Agriculture sector in India is quite huge and mostly unorganized, mainly constitutes small and marginal farmers. Indian agriculture industry is a $400 billion industry, last powered by close to 200 million small and independent farmers. In the last few years, the sector has undergone a massive digital transformation, with e-commerce leading the baton for it. As you all are aware “Agriculture is a noble profession” our country holds the record for the second-largest agricultural land in the world, a major chunk of GDP is associated with agriculture, and also points bent the large scope for agrotech startups within the country to form those hopes of Indian farmers come true. Agriculture domain includes cereals, fruits, vegetables, livestock, fisheries, poultry etc. Over the past decade there has been a gradual shift towards non-agricultural domain and migration to the urban areas.
Digital Marketing combines technology with strategies which reach the potential customers via the Internet. The Virtual marketing includes e-mail marketing, web marketing, e-marketing, blog marketing, App based marketing etc. The application of ICT in agriculture has positive effects for farmers regarding accessing market information and promoting agricultural products. As per the published reports, it is estimated that the overall e-commerce sector in India will be around $120 billion in revenue by the end of 2020, however there is no definitive figure on the share of agriculture in the overall e-commerce pie. There has been a renewed interest in agro startups and so have been the efforts to reap the benefits of the Digital revolution.
Central and State governments are proactively pursuing policies to improve farmers’ lives and income in India. In fact, PM Modi’s government has an aim to double the typical farmer’s income by 2022. This is a herculean task which would need the improvement in the areas of agriculture and allied activities in the country, such as per acre yield, safeguard against weather, storage, agro industries, exports, logistics and Digital marketing. Some grey areas like a drop in landholdings (average 1.4 hectares), small and fragmented land holdings, and a decreasing agricultural land versus a growing population is a major concern. To top it all an absence of an organized marketing structure for produce, manipulation within the existing unorganized agricultural markets, inadequate facilities for transportation and storage, scarcity of credit, and limited access to superior technology are a number of various afflictions which obstruct the Indian agricultural sector.
- To identify the problems existing in the agriculture sector for fair price realization.
- To study the current status of digital marketing in agro sector and future prospects of it.
Factors Affecting Agriculture Sector in India
Agriculture in India is plagued by issues like it is inefficient and non-remunerative to cultivators. Distress sales, especially in villages, where it is the common practice during bumper seasons. The Small and marginal farmers are severely affected and they are time and again forced to mortgage their surplus to the commission agents to obtain loans at times when they were in distress. Distress sale happens due lack of all-weather roads, Storage facility, repayment of loans, local forces, minimal Govt. Support, restricted markets. Optimum and higher price will improve the earnings which will encourage the farmers to grow more.
The prominent ones are explained below.
A) Low yield per hectare : In India, farmers suffer due to low productivity (yield per hectare) of all major crops. Focus on increasing stagnant yields of our crops.
B ) Lack of Awareness and Education : There is an urgent need to educate farming communities on how to use the exchange to hedge their price risks. Moreover, to opt for the modern mechanisms, consolidation has to happen in Indian agriculture.
C ) Farmer’s role in pricing : It is very much important to know the views of the people who produce the grains and also take into consideration the production cost while fixing price.
D ) Rewarding the Farmers : Non passage of the benefits of growth to the farmers is also one of the key factors, recommended is distributing increased production physically but also by providing production incentives and by distributing the benefits of growth.
E) Fluctuating Agro-Commodity Prices : The wide price fluctuations in the commodity markets and the absence of market based risk instruments and the plight of farmers towards less risky cultivation, which perpetuates the growth of Indian agriculture.
F) Few other factors which complicate are Marginal land holdings and poor land reforms, Diminishing land fertility due to non-scientific way of farming, Non – balanced use of water, Crop loans and Insurance reforms, Non usage of advanced technology and difficulty in marketability of products. Post-harvest losses, Changing weather patterns, returns lower than the cost of production, Availability of quality seeds and fertilizers.
Factors affecting optimum price realization
Inadequate Storage Facilities : One of the important factors which influences the price of the commodities is the demand supply gap. Agro production is seasonal hence adequate storage facilities are must, which would lead to fair price realization.
Food Processing Industry : Food processing industry plays a crucial role in providing better market access and stability to our farmers, it envisages additional channels to the market beyond the money where he can expect better prices for his commodities and an assured off take ensuring lower wastage.
