The different business models in Indian Agribusiness – I

In this series, we are going to look at the various business models used in the Indian agribusiness ecosystem. An important point to note is that Agribusiness is a constantly changing and does not conforms to any specific models.
First let us look at Contract farming company. A contract farming company works directly with the farmer and is generally the processor and sometimes also the marketer of the produce.

What is Contract farming?
Essentially,
The farmer is contracted to plant the crop on his land
Harvest and deliver, a quantum of produce, based upon anticipated yield and contracted acreage
This is at a pre agreed price
Towards these ends, key equipment & inputs are supplied to the farmer

They generally recognize that the quality of the produce, practices followed by the farmer and the inputs (seeds, chemical fertilizers & pesticides) have a large effect on their earnings.

Trends:

• Assured procurement
• Marketing by the contracting company
• Supply of quality inputs and leasing out machinery
• Technical guidance, Information on best agricultural practices, Supply of information on weather
• Buy back of produce at ‘pre decided’ price
• Price discovery of commodities
• Easy availability of crop loan
• Serving as a complete solution provider to farmers and building lasting relationship

To get a deeper view of the challenges of working with Indian Farmers, please read the posts DIAPER AND FARMING and DIAPER AND FARMING-II. (In the case of diaper, the user or the consumer is the child. But, the parent takes the buying decision. So, parent is the customer. Similarly, in any effort to improve Farmer’s life, the buyer and consumers are different.)

Following are the business models that are generally utilized in this business:

Contract Farming: Various Business Models

 

Some of the differences that come with these business models:

Component	Type 1	Type 2	Type 3	Type 4
Cost increments due to channel partners	Nil	Minimal	Considerable	Maximum
Scale of operations	Can be taken up with smaller scale of operations	Can be taken up with smaller scale of operations	Applicable for large scale of operations	Applicable for large scale of operations
Channel Partners	No channel partners	Non profit organizations as partners	Traditional channel members as partners	Corporates act as channel partners
Transparency in Price fixation	Completely transparent	Transparent	Low transparency	Very low transparency
Services offered to the farmer	Only extension services. Other services depend on the operating company	Only extension services. Depends on contracting companies.	Loans & other inputs	Holistic range of services

Some Indian companies following the above mentioned types of models:

Type	Companies following this business Model	Commodities	Location
Type I	Nijjer Agro Tinna Oils SNC Oil AVT Natural Products Ltd Natural Remedies Pvt Ltd Himalaya Drugs Pvt Ltd PepsiCo	Tomato & Chilly Soyabean Dhavana Marigold Coleus Ashwagandha Basmati	Punjab Maharashtra Karnataka Karnataka Karnataka Karnataka Punjab
Type II	Ion Exchange Enviro Farms	Organic Produce	Maharashtra
Type III	United Breweries Ltd. ITC-IBD	Barley Soyabean, Wheat	Punjab Madhya Pradesh
Type IV	MSSLEscorts Machinery Group Super Spinning Mills Cargill India Pvt Ltd Appachi Cotton India Gherkin Exporters	Basmati, Non-Basmati, MaizeBasmati Cotton Soyabean, Wheat, Maize Cotton Gherkin	Punjab, Tamil Nadu Punjab Tamil Nadu Madhya Pradesh & Uttar Pradesh Tamil Nadu Karnataka, Tamil Nadu, Andhra Pradesh

More can be read about how Information Technology is being utilized in this process can be found at AGRICULTURE ECOSYSTEM PRODUCT: THE ICT SOLUTION TO AGRICULTURE (PART-II). There are some interesting Drivers that are infusing Information Technology more and more into the system. This is constantly changing the business models. Some of the wonders of IT can be DATABASES, ANALYTICS & AGRI -I and DATABASES, ANALYTICS & AGRI -II.

AGRICULTURE ECOSYSTEM PRODUCT: THE ICT SOLUTION TO AGRICULTURE (PART-IV)

Another story: the story of a Food Processing company.

Declaration: This might sound like a telemarketing  / teleshopping TV commercial, with embellishments;  which are there, in the results;  but not in the capability / features commonly available.

A Food processing major has faced three major recalls in last two years. With the government institutions closely following his every move and competitors not missing a single opportunity to claim the high quality of their products and safety of their procedures, the company needs to bounce back quickly. The Co wants to open up and show his customers insides of each process from growing the raw materials in the field to the final packaging in the plants.

