Building Leaders

Earlier this evening, I made a presentation at the TAAS - NAARM National Dialogue on "Building Leadership in Agricultural Research Management"

Idea of my presentation is to share ITC's experiences in leadership development, to cross-fertilise practices from the Corporate Sector into the National Research System. The dialogue included similar experience sharing presentations from the Not-for-Profit Sector, Government, Defence, besides the various Units of the National Research System itself.

You can access my presentation at this link

Rainbow Revolution in Indian Agriculture through innovative Agri Extension

Earlier today, I chaired a session on "Agri Business Extension" at the NAARM - IFPRI Workshop on "Redesigning Agricultural Extension in India". Since that was the last technical session of the Workshop, I had an opportunity to include "my take-aways" from the deliberations in all the four previous sessions in my opening remarks. My closing remarks were based on the presentations made in that session and the discussions that followed.

My Opening Remarks:

After the Green Revolution for Grains, White for Milk, Yellow for Oilseeds and Blue for Aquaculture, the phrase 'Rainbow Revolution' has been used in Indian agriculture to describe the growth of the horticulture sector. Today I would like to use that label to signify the revolution we can bring about through innovative agri extension services. For a reason... At the beginning of this workshop, we had a white canvas on which we could paint the future of agri extension. While reflecting on the deliberations of the earlier sessions in my own mind, I visualised seven distinct colours on such a painting, if we were to achieve the revolution we all want. Hence my choice of expression, "Rainbow Revolution"!

The first colour I visualised suggested that our focus must be on the farmer. Not just as a passive recipient of Knowledge, as in the traditional paradigm of 'Last Mile in the Technology Transfer", but as an active Co-creator of Knowledge in a multi-way knowledge exchange paradigm. This would ensure access to personalised solutions to the farmer, besides setting a reality oriented agenda for agri research itself...

The second colour depicted synchronised delivery of information, knowledge and inputs. This takes us beyond just transfer of knowledge to actually applying it on the ground. Inputs here mean credit, seeds, nutrients, crop protection chemicals, access to farm equipment, risk management solutions etc.

The third colour called for an alignment with the Government's flagship agriculture programme RKVY, to be able to create a force multiplier. This in turn means building the capacity for village and district level planning. At the same time, there is also a need for redesigning Government programmes to ensure that they don't unduly distort markets; because at the end of the day, we are relying on a market economy.

The fourth colour sought integration of agri extension into the full value chain of that produce. This approach will figure a way to create value by serving the changing needs of an evolving consumer. This also will consciously extend the role of agri extension into the vital post-harvest arena.

The fifth colour I had visualised demanded accountability of the system to all its stakeholders. An outcome oriented system instead of input or output as the only metrics. Today, by making the extension service free, we may have taken away the farmers' right to demand quality. Even a token payment will work wonders in ensuring accountability!

The sixth colour appealed that we be sensitive to the non-renewable natural resources. Agri Extension must promote Conservation Agriculture as much as possible. All of us know the three dimensions of agriculture vis-à-vis climate change (1) that agriculture is a part of the problem, causing climate change through Green House Gas emissions (methane from flooded paddy fields & ruminants like cows, nitrous oxide from the soils, CO2 from fossil fuels used in farm equipment etc), (2) that agriculture is also one of the most vulnerable sectors impacted by climate change (fall in productivity due to changing weather patterns), and (3) that agriculture can be an important part of the solution to climate change (through emission reductions, carbon sequestration, increasing soil organic matter etc)

Finally, the seventh colour stressed the need for a proactive agenda on gender issues in agri extension. Analyse gender roles in farming systems, enable gender sensitive agri extension methodologies...

To paint these seven colours, the speakers in this session have access to several new brushes.

For example, the leapfrogging developments in communication media, information processing and presentation. The medium must be relevant to the message and the context.

Power of partnerships is another good brush! Define complementary roles, varied resources of different partners, and the shared aspirations. Deal with the challenge of mistrust, as one of the earlier speakers pointed out.

