ICT in agriculture. case study india

MASTER IN ECONOMIA DELLO SVILUPPO E

COOPERAZIONE INTERNAZIONALE ANNO ACCADEMICO 2014 -2015

ICT (Information and CommunicationTechnology) for a better and connected

agriculture: Case Study: India.

A cura di Christian Battistoni

Con il patrocinio del

In collaborazione con

I Partner del Master:

Con la partecipazione di:

MAIN SOURCES

• Vodafone: About Vodafone Vodafone is one of the world’s largest telecommunications companies and provides a range of services including voice, messaging, data and fixed communications. Vodafone has mobile operations in 26 countries, partners with mobile networks in 55 more, and has fixed broadband operations in 17 markets. At the end of March 2015, Vodafone had approximately 445 million mobile customers and 12 million fixed broadband customers. Vodafone plays an active role in seeking to address the challenges faced by today’s emerging economies through the use of technology. This includes working with enterprise customers, non-governmental organisations (NGOs) and government agencies to develop mobile services that increase agricultural productivity and efficiency and improve the livelihoods of smallholder farmers.

• Accenture: Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With approximately 215,000 people serving clients in more than 120 countries, the company generated net revenues of US$21.5 billion for the fiscal year 2010.

INCEPTION

" This study makes the case for actions that save lives, createjobs, grow economies and, at the same time, slow the rate ofclimate change. We place ourselves and our children at peril ifwe ignore these opportunities. "

Rachel Kyte (World Bank Group Vice President & Special Envoyfor Climate Change)

4

WORLD CONTEXT

• The world’s climate is changing fast, and willcontinue to do so for the foreseeable future,especially in agriculture, this posing many risk forfood and farming;

• However, the new farming systems can beadapted to cope with the changes. In this way,agriculture could contribute to mitigate ourclimate impact.

We’re talking about the concept of ‘climate-smartagriculture’.

5

SMART – AGRICULTURE

The Food and Agriculture Organization of theUnited Nations (FAO) defines climate-smartagriculture as consisting of three main pillars:

• sustainably increasing agricultural productivityand incomes (food security);

• adapting and building resilience to climatechange (adaptation);

• reducing and/or removing greenhouse gasemissions (mitigation), when and where possible

6

BENEFITS

• In this view, mobile communications and in general M2M solutions,could surely help to meet the challenge of reduce an estimated 9.2billion of people who demand for food by 2050. They can also cutcarbon dioxide emissions by approximately 5 mega tonnes (Mt) inthe developing countries, as India, and reduce freshwaterwithdrawals for agricultural irrigation by 6%, with enormous savingsin water-stressed regions. These benefits assume there will bearound 549 million mobile connections to relevant services in 2020.

• This project aims to stimulate the necessary “alliance” betweenmobile operators, governments, NGOs and businesses to realizethese opportunities and explore others, with reference to theIndian context, with the specific objective to improve efficiency inagriculture and increase income for farmers in this country.

7

INDIAN CONTEXT

• In India live about 1.24 billion people – one-sixth of the world’s population on just 2% of the totalland and its population is anticipated to reach 1.67 billion by 2020. Surely, India is one of theworld’s bigger food producing countries, in view of that about 68% of its large population living inrural areas. Indeed, 200 million people will be working in agriculture in India in 2020. Therefore,Agricultural sector will remain a significant contributor at around 10% of GDP by 2020 Indianeconomy and, in particular, the agricultural sector face a great transiction creating enromousopportunities for innovation and growth. Certainly, problems such as historical underinvestment inagriculture, rural poverty and fragmented properties of land are true obstacles to achieving thisresult.

GENDER IN AGRICULTURE• Within India, the gender gap in income between female and male varied widely across regions in a

range from 90% in Gujarat to 54% in Tamil Nadu in 2004/05.• more than 60% of all employed women work in the sector and in rural areas and the percentage

of women who depend on agriculture for their livelihood is as high as 84 %.• Moreover , about 75% of women engaged in agriculture are illiterate yet, this pose other barriers

in improved of their status.

In consideration of that, a fight against the women situation in agriculture, thanks the use of ICT andM2M Solution in particular, could help to defeat hunger and malnourishment.