They decide to use an ICT based ecosystem platform solution for agriculture value chain. This platform helps the company build a transparent, and a close and coo-operative ecosystem.

He has to be sure of the quality of what he is buying. So, he wants to go back to fields and see how his raw material is being grown. To his delight, The ICT platform gives him insight into the each of the farmer’s activities through the “Crop Diary” feature. This made him peaceful. But, he had to gain the consumer’s trust again. So, with the help The ICT platform again, he gave his customers the ultimate tool: “traceability”. With this feature, it is possible to trace the product back to the farms or to the lots; each bean that is used in each burger can be traced back. Also, processing defects, if any, can be traced back to the exact process step. By opening up with his consumers better, he has built a stronger trust based relationship with them.

As a result, he is able to source higher quality produce for his processing unit. Also, according to a survey done by the company, there has been a consistent change in the general public opinion of its major product lines.  This directly reflects in the 30% increase in sales that they have achieved without increasing the input cost. 

Some Terms:

1. Crop Dairy: This is an interactive recording system which records the activities happening in the field (like sowing, levelling of land etc). This also includes the expert suggested calender / schedules for reference of the farmer with alerts.

2. Traceability: the ability of the final consumer of a product to get the records of the origin of the raw material and the processes used, the conditions recorded and the locations (exact farm, exact traders it passed through) in building the product that the customer has purchased.

AGRICULTURE ECOSYSTEM PRODUCT: THE ICT SOLUTION TO AGRICULTURE (PART-III)

This is another story: the story of an aggregator company. This might sound like a telemarketing  / teleshopping TV commercial, with embellishments;  which are there, in the results;  but not in the capability / features commonly available. 

This is Jennifer, the head of operations at a food giant.

Jennifer aggregates the required inputs from various growers directly or through mandis during the harvest season. Her work is challenging. Two things that worry her the most:

1. Finding the raw materials she needs for her manufacturers/ processing units in the right time
2. Quality and Standards of these raw materials

This being a constant worry, Jennifer was looking for a long term or rather permanent solution to this problem. Finally she decides to use an ICT based ecosystem platform solution for agriculture value chain. It creates strong backward and forward linkages in the supply chain: integrates all the supply chain players together.

Once connected with the paltform, the raw material she needed was just some clicks away. In the “Crop Search” feature, all she had to do was to choose the crop from a drop down list, choose a preferred location and specify the procurement date. And, she had a list of farmers with all that she was looking for, right on her screen. With their contact details also right there, she found herself connected to the last mile. And if this was not enough, she can also just post her “specific requirements” (Post enquiry) and find the suitable farmers from the responses she receives. To decide an optimal price, she uses the “price discovery”, which gives her information on the mandi prices, farmer prices and the distance details of her chosen farmers.

But, she wants to be sure of quality of what she was buying. To her delight, unlike the normal online buying experience, here she could exactly ascertain the quality of the produce using the certifications shared on the portals by the farmers. This made it easy for her to locate the right grade of products. In case of any quality issues, she can trace it back to the sourcing lot! ……………Still curious, she uses the “Crop calendar” to study the farmer’s activities and practices followed in farming put on a timeline: from sowing to harvesting. Now, she can be sure, she is buying the best product… grown in the best possible manner.

With this system in place, she is able to map the supply to the demand. Now, with the data on produce details, quality details, and harvest data available in advance, she is able to plan her production in sync with the harvest dates. Now, she is at peace and on time.

This paltfrom has helped her in cutting down the cost of sourcing by 20 percent. Also, she is assured about the quality now. The time she had to spend on these activities has just been halved. Now, she more time for addressing strategic issues.

Agriculture ecosystem product: The ICT solution to agriculture (Part-II)

This post is a story of how an agriculture ecosystem product can answer the challenges of a contract farming company.

This is Rob, the head of operations at a food giant. The company produces aseptically packaged juices and health drinks.

The prices of fruits are rising and sales have also not exactly been on fire. Rob sources his raw material from a restricted group of farmers with defined contracts with them. With the demand in the market, he could not dream about making profits without charging its customers more and paying farmers less. Rob knows this is not helping him in a long run unless he has an efficient system in place.

