Will Digital Technology Transform Indian Agriculture?

151

WILL DIGITAL TECHNOLOGY TRANSFORM INDIAN AGRICULTURE?

Shalini R
Associate Professor
Adarsh Institute of Management
& Information Technology
Bengaluru
Dr. Mahua Biswas
Associate Professor
Dayananda Sagar College
of Arts, Science & Commerce
Bengaluru

ABSTRACT
As a source of livelihood agriculture remains the largest sector of Indian economy. It provides employment to
58.2% of the population. The social transformation of the country and the economic growth depends on the
performance of the agriculture sector. In the recent past, the per capita agricultural output has seen a steady
rise, but the sector’s contribution to the GDP has been decreasing. Deceleration in the agricultural growth is the
major challenge faced by the so called agrarian Indian economy. The reasons for the deceleration are many like-
lack of public investment in research and development and irrigation, inefficiency in providing inputs, rural
credit and extension services, land fragmentation, out-dated tenancy law, lack of modern market and rural
infrastructure, inappropriate input pricing policies etc. To overcome all these problems, digitization in agriculture
has been introduced. The convergence of agriculture and information and communication technology (ICT) is a
new growth engine which helps in increasingthe efficiency in every process of production, distribution and
consumption. This paper focuses on  understanding  the concept of  digital  agriculture and  how it propels the
development of Indian agriculture. There are multiple software companies which have and are tying up with the
Government of India in terms of how to build and enable the agriculture sector in this Digital Transformation.
This paper also talks about the approach taken by such companies and how the supply-chain demand would be
met in the future.
Keywords: Agriculture, Digitization, Indian economy, deceleration, GDP
JEL Code: Q1

INTRODUCTION
Agriculture plays a vital role in India’s economy. Over 58 per cent of the rural households depend on agriculture as
their principal means of livelihood. As per the 2nd advanced estimates by the Central Statistics Office (CSO), the
share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) is estimated to be 17.3
per cent of the Gross Value Added (GVA) during 2016-17 at 2011-12 prices.(Agriculture in India, 2017)
While agriculture’s share in India’s economy has progressively declined to less than 15% due to the high growth
rates of the industrial and services sectors, the sector’s importance in India’s economic and social fabric goes well
beyond this indicator. First, nearly three-quarters of India’s families depend on rural incomes. Second, the majority
of India’s poor (some 770 million people or about 70 percent) are found in rural areas. And third, India’s food
security depends on producing cereal crops, as well as increasing its production of fruits, vegetables and milk to
meet the demands of a growing population with rising income (Issues & priorities for agriculture, 2017). Hence, a
productive, competitive, diversified and sustainable agricultural sector will need to emerge at an accelerated pace.In
this regard, whether digitization can help to overcome the challenges faced by Indian farmers has to be examined.
If digitization of agriculture is introduced, technologies such as Artificial Intelligence (AI), Cloud Machine Learning,
Satellite Imagery and advanced analytics will empower small-holder farmers to increase their income through
higher crop yield and greater price control(Tang, 2002). Hence it becomes imperative to study the impact of
digitization in agriculture sector in India.
Agriculture in India
The agriculture sector employs nearly half of the workforce in the country. However, it contributes to 17.9% of the
GDP (statisticstimes.com, March 2017). Over the past few decades, the manufacturing and services sectors have
increasingly contributed to the growth of the economy, while the agriculture sector’s contribution has decreased
from more than 50% of GDP in the 1950s to 17.49% in 2016-17 (at constant prices). India’s production of food
grains has been increasing every year, and India is among the top producers of several crops such as wheat, rice,
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pulses, sugarcane and cotton. It is the highest producer of milk and second highest producer of fruits and vegetables.
The production of food grains in India reached a record 275.68 million tonnes (MT) during FY 2016-17, as per the
Fourth Advance Estimates (AE) released by the Department of Agriculture, Cooperation and Farmers Welfare,
Government of India.

