[The views expressed in this article are those of the authors and do not necessarily reflect the views of the Multi Commodity Exchange of India Limited.]

As technologies emerged and the supporting infrastructure developed making tools of Information and Communication Technology (ICT) simple, cost-effective, easy-to-access, and widely available in the 21^st century, ICT started making an impact on the lives of the citizens of the country. While it reduced costs, it also added to the efficiency of economic transactions making manufacturing firms and services compete effectively across the geography. As in any other technology, the first users of ICT tools were businesses, while its use for the larger social cause started as policy makers, and funding and voluntary agencies began exploring opportunities for scaling it up. Initially, ICT tools were largely used to bring in efficiencies by helping businesses in effectively planning and implementing their production processes besides scheduling their procurement and sales logistics to obtain maximum benefit out of it. While its social use started in parallel with commercial use, the high usage costs limited its use to government supported causes. As the government thought about spreading its economic growth to the population equitably, ICTs came in as handy tools by addressing the basic needs of citizens such as health, education, record keeping, etc.

Commerce and administration were the early birds to reap the benefits of developments in ICT while other sectors (including the agricultural and social sector) have remained the late adopters of ICT in their processes. The large tangible benefits that may accrue to commerce and administration out of ICT tools could have been responsible for its adoption and wide usage in these sectors. However, the social and agricultural sectors may largely reap ‘externalities’ or more intangible benefits out of ICT tools than others. Hence the widespread use of ICT in social sectors and agriculture would depend on these ‘externalities’ becoming measurable to make investments in ICT tools justifiable. Use of ICTs in Indian agriculture was driven by the commercial needs of industries whose profits depended on ‘externalities’ such as reliable supply of agricultural produce to schedule their production processes, information about sowing pattern changes, providing farmers with inputs and technical advices to keep their productivity higher, etc. As these continued to remain confined to areas that businesses were interested in developing for their own commercial interests, not-for-profit entities who were already involved with social sector initiatives started using ICTs for cost-effectively reaching out to their target groups, transfer of technology, providing services, accessing markets for rural handicrafts, etc.  Though most rural economies were driven by agriculture, use of ICT tools before the start of the 21^st century was confined mainly to the industry and trade whose interests in agriculture were limited due to problems typical of rural areas such as power availability, connectivity (availability and cost), etc.

To understand the utility that ICT has for Indian agriculture, it is necessary to understand the existing ills in today’s agricultural sector and conceptualize probable solutions to them using ICT tools. Agricultural output has been stagnating over the last decade due to limited land availability and the irrelevance of the technology development and delivery mechanism as it exists in the public sector. Due to lack of commercial attractiveness, private investment in research in agriculture is not expanding at the pace at which it needs to in order to support the expected growth in agricultural sector.  Lack of commercial attractiveness is in turn connected to lack of profitability of the farming sector. This could be attributed to agricultural commodity prices not keeping pace with the increase in prices of industrial products, capital costs, and the cost of technology. Hence, it can be concluded that the crux of the problem lies in providing farmers with market access and information about markets and prices as the logical first step.

For the farmer, as the market related information about his futures returns[1] starts reaching him on a real-time basis, it empowers him to bargain for the best price from the market. This can only happen if the future price information is reached out to the farmers, and the farmers’ reaction to the futures prices information is captured on the futures platform. Therefore, there is a need for dynamic two way flow of information into and out of the markets. Having decided to sow a crop, the farmer is left with few choices in terms of efficient inputs and technology that he can access to improve his returns. The farmer’s own financial and physical restrictions limit the choices the farmer can make, and thus his profit earning capacity making farming a self-centered or a peer-motivated activity rather than a profit-driven one. 

Having decided to sow a crop based on the information available and with accessible inputs and available technology, the farmer begins his farming activities. After sowing the crop, he is faced with several challenges that can affect his profitability, and which could have been avoided through availability of appropriate information, technology and inputs.  Information could relate to monsoon and weather related factors, forecast of the same (if possible), pest and disease infestation, and appropriate intercultural practices. The flow of information to the farming community, which is mostly one-way, addresses only a few problems and that too at a trivial level. Such situations necessitate that there should be two-way communication between the beneficiary/consumer and the technology developer/manufacturer of inputs, which in turn makes a clear case for innovative use of ICT tools in making them interact.

This may at times require that some issues would need to be addressed at the root level itself requiring multi-disciplinary interaction among scientific researchers for technology development, commercialization, and marketing/follow-up.  This crucial link between issues at the field level and research focus of the public sector is too weak in some cases and does not exist at all in most cases. However, ICTs could play a crucial role in providing this link. Enabling the farmers’ access to technologies would not stop at developing and making technology available to them but would extend to financially empowering them. This has been recognized as a crucial area by our ‘central bankers’ also who have been targeting to achieve equitable distribution of developmental benefits to the rural areas and across sectors of the economy. Adding financial services to the rural ICT initiatives would not only add value to them but would also add to their sustainability.

