In this era of knowledge economy, agriculture and allied sectors too must leverage the digital revolution.
ITC’s e-Choupal and related one-stop retail formats were considered as precursors to the digital revolution in agriculture. Now, the emergence of several start-ups providing various value chain services — internet penetration of about 32 per cent provides the basis for the growth of digital platform-based enterprises — is becoming a trend. These are turning into alternative business models for agri enterprises.
Agri-tech start-ups, besides addressing the knowledge gaps, have tied up with leading firms to provide goods and services to farmers, such as access to quality inputs, and reasonably priced credit. Similarly, on the output side, start-ups are working to reduce the farm-to-fork gap, enhance market access and bargaining power of smallholder farmers.
Notwithstanding the various start-ups’ attempts to harness the potential of mobile/smartphone telephony and internet penetration, the agricultural sector has been characterised by interlocked arrangements and exploitative credit, input, and output markets.
Also, the success of these start-ups depends on how they are able to stay with the their professed objective of being farmer-centric and ensuring a reasonable return to their investors or venture capitalists. However, as the philosophy of venture capital and private equity is embedded in market capture and growth, a few agri-tech unicorns can be expected to emerge.
The government has leveraged technology to provide various incentives to farmers and taken steps to create a farmers’ and land ownership database. This much-needed initiative can usher in transparency, reduce the incidence of benami properties, improve tax compliance, reduce the incidence of protracted land disputes, and enable farmers to use their assets to access institutional finance and reduce the challenges banks face in conducting due diligence before advancing agricultural loans.
Also, this database can immensely help in designing scalable interventions.
Checks and balances
Several multinational corporations (MNCs) have assisted the Centre in implementing this ambitious initiative since 2015-16. But the inequitable power structure and resource endowments confer differential abilities to economic agents to derive benefits from available data. While there are privacy and security concerns to contend with, there are also issues of exploitation of farmers and unfair appropriation of traditional community knowledge.
Prior experience suggests that data can also be used as an instrument of coercion, manipulation, and control. While business can leverage granular data of agriculture for generating mutually beneficial outcomes, the absence of appropriate checks and balances can create avenues for exploitation.
They can also use unfair means to appropriate benefits from value creation. Such fears or apprehensions are more pronounced in the case of community-based traditional knowledge societies. This knowledge evolved through years of experience in harmony with their natural environment seems suitable to facilitate value creation from locally available resources. Because of their communal ownership, non-recorded and non-exclusive nature, community-based knowledge is vulnerable to unfair appropriation by businesses. The previous experience with attempts to patent Indian Basmati, Neem, and Turmeric by multinational companies points to the need for developing appropriate safeguards to sustainable digitalisation drive for agriculture.
Policymakers should support the mapping of traditional knowledge and the effective implementation of legal provisions to protect farmers’ rights. The focus should be dedicated to enhancing awareness about the Protection of Plant Variety and Farmers Right Act (PPVFR Act) and strengthening the Traditional Knowledge Digital Library (TKDL) such as e-Kutir and Geographical Indications (GI) initiatives.
Second, the focus should be to involve farmer-owned cooperatives and producer companies in the digital push and enable their functioning as custodians of intellectual property and traditional knowledge of farming communities. Rather than considering civil society groups as a nuisance, policymakers should initiate a multi-stakeholder collaboration for participation of farmer groups and civil society organisations.
Third, there is a need for other complementary interventions and appropriate safeguards against inequitable appropriation of traditional knowledge, decline in local employment opportunities, and businesses resorting to enhancing their topline and bottomline at farmers’ cost.
Fourth, as India moves ahead on the digital journey, it should also be cognisant of the socio-economic realities of farmers and consider outcomes from earlier engagements of MNCs in agriculture. It needs to ensure that the digital push enables the transition towards decreased resource intensity or costs of agriculture, enhanced crop diversification, and nutritional security, and increased farmers' income.
To sum up, as food inflation threatens to impede the nascent economic recovery and farmer protests showing no signs of abatement, the government should ensure due diligence in the digitalisation drive in agriculture policymaking.
Kumar is Doctoral Scholar of Marketing and Dey is Chairman, CFAM of IIM Lucknow. Views are personal.