However, the agricultural yield (quantity of a crop produced per unit of land) is found to be lower in the case of
most crops, as compared to other top producing countries such as China, Brazil and the United States. Although
India ranks third in the production of rice, its yield is lower than Brazil, China and the United States. The same
trend is observed for pulses, where it is the second highest producer. Agricultural growth has been fairly volatile
over the past decade and such variation in agricultural growth has an impact on farm incomes as well as farmers’
ability to take credit for investing in their land holdings. Key issues affecting agricultural productivity include the
decreasing sizes of agricultural land holdings, continued dependence on the monsoon, inadequate access to irrigation,
imbalanced use of soil nutrients resulting in loss of fertility of soil, uneven access to modern technology in different
parts of the country, lack of access to formal agricultural credit, limited procurement of food grains by government
agencies, and failure to provide remunerative prices to farmers. Some of the recommendations made by committees
and expert bodies over the years include bringing in agricultural land leasing laws, shifting to micro-irrigation
techniques to improve efficiency of water use, improving access to quality seeds by engaging with the private
sector, and introducing a national agricultural market to allow the trading of agricultural produce.

Important Challenges of Indian Agriculture Sector

The agriculture sector challenges will be important to India’s overall development and the improved welfare of its
rural poor. The challenges are as stated below:
Will Digital Technology Transform Indian Agriculture? 153

1. By 2050 the world will have additional 2 billion and India has to feed 750 million.
2. India is currently using resources 50% faster than world can sustain.
3. Every second, India loses a football field size of farm land due to soil erosion and urbanisation.
4. India has total 329 million hectares of land of which round 37% (120.40 million hectare) of the country’s total
geographical area is affected by various kinds of land degradation.
5. On an average 16.4 tonnes of fertile soil is lost every year per hectare.
6. India’s small-holder farmers (those owning less than 2.0 hectares of farmland) comprise 78 percent of the
country’s farmers, but own only 33 percent of the total cultivated land; they nonetheless produce 41 percent of
the country’s food-grains.
7. Current farming technology costs far more than most farmers can afford.
While a food scarcity may sound like a faraway problem right now, it’s a reality that India could be facing in as
little as 15 years.India’s growth has been largely jobless, with only 15 million jobs created during the last 10 years.
With employment per factory declining steeply over the years, the chances for a revival seem difficult.
Hence, policy makers have to initiate and include policy actions and public programs to develop this sector and
make it much more productive, internationally competitive, and diversified agricultural sector.
Digitization in Agriculture
The convergence of agriculture and information and communication technology (ICT) is a new development in
India which is intended to increase efficiency in every process of production, distribution and consumption. This
system can be also described as an integrated agricultural system. The main keys of the integrated agricultural
system includes data processing and digital control machinery for digitization, data transmission, data collection,
network and automation of agricultural activity (Tang, 2002).
The current agriculture has converged with technologies such as information technology (IT), biotechnology (BT),
environment technology (ET), and nano technology (NT). (Hwang, 2002) And it mainly focuses on areas such as
cost reduction during production level, reduction in labor burden, high quality and organic production, and quality
management in facility. Second, it is important to meet consumers’ needs at the production and distribution stages
through building a system, which delivers food safety information. This means, IT applications need to be expanded
in the agriculture farming automation system. Furthermore, at the distribution and processing stages, advanced
distribution technologies using IT need to be introduced including the convergence of distribution data. These are
the very small portions of the digital agriculture system that is part of making big database of the whole agriculture
system.
LITERATURE REVIEW
Some of the studies published in the relevant literature on digitization concerning the agriculture sector have been
included.
State of Indian agriculture (2015-16), talks about Indian agriculture, performance, challenges and way forward. It
explains the growth of the agricultural sector, regional variations in agricultural growth, capital formation in
agriculture, production performance, performance of the horticulture sector, correcting land use pattern,
rejuvenating soil health, drought proofing and water wse efficiency, agriculture to climate change, managing
agricultural inputs better etc.NITI Aayog, Government of India (2015), states about raising agricultural productivity
and making farming remunerative to the Indian farmers. The paper offers ideas on how these problems can be
addressed so as to accelerate agricultural growth and bring remunerative prices to farmers. International Crop
Research Institute for the Semi Arid Tropics talks about the digital agriculture, pathway to prosperity. This study
aims to make agriculture profitable, improve farmer livelihood and reduce poverty. Agricultural situation in India
(2017), gives farm sector news, general survey of agriculture, articles on agro economic research, commodity
reviews and trends in agriculture.
Tanvi Deshpande (2017) highlights about the agriculture output becoming volatile. Findings of the study shows
that 86% of the landholdings are less than 2 hectares and informal sources of credit constitutes 40% of loans.
Soma Dhar (2014) studies the socio economic and demographic status of Assam. The author highlight the various
facts & figures of Assam and compare these with facts & figures of all India averages. The analysis of the data
shows that, though in some cases the performance of state Assam is satisfactorily than the all India average.
Sharma (2007) tries to understand socio-economic implications of corporate-led initiatives in agriculture (mainly
contract farming) in the state of Punjab, which has more experience in contract farming compared to other states.
154 Research in Digital Revolution and New India (ISBN : 978-1-5136-2964-3)

