Monday, 19 August 2019

Dynamics of Crop Diversification

One routinely hears recommendations for crop diversification, saying that B crop is more profitable than A crop. The dynamics of crop diversification are more complex than that. In my experience, every farmer evaluates the B vs A trade-off, using a five-dimensional model, often intuitively. And, each of the dimensions have further nuances too.

1. For sure, net profit from one crop vs the other, is the most important variable. But, such profit will be seen from a twelve-month cycle perspective. At times, the chosen crop, depending on its duration from land preparation to harvest, limits the choice of next crop (or prior crop) that can be planted. Hence the twelve month cycle. I am keeping the cases of even longer term options like trees, out of the argument when I said twelve months. Profitability trade-off, often, also involves assigning value to the crop byproducts consumed off-farm for livestock or at home.

2. Another important factor is the effort involved in growing one crop vs the other. Some require more tender care or frequent monitoring vs the other. Or more physical drudgery. One crop may need more farm labour for an operation. Trade-off decisions then involve whether sufficient number of people are available within the family or one needs to hire. Then there are nuances, like labour barter – “I work on your farm and you work on mine”, if the window of that activity has flexibility of time.

3. Going beyond labour, the next factor involves access to resources, such as farm inputs, or credit to buy the inputs. Some of the resources place constraints on which crop can be grown; water for example, be it ground water, or canal water with the attendant restrictions, if any, on the release quantum and timings. Soil and climatic conditions, of course, are the more fundamental factors that limit choices of crops.

4. The fourth dimension is knowledge required to grow different crops. At a basic level, certain generic good practices on growing a crop like land preparation, planting density, irrigation and fertigation cycles, crop protection should the need arise, post-harvest activities etc. Then, every farmer requires certain contextualized knowledge on managing the crop as the growing conditions evolve, in terms of temperatures and humidity, besides any implications of the crop planted in the previous season, or limitations on the resources required etc.

5. Finally, probably most importantly, the risks involved in growing one crop vs the other. There are risks first in the production stage and then in marketing the crop produced. Some crops are more vulnerable to weather variations than the others. This is more important today, when the extreme variations have become the order of the day. Market risks include the extent of price volatility and liquidity of demand for a crop.

The market conditions will throw up a natural bias for one or the other crop in a given region for a profile of the farmer each season. If the Government or any other agency (say, a food processing company) would like to promote a particular crop or variety, first step is to make an assessment if the wind is hitting the tail or the head along all these dimensions and take advantage or neutralize respectively, so that the proposed crop is in the best all-round interest of the farmer.

Sunday, 14 April 2019

e-NAM: Opportunities as an Integrated Market Platform for Agricultural Produce

On the occasion of the third anniversary of e-NAM, I post this blog, envisioning the opportunities for the platform beyond merely linking mandies.

There are four sources of arbitrage that offer an opportunity to capture value and raise farmer incomes:
1. Price difference between the producing and the consuming regions
2. Price rise between the harvesting season and a few months later
3. Gap between the price a consumer pays and the price a farmer receives
4. Price a consumer is willing to pay for superior value, such as safety through traceability

e-NAM is primarily built to capture the value from the first of these opportunities, i.e. the price difference between the producing and the consuming regions. e-NAM can also play a key role as an integrated market platform and capture the value from the other three opportunities by working in conjunction with other initiatives of the Government and / or Private Sector.

1. The basic logic of capturing value from the price difference between the producing and consuming regions is to extend the participation of buyers from across the country, going beyond the physical mandies (APMC Market Yards). In order to that, the e-NAM ecosystem has to integrate a few critical activities like quality assaying, payment mechanism, and logistics to actually enable long distance buyers to participate. I am glad, e-NAM has added or in the process of adding these features in different locations. It is important to keep the costs of these services competitive vs the post-mandi physical chain’s so that they do not eat away the arbitrage between regions and leave nothing for the farmer. One must recognize that our traditional intermediary system is very efficient in this regard.

2. For capturing value from the price rise between the harvest season and a few months later, e-NAM has to integrate with the Commodity Derivative Markets and enable its participants to determine prices linked to Futures and Options. Any farmer would love to sell his output at the time of planting using an Options embedded forward contract, which works exactly like a Minimum Support Price mechanism.