Co-opting social capital resident in the communities for relationship building and group mobilisation.

Then, there are several innovations in aggregation methods, business models and conflict resolution approaches.

Our artistes, the business people that they are, have certain unique capabilities.

Consumer centrality is the essence of business. Understanding, designing and delivering consumer-relevant solutions is how businesses thrive.

These businesses are accountable through "choices". Consumers simply vote with their wallets and feet, when they have choices. Businesses become unsustainable if their solutions are redundant.

Governance processes and the management capacity of businesses need not be reminded to this audience.

Before I pass the floor on to our first speaker, let me also share the specific brush strokes I want to see from each of these artistes...

What's the role of agri-business in extension? What are the risks of businesses engaging in extension activity? What are the contours of a new regulation that can mitigate such risks?

Should the role of Government be restricted only to those areas businesses won't go? That is, poor farmers, backward regions, long term challenges, subsistence crops etc. How do we ensure that subsidies do not unduly distort the evolving agri services market?

My Closing Remarks:

So, we now have a colourful painting and a beautiful frame.

The painting portrays a "co-creation platform", if I can call it so. The platform provider could be Government, or a Co-operative or an Agri-Business. The platform operates globally, but enables seam-less local participation of multiple stakeholders who can simply plug & play. Such an orchestrated yet open platform has the ability to produce a rainbow at will...

The frame I see has the character of regulating by fostering competition, rather than by restricting. The subsidies are delivered through coupons, so farmers can exercise choice across multiple platforms!

eAgriculture: Perspective to Practice

Earlier today, I chaired a Panel Discussion on "eAgriculture: Perspective to Practice" at eIndia 2010. The Panel was quite diverse, consisting of the Knowledge & Information Management Officer of FAO Rome, the Director of Kerala IT Mission, the Dean of Bombay Veterinary College, Dean of Raichur Agri University, a Project Manager of C-DAC who is implementing the e-Village project in Arunachal Pradesh and a Director of a Farmers Organisation from Uttarakhand.

I opened the discussion, by saying that the role of 'e' across the whole agricultural value chain has been well visualised. Several models also have been successfully demonstrated. For over a decade now. 'e' played central a role in information generation, information processing and information exchange in those idea. 'e' filled the gaps in the crucial linkages across the value chain starting with research, and moving on to education, extension, crop management, supply chain management and post harvest management in those models. 'e' increased productivity, improved efficiency, reduced risk and delivered value through traceability in the pilot projects. Yet large scale operationalisation of these ideas is far from satisfactory, in the sense that the intended benefits haven't reached even a fraction of the needy farmers. So, the question to the Panel was "What does it take to translate the Perspective to Practice in eAgriculture?"

At the end of the session, I synthesised the experiences and case studies shared by the Panel into a model that I called "Pentagon", named after the five dimensions of what it takes to translate the perspective to practice in eAgri... The acronym of this model turned out to be C-ROSE, taking the first letter of each of the dimensions!

Collaborative Ecosystem of several stakeholders, that can stitch an integrated end-to-end solution for the farmer instead of each player targeting a sliver and increasing the costs of friction. An ecosystem that institutionalises a Knowledge sharing network for collaborative learning to hasten evolution of the practice.

Relevant Technology that is easy to use, in local language; may be a speech interface in addition to the text. A technology that is robust to withstand the challenging physical conditions and make up for the infrastructural deficiencies.

Orientation that doesn't view outreach to the farmer just as a last mile challenge, but more importantly, sees it as a first mile challenge to appreciate the individual needs of all the farmers. This can help in delivering personalised solutions. Given the heterogeneity of farmers' circumstances, such an approach is vital.

Sustainable business models that can be scaled to reach out to "all" the farmers, not just a prototype here or a pilot there. Scale doesn't necessarily mean that one initiative needs to reach "all" the farmers; multiple local enterprises can replicate a proven model and scale out to saturation.

