Strengthening agriculture: Connected agri-value chain required for the success of agri-reforms
October 5, 2020 4:20 AM
A similar vision has been presented through these Bills—a lady, for example, sitting in Jodhpur, would be able to trade in mustard in a mandi of Punjab.
The proposed reforms pave the way for introducing technology into agriculture through which crops can be managed remotely.
By Sandeep Sabharwal
On September 14, the government replaced the three ordinances issued during the lockdown by introducing a trio of Bills on agriculture reforms in Parliament—Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020; Farmers (Empowerment and protection) Agreement of Price Assurance and Farm Services Bill, 2020; and Essential Commodities (Amendment) Bill, 2020.
These Bills present a global vision for agriculture with seamless opportunities for farmers and the agri-fraternity. The step aims to marry agriculture with technology and the government is of the view that the proposed agri-market reforms will attract investment in infrastructure and offer farmers competitive remuneration.
No doubt, these reforms are well-intentioned and will help connect archaic India with real India, and to achieve that an integrated platform play would be required. Though doubts have been raised over the existence of the traditional system of mandis, going by the fine print of the proposals of these Bills it can be said that mandis aren’t going anywhere and their importance is only going to amalgamate into a larger vision.
The proposed reforms pave the way for introducing technology into agriculture through which crops can be managed remotely. These intend to make tech-driven warehouses a virtual mandi where trading could be done through trading platforms. To understand this, one must recall the old days of stock exchanges when trading was done through an open outcry system. Buyers and sellers used to operate from a specific area of the trading called the trading pit and purchased and sold stocks through the open outcry system. In the pit, brokers matched customers’ buy-and-sell orders through shouting and hand-signalling. But with the advent of technology, the pit has ceased to exist. Trading has become digital and a person sitting in Guwahati can trade in the scrip listed on the stock exchange of a company operating from Tamil Nadu.
A similar vision has been presented through these Bills—a lady, for example, sitting in Jodhpur, would be able to trade in mustard in a mandi of Punjab. These Bills envisage a change in the way transaction in agriculture takes place in India.
For this paradigm shift what is required is smart warehousing—where smart warehouses are integrated with real-time data embedded in artificial intelligence doing real-time tracking of facilities and providing error-free results on the status of the warehouse and the products stored within as well as in transit. A smart warehouse linked to such platforms using paperless quality control, paperless trading and financing could usher in an era for a platform play in the agri-market and the companies with smart warehousing would act as stimuli in streamlining the agri-environment. For this, focus must be on the development of an Integrated Paperless Framework for Agrifood Trade Facilitation with embedded components such as paperless quality control, paperless trading and financing. Take the example of quality control. Agro and food commodities are particularly subject to severe hygiene standards in storage facilities as inappropriate humidity or randomly variable temperatures may alter product quality, making them unfit for consumption, and therefore humidity data are inevitably collected at all stages in a storage process. Now if the entire system of quality control moves to a paperless system then the data could be obtained in real-time which will ensure that all processes are connected from inputs to outputs and are traceable. It can then be embedded in a smart warehouse that will make it easier to monitor the composition of each lot precisely along the chain.
Trade in agricultural and food products is more complex than trade in manufacturing—regulations are stricter, paperwork is more cumbersome and logistics are more complex. Therefore, a paperless system would not only increase the efficiency of agri-trade, but would also help in the conversion of warehousing into smart warehousing, thus guaranteeing food security for all. Once that is achieved, the realisation of the vision of transforming Indian agriculture into a profession with seamless opportunities won’t be difficult.