Abstract

Indian agriculture has the potential to dominate the global markets provided post-harvest losses are minimized and the link between farmers and other stakeholders can be established through ICTs. This article describes the opportunities and challenges of agricultural supply chains in India , and explores how ICTs can facilitate the building of linkages between farmers and markets thereby increasing efficiency across supply chains. In addition, this article discusses the critical success factors (CSFs) which shall drive the ICT revolution in Indian farming.

Introduction

Information Technology has revolutionized the farmers across rural areas all over the world. ICTs (Information & Communication technology) can also do wonders in empowering small and marginal farmers of developing countries, who have poor access to information, especially regarding customers and markets. In developing countries, the limiting factors for farmers wanting to maximize their farm incomes are poor market linkages, poor access to quality farm-inputs, services and technology, lack of information about Government resources, institutions and extension services. The farmers also lack real time information about consumers, market demand and prices and hence are prone to more exploitation by existing intermediaries in the supply chain. With the growth of organized retailing and free global trade, farming is becoming highly knowledge intensive, commercialized, competitive and globalised, making it necessary to rebuild competitive and efficient agri-supply chains to benefit both the farmer as well as the consumer.

Agricultural Supply Chains in India

Agricultural supply chains involve both backward as well as forward linkages among all the stakeholders i.e. input companies, government institutions, market intermediaries, consumers and farmers. At the back end of the supply chain are private sector and public sector companies that manufacture, trade and export inputs like seeds, pesticides, fertilizers, farm machinery, etc. for the farmers’ use. Information is also counted as an important input these days. Farmers need to have information on farming practices, weather, sowing and harvesting time, pest management, fertilizer use, etc. Farmers need information on new products and brands launched by these companies. Information is the most important input which can ensure the availability of all other required inputs at the right place and right time. Presently, due to the lack of proper information on inputs, advisory services, and weather and climate information services, farmers are unable to align the quality and price of their products to the market standards.

Marketing of agricultural products in India takes place through agricultural mandis, which are regulated by the Agricultural Produce Marketing Committee Act (APMC Act). The produce is brought to these mandis by farmers, where a long chain of intermediaries is involved. The price of the commodity is decided through behind-the-scene auctions by the aartiyas[i] who function as intermediaries. During the peak season, the farmer sometimes has to wait for many days to get his produce unloaded. These mandis lack basic marketing infrastructure such as grading, standardization and storage facilities. In the process, the quality of the produce deteriorates. It has been found that post harvest losses in mandis occur primarily due to lack of marketing infrastructure and storage facilities. After the produce gets unloaded, the farmer is at the mercy of the aartiyas, as they are the ones who decide the price of their produce. The farmer has to sell at whatever price is decided by these intermediaries. There is a lack of transparent weighing facilities in the mandis. All these constraints lead to inefficiencies in the value chain and result in a very small monetary share for the farmer. The efficiency of a supply chain depends upon the extent to which both our backward as well as forward linkages are integrated with all the functions in the supply chain so that all the stakeholders involved are benefitted.

To reap the benefits of the existing opportunities, there is a need to circumvent the agri supply chains by removing the inefficiencies in the marketing system. Government is taking steps to improve the system in the country by permitting contract farming and direct procurement from farmers through amendments of the APMC Act. Several schemes have been launched such as the marketing infrastructure scheme,[ii] Rural Godown scheme[iii] and AGMARKNET[iv] to empower the farmers. Besides Government efforts, corporate giants, which have entered into food retailing are also investing in supply chain and are trying to build up information network to facilitate the agricultural marketing trade in the country.

ICT and Indian Agri-Supply Chains

Innovations in ICT are helping to bridging the gap in the agri supply chain and offering a communication platform to link farmers to the markets. Both computer-based as well as mobile-based models have been adopted to spread the information in these countries. E-choupal,[v] Warana, Grameeen Sanchar Society (Grasso), Reuters Market Light, AGMARKNET and Lifelines are a few successful examples. Amongst the promoters are public sector, not-for-profit sector and private sector companies who are targeting the major stakeholder i.e. the farmer, with their unique information delivery systems.

Mobile companies are also targeting rural areas with their specific products and services. The Nokia Life Tools project is one such example along with the Airtel and Reuters Market Light project, both of which are marketing commodity-specific information packages to farmers. As many public sector and private sector models are being tried in an effort to link the farmers to markets, it becomes important to study these communication packages as a bundle of benefits to the farmers and other stakeholders. However, the success of these models depends on how effectively and efficiently farmers are able to make use of these technologies.