Enabling Environment, most critically the Policy environment that fosters competition and that does not distort markets. The reversal of reforms in APMC Act, Essential Commodities Act or Forward Markets Regulation halted the roll out of 'e' solutions more than, possibly, any other dimension mentioned in the model.

Happy to incorporate any other dimension that any of you would like to add, and change the shape of this model. A Hexagon or even a Septagon? The end goal is to be Bang-on :)

Connecting Small Producers to Global Supply Chains: Importance of Local level Logistics - ITC eChoupal Case

A summary of the presentation made at World Bank, Washington DC on 6 May 2010

Customers served by the global supply chains look for consistent quality products that are cost competitive and delivered on time.

To meet these expectations while connecting small producers to global supply chains, four components of the local level logistics need to be managed. I will use agriculture to illustrate my arguments, but the same logic applies to several other non-farm outputs of small producers e.g. handicrafts.

The Local Components of Global Supply Chains:

Two of these are targeted at improving efficiency

1. Logistics Costs
2. Farm Productivity

And, the other two enhance effectiveness

1. Produce quality aligned to market demand
2. Safety in production and supply chain

Default characteristics of each of these components, in the emerging economies, constrain the small producers from achieving the desired objectives:

1. When farmers sell their output to agribusinesses, avoidable additional logistics costs are incurred because the price is discovered only after quality check is done at produce consolidation points i.e. mandis (auction centers) that are some 25 km away from the farm gate. From mandis, the produce then moves to the warehouses of the processing units. This system is in vogue for nearly half a century, as there was no other go when the farmers are small, they live in widely dispersed villages and each one’s quality is different given the heterogeneity of farming conditions.
2. For the same reasons of fragmentation, dispersion and heterogeneity, the delivery of agri extension (crop management knowledge) and other farm inputs viz. information, credit, seed, nutrients, crop protection chemicals, insurance etc., are uncoordinated. And, typically, this delivery is seen as a “last mile challenge”; hence there is no focus on building solutions for individual farmers keeping their unique contexts in mind. As a result, farm productivity tends to be much lower than the potential.
3. On the quality front, these supply chains are great illustrations of “lemons problem”, where the real quality of the produce is not objectively factored into pricing at the mandi, eventually driving out the quality consciousness among the producers. The intermediaries, who make up for the missing infrastructure, act as Principals to transactions further aggravate the problem by blocking market signals & information flow along the chain.
4. The product loses identity along the chain, due to indiscrete aggregation of the produce (of multiple producers) done by the intermediaries to maximize value for themselves. Varieties and grades get mixed up, giving no opportunity for the processors to determine blending ratios based on consumer preferences.

ITC eChoupal factors all these challenges and connects small producers to global supply chains efficiently and effectively:

1. Quality factored price discovery in the village itself, by leveraging the power of Information & Communication Technologies and by co-opting a local farmer as Choupal Sanchalak to facilitate quality assessment.
2. Bypasses the traditional intermediaries in the flow of information and market signals, yet leverages their physical handling capability in a weak infrastructure context, to manage the flow of goods & cash more efficiently, by co-opting them as Samyojaks.
3. Using the same ICT platform to gather the crop management problems of individual farmers, builds “first mile solutions” in collaboration with experts at the back end
4. Preserves product identity through the supply chain by defining the stack specifications, having already eliminated the vested interest of the intermediate principals by converting them into service providers.

Impact of ITC eChoupal on the four components of local logistics:

1. Since the price is discovered within the village, the produce is now moving directly to ITC’s warehouses bypassing mandis, thereby eliminating non-value-adding handling expenses.
2. With the context specific farming solutions offered, together with farm inputs, best practice adoption increased, thereby raising farm productivity and / or reducing the costs of farming.
3. Since the quality is objectively factored into pricing, farmers are incentivised for improving quality. Free-flow of market signals on ICT infrastructure, is enabling production system to respond to consumer demand in terms of variety and quality.
4. Since the sourcing is now directly from farmers, product identity is preserved along the chain with complete visibility provided to customers to determine their blends based on final consumer demand.