Objective & Methodology

This paper focuses on understanding the concept of digital agriculture and how it propels the development of
Indian agriculture. There are multiple software companies which have and are tying up with the Government of
India with respect to how to build and enable the agriculture sector in this Digital Transformation. This paper also
examines the approach taken by such companies to check how the supply-chain demand would be met in the future.
The research is descriptive in nature. The study is conceptual and based on secondary data collected from company
websites, newspapers and journals. The scope of the study is restricted to agricultural sector only.
Significance of Digital Transformation:
A digital transformation will help the farmers in multiple ways. It is reflected in the following below diagram:

Figure: 1 - Digital Transformation

As detailed in the above figure, the following are the key needs from Digital transformation:
- Access to Finance: The farmers in India today face acute shortage of money due to the various challenges
highlighted earlier. Digital transformation helps the farmer in getting access to funds from various sources due
to the exposure and awareness they get from being digital.
- Forecasts on Climate Change: In India (as compared to other advanced countries), the ability to forecast
weather changes and in turn the impact that it would have on farming, has been a difficult task. Having the
right inputs on potential Climate Change will help the farmer in deciding the right seed to grow and in turn
fulfill the demand that is out in the market.
- Access to Farming Equipment and New Technology: In many of the developed countries, Robotics play a
bigger role in farming. India is yet to see this advancement and hence there is a crucial need for this transformation.
- Inputs for Better Soil Fertility and Soil Structure: The farmer in India rarely does an investigation of the
fertility of the soil and hence the kind of seed to grow. What has been done in the past generations is what the
Indian farmer today develops. There is thus a need to have a more scientific approach to agriculture.
- Access to Markets: The farmer, though he does all the hard work today, is not compensated fairly for the work
he does. Due to middle-men involved in the buying and sellingof the farmer’s products, the actual farmer gets
a pittance compared to the profits that the middle-men make. There is thus a need for a platform which will
enable the farmer to sell directly to the buyers (rather than go through middle-men).
Will Digital Technology Transform Indian Agriculture? 155

- Access to Information: The farmer today bases his produce based on his peers and what has culturally been
grown in his land. What worked yesterday or for someone else, does not always mean a success for today or for
ourselves. The farmer will have to try out new experiments based on the information available which will
enable him/her to produce more and get the right financial backing. The digital transformation is expected to
handle this appropriately.
- Small Landholdings: With the amount of barren land which is unutilized, the fact of the matter are that today,
many farmershave very little land which does not help in growing the right crops. This needs to change if we
need to overcome the challenges.
- Predictive Analytics: Using the latest technology available in the market, if the agriculture sector is ignited with
this digital transformation, the amount of data that would be available will help the farmer in growing the right
crops at the right time. Thus the standard of living for the Indian farmer would go up, which would in turn
encourage others to get engaged in farming.
Thus, the farmer can get benefited with above inputs using Digital Transformation.
Life Cycle in a Digital Transformation:
Digital technology is the only way forward to achieve the desired output. But it is not an easy task in a country like
India. It is going to be a very slow and tedious process in implementing technology country wide. A digital
transformation would encompass the following steps as detailed below, consisting of Planning, Capacity Building,
Identifying the right stakeholders, providing mechanisms for Governance and monitoring. In the life cycle, we also
need to look at how to onboard the Suppliers and Buyers, creating the supply-chain and demand pipeline. For all
these to be effective, there is thus a need for a Point of Sale application (mobile enabled at some point), which
would bring the buyers and sellers together on one platform.

