Budget 2022: Digitisation of agri ecosystem needs to be effectively implemented

Budget 2022: Digitisation of agri ecosystem needs to be effectively implemented
The measures announced in the Budget is a great opportunity for the agriculture sector players to take forward years of work in bringing about a positive change in the livelihood of marginalised farmers, Palat Vijayaraghavan, Founder & CEO, LEAF writes

Smallholder farmers who account for more than 80 per cent of India’s agrarian economy, are often at the mercy of severe opacity and are perpetually dependent on intermediaries. Be it in sourcing quality farming products, realising optimum value for their harvest or using formal credit channels for payments, farmers are facing challenges at every step.

The agrarian ecosystem players are hampered by a lack of transparent access with actionable information. Digitisation solves this challenge by integrating a virtuous loop between farmers and markets, giving better access to information. The measures detailed by Union Finance Minister Nirmala Seetharaman during the Union Budget 2022, is a great opportunity for the agriculture sector players to take forward years of work in bringing about a positive change in the livelihood of marginalised farmers.

It is not enough to just bring digital solutions to the agriculture sector, it requires significant deep-rooted understanding and walking with the farmers in the entire life-cycle of the crop which will enable sustainable growth of the sector.

We need integrated full-stack solutions which will digitise marketplaces, payments, workflows, and farmer transaction histories by connecting buyers, farming inputs, suppliers, agtechs, and banks with farmers and farmer producer organisations (FPOs), helping to create a commercially sustainable ecosystem comprising all relevant agriculture value chain players with equitable commercial exchange mechanisms. Such an initiative will support the farmers through comprehensive training and capacity building in the entire lifecycle of the harvest, including post-harvest management to reduce wastage.

The measures announced during the Union Budget 2022 is a good platform that will empower agriculture ecosystem players to seamlessly bring in access to good quality produce at scale, enable price negotiation with complete transparency and manage end-to-end logistics with quality control.

You may also like to read: Budget 2022: CropLife India welcomes the move on ‘Kisan Drones’ for agrochemical spraying, crop assessment and digitisation

What is required to effectively implement is to digitise the produce buying process enabled by a rural relevant, secure feature phone driven and internet agnostic technology.

The agriculture sector requires the full breadth of resources available – people, data insights, technology and philanthropy – to create solutions for sustainable and inclusive growth. We need to leverage the power of digital technologies to bring together key stakeholders across the agricultural value chain to ensure that farmers get direct access to the knowledge, skills and markets that they currently lack.

The other aspect that digitisation of the agriculture ecosystem will empower is how the financial services can be effectively structured. The financial ecosystem is struggling to serve the rural ecosystem effectively as incomes are largely paid in cash, which leads to the economy being largely cash-based, low account balances and high servicing costs for banks. Additionally, most farmers do not have a formal credit history, and it is difficult for them to access any formal financial services. Enabling digital payments for farmers will drive active account usage for farmers. With digitisation, farmers will get paid through their bank accounts or cards designed for offline rural usage, providing liquidity of the digital money, instead of going to their bank branches or business agents in nearby towns.

This will eventually enable farmers to save more money and entice them away from unofficial money lenders. Financial inclusion also serves as positive reinforcement for farmers to use formal channels for payments, which builds their credit profile and makes them eligible for loans from financial institutions, helping them be part of the formal economy. We need to provide 360-degree intervention and improve transparency in agricultural trade while ensuring that the value is retained within the ecosystem.

(By Palat Vijayaraghavan is the Founder & CEO of Lawrencedale Agro Processing India (LEAF). Views expressed in the article are author’s own.)

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About Palat Vijayaraghavan

Palat Vijayaraghavan is the Founder & CEO of Lawrencedale Agro Processing India (LEAF). LEAF is India’s leading integrated agriculture technology player that works to improve the livelihood of marginalised farmers.

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