3. To capture value from the huge gap that typically exists between a consumer and farmer price, e-NAM has to plug into initiatives like ITC e-Choupal. The roles of each of these platforms are different. While e-NAM enables competitive discovery of quality-factored spot prices for physical goods, Derivative Markets enable discovery of future prices by standardizing product quality, ITC e-Choupal enables discovery of different consumer segments for different varieties and qualities of the produce

4. By integrating e-NAM with GrAM, the latest Government initiative to create more spokes in the form of Gramin Agricultural Markets that are in proximity to production clusters. This enables improved traceability and identity preserved supply chains in the public domain, much like ITC e-Choupal has been able to do in a private network.

As e-NAM evolves into an integrated market platform, APMC Markets can transform themselves into Post-harvest Service Organisations to work with the farmers to improve quality and lower costs.  


Monday, 7 May 2018

Economic Diplomacy for Development

The “Deccan Dialogue” is a conference jointly organised by the Ministry of External Affairs, Government of India and the Indian School of Business on the theme “Economic Diplomacy for Development” on 6th May 2018, in Hyderabad.

Here’s a summary of my remarks in a panel discussion at the conference, the session’s theme being, “Taking economic diplomacy to the grassroots for strengthening development partnership”

Friends, I will use the time allotted for my opening remarks to make three brief points, and pitch with the Conference Organisers for one action at the end!

Firstly, the word “development” in the conference theme, auto-suggests that one sector we should strategically focus on is “agriculture”. Because agriculture engages half of our workforce, with per capita incomes that are just about one-fourth of that of the rest of the professions. For this reason, we should work on raising incomes of the farmers, with as much importance as we give to creating new jobs. On the other hand, providing food security to the growing population of the world is another developmental concern. At a global level, one calculation estimates that we need to produce as much food in the next forty years to feed the people, as we had produced in the last eight thousand years in aggregate. Yes, you heard it right! Can you visualise how daunting the task is?

Growing more food by increasing farm productivity sounds like a simple solution that can raise farmer incomes and feed the world simultaneously. No, actually doing it is not as easy! That brings me to the second point I wanted to make. That solution to this problem lies in elevating the issue to the level of economic diplomacy, the other part of this conference theme, rather than treating it as business-as-usual activity. Because, we need to increase the farm productivity factoring the twin realities of ‘changing climate’ and ‘depleting natural resources’ such as water and top soil. These mega-challenges require collective action at global level and access to technology seamlessly across borders. This requires diplomatic engagements. Also, while the Hon’ble PM has given the call for “Doubling Farmers Incomes” and the Centre supports the implementation with several schemes, agriculture is a State subject and onus of action lies with the States. Given the extent of Agro-climatic heterogeneity among states, the other phrase much-mentioned since morning, “Competitive Federalism” comes into play. Each state must make efforts to raise their farm productivity within the realities of their states and must therefore look for global country or state partners who have natural reciprocal dependencies to enter into sustainable arrangements for mutual benefits.

In this context, economic diplomacy must move beyond the routine Trade & Investment Policies, FTAs etc. These policies and agreements, of course, do lay the necessary foundation. They must also move beyond placing Economic Attaches in the Embassies. Such presence also, of course, we must have, to assist exporters, and we did experience significant progress on this front. The third point I wanted to make is about the role of the Track II Diplomacy, involving the Private Non-Government Sector. Even assuming, global collaborations are done and access to technology is arranged through Track I, at the point where the till hits the soil, to translate these agreements into income for the farmers and products for the consumers, it is the private sector that has to play a crucial role. Just more production won’t be enough, robust value chains must be built. Chains that transmit demand signals to the production system and for linking the produce to the markets with minimal waste. To facilitate management of production and market risks. To process and add value. Even to help Governments identify reciprocally beneficial global partners relevant to each ecosystem. And so on…

Finally, I would like to pitch for one action before I close: Since morning there has been a lot of chatter about formalising Deccan Dialogue along the lines of the ‘Raisina Dialogue’ in Delhi and the ‘Gateway of India Dialogue’ in Mumbai. I urge this forum to create a permanent Agricultural Track in the ‘Deccan Dialogue’ in Hyderabad to carve out a niche position for itself.

