The Indian Government’s proposal to deliver hi-tech services to farmers through public private partnerships (PPPs), recently presented in its annual budget, is likely to offer critical support for the agricultural sector at a time when it is greatly needed.
The COVID pandemic and the war in Ukraine has massively disrupted the global food system, putting huge pressure on agriculture-focussed countries like India to provide more sustainable options.
This is where agricultural technology could prove key. India has potential economic value of $50-65 billion through digital agriculture by 2025 translating to 23% addition to the current value of agricultural produce, according to a report by the country’s Ministry of Electronics and Information Technology and McKinsey & Company.
Such investment can also have a significant impact beyond the economy. With 60% of India’s agricultural land being rain-fed, climate change poses a critical threat to food and agricultural systems.
So using agricultural technology and precision tools will be more important than ever to prevent hunger and eliminate food waste, and making these technologies more available to India's 130 million smallholder farmers can ensure greater financial resilience for them.
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As new technologies present a major opportunity to transform agricultural systems, every stakeholder must play a role in realizing this potential. This is where public private partnerships (PPPs) will be vital.
Public private partnerships key to leveraging agricultural technologies
Public private partnerships involve collaborations between a government agency and private sector body to finance, build and deliver a public asset or service. They combine the strength of the government’s mandate and ability to deliver public services, with the private sector responsible for investments, technology, products and distribution systems.
Under a PPP model for agriculture, a start-up ecosystem can drive emerging tech innovations and agile business models, while universities and research institutions can bring in domain level agricultural expertise and help validate the solutions for scaled deployments. In addition, the role of farmer producer organizations (FPOs) and non-governmental organizations are critical for building capacity and extending digital products and services to farmers.
Fundamentally, there are four pillars needed for successful public private partnerships in agriculture and how they are already being applied in India:
- Open up the data ecosystem.
Why it's important: Through an extended discussion with 35-plus leading agricultural technology start-ups and some of the largest industry players, opening up critical datasets are the most important factor for unlocking the $65 billion digital agriculture economy. Farm level digital advisory services can enhance productivity by 15%, but they need datasets of soil health, weather and farm sensors.
What's in development: The E-Sahamathi initiative of Karnataka enables the sharing of agriculture and horticulture data from its database of more than 7 million farmers with start-ups/ service providers from its FRUITS (Farmer registration and unified beneficiary information system) platform. Meanwhile, Telangana, in partnership with the World Economic Forum, is working towards establishing agriculture data exchange ADEx, which could enable private industry to share, as well consume, their data with other service providers –in line with similar global initiatives like Agrimetrics and Dawex. Access to digital financing and insurance services for hugely underserved smallholding and women farmers needs data from digitized land records, crop-cutting experiments, satellite images, fertilizer consumption and crop history. There is potential for 40-60% of agricultural surplus to be sold through digital marketplaces by 2025, reducing waste and help improve farmer price realization by 10%, the report says.
- Share field resources and infrastructure
Why it's important: India has 650 plus start-ups that offer agri-tech innovations in partnership with industries and financial institutions, but lack scale due to the very high costs of serving smallholding farmers and building their own distribution system.
What's in development: National and state governments have multiple institutions providing extension services to farmers like the CSC portal, a pan-India network of common service centres for extending e-gov and business services to rural areas through a single delivery platform; MeeSeva, the Telangana state government programme for integrated services delivery; and self-help groups, which can be enabled to extend agricultural technology services through PPPs. The convergence of these institutions for digital services, in partnership with start-ups and industry, will help provide the benefits of technology to smallholding farmers in order to achieve better incomes and greater sustainability. - Partnering with academic and research institutions
Why it's important: While start-ups have good expertise of emerging technologies like artificial intelligence (AI), the internet of things (IOT), blockchain and drones, they often lack the application level domain expertise. Such digital innovations also need testing and validation for credibility among farmers and scaled field deployment. The existing body of agricultural research from universities and institutions can be better leveraged to scale work done by private agricultural technology players through PPPs.
