TORONTO: Amazon, Microsoft Swoop In On $24 Billion India Farm-Data Trove

TORONTO: Amazon.com Inc., Microsoft
Corp. and Cisco Systems Inc. are among technology giants lining up to harness
data from India’s farmers in an ambitious government-led productivity drive
aimed at transforming an outmoded agricultural industry.

Prime
Minister Narendra Modi’s administration, which is seeking to ensure food
security in the world’s second-most populous nation, has signed preliminary
agreements with the three U.S. titans and a slew of local businesses starting April
to share farm statistics it’s been gathering since coming to power in 2014. PM
Modi is betting the private sector can help farmers boost yields with apps and
tools built from information such as crop output, soil quality and land
holdings.

Jio
Platforms Ltd., the venture controlled by billionaire Mukesh Ambani’s Reliance
Industries Ltd., and tobacco giant ITC Ltd. are among local powerhouses that
have signed up for the program, the government said this week.

With the
project, PM Modi is seeking to usher in long-due reforms to make over a farm
sector that employs almost half of the nation’s 1.3 billion people and
contributes about a fifth of Asia’s third-biggest economy. The government is
counting on the project’s success to boost rural incomes, cut imports, reduce
some of the world’s worst food wastages with better infrastructure, and
eventually compete with exporters such as Brazil, the U.S. and the European
Union.

For
global firms, it’s a stab at India’s agritech industry, which Ernst & Young
estimates to have the potential to reach about $24 billion in revenue by 2025,
with the current penetration being only 1%. It’s also a chance to deploy
networks, artificial intelligence and machine learning in a developing country,
while for e-commerce firms such as Amazon and Reliance, securing a steady
stream of farm produce could help crack a groceries market that accounts for
more than half of the $1 trillion in annual retail spending by Indians.

“This
is a high impact industry and private players are sensing the opportunity and
want to be a large part of it,” said Ankur Pahwa, a partner at consultancy
EY India. “India has a very high amount of food wastage because of lack of
technology and infrastructure. So there’s a huge upside to the program.”

The idea
is simple: Seed all the information such as crop pattern, soil health,
insurance, credit, and weather patterns into a single database and then analyze
it through AI and data analytics. Then the goal is to develop personalized
services for a sector replete with challenges such as peaking yields, water
stress, degrading soil and lack of infrastructure including
temperature-controlled warehouses and refrigerated trucks.

Under the
agreement, the big tech companies help the government in developing proof of
concepts to offer tech solutions for farm-to-fork services, which farmers will
be able to access at their doorstep. If beneficial, firms would be able to sell
the final product to the government and also directly to growers and the
solutions would be scaled up at the national level.

So far,
the government has seeded publicly available data for more than 50 million
farmers of the 120 million identified land-holding growers. Some of the local
companies that have signed up include Star Agribazaar Technology, ESRI India
Technologies, yoga guru Baba Ramdev’s Patanjali Organic Research Institute and
Ninjacart.

Wetter
September to Cut India’s Rain Deficit and Ease InflationA fruit and vegetable
wholesale market in Guna in the central Indian state of Madhya Pradesh.
Technology giants are lining up to harness farm data in an ambitious
government-led productivity drive aimed at transforming an outmoded
agricultural industry. Photographer: Anindito Mukherjee/Bloomberg

But
success is far from guaranteed. The plan to rope in big corporations is already
drawing fire from critics, who say the move is yet another attempt by the
government to give the private sector a greater sway, a development that could
hurt small and vulnerable farmers.

The
program may even add fuel to the protracted protests PM Modi’s government has
been struggling to tackle for more than nine months after controversial new
agricultural laws riled up some farmers. With crucial state elections due in
2022, it may get tougher to sell the technology-to-help-agriculture plan to a
farming community already suspicious of the government’s intentions.

“With
this data they will know where the produce wasn’t good, and will buy cheap from
farmers there and sell it at exorbitant prices elsewhere,” said Sukhwinder
Singh Sabhra, a farmer from the northern state of Punjab, who has been
protesting since November against the new farm laws. “More than the
farmers it is the consumers who will suffer.”

Technology
adoption is still at a nascent stage in India, said Apeksha Kaushik, principal
analyst at Gartner. “Limited availability of technology infrastructure and
recurring natural phenomena like floods, droughts have also worked against the
deployment of digital solutions,” she said.

Anxiety
over data privacy could be another challenge. Abhimanyu Kohar, a 27-year-old
farmers’ leader, who has been supporting the protesting farmers, said it’s a
“serious issue.” “We all know the record of the government in
keeping the data safe,” he said.

Despite
the hurdles, a few one-year pro bono pilot programs are already underway.

Microsoft
has selected 100 villages to deploy AI and machine learning and build a
platform. Amazon, which has already started offering real-time advice and
information to farmers through a mobile app, is offering cloud services to
solution providers. Representatives at the India offices of Microsoft and
Amazon didn’t respond to emails seeking comment.

Star
Agribazaar, whose co-founder Amit Mundawala calls the project a “game
changer,” will collect data on agri land profiling, crop estimation, soil
degradation and weather patterns. ESRI India is using geographic information
system to generate data and create applications, according to Managing Director
Agendra Kumar.

“Once
you have the data, you can correlate with on-ground reality and improve your
projections, take informed decisions and see which regions need policy
intervention,” said P.K. Joshi, former director for South Asia at
Washington-based International Food Policy Research Institute.

A similar
data-driven system implemented in the southern state of Karnataka last year
helped increase efficiency in delivery of government benefits, said Rajeev
Chawla, the state’s additional chief secretary. Some bank loans have even been
made to farmers using the centralized data, and all government programs,
verification for insurance and loans and minimum support price are being routed
through the mechanism, plugging leakages and eliminating frauds, he said.

Besides
the tech giants, many smaller companies and startups are likely to join the
program. When completed the project will form the core of a national digital
agriculture ecosystem to help farmers realize better profitability with access
to right information at the right time, and to facilitate better planning and
execution of policies, according to the government’s consultation paper on
digital agriculture.

 “How this exercise will
translate into action or lead to higher production and farm income, that
remains to be seen,” said Madan Sabnavis, chief economist at Care Ratings
Ltd.