Thank you 😊

Saturday, 3 March 2018

Creating Cross-sector Partnerships for a Sustainable CSR


This is an outline of my talk at the CSR Conference organized by the Madras Chamber of Commerce and Industries, Chennai on 2 Mar 2018

A partnership becomes meaningful when its accomplishment as a whole is greater than the sum of achievements of its parts! As is self-evident, the word “part” is an integral part of a “partnership” J

Let’s take a step back, look at the parts in the context of today’s conference, understand their roles and achievements todate:

Some five thousand years ago, our society organized itself into three broad parts.
  1. For Profit Businesses: Provide goods & services to consumers, create employment, generate wealth, pay taxes 
  2. Governments: Foster competition among businesses, tax them, deploy the resources on common physical & social infrastructure for the welfare of people 
  3. Not for Profit Non Govt Organisations: Keep a tab on 1 & 2 on behalf of people, for their general well-being
One can granulate further and make more parts, like academia (but they could be made up of any of these parts, as in academic institutions for profit or set up by Government or not for profit), or media (again could be any of these three parts). There are also For Profit Social Enterprises and Not for Profit Businesses. Keeping those nuances aside, for the sake of ease, let’s recognise these three parts for our narrative and move on.

What has this socio-economic structure achieved in terms of wealth, welfare and well-being in these five thousand years? 
  1. As of this evening, we have lived through 17% of this year 2018. That's two out of twelve months. But, do you know that we have exhausted 29% of the natural resources our earth can regenerate in the same twelve months? Which means, we have lived on the resources borrowed from our children and their children. Actually, stolen from them! This description is just a recast of Earth Overshoot Day, some of you would be familiar with. That was 2nd August in 2017. 
  2. Top 1% of the richest people on earth own 50% of all wealth. And, the bottom 50% own a meagre 1%. A statistic we can all be very shameful of…      
These "inglorious" achievements were recognized a few decades ago and we have set for ourselves what we called Millennium Development Goals then. We didn’t get very far, so we have re-set for ourselves Sustainable Development Goals, now to be achieved by 2030.

For a more balanced achievement of wealth, welfare and well-being, as envisaged in SDGs, we need to see ourselves as “partners” in the mission than merely as “parts” doing our own bit. All hands must be on the deck. 2030 will just be here, like tomorrow! Each part does have a different and complementary role in this new “partnership” approach.
  1. Government: For scale. Not just for funds, but for its machinery that’s spread across the nook and corner. 
  2. NGOs: Terrain knowledge. Social mobilization. Community empowerment. For, there’s no better bet than empowered communities to achieve sustainable development. 
  3. Businesses: Surely, not for the CSR money they are manadated to spend. The mandatory CSR spend, aggregating to Rs 25,000 crores, doesn’t even add up to four days of Government’s budget on welfare! It’s actually for their project and financial management capabilities. More importantly, for their entrepreneurial energies, innovation, and for designing the much-needed impact-making interventions. 
  4. In addition to the three parts I had outlined earlier, I will call out a fourth part: Technical & Scientific Establishments - these could be from any of the three sectors - for their domain knowledge and for continuous action learning. For designing best practices based on science and evidence. Otherwise, the interventions end up shortsighted.
It’s easy to play the words, parts and partners, but it is not easy to actually forge and foster partnerships. There are more broken and failed partnerships, than there are successful ones. It’s important to recognize the barriers to partnerships before we move any further.  
  • Entrenched prejudices colour actions and communications:
    • Businesses and Governments think NGOs are too micro-focused and inefficient.
    • Governments and NGOs think Businesses are too profit-minded and there’s always something ulterior in their social motives.
    • NGOs and Businesses think Governments are just outlay focused and its officers are corrupt.
    • Work cultures and practices lead to operational friction and frustration:
      • NGOs can’t fathom the need for institutional systems & controls. “Can’t you just trust us?” is their exhortation. 
      • Government is too siloed and procedure oriented and end up pushing all action to the last quarter of a year! Do you know that some 27 approvals are required to translate an MGNREGA project idea into a reality? 
      • Businesses expect execution like clockwork, which doesn’t make sense when social capacity of underprivileged communities needs to be built.
    • And, once partnering starts, there’s a new problem! Of adversarial posturing by each partner, due to perceived threat to their respective territories.
      • We know our bit. You don’t need to tell us!
    With odds stacked so badly against partnerships, how do we make partnerships work? Let me share a three-point formula, based on our experience of implementing ITC’s CSR projects in partnership with some 85 NGOs, 9 Governments, and 15 Technical & Scientific Institutions:
    1. Co-create projects from the beginning. Conceptualise multi-stakeholder projects after explicitly recognizing the complementary strengths of each partner, and how without any one of them the outcomes would fall short of the community needs. 
    2. Design a predetermined review rhythm. A platform of key members of each partner to review progress and remove roadblocks. This way, the engagement becomes more evidence based and resolution focused; otherwise, there’s lot of finger pointing based on different perceptions. 
    3. One of the partners must become an Orchestrator of the partnership and take on the primary responsibility for the project outcomes. To convene and harness the collective power. To make things work.