8

STAKEHOLDERS

PARTNERSThe government of India would develop projects in mobile across the country. Given the difficult in ttheconduct yield verification exercises (CCEs) over millions of very small land holdings across the country,the use of remote sensing technology would serve to concentrate the exercise in areas where we canfind higher incidence of crop failure. Also the role of domestic and foregin financial institutions,international organizations, ONG donors in general, can help to finanancing this projects.M2M PLAYERSThere are several stakeholders to take into consideration for the developement of the M2M System.These are: module vendors, connectivity providers, M2M platform and application providers, deviceplatform providers, mobile operators, aggregators and mobile virtual network operators (MVNOs).PARTNERSHIPSthe importance of public-private partnerships is clear. Partnership is central for the strategy to get scaleand continue to grow. Partnering with both government and NGOs allows us to establish an extensionsystems other than, naturally, community networks, domain expertise, and to scale operations.INTERMEDIARIESThe role of intermediaries in a model of ICT-based advisory services continues to be controversial.While intermediaries, from radio announcers to private sector extension agents, are playing a role inextending reach and addressing human capacity issues, there is disagreement about what role they playin a sustainable business model. Therefore, will be difficult to describe which could be the future role(s)of intermediaries in transmitting information within the innovation system.

9

PROBLEMS AND SOLUTIONS

1. Information ServicesProblem: Lack of information is the greater barrier to improve yields and consequently incomes for India’s smallholders

farmersSolution: Thanks the use of this information service Farmers increased their income by an average 5-15%.2. Receipt ServicesProblem: Fraud and losses are one of the major concern on income and efficiency for small farmers due to the lose of

productivity.Solution: Receipt services can eliminate fraud previously causing loss of 20% of daily supply.3. Payment ServicesProblem: Many suppliers of service some services and others haven’t a bank accounts but often need a loan and

problem for payment.Solution: For example, In Tanzania thanks mobile payments, Farmer made about 74000$ in mobile payments and

loans during the pilot project.4. Field AuditProblem: In the past the main problems in this case were the impact on enviroment other then the efficiency in the

supply chainSolution: Thanks our system, auditors can save one day for week by eliminating paper records.5. Enabling access to local marketsProblem: In many big countries ther are several problem in regard to travel costs and time for payments, in particular

for women.Solution: Thanks to mobile systems, about 15000 farmers supplying stand to benefit from mobile payment and

ordering.6. Smartphone enabled –servicesThanks the use of these devices we can obtain a great growth in production and in annual efficiency saving for farmers.

10

Barriers to scale M2M Applications in agriculture

COSTSProblem: Cost is the most important barrier for the adoption of Agri M2M applications, particularly in emerging markets. Solutions: Exist, however, an opportunity to create innovative business models to help overcome this barrier. Moreover, the Agri M2M

solutions could be developed by cooperatives or agri businesses, who can finance the solution out to the individual farmers.

LOW WAGES IN EMERGING MARKETS:Problem: Low wages for agricultural workers in emerging world are one of the most important challenge.Solutions: Until low-income countries can improve their incomes to levels at which they obtain sufficient savings to meet their investmentneeds, they will rely on external investments and resources for the sector development.

LIMITED KNOWLEDGEProblem: Small or not understanding of the benefits of Agri M2M solutions is naturally a barrier. Lack of technical knowledge could alsocreate a problem for the rollout of services, as the end users would need to know how to set-up, maintain, and use the applications.Solution: However, knowledge could be improved due to initiatives in educating the end user and other players in the applications and benefits of Agri M2M.

NETWORK COVERAGEProblem: 85% of the world’s population is covered by a mobile network. However, coverage is heavily focused on densely populated urbanareas, leaving the rural locations, which are of course primarily where agriculture is based, underserved.Solution: One way to address this problem is with the use of low frequency spectrum. Moreover, Exist possibilites to use low cost low powersolutions in Agri M2M thanks the use of low power.

RELIABILITY OF EQUIPMENTProblem: M2M system in the agricultural sector impose new needs on available technology.Solution:This surely provide an opportunity for mobile operators.

MARKET FRAGMENTATION To develop M2M solutions is most important not have a fragmentated market. Therefore partership and strategic solution beteen farmers or cooperative are the better solution.

11

GOVERNANCE AND STRATEGYThe Indian governament issued several policies to increase agricultural production and infrastructure using various ICT projects.

For instance, the Indian Universal Service comprehend a Universal Service Fund that bring to completion the four points below:

1. Arrange for non-discriminatory and widespread access to quality ICT services at reasonably prices to all people in rural and distant areas.

