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Agri-inputs industry in India: Time for a ‘Tech-Makeover’
Jan. 14, 2020
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Raghavan Sampathkumar
Head - Policy Advocacy & External Affairs, Samunnati
Ten years ago, it was unimaginable, if not laughable to think that farmers would order fungicides and fertilizers online through a mobile app and get them delivered at their doorsteps. But today, Voila! It’s being done by several companies already.
India is evolving faster than ever before with the number of monthly active internet users fast approaching the half a billion mark (451 million, to be precise) in 2019. As the “tech tsunami” is literally sweeping all the industries off their feet in an unimaginable manner, it is also ruthlessly making things, concepts and ideas become obsolete at an unforgivable pace. Added to this is the proliferation of the “ubiquitous social media”, which transformed the way people (including farmers and other rural dwellers) get educated and entertained about anything in the world.
In tandem with this trend, Indian agri inputs marketing (particularly, brand and product promotion) needs to evolve from its time warp mode of using the age-old methods, techniques and channels for communications since several decades. In this context, this column is an attempt to delve into the Indian agri-inputs industry’s (specifically, marketing) past history, present status and future prospects; seismic changes brought by IoT (Internet of Things); and the strategies for the companies to reinvent and remain relevant.
The Good Ol' Days of agri-inputs marketing
India’s agri-inputs industry comprises three key sub-sectors viz., crop protection (pesticides), crop nutrition (fertilizers), and seeds. According to FICCI, its value stood at US$ 5 billion (2018), with domestic consumption at US$ 2.77 billion. The industry is set to grow at an impressive 8.1% annually and touch US$ 8.1 billion by 2025.
To understand the industry’s evolution better, one needs to go back a couple of decades when the now-ubiquitous mobiles were unaffordable to the common man. Even landline phones were very rare as a village might hardly have one or two and so were television sets. Hence, to reach a farmer, demonstration plots, wall posters, hoardings or banners at prominent places like common meeting points or tea shops and during melas/ haats, and other literature (posters, banners, POP displays, leaflets, brochures) at the dealer’s shops were necessary. Further, vehicles fitted with AV (Audio Visual) equipments used to ply across the villages, Progressive farmers who would further spread the word on new products and provide advice on cultivation to others, were also one of the most important and credible channels. During the cropping season, advertisements shown in the village cinema halls (aka ‘tents’) and on television were once regarded innovative non-traditional. But, what has changed today and how it impacts the agri-inputs business?
IOT: It’s Out There!
With the IT and telecom revolution, farmers are fast evolving into well-informed consumers who are at ease with gadgets as their source of advice on cultivation, finance, weather, and market trends. Hence, agri-inputs companies, willingly or not, are forced to evolve from their Paleolithic practices of simply producing (and re-producing) different types of printed literature and the usual field demonstrations, PoS (Point of Sale) materials. They are pushed to explore holistic, newer, and more targeted or customized (based on the product, region, crops, season, etc) approaches while rethinking their good-old 4Ps and communication (ATL/BTL) strategies.
One must not forget that during those days there was less noise or clamour around a person, let’s say, a farmer. As the rural-urban divide is fading away, today as almost every household boasts a TV with 130 channels; 3G/4G internet on mobiles with hundreds of AM/FM radio stations screaming all day; and people spend hours on YouTube, Facebook and WhatsApp every day. In today’s clutter and cacophony an average consumer is exposed to more than a thousand products; gets flooded with offers and promotional messages.
In this context, it is important for the agri-input industry to introspect
• Whether these the antique, traditional means are still relevant and effective?
• What are the potential impacts on sales and brand recognition? If so, to what extent and how it can be improved?
• Whether the industry cares to understand the technology evolution of its erstwhile tech-averse customer base who are now at ease with gadgets
Except a few, in many private and public sector organizations, these questions are seldom asked possibly due to the following:
The ‘Know-it-all’ pitfall
Perhaps this could be the most gravely mistake many companies in the agri-inputs sector are oblivious of unlike FMCG or electronics, where the consumer trends are tracked almost in real time. This License-Raj attitude, if perpetuated, will make the company ignore the dynamic changes occurring in the marketplace every day and the waning effectiveness of their old gimmicks. Only the agile and responsive ones have remained successful and will remain so. Among the three, the “Seeds” sub-sector fares better than the pesticides and fertilizer sectors, as it is constantly gauging farmers’ preference for new hybrids and/or traits to drive R&D and product development and consequently, their product promotional efforts.
Traditional Lab-to-Land or Expert-to-Farmer knowledge transfer
This again, is yet another vestigial thinking from the ‘Green Revolution’ times when farmers were taught and trained on cultivation of high yielding varieties, hybrids, use of synthetic fertilizers and pesticides etc. Except a significant few, by and large the academia, public-sector research, and extension machinery still believe till date that farmers need to be educated by experts. But the private sector cannot afford to overlook the hard truth that it should be an interactive, two-way learning process.
Thinking of farmers as a homogenous group
Like the know-it-all attitude, thinking of farmers as a monolithic or homogenous group might have been perpetuated to keep justifying expenditure on traditional communication methods without evaluating their effectiveness in today’s changed circumstances. It is going to be critical in future that companies need to analyze and understand the differences between their segments for example, in media consumption of farmers of different socio-economic categories, use of media among women farmers, etc.
Nonexistent Agribusiness Market Research industry
All the points mentioned above are both causes and results of lack of proper market research functions in the companies. Agribusiness MR is one of the largest segments globally but in India, it is just non-existing. The rationale could be “We are the “know-it-all” so what more insights an agency can provide us additionally?” However, farmers have evolved so much that the industry needs to invest in regular research efforts to track and understand the fast changing preferences, expectations, media consumption behavior, demographic and lifestyle changes, etc. It is highly imperative that the industry needs to shed its entrenched prejudices and must begin to invest to investigate in professional research which ones among their current communication strategies, techniques and channels have greater impact and help generate more sales and/or build brand equity. Unlike the developed countries, there is virtually zero-demand for specialist market research in agribusiness in India but in future all the decisions must be data-driven.
To sum up, the time has come for Indian agri inputs companies to reinvent their perspectives completely to understand their customer base (farmers) better; to view them as not just receivers of information but as collaborators; and importantly, to understand the enormous impacts of smart phones, mobile apps, internet-based technologies and e-commerce etc. The introspection about leveraging the hi-tech ecosystem to supplement and/or replace the same old plain-vanilla approaches must be continuous and of high-priority.
To be continued….
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