    Thank you.

    Wednesday, 29 November 2017

    Agriculture: Twenty Years from Now...

    Following is a summary of my remarks in an “Agri Panel” at the Global Entrepreneurship Summit earlier today, in response to the question, “What do you think will be game-changing about how we think about agriculture, twenty years from now?”

    Soon after the panel moderator sent me this very interesting question a couple of days ago, the first thing I did was to post this question on Twitter, Facebook, and LinkedIn to crowdsource thoughts from my friends. There were nearly two hundred unique responses! They added up to twenty pages of text, without counting the number of pages in the links I received. Overwhelming, isn’t it?

    All I am doing now is to simply synthesize those inputs and share with you J

    The future of any system is shaped the current aspirations of the key stakeholders. Let’s take a look at the aspirations of the consumers, producers and the society at large…

    Consumers want sufficient quantity of food (because we would be nearly nine billion by then, and on average richer than today), that is tasty (although, a friend did say in lighter vein, “since we will have nano-bots in our blood streams, and since our memories could be uploaded on to cloud, maybe we don’t need food and therefore no agriculture; we probably just need some electricity, or batteries, or just a few hours of exposure to sun ;-), is safe (you are all consumers here, don’t you agree that harmful chemicals in food is your topmost concern?), nutritious (scientists say that most of the world is suffering from invisible hunger), and all of these at reasonable prices!     

    Farmers want higher incomes (as you know, per capita income of farmers around the world, especially in emerging economies, is far lower than the general per capita) with lower risk (weather and disease related production risks, price volatility). Their labour deserves more dignity (as it is, hardly any youth from the next generation wants to be a farmer) and they deserve better quality life (as in, the conveniences and comforts that are common in urban settings).  

    Society at large would like agriculture to conserve natural resources (water and top soil, for example) and where possible, actually renew them. Agriculture needs to be resilient to climate change (the summer rains and warm winters, extreme climate episodes like heavy downpours on one hand and droughts on the other, etc), and again, where possible, positively impact climate change (sequester carbon, minimize greenhouse gas emissions etc).

    An interplay of these different - at times conflicting - aspirations gives rise to three distinct scenarios, all of which will co-exist in twenty years. Let me label them: Farms as Factories, Homes as Farms, and Back to Basics!

    Farms as Factories: By using the metaphor of factories, all I am saying is that the consistent quality of output will be produced, crop after crop, by leveraging the evolving technologies – both farming (like seed, nutrients, farm-equipment, agronomy practices etc) and digital (IoT, block chain, hyper-spectral imaging, GPS / GIS etc). A friend called them, “hardware, software, and liveware”). Another friend went to the extent of visualising a self-managing seed! These seeds will analyse the experienced conditions like soil, weather, water etc and invoke the necessary embedded features that would maximize the yield and quality. This may sound like fantasy today, but those of you who are familiar with experiments on seeds with multiple layers of coating in the past may very well say this could be a reality in twenty years!

    Homes as Farms: I am sure, you have heard of vertical farming, balcony farming, kitchen gardens and such other names. Once supply chains are established to supply DIY-type mini production units, seeds, nutrients etc to the households, this phenomenon will expand more rapidly. This food is safe without any doubt in the consumer mind, and zero carbon miles! Business Models are also in the works for another kind of service. If you are not adventurous enough to grow crops in your backyard yourself, you can simply let out the space to Service Providers who can grow crops on a BOO model. Besides experts growing the crops in this model, a colony-level kitchen garden is more optimal than a household level garden. And a third model, which is not a ‘home-as-farm’ strictly speaking, is a partnership between a group of, say, five thousand, consumers and a community of, say, five hundred farmers. I know of several such partnerships across cities, built as WhatsApp Groups integrating even the e-commerce functionality.       

