Agri Business

How using technology across agriculture value chain will benefit farmers

N Ramakrishnan Chennai | Updated on June 28, 2020

There will be greater role for technology in the agriculture value chain as farmers now have the option of directly engaging with sellers and large corporates, bypassing the traditional supply chain. There are a number of factors driving this transformation.

The Centre recently removed APMC (Agriculture Produce Market Committee) restrictions on farmers, allowing them to deal directly with large corporates to sell their produce, including those like ITC and Reliance Retail, or new-age companies such as WayCool Foods & Products.

Technological changes are sweeping through traditional agricultural practices and farmers have start-ups such as CropIn Technology offering satellite-based images that can help them improve their farm practices.

Health conscious consumers

Three, and more importantly, there is a distinct change in consumption patterns with consumers becoming more health conscious and wanting to be able to track and trace the complete chain through which their food travelled before reaching their plate. The nationwide lockdown due to the Covid-19 pandemic has accelerated the change in consumption habits.

A CEO roundtable webinar on “Reimagining food and agri in the next decade” organised by ThinkAg, a food and AgTech platform, brought out these points. Participants included D Narain, MD and CEO, Bayer CropScience; Karthik Jayaraman, President & Co-founder, Waycool Foods and Products; Krishna Kumar, Founder and CEO, CropIn Technology; Harsh Kumar Bhanwala, former Chairman, Nabard; Siraj Chaudhury, CEO – Grocery, Reliance Retail; Rajan Anandan, Managing Director, Sequoia Capital; and, Hemant Mallick, Divisional Chief Executive – Foods, ITC Ltd.

Mallick said there were fundamental shifts related to health and consumers’ way of looking at health. During the early part of the lockdown, there were jokes being circulated on social media about people putting on weight, but in reality people had lost weight as they had become more aware of what they ate and how they exercised.

While sales of biscuits as a category increased during the lockdown, the growth was higher in health associated biscuits. Packaged foods, too, were growing and consumers wanted to be able to track and trace the origins of what they ate.

Direct engagement

Jayaraman said farmers were willing to engage directly with companies such as WayCool, whose operations span product sourcing, food processing, branding and marketing, last mile distribution and farm inputs. This gave the company complete control over the food value chain. Farmers, he said, realised that they could reach them through a simple platform like Whatsapp. Demand for organised distribution in urban areas had increased and consumers had started valuing the ability to order digitally.

Anandan felt that there would be a greater integration of agriculture and technology, with more start-ups coming up solving problems across the entire value chain. This would be driven by those with an agriculture background.

The number of internet users is expected to double to a billion in the next five-seven years, with bulk of the growth coming from rural areas thus benefiting farmers. More money will be pumped into AgTech start-ups that solve problems across the value chain.

The panelists said increased digitisation of consumer behaviour was evident and this would only increase. Direct-to-consumer brands would grow and the value chain would grow on the back of contact-less transaction and digitisation. Farmers would be more than willing to adopt the latest technologies to increase yield and get better prices. There will be greater integration across the value chain, covering farms, warehouses, storage solutions providers, logistics, organised retail, large corporates that are into the food business, agri-tech start-ups and financial institutions.

The government’s role in the output market, right now dominated by the FCI and CCI, will progressively come down — thanks to reforms and the private sector will usher in competition and bring in efficiencies.

Published on June 28, 2020

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