Home / Opinion / Transforming the food chain byte by byte

In the past few decades, while other economies have used technologies such as hybrid seeds and precision agriculture (using detailed soil, water and geographical data to guide planting) to raise crop yields, India has fallen further behind. According to estimates by the UN Food and Agriculture Organization, India’s yield per hectare is half the average level for China, Vietnam, Indonesia, Malaysia, and Thailand. We estimate that raising yields to the levels of other Asian countries could help bring 125 million poor and vulnerable Indians to a minimum acceptable standard of living.

Why should it be possible, after all these years, for India to close the yield gap? The answer is that a range of disruptive—and increasingly less costly—technologies that have been sweeping the world are poised to transform India, too. These include the mobile Internet, advanced geographic information systems (GIS), the Internet of Things and advanced genomics. The Internet of Things, which involves sensors and actuators that can be used to track and operate things in the physical world across the Internet, include low-cost sensors for irrigation systems and clip-on devices for mobile phones to test soil quality. With the mobile Internet and automation of knowledge work software, farm-extension workers with limited training can bring expert knowledge and advice to farmers in their own languages.

GIS technology and sensors are being used in precision agriculture, gathering and analysing data about soil, weather, and ecological conditions for a specific piece of land, and then guiding planting, fertilizing, and watering of various crops to maximize yields and avoid wasted inputs. Originally developed for large tracts, precision farming techniques are now being applied to small plots in India. In Tamil Nadu, for example, a state government project used GIS-based field and soil mapping, and drip irrigation and fertilizing systems to achieve yields that are 60-80% higher than in conventional farming. And 95% of the harvests were of first-grade marketable quality.

Digitally-enabled farm extension services may be particularly important. India has just 750 extension workers per million farmers, in comparison with 2,500-3,500 in China and Vietnam. With the mobile Internet, tablets and intelligent applications, a relatively unskilled worker can deliver superior extension services to far more farmers. The Grameen Foundation in Uganda uses moderately skilled farmers, who are well-regarded in their communities and chosen by their peers, to bring farm extension services to their neighbours using smartphone apps. These apps provide information on weather and commodity prices, crop management and pest and disease control. The workers disseminate the knowledge to farmers and train them to use the smartphone apps themselves.

Big Data can also aid in agricultural finance. India’s banks have over 5,000 billion of loans outstanding to the agricultural sector. Tech-enabled advisory services and crop monitoring at a micro-market level will lead to large pools of data, much more granular information that can be aggregated and analysed, yielding insights that enable better targeting of funds, and better risk management.

Indian farmers wind up realizing relatively little from the sale of their crops because of what happens in distribution. Some 30% of India’s fruits and vegetables are lost to spoilage on the way to market. This costs an estimated $4 billion per year and contributes to food scarcity. The use of information technology to track food can improve matching of demand and supply across markets and locations and help farmers capture more value from the sale of their output. In Colombia, for example, coffee growers use radio-frequency identification tags on bags of specialty beans to certify their quality, and are able to command 200% higher prices as a result. In future, India too can use technology to reduce the cost of its multi-layered distribution channels, curtailing the role of middlemen, raising farm incomes, and feeding more Indians.

The challenges are immense. India’s fragmented and highly diversified agriculture sector is not amenable to standardized solutions. Many fundamental improvements are needed before technology applications can pay off: increasing land under irrigation, mechanization, investment inpost-harvest infrastructure, and creation of more efficient markets for agricultural produce.

A few important steps now can help promote the faster adoption of technology, too. Private sector investment in agricultural universities can help create centres of agro-tech excellence, which might aggregate GIS data, develop expert systems using local knowledge, train farm extension workers, and customize farming practices for specific zones. A clear regulatory framework for GM crops could be developed, to govern the production, pricing and sale of seeds. Special funds for technology investment can be created to encourage digitization of wholesale markets and public distribution systems. The massive scale of the opportunity, and its potential impact for poverty reduction and quality of life in India, makes agriculture a high priority sector for the application of disruptive technologies.

Anu Madgavkar is a senior fellow at the McKinsey Global Institute and is based in the McKinsey’s Mumbai office, where Saikiran Krishnamurthy, a director of McKinsey and Co., is also based.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.
Post your comment

Recommended For You

Trending Stocks

Get alerts on WhatsApp
Set Preferences My ReadsWatchlistFeedbackRedeem a Gift CardLogout