    Back to Basics: Much of today’s ills of agriculture are due to chemical-intensive mono-cropping paradigm. A more sustainable future scenario would be an integrated farming system consisting of polyculture, permaculture, organic compost, bee-keeping, animal husbandry, renewable energy. In fact, I already see some farms where solar energy brings larger revenue than the conventional crops.  
    As the panel went forward, there were other questions, but for now I am wrapping up this post without covering them.

    As always, comments are most welcome J This is a live and lively topic! 

    Thursday, 17 August 2017

    Andhra Pradesh: A Role Model in Agriculture & Allied Sectors - Marching towards Doubling Farmers’ Incomes

    This article was originally written for Andhra Chamber of Commerce, Chennai for their 90th Anniversary Souvenir

    The State’s strategic location and bountiful natural resources, supplemented by smart investments in infrastructure made it a leader at an all India level
    Andhra Pradesh’s significant contribution to India’s agricultural sector is validated by the leading position the state occupies in the production of several major crops. The state is not only known as the “rice bowl of India”, but also ranks either first or second in the production of maize, groundnut, mango, papaya, lemon, chilli, turmeric, fresh water fish and prawn.
    The state’s abundant natural resources – river systems such as Godavari, Krishna, Tungabhadra, Penna etc., and a wide variety of soils – support a diverse cropping pattern across the five agro-climatic zones. On its part, the Government has ensured propagation of sustainable farming practices, making Andhra Pradesh a pioneer in technologies such as micro irrigation and balanced fertiliser use based on soil health mapping.

    Further, the State’s strategic location with 980 kms of coastline, fortified by several ports, makes it a gateway to the East and South East Asia, promoting the agri-exports from the State.

    The inspiring vision of the Hon’ble Chief Minister is to make Andhra Pradesh amongst the three best states in India by 2022 and the most developed state by 2029. Agriculture sector has a vital role to play in achieving this goal, with the sector currently contributing 23% of the GSDP, and offering livelihoods to nearly 60% of the state’s population. A corollary objective is also to double farmers’ incomes by 2022.  

    Agriculture in Andhra Pradesh has immense potential: Realising this requires regionally differentiated strategies and sharper market orientation
    Raising the agriculture budget for 2017-18 by 12% over the previous year, to Rs 18,214 Crores, the state has already demonstrated its commitment to the cause.
    In addition to the ambitious Pattiseema project that brought water to the drought-prone Rayalaseema region besides stabilising the Krishna Delta, several drought-proofing technologies have also been deployed in the rainfed districts of the state, making state’s agriculture more resilient. Various other steps to raise the productivity, viz. seed supply, farm mechanisation, access to credit, extension services to popularise scientific practices etc., will all go a long way in raising the growth of agricultural sector and increasing farmer incomes.
    Actually, as a state-wide average number, the per-capita income of an Andhra Pradesh farmer is already higher than the national average. The focus must now shift to dealing with the regional variations within the state, which are quite significant. A Guntur farmer earns four times that of a Srikakulam farmer, while a Nellore farmer more than twice that of a Kurnool farmer.
    Raising productivity is a very important task, given the head-room that’s available, but higher productivity does not necessarily lead to larger farmer incomes, as a tomato farmer in Madanapalle can woefully vouch for, or the mango market in Nunna is a mute witness to, every time the production of those crops is bumper.
    Only a fundamental shift in the approach can mitigate this risk. We must move away from finding markets for whatever is produced to producing what the consumer wants. Such demand-driven value chains can bring enormous benefits to the farmers if they are able to align production to market signals. This means a more regionally differentiated and sharply market-oriented production strategies.    
    For example, diversifying into horticulture and mastering the associated post-harvest operations are more critical for Kurnool, while communicating the nutritive value of millets to consumers in metro-cities is a prerequisite before the production is stepped up in Anantapur. The same objectives could be achieved by raising the food-safety quotient for chillies in Guntur and prawns in Nellore in order to service the global customers. On the other hand, the secret might be in putting special efforts to market the organic coffee from Araku valley that could help multiply farmer incomes from that region.   