2. Furnish a powerful and valid connecting to the hinterland to link the populations of rural and remote areas with urban centers.

3. Assure that Universal Services are supplied in an economically efficient way

4. Guarantee that the benefits of inclusive growth lead rapid socio-economic development and an improved standard of living to unconnected areas

M2M Development

Therefore, The Indian agricultural sector costitutes a fundamental opportunity for operators to develop and deploy M2M solutions and products.

there would be scenarios that can help mobile operators to get a bigger share of the Agri M2M pie, and create a growth of the Agri M2M ecosystem:

• Connectivity only: sure the more expanded sector with a big limit for their revenue potential as well as the growth of the Agri M2M industry

• Partnerships: creation of active partenrship and collaboration with other players across the ecosystem, such as also systemintegrators, solution providers, service providers and application developers as well as naturally start-ups and entrepreneurs, to implement E2E Agri M2M solutions and with a great help for innovation

• Marketing and Partnerships: marketing support, enter partnerships, leveraging brand and other strategies to train the end users on the use and benefits of Agri M2M

• Vertical integration: develop and deploy end-to-end Agri M2M services

COSTRAINTS

12

Infrastructure costraints: In india this problems exist above all in some zones,where small farmers highlighted infrastructure gaps that affected their abilityto realise productivity gains through improved yields and higher prices.Thanks ITC’s internet service is possible to overcome some of the challengespresented by inadequate infrastructure.Other costraints: other issues were also raised over the course of ourinvestigation.a) Access to creditNon-availability of credit at reasonable rates is a persistent problem for smallfarmers. It’s possibile to overcome this problem thank the help of severaldomestic and International financial institution, International Organizationsand Donors.b) Capacity for risk-takingFarmers, in general, are naturally conservative. However, in order forinformation to drive agricultural productivity, farmers must be willing to trynew strategies, which may include new farming techniques.

SUSTAINABILITY

13

Even where adequate infrastructure exists, collecting data and creating content requires a hugeinvestment in human resources and in establishing suitable systems. Yet, both public and private funding is often limited and, in the case of most development projects, short-lived.

Large donors can play a key role in promoting data sharing, for instance by making it a requirement. Indeed, in many projects, At the pilot stage of providing these services, the costof delivering information to farmers was borne by Intenational Organizations and NGO.

Overall, in this project we have learnt the following from these case study and further:

• 1. The information service model should be able to meet the varied and increasing demandsof farmers;

• 2. accuracy and timeliness of service is an important factor;

• 3. an assessment of the farmer’s need for information should be done at the village level, and continuous evaluation of needs should be an inbuilt part of the system;

• 4. modern service providers should not compete with other service providers but shouldbuild synergies with existing extension services and fill existing information gaps;

• 5. the service providers should utilize the potential of a two-way communication facility on mobile phones, and help lines should be created to provide customized solutions and to enable feedback from farmers; and

• 6. finally the service providers should have an idea of the existing socio-economic situation of farmers and the prevailing market and infrastructure constraints.

MONITOR AND EVALUATION

14

Waverman suggests that a valid way of measuring the economic value of mobile telephony is by examining the willingness of the poor to pay for mobile phones. Indicators could also focus on specific commodities and parts of the value chain . Other suggestions for what to measure include: • new investments that ICTs have attracted to the community; • tasks that have become more cost- or time-effective; • new businesses which were created; • ICT related policy shifts; • increased participation by women, youth and marginalized members of the community.Other Examples of cost-effective ways to measure impact include the Progress out of Poverty Index® (PPI®) and the Base of Pyramid (BoP) Impact Assessment Framework.

THE IMPACT IN INDIAThe services for agriculture showed in this project, could create compelling benefits for farmers and society in India. Indeed, they could positively impact the lives of nearly 70 million farmers in India in 2020 through a range of information and functional services. This is equivalent to 60% of Indian farmers in 2020. The benefits from these services include: • Better access to information on, for example, agricultural best practices and weather forecasts • Better access to information on market prices and the ability to connect more directly with buyers• Improved communication and efficiency in agricultural supply chains Reductions in fraud and losses• Easier access to financial services and credit for farmers Reduced travel time and costsTogether these benefits can support increased yields, improved crop quality and access to higher

market prices, as well as reducing losses and inefficiencies for farmers, by generating $9 billion in additional income for farmers annually in 2020.