Once the crop is harvested, farmers face the problem of marketing their produce both in terms of access to the markets and information regarding the market prices.  His problem would be over once his produce is disposed off.  However, the prices that he may receive may not be remunerative at the time of harvest due to enormous selling pressure during the peak arrival period. This could be partially put off if the futures prices are made available for the farmers to take sell/store decisions based on them. Further, logistics, quality testing and standardization, and scientific warehousing remain inefficient due to lack of appropriate linkages. Use of ICT in post harvest management would not only lead to increased efficiency in marketing, it would also lead to reduced wastage due to quality testing and standardization, packaging, proper handling, creating access to scientific warehousing, and effective logistics management. Apart from prices, an efficient market chain enabled by ICT would also help in adding value to the economy and its participants by reducing transaction costs.  ICT tools could be used for a wide range of activities ranging from creating awareness, providing connectivity for providers of services ranging from warehousing, grading or testing facilities to transportation and logistics. While a part of ICT initiatives in the agricultural marketing area could be commercially driven, the other part should be driven by social-causes aimed at socially weaker sections of the farming community both in terms of their geography and economy.                                                                           

In order for the farmers to benefit from a holistic point of view, MCX on its part had initiated the “Grameen Suvidha Kendra” (GSK) model in four places of the country in collaboration with the Indian postal department. This provides various facilities such as price/market information, addressing technical queries regarding farming, providing scientific warehousing facilities, warehouse receipt issuance and access to finance, quality inputs, and bank loans. This also provides for flexibility in terms of adding more such services that provide value to the rural economy and service its needs. While the entire motive behind this initiative has been to reach the exchange discovered prices to the farmers, it was planned to add more value-added services not only to enrich the rural economy but also to make this initiative a self-sustainable one such that the rural entrepreneurs can help GSKs to scale up across 120,000 plus post offices, some of them in remote areas. This runs on a ‘hub and spoke’ model supported on the hub by a kiosk set-up and aided at the back end by the physical structures of post offices. Post offices disseminated the price information through black boards and acted as service providers for other services through the hubs, and at the same time helped the initiative to overcome difficulties such as connectivity and power availability. 

While kiosks such as the GSK initiative serve as community-based tools for providing value addition to the farming community that accesses them, mobiles have become personalized tools to deliver information and services that could add value to the farming community. Keeping this in mind, MCX had strategically tied up with the government-owned service providers, BSNL and MTNL, covering the entire geography of the nation to provide its real spot and futures prices on the mobile platform. MCX also went a step ahead to tie up with Tata Indicom to provide this price information on their Interactive Voice Response (IVR) platform on a toll-free basis. While trading in futures on mobile phones is a possibility today, its high cost of access prevents this personal communication tool from becoming an enabler in India. In this case, it would be worthwhile to note the example of Africa where farmers have moved forward from no phones to mobile phones. Particularly in Kenya, the measures taken up by Kenya Agricultural Commodity Exchange (KACE) are a good case in point. KACE allows trading on spot markets for agricultural commodities through its internet-based auction exchange, and sends the price information on mobile phones through a branded service – SMS Sokoni in partnership with a leading mobile phone service provider (Safaricom Ltd.) in Kenya. Farmers can access market information such as commodity prices in different markets, who is buying or selling what commodity, at what prices, where and when. Taking a step further, the export promotion center of Bolivia (CEPROBOL) offers an e-commerce platform to link small export companies and producers via the Internet.  These are innovative uses of ICTs for dissemination of market information and providing access to markets.

Another program that is worthy of notice in this discussion would be the European Research Area–NET that had been initiated to fund innovative use of ICT tools in research activities in Europe by facilitating better coordination between the stakeholders and research agencies situated across the EU. This initiative has created a virtual European Research Area helping researchers in prioritizing research areas, coordination of research activities within and across countries, and implementation of joint research work aimed at resolving common strategic issues. Tools of ICT were used especially in areas such as coordination of technical activities, management of the consortium, knowledge management and other innovation-related activities, and in overall maintaining communications with the commission.[2]  This is an excellent model that could be adopted by other researchers in the field of agricultural networking to effectively utilize resources for research areas that are likely to make most impact on the stakeholders and hence on the economy as well.

While access costs to various ICT tools are coming down and the technology is bringing down the costs of the tools themselves, there is no doubt that there have only been piecemeal efforts by various organizations in various fields of agriculture.  Most of these initiatives have largely focused on agricultural knowledge dissemination and providing price information.  However, access to technology, inputs, capital, and markets still remains an issue that needs to be addressed urgently. Instead of replicating the piecemeal initiatives that have already been taken up in rural areas by several entities, the National Alliance for Mission 2007[3] should attempt to leverage these initiatives, reduce costs of implementation and integrate them towards the common national development goal. For any ICT initiative to succeed in driving development of agriculture, it is necessary to make this process a holistic and a two-way channel.