The result is a more efficient & effective connection of small farmers to the global supply chains, increasing their incomes and improving their ability to respond to markets.

CK: Next would've been what?

Quite unlike many other management gurus, CK was not a one concept wonder. Every five to seven years he would come out with a blockbuster idea that would change the way people looked at business globally. Be it around core competency and strategic intent, value co-creation with customers, business opportunity at the bottom of the pyramid or his latest thoughts on the new age of innovation where he set out the arithmetic that defined the future of business as N=1 & R=G!

What also stood out about CK was that he was a man who would hardly leave his ideas at conceptual level for the management practitioners to follow up. Instead, he would himself aggressively campaign and canvas for them and seek ways of translating concepts into action on the ground.

That said, I must mention that this piece is not so much about CK the man and what he was, but more about what his next blockbuster idea would've been and about which action agenda was engaging his mindspace.

Last year, while writing an update on ITC e-Choupal for the fifth anniversary edition of his book 'Fortune at the Bottom of the Pyramid', I concluded my piece articulating the vision of eChoupal using a metaphor from physics 'black holes for a green world'. CK, as many would know was himself a physics student and was quite intrigued; we had a long conversation on the subject. My idea was to pursue a pull based model (symbolised by black holes) to achieve sustainable development (symbolised by green world) as against the current approach of "pushing" sustainability that's obviously unsustainable. It was then that he shared his thoughts on how the challenge of sustainability was engaging his attention, and how it could be the new frontier of innovation. He was looking at creating a fusion in a manner that there was no conflict between the developed and emerging nations or business, Government and civil society organisations. Further, synthesising this domain with the BoP space, he was also visualising market mechanisms where poor people produced some kind of positive climate change instruments and trading them with rich nations thereby creating new sources of income for the poor. Alas, we have now missed out on the next blockbuster idea from CK!

On a different plane, CK was in the middle of cascading an action plan on India@75 to see India as a developed nation by 2022. If there was one programme to which he was giving his heart and soul in recent times, this was it! Interestingly our paths crossed on this front too! Around this time he was also guiding the field work of a team of Michigan students to write a case on 'the making of ITC eChoupal 3.0'. CK quickly picked up that personalised crop management advisory envisaged under eChoupal 3.0 was aligned with the core theme of 'the new age of innovation' i.e. servicing one farmer at a time (N=1) taking the unique circumstances of each one into consideration, and by leveraging the capabilities of multiple firms and resources (R=G) as against the traditional method of one generic solution serving a mass of farmers. He immediately wanted this approach to be an important component of the agri agenda in 'India@75' programme. He suggested that we develop a detailed working paper together along these lines, whereafter he wanted to meet the Prime Minister to propose this as a solution to rejuvenate Indian agriculture. I was to download his thoughts during one of his forthcoming visits to India before I worked on this. Any which way, India@75 was what he was keenly looking forward to as his pet action project. India would find it hard to replace CK in this journey.

It is at once stimulating and saddening to imagine the next steps of the master of next practices. May his soul rest in peace...

PS:

1. Published in Business Today issue dated May 16 2010 (page 84) with the title "What CK would have done next"

2. I wasn't sure if this piece belonged to Third Eye or Random Reflections! Cross posting in both...

Evolving Landscape of Rural India: Role of Mobile Devices

Mobility will play a central role and significantly influence the very evolution of rural India hereafter. Therefore, rather than suggesting a plain list of ‘many ways in which mobile devices can be used in rural areas’, I would like to start with a quick look at the underlying drivers of rural India and then propose a framework to visualize the consequent strategic role that mobile devices can play.