Opportunities of Information Delivery

A strong need has been felt regarding the informational needs of the farmers throughout agricultural value chain. (Table1). The farmer lacks information regarding mandis, commodity prices at various mandis thus delinking him from markets and consumers and making him prone to exploitation in the hands of intermediaries. Information is needed by farmers at every stage, right from sowing the seeds to selling his produce in the mandis. Farmers lack awareness about domestic/international markets as well as alternative market channels. They must have information about what varieties are preferred by the consumers and how the agricultural as well as post harvest management practices can be employed in order to fetch better prices for their produce. They also need information on Government schemes and funds available to them for adopting new technologies/processes. Besides the needs to obtain information, farmers also have an inherent desire to interact with various peers and experts in order to discuss problems related to agriculture. This can be possible only when they are connected through an informational network specifically designed according to their needs. For a company marketing information through internet as well mobiles, there are a lot of opportunities existing at both the ends.

Table 1: Informational Needs of Farmers

Critical Success Factors for Implementation of ICT Projects

Despite the efforts of the information delivering agencies, these projects have a long way to go because of the challenges being faced at implementation level. These challenges are mainly related to three areas as shown in Table 2.

Table 2: Critical Success Factors for ICT-Based Information Delivery

Revenue-cost stream

Most of the Government funded IT initiatives provide free of cost information to the farmers whereas some recently launched mobile based services such as Reuters Market Light, Nokia Life Tools and Handygo run on business models that involve payment of subscription charges. There have been arguments earlier about whether farmers are willing to pay for services or not. Experiments done by these companies have shown that farmers are willing to pay for these provided they get the right information at the right place and time.[vi] However, the need and quality of service delivery is very important for paid services. Economies of scale are also important for sustainability of such initiatives. For any kind of ICT model to be successful, it is necessary to generate a parallel revenue stream as has been tried by e-choupal. To start with, Government funded projects get a head start, but after some time the sustainability of these projects has to be ensured through alternative income sources such as content selling through input companies or paid services.

Infrastructural constraints

ICT initiatives typically require infrastructure in terms of hardware, connectivity, electricity availability and internet availability. In a remote village, irregular or no electricity supply, absence of fixed telephone lines, inadequate bandwidth, etc. may limit the possibility of running an IT kiosk successfully. Therefore, it is essential to ensure availability of proper infrastructure in these areas. Public private partnership could be one way of ensuring the availability of basic as well as specialized infrastructure.

Need based quality informational inputs

It has been seen in various cases that farmers only value need-based quality information. A generalised content in these cases might not help as farmers in different regions need different kinds of information. Also, the informational needs are crop-specific as well as time-specific. The farmers are also willing to pay for these services if they help them enhance value of their output in both production as well as market terms. Issues such as what information farmers need and when need to be considered carefully. Some of the other important considerations for delivering information to farmers are indicated in Table 3.

Table 3: Delivering Information to Farmers: Need of the Hour

Mode of delivery

The mode of delivery of information to farmers and other rural folk is very important. The ease of delivery of information with respect to language, dissemination and readability should also be ensured in order to make these initiatives useful as well as popular. Quite recently, there has been a debate on which is the better medium of communication for information delivery.  - the Internet or the mobile? An Internet based kiosk ensures that a large number of beneficiaries benefit from the same kiosk and also have an added advantage of multimedia and interactive communication. On the other hand, mobiles can deliver more personalised and customised information.

Nokia Life Tools and Reuters Market Light are SMS (Short Message Service) based services through which farmers get information on sowing time, weather conditions and pest management practices from time to time. On the other hand, Handygo services are based on voice based interactive systems.

Commitment of stakeholders

The success of these projects requires strong commitment of all stakeholders. In the case of the public sector model, the state agricultural marketing boards, local district authorities and extension officials need to work with local agencies for data collection, validation and delivery of service to the farmer. These initiatives are launched because of push from higher authorities, but sometimes they suffer in the hands of implementers because of lack of interest. Therefore, commitment of the local staff is important to generate interest and awareness among local user communities.