Figure : 2 - Life Cycle in Digital Transformation

How are Software Companies building the Technology Platform:
For the digital transformation to be successful, it is thus critical for the Software Companies to help build a
platform which will enable the stakeholders to collaborate and find the right mechanisms to help each other.
A skeletal approach to the building of the Technology Platform is as show below:
156 Research in Digital Revolution and New India (ISBN : 978-1-5136-2964-3)

Figure: 3 - Skeletal technology Platform (Source: One of the Indian IT Companies)

The approach thus talks of how the inflow of the real needs are assessed in consultation with the Government, right
technical and domain experts so that the platform can scale to the intended audience. Planning needs to be done in
terms of the demand-supply chain, forecasting, types of sectors that needs to be targeted, the kind of infrastructure
that would be required to create and get Suppliers and Buyers on this platform.
How will this Technology Platform bring the change:
The change that this technology platform will bring is illustrated in the annexure.
The outcome of this would thus be Increased Income, Improved Resilience and Sustainable Eco-system.
CONCLUSION
Hence it can be concluded that the technology platform will bring the desired outcomes in agricultural sector like
reduced costs, improved productivity and quality, improved prices, reduced risks and ultimately sustainable eco-
system. Many software companies (including Microsoft) have entered into agreements with various State
Governments in India to help build this digital transformation. This has already seen much progress in Hyderabad,
Assam, Karnataka to name a few.
Policies need to adapt to this changing Digital world to ensure that the challenges mentioned above are overcome
and lead to increased efficiency in the production, distribution and consumption of agriculture produce.
REFERENCES
 Annual Report 2016-17, Department of Agriculture, Cooperation & Farmers Welfare Ministry of Agriculture &
Farmers Welfare Government of India
 Agricultural situation in India, 2017, ISSN 0002-1679, VOL. LXXIII, No.11
 Deshpande Tanvi (2017), State of Agriculture in India, PRS Legislative Research
 Raising Agricultural Productivity and Making Farming Remunerative for Farmers, An Occasional Paper ,NITI
Aayog, Government of India 16 December 2015.
 Soma Dhar (2014), Socio-Economic and Demographic status of Assam: A comparative analysis of Assam with India,
International Journal of Humanities & Social Science Studies (IJHSSS), ISSN: 2349-6959 (Online), ISSN: 2349-
6711 (Print) Volume-I, Issue-III, Page No. 108-117.
 Saima Khan (2015), Digitization and its impact on Economy, International Journal of Digital Library Services,
ISSN:2250-1142 (Online), ISSN 2349-302X (Print), Vol.5, Issue 2.
 Sharma Vijay Paul (2007), India’s Agrarian Crisis and Smallholder Producers’ Participation in New Farm Supply
Chain Initiatives: A Case Study of Contract Farming, W.P. No.2007-08-01, IIM Ahmedabad.
 State of Indian Agriculture, 2015-16
Will Digital Technology Transform Indian Agriculture? 157
 Tang, S., Wu, M., Zhou, X., Zhu, X., A Conception of Digital Agriculture, Geoscience and Remote Sensing Symposium,
2002, IGARSS ’02. 2002 IEEE International, 3026-2028 vol.5. DOI: 10.1109/IGARSS.2002.1026858
 Xu, C, Research of Real-time Agriculture Information Collection System Base on Mobile GIS, Agro-Geoinformatics,
2012. DOI: 10.1109/Agro-Geoinformatics.2012.6311703.
 http://www.icrisat.org/digital-agriculture/http://www.worldbank.org/en/news/feature/2017/05/17/india-agriculture-
issues-prioritieshttps://www.ibef.org/industry/agriculture-india.aspxhttps://news.microsoft.com/en-in/features/ai-
agriculture-icrisat-upl-india/
 http://www.digikissan.com/digital-farming/digital-technology/

Figure: 4 – Desired outcome

ANNEXURE