Stacking for agriculture: Missing pieces of India’s Agristack puzzle

Aparna Chandrashekar   /    Content Specialist    /    2022-04-21

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The stakes in agriculture are high - it's fraught with risks; for farmers, agri-businesses, lenders and the economy. The rapid proliferation of information technology promises transformative powers for a sector riddled with risk. Going beyond the narrow view of ‘technology’ as a tool, the broader concept of ‘digitisation’ is seen as a potential game-changer. 

The Agristack, India’s digitisation proposition for agriculture is an ambitious project to reset how farmers manage their businesses and the tools that they use to make decisions.  It’s envisaged to facilitate a single-window view for farmers to access proactive, universal and personalized services through an Aadhar-linked digital ID.

All this and more are aimed at increasing farmers’ incomes. In return, the government will collect farmers’ data-name, age, crops grown, seed use, financial details and most importantly land details.

Since it was first introduced in November 2020, the Government of India (GoI) has launched the Unified Farmers Service Portal (UFSP), put out a consultation paper on IDEA (India Digital Ecosystem of Agriculture), and signed MoUs with 10 private firms in relation to the AgriStack project. 

But not without a contest. It has been criticized by farmer groups and civil society organizations for excluding a significant portion of the farmer population, data privacy concerns, lacking proper consultaion and risk of data exploitation by companies

For businesses, the proposed Agristack can be challenging given - 

What then are the enablers to holistically digitizing agriculture in India? 

 

Sandbox for Agri-fintech

Despite being the top beneficiary of the priority sector lending (PSL), about 70%  of farmers do not have access to institutional credit, paying interest of 24% to 60% per annum (against 7% under PSL). Likewise, MSMEs, which dominate the food supply chain, pay a high cost of working capital (15 to 18%). 

The high cost of capital makes agriculture and the entire value chain unviable for businesses. Creating a sandbox where private and public sector banks can be incentivised to work with multiple startups in the agricultural supply chain can help scale innovative agri/fintech solutions faster. 

Data Stewards

Existing data stewardship efforts in the agriculture sector have the potential to fix the lacuna in Agristack policies and move towards more holistic digitisation of the sector. The trustdeficit between the government and farmers, which has only widened in recent times, can be fixed by data stewards. They can act as intermediaries that unlock the value of data, while simultaneously safeguarding the rights; they’re perfectly placed to foster trust within the community. 

Stewards like Jaljeevika, for instance, can train local communities and farmers on digital literacy and make information around data sharing easily digestible. 

Policy provisions that encourage data stewards will also ease the burden of aligning data discrepancies that arise from the lack of last-mile transparency. 

Network platforms

Farmer Producer Organizations (FPOs) and MSMEs are elemental to farming in India.  And yet the interface between FPOs, MSMEs and the multiple startups in the agriculture sector is limited. There are nearly 7000 FPOs in India, but only a few have the capacity for scale and commercial viability. This is because of a lack of financing, credit rating, warehousing facilities etc. A policy initiative to bridge the gap between FPOs and agritech startups via partnerships will be a huge step in digitizing the last mile.

Read: FinTech partnerships with FPOs and how they're crucial to effective lending

Centralized data science department

The secret to leveraging data rightfully lies in building Machine Learning (ML) and Artificial Intelligence (AI) capabilities. And while Agristack promises digitizing of land records and Personally Identifiable Information (PII) of farmers, the biggest challenge to scaling an AI data model is access to good quality data. Only relying on the data collected henceforth can run the risk of undoing a lot of pre-existing research from universities and think tanks. Building public data repositories by collating already existing datasets that lie with government departments, research institutions and universities can ensure better data modeling. 

Catch ‘em young

The agricultural sector and the argitech space need good quality talent above everything else to scale models of digitisation. Nurturing talent at the college/university level, by incorporating courses around data science, data analytics, AI/ML could prove to be hugely beneficial in continuously fostering the digital ecosystem. 

Conclusion 

The agristack, as it exists on paper currently, may be subject to criticism. However, the utility of the Agristack can only be tested by inviting partners including banks, insurance companies, agri input and output companies and anyone who wants to build first and last-mile access to the farmers. And much like anything else, it will need iterations.

While building the Agristack is a one-time investment, maintaining and updating it is a recurring cost and a challenge. To that end, it’s useful to build a holistic ecosystem that can continue to cull the benefits of technology. 

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