Export Incentives : Exports can certainly boost the framers’ income. Govt. Policy and proper channels for exports of commodities like suitable environment, transportation, taxation, legal documentation and payment terms is also lacking in our country.
Marketing of Commodities: If marketing of agricultural produce is properly organized, it can fetch a good price to the farmer and he will be inspired to produce more. An efficient and properly organized marketing intelligence system should get along with price strategies. Therefore, insure fair price to the producer as well as to the consumer. “Rationalization of Market Fee” the present system of levy of fee at multiple points for the same commodity at different stages of transaction needs to be replaced by a single point levy of market fee in the entire process of marketing in the country/state.
Digitalization in Agriculture
Agriculture in India has mostly been monsoon dependent in the past and still it continues to be, due to inadequate irrigation facilities. The changing weather conditions have made the farmers vulnerable to the crop failures. Now with the digitalization and use of AI in agriculture, Society hopes to succeed in transforming the lives of farmers in some parts of the country and it has gained momentum.
AI in agriculture is just getting started, shifting weather patterns such as increase in temperature, changes in precipitation levels, and ground water density, fertility level of soil can affect farmers, especially those who are dependent on timely rains for their crops. Leveraging the cloud and AI to predict advisories for sowing, pest control and commodity pricing, is a major initiative towards creating increased income and providing stability for the agricultural community. At present, price forecasting for agricultural commodities using historical data and short-term arrivals is being used by the few state governments to protect farmers from price crash or shield the population from high inflation. However, such accurate data collection is expensive and can be subject to tampering
The areas which need attention are to increase crop production, improving the nutritional value of the crops, reduction in input prices for farmers, improving the overall process-driven supply chain, and reducing wastage in the distribution system, fair price realization, proper supply chain, and better shelf life among others. Agrotech startups are also leveraging technology in the area of market linkages such as retail, B2C and B2B marketplaces and digital agronomy startups. They are now able to address input challenges of agriculture in India from the very beginning. The agrotech startups are able to provide correct information, techniques, and efficiencies to farmers both for pre-harvest applications and post-harvest use cases. Some are as below
DeHaat : They provide free advice to the farmers and also help in selling Agri-input products such as seed and fertilizers. Even helping them sell their yield to bulk buyers such as Reliance Fresh, Udaan, and Zomato!. This agro startup is mostly working in the eastern part of the country.
KisanHub (Pune) : With a focus on helping the farmers realize their profit goals, KisanHub works at the intersection of precision agriculture, big data, cloud computing and mobile to deliver clear decision points to farmers and agri-enterprises.
Advantages of Digital Marketing
Digital Marketing opens a Pandora’s Box for the marketers and producers. E-Commerce removes the middlemen; one can get directly connected to the retailers and the customers. Digital world has brought the market at the feet of the farmers; they can market/promote their produce across states/countries /continents. It hardly matters, in case you are in the field/market/home /shop of that matter anywhere the digital connections will continuously work for you. The whole of the marketing / promotion can be automated which gives farmers the extra leverage for other relevant work. In India only 40% of the paddy produce is converted to rice and reaches your plate, imagine the wastage here due to multiple reasons, digitalization minimizes it, since you have access to customers anytime.
Relevant customers and optimum price realisation is possible as farmers can promote their products through various apps or online medium, also they can promote it through blogs and articles. The Social Media plays a vital role in digitization and has an immense clout in building opinions. Farmers can make use of social media for innovative practices, sharing information etc. the most popular social media in agricultural marketing is Facebook, YouTube, WhatsApp, Twitter, Instagram and LinkedIn.
How to Promote/Market Agro products Digitally
A) Agrotech Startups : While we see a lot of AgroTech startups in India are transforming agriculture by developing innovative digital solutions to maximize productivity, improve market linkages, increase supply chain efficiency, and provide greater access to inputs for agri-businesses. A Pune-based agrotech startup AgroStar raised the highest funding of $10 Mn Series B funding led by Accel India in March this year. Mirroring Agrostar in its funding amount was Noida-based EM3 Agri Services which offers pay-per-use farm services for every step of the cultivation process and raised $10 Mn in a Series B funding round led by Global Innovation Fund (GIF) in August. Even Microsoft has launched FarmBeats, enabling aggregation of agricultural datasets across providers and generation of actionable insights by building AI/ML models based on fused datasets.
