease of doing business in the sector for both farmers and traders. Through Dhanuka, we propose following two innovative ways – Introducing Blockchain technology, and ensuring intellectual property protection supports . Let us see the context first.

The major challenge the Indian Agriculture is facing is Agri- Marketing. Producers’ prices are often below international prices and even below support prices. Within the marketing structure defined by the ECA and the APMC Acts, the central government’s price policy for major agricultural crops seeks to ensure remunerative prices to producers with a view to encouraging higher investment & production and to safeguard the interest of consumers by making supplies available at affordable prices. The Food Corporation of India (FCI) is the main agency for executing the food grain policies of the central government. The FCI procures food grains from farmers at remunerative prices, distributes food grains to consumers through public distribution, and maintains buffer stock of food grains for food security and price stability.

The central government sets a Minimum Support Price (MSP) for 24 crops each year, as well as a bonus above the MSP for some crops. The FCI and state-level agencies operating on behalf of the FCI buy wheat, rice and coarse grains through open-ended procurement at MSP. A number of other agencies buy pulses, oilseeds and cotton at MSP, and some perishable agricultural and horticultural commodities without MSP are also procured. However, price support procurement effectively operates mainly for wheat, rice and cotton, and only in a few states. Most farmers sell to other buyers at prices other than the MSP, especially in eastern India where procurement is not effective and no alternative buyers are present. The procurement of wheat and rice is of the order of 30 percent of production. Wheat, rice and coarse grains procured by the FCI and state agencies are issued to the relevant agencies for distribution under the Targeted Public Distribution System or other welfare schemes, or disposed-off through sales, including sales for exports.

The procurement system and price check in the market should be improved in order to ensure handsome remuneration to the farmers.

Solution – Potential resolution to the identified problem, and Blockchain intervention. One of the biggest problems in proper management and administration of agriculture in India is non availability of real time data. Further, with increasing consumer demands for transparency in the food supply chain, producers and manufacturers struggle to provide accurate data. Blockchain technology promises to improve traceability and transparency within agriculture value chains. Unfair pricing due to price extortion, delayed payments, the
presence of middlemen and high transaction fees are some other challenges that exist in agriculture supply chains. Additionally, food shipping and logistics are complex and at times require intra-continent supply chains.

Such supply chains involve dozens of personnel and hundreds of interactions, with high probabilities for human error. Blockchain technology has the potential to make the agro-supply chain more secure, transparent and efficient. It promises end-to-end supply chain visibility and allows one to trace the origin of a produce (provenance) and track a product/produce during its journey in a supply chain.

Blockchain solutions, if implemented, may lead to the elimination of intermediaries or middlemen, thereby leading to improved pricing, decreased transaction fees, and eliminating issues of hoarding. Other possible applications include the use of blockchain technology to record and manage agricultural land records as well as agriculture insurance. Additionally, blockchain can also solve the problem of micro-financing for farmers by facilitating micro-lending, increasing transparency, and lowering the cost of funds.

Blockchain solutions, if implemented, may lead to the elimination of intermediaries or middlemen, thereby leading to improved pricing, decreased transaction fees, and eliminating issues of hoarding

Harnessing the Potential of the Digital Economy
Modern technologies such as ICT have enormous potential to overcome deficiencies in personnel and infrastructure for the delivery of new knowledge and skills to farmers. For this reason, investment in the infrastructure needed for a well-functioning digital economy will be an important prerequisite, both for agricultural and rural development more generally. More specifically, the full potential of ICT, big data, and precision agriculture will need to be harnessed to the task of generating sustainable productivity growth, including resolving the water crisis and coping with climate change.

Ensuring Intellectual Property Protection Support Needs Innovation
Appropriate protection of intellectual property rights is essential to foster the private development of new technologies, whether by domestic actors or through accessing technologies developed internationally. While India has enacted legislation to conform to international obligations such as under the WTO TRIPS (Trade Related Aspects of Intellectual Property Rights), India has been reluctant to go beyond such provisions, and there have been some issues in implementation. For India to be able to access the technologies it needs to achieve sustainable productivity growth, including many already developed or under development, it must be able to guarantee appropriate protections. Otherwise, India’s agriculture may have to forego key technologies which the current research system is not in a position to generate by itself. More generally, in India, there is resistance in both official and farmer circles, to exclusive reliance on technologies from abroad due to a perception that dominant firms will extract excessive rents from a captive farm clientele.

The overarching need is to secure increased funding for the agricultural innovation system, including potentially through the diversion of funds from programmes which have been identified by CNRI as inefficient, wasteful and harmful for the environment. Specifically, provide the funds needed to increase the research and development intensity of the agricultural sector, while paying attention to the appropriate balance between strong central priority setting & coordination, and more bottom-up regional & local approaches, to the quality of research personnel and systematic monitoring of outcomes.

Encourage inter-disciplinary and systems approaches to innovation, and strengthen the focus on current challenges such as sustainability, climate change and diversification needs. Continue and intensify reforms of the extension system, focusing on the needs of smallholders unable to access commercial services, and going beyond classic approaches to focus more on climate change, sustainability, and on business & digital skills. Pay attention to the quality of extension personnel and systematic monitoring of outcomes. Invest in digital connectivity in rural areas to enhance the potential to deliver education and extension services, as well as market information, and facilitate broad agricultural and rural development. Ensure that intellectual property protections are supportive of needed innovations, and accompanied by appropriate competition policy settings. Launch a wide awareness campaign explaining the needs for, and benefits of new technologies to the Indian public.

Its therefore we emphasize on ‘Measure to Manage’ and institutionalization of monitoring, evaluation, and output-outcome-impact pathway assessment, as there exists huge technology transfer gap, and several important targets stand unmet. We need to cross-examine several scientifically unauthenticated technologies such as Zero Budget Natural Farming, whereas many scientifically proven technologies, viz. genomics, are being discouraged. Scientifically evidenced outlines and criteria for evaluating research, technology, innovation, and education outcomes for development are available and ever-evolving and should be used for creation of reliable databases.

Cloud computing and measuring veritable main and interaction effects in a multidisciplinary holistic system for developing effective indicators and sound plans & implementation pathways, especially for assessing progress in hunger, malnutrition and poverty reduction and elimination have been emphasized.

If we are looking forward for placing India into the comity of developed economy, we have to set the tone as quickly as possible and look forward for tuning ourselves with these disruptive technologies like Blockchain and cloud computing in measuring veritable the multidisciplinary sector.