Rob decided to go with an ICT ecosystem platform, the perfect ecosystem for agriculture value chain. This platform seems to have a solution to every problem that Rob has. Rob wonders: “The next sowing season is knocking on the door”,

1. “How do I get my farmers the right set of inputs at the lowest possible cost?”

With the help of ecosystem supplier marketplace, Rob finds the right supplies at discounted prices. Using “Input tracking reports”, he is able to track the inputs to the farmers zeroing down the possibility of input diversion.

1. Rob was delighted to be able expand his base list of farmers through “Farmer’s Marketplace” which armed him with the insights of farmers in no time.
2. With the increasing list of farmers, how do I ensure the same quality in produce?

Rob uses the expert connections through the platform and orchestrates appropriate advisory to farmers. These experts use the “Farm-crop advisory” to teach the farmer the best practices at each step of production process.

1. Rob uses the procurement module. With the data on produce details, quality details, and harvest data available in advance, he is able to plan his production in sync with the harvest dates and juices make to the market on time.

Now Rob sleeps well. The crop calendar lets him have a complete view of the contracted farmer’s activities from anywhere.

With this visibility, he is in the right position to appraise the farmers. With the platform, Rob’s company was able to reduce costs by 20 percent, and achieve a 10 percent hike in sales.

Terms used in the story:

1. Ecosystem supplier marketplace: It is a ‘buyer meet seller’ place on the portal / web / mobile, where according to the input needs of the farmers, an interested buyer can be found (through the  advertisements posted by the sellers or through the buyer posting an enquiry on the portal or through a backend analysis by the service provider to connect the needs of the registered buyer to the offerings of the registered sellers)
2. Input diversion: The most common practices in the ‘contract farming sector’ include providing the farmers with the inputs required in the farm like seeds, pesticides, fertilizers, machinery. It is not uncommon for the farmer to resell the seeds, pesticides and fertilizers in lieu of short term gains.
3. Farmer’s marketplace / find new farmers is place where the contract farming company finds the data about farmers whom it doesn’t have under contract and have all the apt features for acquisition ( e.g., a company selling potato chips can connect with farmers growing potato and  onion too(say) because of the similar needs of the environment and soil and skills)
4. Expert connections / Farm-crop advisory is a prominent feature, where a farmer in need of insights and advice, can connect with the right kind of experts through sms based, call center based, IVR based advisory to find solution to their queries. Other than that, this feature also popularly provides the farmer with a library of useable information that s/he can look into before going to an expert.
5. Procurement module: this module is used to manage the fulfillment status of the contract farming company. This along with the crop maturity status details of farmers, with probable harvest dates, farmer’s self-attestation of quality, help the company to find the right input for their processing units quickly and with lesser cost.

Agriculture ecosystem product: The ICT solution to agriculture (Part-I)

Agriculture’s major problem is not that is has a fragmented supply chain or let’s say value chain. The biggest problem is the archaic way of looking it as a chain (of activities, of stakeholders). The sector is a complex inter-connections of people (stakeholders) dependent on each other. May be it was agriculture (rather agribusiness) that made Emile Durkheim coin the term organic solidarity (Wikipedia defines: In a society exhibiting mechanical solidarity, its cohesion and integration comes from the homogeneity of individuals—people feel connected through similar work, educational and religious training, and lifestyle. And Organic solidarity comes from the interdependence that arises from specialization of work and the complementarities between people—a development which occurs in “modern” and “industrial” societies.). Calling it the agriculture ecosystem is more advisable.

Now the most ideal agricultural ecosystem has: 1) large number of inter-linkages, to create an environment of healthy competition for each service required for each stakeholder a part of the web, and 2) smooth linkages, (ease of access of required services). This should lead to a seamless communication and continuous collaboration between the stakeholders.

But where does it exist in the real life?

It exists where IT meets agribusiness. ICT and mobile application based solutions can help create this connected agri-ecosystem.

ICT makes a difference in this field by providing the right personalized information at the right time.

Types of ICT information services available:

• Short-term productivity information services

–      Providing  timely information mainly to end beneficiaries, such as farmers, to help them improve their productivity / crop yields in the near-to-medium term

• Crop advice from experts using digital photos: Project e-Sagu of the International Institute of Information Technology (IIIT) Hyderabad, India enables farmers to receive advice on planting, monitoring and harvesting crops and on pesticide and fertilizer usage based on digital photos taken by the farmers themselves.
• Crisis management information services

–      Essentially help prevent losses, rather than raising productivity.