My presentation is set in four parts:

1. Aspirations of rural people
2. Fundamental characteristics of rural India and how they come in the way of fulfilling those aspirations
3. Components of value in general, and their relevance to rural India vis-à-vis the aspirations and characteristics
4. The role mobile devices can play in this backdrop

Over the thirty years I have been working in rural India, the most remarkable facet I observed is the transformation of rural mind-set from one of ‘resignation due to deprivation’ to ‘aspiration arising out of empowerment’!

• This transformation occurred as the rural infrastructure improved (especially roads and telecom) and their incomes rose. And the sources of income expanded too - within agriculture diversification helped, while the non-farm activities multiplied (livestock, sales & services in rural markets). Several Government schemes as well as remittances from the kin who migrated to towns brought in more money into rural hands.
• The aspiration is primarily for better basic services (education and health), and superior quality of life (access to consumer goods used in urban India, financial services and entertainment). People, naturally, are also looking for opportunities to step up their incomes further (new livelihood sources and appropriate production inputs are the needs here) to be able to afford such products & services.

However, three characteristics of rural India come in the way of realizing these aspirations…

• The wide geographic dispersion of our villages constrains access to products & services mentioned earlier, in terms of timeliness, quality and cost - if they access at all. Because villages are a long way away from the centres of action (urban areas) where specialists reside or these products & services originate.
• Extreme fragmentation in terms of the size of rural production units reduces their bargaining power when they buy their inputs or sell their output. This is true even for financial services and consumer goods as well, as the ticket size of their purchases is very small. Aggregation can empower them, be it in the form of cooperatives, or self help groups; whether physically or virtually
• Wide heterogeneity in circumstances of the people across rural India requires products and solutions that are personalised to their unique needs. Delivering such solutions is expensive as is, and is further unattractive when the unit volumes and paying capacities are small.

Value has three components. Value Creation, Value Delivery and Value Capture

• By a logical extension of the three characteristics already described, it is obvious that value can be created in rural India by delivering services remotely (overcoming dispersion), by personalizing solutions (that address heterogeneity) and by democratizing access (neutralizing scale / class disadvantage, eg. for poor people & women).
• What is not commonly appreciated is the fact, that the same three characteristics constrain rural people from taking advantage of even the available products & services unless they are delivered as a complete end-to-end solution. For example farm productivity won’t rise unless relevant agri advisory, real-time weather / market information, credit, seed, nutrients, crop protection chemicals etc are all available in a coordinated fashion. So, a well-orchestrated ecosystem is needed for actually delivering the value created by using the ideas mentioned in the first bullet.
• For any enterprise to scale and sustain over time, some of the value created & delivered must be captured for its financial investors. All of you know the famous examples of many dotcom companies that created value for their customers, yet went bust as their business models could not capture enough value for themselves! In case of rural markets, plain vanilla business models that try to capture more share of the small wallets find it difficult to sustain. Innovative models leverage aggregate volumes of these markets and get interested third parties to cross-subsidise (much like the media business), besides capturing some value from the rising incomes (having facilitated such rise in the first instance)

Interestingly, with their wide-ranging capabilities, mobile devices can play a central role in all the three components of value in rural India

• Remote delivery of certain virtual elements in areas like education, health, entertainment; both information & transactions in income generating areas like agriculture, financial services, governance & citizen services; exchanges for employment and matrimonial; social networking platforms etc are all already happening at some basic level using mobile devices by extending the applications designed for Web.
• Additionally, by integrating features like unique identification, crowd sourcing, GPS, GIS, visual mapping, text-to-voice, multi-player collaboration etc., several other value creating applications can be developed which wouldn’t be operationally feasible without mobile devices.
• Finally, with targeted delivery of content & advertisements mobile devices will facilitate the value capture process.
• Remote delivery at door-step, personalized solutions for relevance, virtual aggregation for economies of scale, collaboration for putting end-to-end solutions together, unconstrained access even for the disadvantaged – all so necessary for development of rural India, are now possible due to mobile devices

Let me now illustrate these propositions with some specific uses of mobile devices along these lines

