India hopes digital tech will save its floundering farm sector – but it’s working without evidence

With government’s recent bills claiming to effect far-reaching agricultural reforms, farmers in Punjab and Haryana took to the roads in protest, fearing that their most important lifeline will be taken away from them – the assured procurement of their produce at minimum support prices.

These minimum support prices offer a sense of security for farmers at a time when agriculture offers a precarious livelihood. Ecological unsustainability wrought by the chemical-driven Green Revolution since the 1960s as well as increased competition for Indian farmers from highly state subsidised large farmers in the US and Europe due to the increasing liberalisation of Indian agriculture since 1990s has made Indian agriculture largely unprofitable. Minimum support prices are such a sensitive subject that the controversy prompted a Union cabinet minister from the largely agrarian state of Punjab to resign soon after the protests began.

India’s farmers today are trying to run on a technological treadmill of rising input costs, increasing frequency and virulence of insects and pests along with declining levels of groundwater and soil fertility. This treadmill will not stop unless a paradigm shift is made towards sustainable agriculture. Despite compelling evidence that this is the only path forward, this change is resisted by experts who believe that technology is a panacea for all challenges.

Burgeoning agri-tech enterprises

As a consequence, India has witnessed a burgeoning of agri-tech start-ups. Over the past five years, more than 450 enterprises have been launched in domains as diverse as developing equipment for small farms, image-sensing-based quality grading of produce, blockchain-based traceability of produce across long supply chains and more.

In the first six months of 2019, agri-tech start-ups in India experienced a yearly growth of 25% and attracted investment of $248 million, according to a report by NASSCOM, a trade association of Indian Information Technology and Business Process Outsourcing companies.

These figures would be noteworthy for any domain but especially so for agriculture, thought to be one of the most complex sectors for a new enterprise to venture into. This is because it is primarily a rural sector, digital connectivity is intermittent, infrastructure such as warehouses and cold storages is often inadequate and there is a great deal of regulation.

A millet farmer outside Ahmedabad

The manner in which the process of digitalisation is unfolding is similar to the way in which the Green Revolution proceeded – driven by an ecosystem that was certain that the technology would automatically improve the sector.

As a consequence, the digitalisation of Indian agriculture is advancing without an informed understanding of its implications. There have been almost no critical social studies on agri-tech start-ups in India. Instead, policies are being framed largely based on anecdotal instances and empirical evidence collected from the context of developed economies.

Unexamined questions

This leaves several unexamined questions about the implications of digitalisation in Indian agriculture. These include the questions such as: who owns the data collected through sensors installed on an ordinary farm? What are the primary motivations of entrepreneurs involved in the domain? Which geographical regions are these agri-tech start-ups spreading into? What impacts will these enterprises are going to have on small farmers and landless agricultural labourers?

Take, for instance, an agri-tech start-up involved in the business of supply of agricultural inputs such as seeds, fertilizers and pesticides. This entity will directly compete with traditional channels of input supply such as local pesticide and fertilizer stores. The influx of large investments in such a start-up might make it impossible for these local input dealers to compete, potentially creating a situation of an oligarchy at the village level.

A recent study conducted in the United States found that digitalisation of agriculture is not solving the social and environmental problems such as adverse impacts of chemical agriculture in the form of declining fertility of soil, loss of control over local resources etc. being faced by the farmers. Instead, it is going to “shore up and intensify” such problems in case the growing cultural tendency to consider digital technologies as revolutionary is not abjured.

It is not that the digitalisation of agriculture is necessarily bad. But India lacks a grounded understanding to discuss the possible implications of this process. India must ensure that evidence-based agri-tech policies are framed so that possible pitfalls can be avoided.

Low investment in research

However, this will be possible only if policy-relevant research in agriculture is promoted by the governments at the Central and state levels. According to the Ashok Dalwai Committee report on Doubling Farmers’ Income released in 2018, India’s research spending on agriculture has been abysmally low, especially compared to countries such as China and Brazil. India’s spending on agriculture research and development has hovered around 0.50% of the agricultural GDP since 2001. Of this, 90% is spent on salaries and day-to-day expenditures of research organisations and universities.

Moreover, India must promote inter-disciplinary research to ensure that agriculture does not remain confined to natural sciences but includes social science disciplines as well.

“The fad of the moment (be it dams, barefoot doctors, microcredit, or whatever) is turned into a policy without any attention to the reality within which it is supposed to function,” Nobel Laureates Abhijit Banerjee and Esther Duflo write in their book Poor Economics.

Considering the vulnerability of Indian farmers and the rapidly growing agri-tech sector, the implications of digitalisation in Indian agriculture must be examined so that the resources and entrepreneurial energies of agri-tech entrepreneurs can be channelised effectively.