• Weather and pest information for farmers: In Turkey, the agricultural department gathers information about when pests are likely to be prevalent by placing pest traps and observing temperature levels. Using the information, the farmers have been able to reduce their use of pesticides by 50 percent – lowering expenses and improving crop productivity. The tracking of temperatures also helps farmers to prevent losses from frost by monitoring temperatures hourly and sending text messages to the farmers
• Sea conditions for fish farmers: The Chilean Aquaculture Project provides daily information about the sea surface temperature, the clarity of the seawater and the amount of chlorophyll in the water. It enables fish farmers to take action when harmful algal blooms multiply to a level where they threaten farmed fish
• Long-term productivity information services

–      cover topics that take longer to learn, and are often offered with other technologies and channels, such as face-to-face training or one-to-one support  from local extension agents, long-term training, extension services, demonstrations and field visits. Benefits from these services are generally realized months or even years later. These services typically focus on education, often with a distance learning aspect. They can also serve as tools for obtaining follow-up on services provided in the short term

• Training farmers in the use of agricultural information – the Community Network in Chancay-Huaral, Peru (long-term productivity enhancement): a good infrastructure
• Risk management information services

–      Are also long-term in scope and, as with crisis management services, they help farmers to avoid losses rather than increasing productivity. These types of service differ from crisis management services in that they take longer to absorb and implement, and the benefits are realized much later

• Distance learning to help women in India overcome drought and pests: In 2004, the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) created a Virtual Academy that trains local women who then, with the help of remote scientists, provide critical information to farmers in 21 villages. These women meet ICRISAT

 

Four types of players can be important targets for such solution. They are capable of paying for this service and higher productivity and yield is as much in the interest of the farmer as these companies.

They are:

1. Output players:
   1. Retailers
   2. Food processors
2. Agri Input players
3. Contract farming Companies

Please read the next posts in the series to find the detailed user stories of each of the above categories. These posts are nothing less than a value proposition statement for each of the above prospective customer groups for any ICT based platform service provider.

 

The complete consolidated list of services can be found in another post in the series.

Market dynamics and sustainable agriculture

The most important question that every solution on sustainability poses is that of its own sustainability.

Does the practice ask too much from the user (farmer)? Is he being benefited in the same proportion?

What is the rate of inflow of this ‘benefit’ (the more returns in the beginning the better)?

All the above questions are related to the Market linkages.

Issues related to Marketing of the produce can be put under three categories.:

1. Sell-ability and bargain capacity:

   1. Demand supply matching

   2. Quality of produce

   3. Post- harvest processing facility

   4. Storage facility

   5. Price information

2. Earning capacity/margin:

   1. Connect to market

   2. Cost of production and processing

   3. Loss minimization / crop protection

3. Time to market:

   1. Storage facility

   2. Market linkage

Sell-ability and bargain capacity:

This is the biggest worry for a farmer is the sell-ability of the produce. There are questions that farmer has in mind:

1. What is the right time to harvest?

   1. The answer lies in providing the weather updates: Rains on a standing crop can be dangerous in case of some crops.

   2. Matching the demand and supply: many companies are looking for an assurance from farmer groups that they will sell their complete produce to that company only. This reduces the risk for the farmers.

2. Is the produce of the right quality?

   1. The grade of the produce is a very important factor in determining the price. Providing linkages with the harvest quality testing labs run by government.

   2. Certifications on produce quality and practices that went into growing it are available like GMP, GAP.

3. What price will I get for this produce-today? Tomorrow?

   1. Market price information (e.g., Reuter Market Light). This will help farmer earn better returns.

   2. Also, important is the logistics prices. The farmer should also be apprised of the distance of each Mandi along with the prices to complete the picture.

4. Otherwise, where can I store the produce till then?

   1. Connection with the complete ecosystem in the region is important. There are small farmers who can be connected to bargain collectively for storage of their produce.

5. How can I get one buyer to pick up complete produce from my farm?

   1. Connecting the buyer to the seller before the harvest can help coming to an understanding for such deals. Also, if the farmers could, through a forum, market their produce to many users at the same time, s/he need not be worried about this. “Virtual Spot market” is a concept started in the same direction.

