Digital Technologies and FPOs: What have they achieved together? A case study of India

Digital Agriculture Agricultural practices across the world are variable, just as both plants and their growth patterns differ according to their geography. Yet, sharing of knowledge from different groups of people involved in agriculture can bring about improvements in many-a-technique. One field of knowledge that has come to the aid of such sharing is Information Technology. Farming and IT appear to be the most distantly placed knowledge sets in the world – farming being one of the most primitive, and Information Technology being one of the most advanced and futuristic. And yet, IT can be an effective means to bring together information on farming practices. While farming is essential to sustain our life on earth, IT can aid farming by sharing techniques that help produce better.

From the convergence of these two fields of knowledge has emerged the sector of e-agriculture. The emphasis here is to enhance the agricultural value chain through internet applications and related technologies. Using these applications, farmers can access a host of services, including information related to policies and programmes of the government, new schemes, and good agricultural practices. Perhaps IT-aided agriculture can give a much needed fillip to Indian agriculture, which has been reeling under the agrarian crisis. Despite having the second largest area of arable land in the world, issues such as shortage of farm labour, fluctuating prices and large-scale rural to urban crisis have left Indian agriculture in the doldrums for a long time. Traditional approaches to improving farmer incomes and social security are just not making the cut. There’s got to be other avenues to explore. The need of the hour is to increase farm productivity while cutting production costs. To support this, the access to reasonable credit needs to be available, along with the right prices for their produce.

Before Information Technology can pitch in to lead the way, there’s got to be another level of organization that must happen within the farming communities themselves – what’s called ‘aggregating forces’. The Farmer Producer Organisations, or FPOs, that have been in existence in India since the 1950’s, is an excellent example of such aggregation. An organized entity is better placed to access credit, create market linkages and obtain farm inputs in comparison with a lone farmer. Technological interventions, in turn, can enable the formation of such communities. Together, these two forces can make agriculture more productive, profitable and sustainable.

Let’s look at these benefits briefly, and see how they can and have used information technology to improve their situations:

1.Farmer Aggregation for strengthening farmers’ capacity By collaborating through FPOs, farmers have better capacity for and access to technical know-how on crop planning and management, inputs, credit, post-harvest management, value addition, and better market linkages. The process involves mobilizing groups of between 15-20 farmers.

2.Agri-business village resource centres To achieve the objectives of farmer aggregation in the context of sourcing of inputs, credit, value addition and sale of output, the critical link is a local facilitation centre. Such a centre would provide the necessary services to members of FPOs in their quest to become more productive and efficient, and thus, viable farm enterprises. Such centres would be managed by their associated FPOs and are equipped to handle a variety of services and also to support farmers for tapping growth-oriented opportunities.

3.Custom hiring cum agribusiness centres While smallholdings have higher productivity compared to medium and large farms, their cost of production is equally high. Through timeliness of operation, increase in land productivity, saving in labour requirement and reduction in human drudgery, farm mechanization leads to increase in output and productivity, safety and ease in farming, resulting in improved returns and profitability. It becomes a facility for farm equipment to be shared.

4.Access to credit Another way in which FPOs are useful is to access to credit. The formal banking sector avoids lending to individual farmers because of the perceived high risk, but when channeled through an FPO, the risk may be lower. Imagine an integrated digital platform that caters to end-to-end agricultural activities. Such an initiative can potentially raise productivity, reduce input costs, improve access to reasonable credit, especially for small and marginal farmers, and ensure fair prices.

5.Digital modules Apart from other farmer concerns, agriculture in India is primarily dependent on the monsoons, which are unpredictable. While a drought year increases the cost of irrigation, other inputs including seeds, fertilizers, pesticides and farm equipment become costlier during an above-normal monsoon. Digital modules geared to enable farmers to share farm equipment will not only reduce their input costs but also enhance their collective productivity. This can also be facilitated through FPOs.

6.Cashless transactions Farmers have always been dealing with cash in all their transactions – it’s time to digitize their bank inflows and outflows, and make them ‘financially included’ citizens. To achieve a cashless transaction economy in the truest sense, access points need to be created for banks in villages. Currently, there are only limited cash-out points in rural India, which are insufficient to address the requirements of over 600,000 villages. Indian farmers need to be encouraged to spend their income in a cashless manner. This has been made possible through the Kisan Credit Card, which allows farmers to have cash credit facilities without going through time-consuming bank credit screening processes repeatedly. Repayment can be rescheduled if there is a bad crop season, and extensions are offered for up to four years.

Other than that is the Kisan Call Centre, which is an expert advisory system. The farmers can call a toll free number to seek expert advice on different matters related to agriculture and allied sectors. This is designed along with a Kisan sms portal, where the farmer receives small messages providing information or delivering service or giving advisories on his mobile from experts.

These are a few examples of how farmer aggregation and Information Technology can come together to ease the farmer’s life to some extent. No doubt, there’s a long way to go before its true impact can be measured.