What's in development: Praveen Rao, Vice Chancellor at Professor Jayashankar Telangana State Agricultural University, says: “We support more than 20 start-ups across AI, drones, IOT sensors etc through our Agri-Hub sandbox and support them with domain level expertise, improve their solutions and complete validation testing before scaled deployment. Our mission is to build a vibrant entrepreneurship culture among all the innovators, including start-ups, student entrepreneurs, rural entrepreneurs and grassroot innovators, and especially youth, women and farmers.” - Convergence of programmes and policies for agricultural technology services
Why it's important: Government can help build a standardized platform for farmers and farmer producers organizations (FPOs) to be able discover various hi-tech services, such as financial technology and insurance services, farm level agriculture advisories, drones-as-a service and market connect platforms. It can also provide direct support and incentives to farmers and FPOs, which could specifically be leveraged for agricultural technology services. Jinesh Shah, Managing Partner at Omnivore, a leading venture capital organization focussed on agriculture, says: “Public private partnership for digital services in agriculture is an urgent requirement to help scale the agri start-up ecosystem and enable innovation to reach smallholding farmers."
What's in development: In an interview with Financial Express, G R Chintala, Chairman at the National Bank for Agriculture and Rural Development (Nabard), a public sector organization which has set a target to form 10,000 FPOs by 2027-28, said: “The key challenge being faced by farmer producer organizations (FPOs) is inadequate access to institutional credit due to low capital base, absence of credit history and non-availability of collateral. FPOs are going to play an important role in making Indian agriculture globally competitive and remunerative to farmers."
Agricultural technology efforts in development
Some efforts are already taking shape. In 2021, India’s agriculture minister launched an initiative to enable a multi-stakeholder ecosystem named IDEA (India digital ecosystem for agriculture), which will open up infrastructure, data sets, academic and research expertise and innovative policies in order to partner with a huge private ecosystem.
Meanwhile, a private ecosystem consisting of agriculture products, banking and finance, technology and the services industry is already enabling its active agricultural technology start-up ecosystem.
The World Economic Forum has launched the AI4AI (AI for Agriculture Innovation) initiative and Food Innovation Hubs in collaboration with India’s agriculture ministry and multiple state governments with the intent of enabling and scaling PPPs for driving innovation across the agriculture ecosystem, establishing toolkits and frameworks through evidence based learning from pilots on ground.
Telangana state’s Saagu Bagu initiative, for example, aims to enable digital agriculture through PPP-based pilots aimed at transforming chili, groundnut and cotton crops, with an objective of evidence-based learning and subsequent scaling.
Other states including Madhya Pradesh, Meghalaya and Karnataka have also been exploring various PPP approaches for hi-tech agriculture services. Madhya Pradesh has launched a Food Innovation Hub to explore PPP models for crop value chain transformation, while Meghalaya has been examining how to leverage technologies to transform the turmeric value chain.
Agricultural technology revolution needed
To realize the opportunity of emerging technologies for agriculture and food systems much change is needed. For instance, it will be critical to develop a flexible framework/handbook for defining a PPP approach through multi-stakeholder consultations, which can then be adopted by states to meet specific priorities.
Working with academic and research institutions, a partnership approach for innovators should also be enabled to co-develop solutions and evolve a qualification approach, instead of the selection approach of current procurement models.
There should also be a time-framed approach for opening the agriculture data ecosystem with appropriate personal data protection measures, developed in partnership with states and industry partners. Overall, large agricultural players should work to enable a platform for pooling resources and funds to support the agricultural technology initiatives and scale them in PPP mode.
Since the budget announcement of hi-tech services for farmers through a PPP approach, there is a need of launching this initiative in mission mode. National and state governments can strengthen the dialogue with private stakeholder ecosystem and establish the PPP framework through consultations and evidence-based learning through pilots.
Overall, it is an excellent opportunity to revisit policy level support for innovation and for changing the landscape of agriculture.