B) Social Media : Social media is very different from traditional media. The users of social media are creating their own groups, pages, community, blogs to share information. In this group they are also selling, buying agricultural commodities. It can be done by sending images, pictures, links, videos etc. This sharing of information facilitates the marketing of farmers’ produce and formation of a network. There are many blogs covering agricultural marketing related information.
C) Personal Website : Farmers can create their own website to promote their commodities online and make it available through personal web stores. Online websites will create a sense of security and the customers can be tracked and can be looped in for increasing the online presence.
D) Online Aggregators : These are the app based agri stores which are very handy and manage the procurement and supply chain and help people who like to have the commodities at their doorsteps. The prominent among them are Reliance Retail, Grofers, Big Basket, Jubilant Foodworks, Big Bazar and Metro Foods etc.
E) Virtual agricultural market : The Govt is working in the direction of virtualization of the agri business so that maximum benefits can be drawn from it. We have Regulated markets / APMC and other physical markets to support the sale of commodities. Now with the proliferation of online marketplaces, selling agricultural products online just got a lot easier. There are multiple online marketplaces in India some examples are Kisan market, Farmers market etc. Listing your farm products on these platforms is another way to get more exposure, and subsequently sales.
CSC Grameen e-stores is a concept by the govt. to provide door delivery and procurement from the farmers directly removing the middlemen. The store model offers vegetables that are directly brought to the market from the field. It is helping people even in the remotest regions of the country with the help of VLE’s.
National Agriculture Market (eNAM)
VISION & MISSION: To promote uniformity in agriculture marketing by streamlining of procedures across the integrated markets, removing information asymmetry between buyers and sellers and promoting real time price discovery based on actual demand and supply. Integration of APMCs across the country through a common online market platform to facilitate pan-India trade in agriculture commodities, providing a better price discovery through transparent auction process based on quality of produce along with timely online payment.
Few more initiatives are Farmers Portal (farmer.gov.in), mKisan, Soil Health Management, Marketing Directorate, MH (https://mahapanan.maharashtra.gov.in/)
Findings & Suggestions
The challenges in the Farming is manifold, the most important is the access to the marketplace and the logistics along with transportation. There is over dependence on the general theory of perception and guesswork in agro domain. Indian farmers lack in availing the scientific methods and processes for fear of cost escalation. R&D spends on agriculture as a percentage of GDP is only 0.7% in India. There are 896 agro-tech startups providing tech tools for pre-harvest, post-harvest and during plant-growing periods, according to Tracxn data as on July 1. Price fluctuations crippled by the theory that more you produce, you get lower returns and act as a deterrent. The study suggests measures such as Contract Farming for guaranteed realization of optimum price. Market Intelligence has to be very accurate for predicting the production / shortage / stocks and pricing of the produce based on a price stabilization fund. There has to be a serious effort to strengthen the farmer’s group by constituting an NGO and supporting it by FPO.
Farming in India has been mired in multiple problems which have been growing with weather playing tantrums and highly fluctuating prices of the commodities which adversely affect the income. The rise in the input costs which include cultivating, sowing, irrigating, protecting, harvesting etc. has left very little margin in price realization of the commodities. In the absence of any price guarantee scheme and adequate procurement policy the benefits derived are less (Esp. for Fruits/ Vegetables/ Onion/ Pulses).
Digital platform for Marketing and the related activities is need of the hour. The Internet boom can be very well utilized for creating a channel which will benefit the farmers and consumers equally. The access to the technology and training to use it for the benefit of all would remove many of the issues. The Government as well as the IT sector has taken a lead in providing solutions which would help clear the gaps and make it a profitable profession of farmers. Artificial Intelligence in agriculture is being used to maximize crop yield using machine learning techniques. There is a need to apply this technique for the weather prediction and climate changes. The uncertainty on the yield being affected due to weather is the major area which needs to be addressed.
Focus has to be on developing the market and creating demand for optimum pricing, There has to be crop production and rotation as per the demand predictions, last is access to markets with links to warehouses, derivative markets, F&O. Online Aggregators integrate all of these and offer a complete solution.
3) AG Abhishek, M Bharathwaj, L bhagyalakshmi ‘Agricultural marketing using web and mobile Based technologies, 2016
4) Research Papers
5) Govt Websites
6) Journals & magazines
8) Website : inc42