Agri Business

How open agri networks can sow the seeds of ‘Agri 4.0’  

Pravesh Sharma | Updated on: May 19, 2022
Representative image

Representative image | Photo Credit: lamyai

A technology-led approach can help end the economic and social disparity in the agricultural sector

The success of any industry depends on access to three important factors: adequate and affordable capital, free and fair markets, and the latest technology. These remain a challenging proposition for India’s agricultural sector and the disparity is glaring, as borne out by the numbers.  

Nearly half of the working population depends on agriculture for a livelihood, yet the sector only contributes to 17 per cent of India’s GDP, owing to fragmented holdings, low productivity, uneven deployment of technology and inefficient markets, among other reasons. 

A  majority of agricultural households heavily depend on non-farm income. According to a report by PWC, the share of farm mechanisation in India is 40–45 per cent, compared to 90 per cent in developed economies. This disparity can be resolved through a technology-empowered approach. 

Technological revolution 

Agriculture is undergoing a technological revolution, supported by policymakers around the world. Termed ‘Agriculture 4.0’, the trend is towards the use of artificial intelligence, robotics, digitisation and internet of things (IoT) across the agriculture value chain. Thus, Agriculture 4.0 aims to enable technology-assisted sustainable farming practices, precision farming, and the use of big data to drive business efficiencies in the face of rising populations and climate change.  

In line with this global trend, the agriculture sector in India has also witnessed interventions by both public and private actors that are focused on integrating technology in the agriculture value chain. One such example is e-NAM, introduced by the government to integrate markets across the country through a common online platform. Similar technology-led interventions and the challenges in implementing them have highlighted the need for a bottoms-up and collaborative approach.  

Enabling smooth journey 

Given the unique underlying conditions of Indian agriculture, especially the predominance of smallholders (86 per cent), we will have to adapt global models to local situations and challenges. Thus, the journey towards Agri 4.0 in India must focus on grassroots-level interventions and innovations. Fragmented supply chains for credit, inputs and marketing of produce have led to skewed distribution of value generated in agriculture. On an average, the primary producer receives barely a third of the consumer price of agri goods. Inefficiencies and information asymmetry characterise most factor markets in agriculture.

The ‘open agri network’ seeks to address this gap by connecting farmer producer organisations (FPOs), farmers, traders, input suppliers, government authorities and end-consumers. For instance, farmers will be able to find competitively priced credit, inputs and the best prices for their harvest with a ‘tap’ on the network. These networks will enable big data insights, digital market linkages, and effective information dissemination, leading to increased transparency, profitability and sustainability throughout the value chain. However, to be effective the network must be accessible to all and collaborative from the ground up. A successful agri network will serve as the foundation to develop a blockchain of the agri chain contacts, based on the principles of transparency, decentralisation and access to all.  

Such an open agri network can enable quicker implementation and scalability. Private actors along with government support can cover ground faster, through knowledge sharing, access to capital and bypassing bureaucratic hurdles.  

The writer is Director, Samunnati Agro Solutions  

Published on May 19, 2022
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