Selection and capacity building

Capacity building of kiosk operators and other people involved is also very important. In the case of IT kiosks, the kiosk operators need to be capable of handling both the operational and technical aspects of IT. Selection of kiosk operators is important so as to pick the most suitable and committed people from the local community itself. Such a person would be able to win the support of the local people. The capacity building of the support staff is also important from time to time in order to build their awareness, generate interest, and to keep them motivated.

Awareness and communication

Adequate awareness of exiting initiatives has emerged as one of the important challenges in this area as many a times people living in the same area are not aware about IT kiosks or other services available. The information providers have to ensure awareness among targeted beneficiaries and users for their proper usage. Farmers and supply chain partners must be made aware about the services available for their proper use. Awareness campaigns, farmer melas, pamphlets, brochures etc. help in generating awareness about relevant websites and services available.

Conclusion and Policy Implications

Information technologies can be the best way for farmers to update themselves on information related to agri-inputs, credit, markets, weather, extension advisory and other e-governance services, etc. Both mobile as well as Internet based models can gain popularity among farmer folk as each of these offer advantages. Internet can provide a range of services through an interactive, web-based interface and multimedia to a large number of beneficiaries at a minimal cost; however Internet connectivity, electricity availability and capacity building are some of the challenges before it. Mobiles, on the other hand are capable of providing customized services and ensure speedy and timely delivery of information. Hence the challenge is how both types of communication technologies can be used based on region, crop, type of infrastructure availability, and cost of infrastructure development. For empowering the farmers through ICTs, there is a need to first have infrastructural and operational modules, user friendly mode of delivery and right product-service mix. However, the most important strategic issue before these models is how these can be made sustainable on their own? Whether to charge farmers or have alternate source of income generation for sustainability remains the important question? Whether farmers are willing to pay and for what services also needs to be answered through further research studies in this area.

References

§  Narula, S.A. & Chopra, S. (2010) Identifying Stakeholders’ Needs and Constraints Adoption of ICT Services in Rural Areas: The Case of India forthcoming for Social Responsibility Journal (Emerald Publishers).

§  Narula, S.A., Singh, S.P., Chawla, K.L. & Sikka, B.K. (2009) Empowering Farmers Through Mobile Net Services: A Case of IFFCO-Airtel Alliance in India presented at International Conference on Agribusiness and Rural Development organized by BHU and Tennesse State University at Varanasi, Dec. 2009.

§  Narula , S.A. (2009) Empowering Farmers through ICT enabled Agricultural Supply Chains in Uttarakhand, presented at Fourth Uttarakhand Science & Technology Congress held at G. B. Pant University of Agriculture & Technology, Pantnagar. November 11-12, 2009.

§  Narula , S.A. (2009) Usage and Potential of ICT among Farmers: The Missing Link, Key Note Presentation, eIndia 2009 ( India ’s largest ICT Event): eAgriculture, Hyderabad Inetrnational Convention Centre, Hyderabad , August 25-27, 2009.

§  Narula, S.A. (2009) ICT enabled Food Supply Chains, I4D (July-September, 2009), Vol. VII, No. 7, pp. 29-31.

§  Narula , S.A. (2009) Social Networking……….. For Farmers, I4D, Feb 2009, pp. 32-34.

§  Narula S. A., (2008) Leveraging  ICT to Link  Farmers to Markets: A Case of Indian E-Business Models Paper presented in International Conference on Technology and Innovation in Marketing held at IMT, Ghaziabad during 18-19 April, 2008.

§  Narula, S.A. & Sharma, N. (2008) Implementing ICTs in Agribusiness I4D, September, 20-22 available at www.i4donline.net/September08/September08.pdf

§  Narula, S. A. (2008) Leveraging ICT to Link Farmers to Markets: A Case of Indian E-Business Models in Rajat Gera (Ed.) “Technology and Innovation in Marketing”, Allied Publishers, New Delhi.

§  Narula, S.A. & Sharma, N. (2008) ICT and Agribusiness: A Suggestive Model based on Mckinsey 7S Framework  paper presented in International Forum eIndia, 2008  held at Pragati Maidan, New Delhi, 2008.

§  Sikka, B.K., Sharma, M.L., Singh, S. & Narula , S.A. (2005) on E-Marketing of Apples in Uttaranchal Conference Proceedings of Indian Society of Agricultural Marketing, Pantnagar, published in Indian Journal of Agricultural Marketing, Vol. 19, No. 2, Conference Spl., May-August, 2005.