    This strategy also provides a great opportunity for extensive corporate participation in execution, supplementing Government’s efforts  
    In a way, such participation by corporates is also an imperative, given their ability to build consumer-focused businesses more effectively. Recognising this, Government of Andhra Pradesh has already initiated a Public Private Partnership Project linking Farmer Producers Organisations (FPOs) with Corporates in 2016, with an explicit goal of doubling the farmers’ incomes.
    This partnership approach provides a comprehensive crop production & marketing framework, integrating the strengths of all the stakeholders to support the small & resource-poor but very resourceful farmer. The government provides a favourable business ecosystem through investments in basic infrastructure in the project area, and converges all the subsidies being given to the farmers under different schemes. Agri Business / Food Processing companies bring in market linkages and the required technology along the full crop value chain as per global standards, and also be responsible for the overall project management and the deliverables. Where necessary experienced NGOs are brought in to assist in formation of farmers’ groups and their capacity building.
    ITC Limited is also a committed partner in three such projects covering agriculture, horticulture and aquaculture segments, targeted at both domestic and export markets. By the time these projects scale, ITC intends to further widen the scope by integrating the various initiatives into the “digitally plug & play ready” e-Choupal 4.0 to support a large number of IT-based agri-services start-ups in reaching out the farmers across the state.


    With these innovative initiatives, the State is well on its way from the Green Revolution days to the Golden Revolution era in the agriculture sector as an integral part of the Swarnandhra Vision 2029   

    Tuesday, 25 July 2017

    ITC e-Choupal 4.0

    This was an interview given to Commodity India Magazine. Reposted here: 

    CI: We came to know that you are about to launch the next version of ITC e-Choupal, called 4.0. Can you tell us something about that? Actually, please tell us about e-Choupal 1.0 to 3.0 first.

    SK: In a sense, it’s not the next version, as much as it’s the next tier, because e-Choupal 1.0 to 3.0 continue to operate and reinforce one another…

    The e-Choupal 1.x series is about re-engineering the agricultural supply chains to make them more efficient and effective.

    For example, 1.1 eliminated the non-value-adding costs along the supply chains of oilseeds and grains – such as, multiple handling costs & transaction charges – by enabling competitive price discovery of the price of farm produce in the village itself instead of farmers taking their produce to the mandi, which resulted in the avoidable additional costs. Free access to Internet through the e-Choupal Sanchalak, prices published on the echoupal portal, quality assessment system and quality-factored pricing mechanism at the e-Choupals in the village have made this possible. Because of this re-engineering, farmers net revenue increased while ITC’s gross costs reduced.     

    In 1.2, the identity of each variety of a commodity (eg wheat) and its unique characteristics were preserved along the supply chain by virtue of direct buying from the farmers. Specially developed blends of such multiple varieties offered value-added products to the diverse needs of the different segments of consumers (eg atta of different colour, texture, taste, water-absorbing capacity, broken-starch content etc). Because of this re-engineering, ITC was able to build winning brand (Aashirvaad) and the farmers received better prices for the varieties in demand, instead of the usual average price that is equivalent to the lowest common denominator.

    In 1.3, the traceability is pushed one-step further upstream to the practices followed on the farm (eg prawns) to ensure food safety and deliver the same to the consumers around the world. Similar innovations in 1.4 to 1.6, each suiting the dynamics of different agricultural commodity.
    The e-Choupal 2.x series is about reimagining the infrastructure built for re-engineering the supply chains as a platform, and improving the delivery of products & services into rural India. The reverse flow…

    If 2.1 delivered agricultural extension services through Choupal Pradarshan Khets, 2.2 to 2.4 delivered agri inputs, financial services (Kisan Credit Cards, Insurance) and FMCG. 2.5 brought modern retail experience to the rural consumers by co-locating hypermarts at Choupal Saagar Integrated Rural Service Centers. Each Choupal Saagar is positioned at the hub of a cluster of e-Choupals, housing a commodity warehouse, soil testing centre, fuel station, food court etc. Similarly, 2.6 to 2.8 deliver other goods & services relevant to the rural production or consumption.

    To deliver the 2.x services effectively, ITC partnered with several businesses, governments & government agencies, not-for-profits etc combining their domain strengths with e-Choupal’s terrain knowhow and on-ground presence.