• In education, e-learning will morph into m-learning; further moving to potentially deliver books over mobile devices as the screen sizes expand; with the ability to stay in touch on an ongoing basis, life-long delivery of continuing education is possible
• Last mile access in health services, drawing upon experiences from web based tele-medicine services. Mobile device itself as a medical instrument (eg pulse reader) is not a distant dream.
• Entertainment applications do not need much elaboration; will have instant demand
• Location based information services like Yellow Pages (eg doctors, agri input stores) can morph into mini meta markets
• In agriculture and other livelihood activities, starting with elementary services like information provision - delivered as text or voice - (eg. weather forecasts, market prices) to transactions (eg e-procurement through auctions, negotiations) to sophisticated applications like precision farming through personalized crop management advice (with the ability to click and transmit photographs on one hand, and integration with GIS on the other hand)
• Banking transactions
• m-commerce transactions like railway ticket booking
• Calendar integrated notifications and alerts
• Remote monitoring and activation of farm automation systems (eg irrigation, fertigation), some of which is already happening as a grassroots innovation
• Supply chain management applications in rural marketing (for FMCG, medicines etc) like order taking, promotions, information uploading, remote stock management in rural outlets
• Governance applications like voice / text alerts of Government Scheme; or operational activities like uploading of local data by Village Accountants, Anganwadi Workers, Warehouse Keepers etc
• Citizen reporters generated news and other local information, or even poll based market research, visually mapped by integrating with GPS for reading patterns & movements and re-casting for local action

In short, a mobile device can become a hand held transaction platform, a personalized bank branch, a retail store, a cinema screen, a teacher, a doctor and many such, besides being the good old communication tool. Thereby, playing the role of a key enabler in taking rural people forward with rest of India; delivering the much desired inclusive growth :)

PS:

1. This blog is a summary of my talk at the Nokia Strategy Summit in Amby Valley (Lonavala) on 29th April 2010.
2. I am thankful to so many friends (a record fifty four in all) who shared their thoughts via Twitter, Facebook and LinkedIn as valuable inputs for this talk.

Investment Opportunities in Indian Food & Agri Business Sector

Here is a summary of my talk at the BRIC-IBSA Business Forum in Rio De Janeiro on 14 April 2010

Investment Opportunity in Indian Food & Agri Business Sector is founded on Four Pillars

1. Large Sector with further tremendous upside

2. Indian Consumer is seeking new products

3. Production system has potential to supply those new products

4. The Business environment is very conducive

Pillar 1: Large Sector & Further Upside

• Size > US$ 200 Billion

• 50% of household expenditure is on Food

• 50% of workforce is engaged in agriculture

• That rest of the economy is outgrowing agriculture, is a signal for investment opportunities in agriculture

Pillar 2: The Consumer Dimension

• More than 1 billion consumers

• Rising incomes & rapid urbanisation changing the profile of consumption

• Global experience: US$ 1000 per capita is the sweet spot for shift in food consumption patterns, from basic to value added food

• Consumer is looking for new value: quality, variety, safety, convenience etc.

• Besides this domestic opportunity, there are export prospects too in several products

Pillar 3: The Production System

• Large arable area > 150 million ha

• Rich & diverse agro climatic zones

• Characterised by small farmers

• Good scope for productivity enhancement through technology induction

Pillar 4: The Business Environment

• Significant private participation after policy reforms in the last decade

• Traditional farm labour seeking new jobs

• Large infrastructure investments in the recent past: roads, telecom, irrigation etc

• Thrust area for Government as a strategy for “inclusive growth”

The Investment Opportunities

• Innovation at the consumer end of the chain (Processing, packaging, retail formats)

• Effectiveness at the farmer end of the chain (Productivity, quality - pre & post harvest, labour saving technologies)

• Efficiency along the whole chain (Integration, coordination, infrastructure)

• Cross BRIC-IBSA collaboration imperative (Food Security, Climate Change)