    Bundling the strengths of e-Choupal with those of the partners brought together in Tier 2.0 ITC e-Choupal became a more complete rural ecosystem. In the 3.x series, the whole ecosystem is offered as a service, as an EaaS model, to bring more platforms to the rural markets…

    3.1 connected rural youth to vocational skilling and employment markets, and 3.2 connected the farmers to the farm-machinery based service providers. Choupal Haats became 3.3, providing rural marketing services through a unique interactive engagement platform for the rural consumers. As many as ten million consumers annually across the e-Choupal geographies. More platforms are work-in-process, as we speak.

    CI: So, how many e-Choupals exist today?

    SK: Actually, after e-Choupal 1.0, the number of e-Choupals is a redundant metric. In its evolution into a platform and then an ecosystem, the media for interaction naturally expanded to mobile phones, Farmers’ Field Schools, Choupal Haats etc. So, while for record, there are 6100 e-Choupals, a better metric would be an outreach to 40,000 villages through one or the other medium.

    CI: That’s a mind-boggling evolution through three tiers in seventeen years! Now, can you tell us about e-Choupal 4.0?

    SK: In a way, e-Choupal 4.0 is an aggregation of e-Choupal 1.0 to 3.0, but more “plug & play ready” for partners in the rapidly growing digital economy.
    In addition to the conventional agri input selling and agri output buying companies, you are seeing hundreds of agri services start-ups in the recent past. From hyper-local weather forecasts to support systems for precision agriculture; from sensors for smart irrigation to drones for crop-health monitoring; from image processing for disease recognition to predictive analytics for epidemic management; from next-gen farm management to online consumer outreach directly… the list is unending!

    Most of these start-ups have brilliant technological solutions to everyday farming problems, and their business models are relevant across the country. Their technology is scalable too, but a large majority of them find it difficult to reach the farmer physically beyond their own local areas. With the rest of the agricultural ecosystem like ground-truth correlation, quality assaying, logistics, credit ratings, payment etc having not evolved enough, for each IT based solution to offer value to the farmer as a point solution.

    e-Choupal 4.0 becomes an aggregator for all such services after integrating them with the on-ground presence of ITC’s agribusinesses across 70,000 villages (this goes beyond the reach of e-Choupal 1.0 to 3.0) and offers a meta-market to the farmers.

    Two prototypes are already in their second season. First one, for example, is about building a community of seed producers and consumers focusing on open-pollinated seeds in which the seed companies have low interest (because there are no hybrids) and the farmers are saddled with impure seeds (because of low seed replacement ratios). From among the same community, there are seed processors, seed certifiers, seed financiers until the planting season and so on. In effect this is a self-managing community accessing all the relevant agri services through e-Choupal 4.0 platform.

    Our plan at this time is to roll out the full-scale e-Choupal 4.0 by late 2018, by fusing multiple such communities across agriculture, skilling, health care etc.

    CI: That’s a grand vision! But, do you think rural telecom infrastructure is geared to support such a platform?

    No doubt, the infrastructure is still evolving. The penetration of low-cost bandwidth and the smart gadgets in rural India will reach an inflection point in a couple of years. The idea is to build partnerships and refine the business model by then.

    In any case, even where farmers have personal smart phones, the preference is for assisted service. Like the e-Choupal Sanchalak who was key in executing 1.0 to 3.0, service providers dedicated to each identified group of farmers will be key in 4.0 as well. The Sanchalak numbers will multiply manifold.

    CI: What’s the role of government policy in all these plans?

    SK: Right from tier 1.0 to tier 3.0, the ongoing reform of agricultural policy has played a key role in expansion and evolution of e-Choupal. When 1.1 was first conceived, the APMC Act wouldn’t allow an agri produce marketing transaction outside the mandi. Since then a few states reformed their APMC Act and e-Choupal could operate in those states. Now, as part of doubling farmers incomes goal set by the Hon’ble Prime Minister, a new Model APMC Act is being proposed. Once implemented, this will open several possibilities for e-Choupal 4.0.

    Similarly, allowing futures as a commodity derivative since 2003, and now options, the price risk management for the farmers as well as the processors like us becomes more institutionalized, laying ground for transacting much larger volumes of commodities.

    The new GST regime, where basic agricultural commodities are exempted from tax, more transactions will happen in the formal sector because the tax-evading unscrupulous do not have an advantage any more.