6. Should I sell at the Mandi? Which Mandi will get me a hassle-free sale and better price?

   1. The solution is comparative market information.

7. How do I pack the produce in order to reduce losses in transportation and increase the chances of lot acceptance by the buyer?

   1. Every crop has specific requirements after its harvest. It has to packaged in that particular way to get maximum returns while selling.

Earning capacity/margin & Time to market (especially for perishable goods):

The story doesn’t end at the farm gate. The produce harvested has to be sold. Some questions on right time to harvest (1), right quality (2), when and where to sell depending on the price one garner (3,6) need to be answered to make the right selling decision.

Heavy dependency on the adatiyas (middle men) for link to market and size of produce: The small or marginal farmers, constituting a huge majority in the agriculture practice, do not have the bargaining power for the cold storage facilities and the critical load size (truck load) for a profitable transportation of the harvest. Also, for perishable items (fruits and vegetables, leaves), the packaging plays a very important role. Not left right air spaces, or not handled properly, the amount of produce eligible for sale goes down. Read LOSS. Losses in the field due to diseases, pests and weeds, another factor which eats up the already thin margin the farmer has. This is dealt with in another blog entry………. in more detail.

The knowledge (and current intelligence) and expertise on this should be shared. The market can open up if the seller and buyers could be connected without any middle men (like ebay).

The facilities and experts of the field should be connected to the farmer and a constant two way communication should be catalyzed. This will empower the farmer to reduce unwarranted losses and also increase yield.

It cannot be emphasized enough that the financial sustainability of the farm or the farmer himself is the most important factor. At a time when challenges to conserve the nature is as important as the increase the yield enough to prevent a worldwide famine, a well-rounded approach is needed which both increases the topline and reduces the bottom line for every farmer. At the same time, the farmer needs to make quick money.

Diaper and Farming -II

As with other development efforts, the development in agriculture too has a basic distinction between the customer and the consumer.

Like parents, the funding agencies are the real customers. But, unlike a child, who can’t express the choices on diaper, the beneficiaries of a development fund (say farmers) can be vocal about their choices.

Isn’t that a good thing?

It is indeed a good thing. People’s problem can be understood through conversations: surveys, interviews. They can be involved in the application of a solution and feedback can be taken from them.

Taking the case of agriculture, the advantage of a vocal beneficiary (or consumer) can be demonstrated:

Of late, a lot of companies from those involved in food production to those involved in selling inputs to farmers are also providing expert advisories to farmers on the real time issues being faced by them in the field. A little bit of how it works:

..here, a farmer is helped taking a soil test. Based on this soil report and the crop that the farmer wants to grow the inputs, the date of sowing and the whole set of activities till the harvest is laid down even before the sowing is done. This is prescriptive, reminds me of the do’s and don’ts given by parents . But, what differentiates the situation is that the farmer decides the crops and the inputs at the end of the day based on the suggestions given. After sowing, the farmer, whenever faces challenges, takes the help of the experts.

May be what differentiates the diaper and the development is that while former is ‘selling a product’, while the ‘second is selling a service or a make-to-order product’.

The final solution is thatched out in the real time and this adds to the differentiation between consumer and customer, the final satisfaction of both can be a challenge. Of course, the good business demands satisfying the funding agencies. But, not satisfying beneficiaries leads to politicization and criticism in the popular media. This creates a catch 22 situation in many cases.

What is the solution? : Intertwining of the interests of the beneficiary and the funding agency. Refer to the post “Diaper and farming” dated December 17th, 2013, for a complete solution.

The better the intertwining, the lesser will be the dissatisfaction in any of the parties….

Diaper and farming

The challenges of Diaper and farming (also, whole development sector) are similar.  It puts a big question mark on the sustainability of the “sustainable development” programs.

How are they similar?

To state it aloud:

In the case of diaper, the user or the consumer is the child. But, the parent takes the buying decision. So, parent is the customer.

So similar is the case of the development efforts (equally applicable to international organizations or voluntary organizations or CSR activities alike). The benefited does not have the capacity to buy these services (the whole point of philanthropy actually). The customers of these efforts are the funding organizations.

So, why does it put a question mark on sustainability of these efforts?

The parents (exceptions can be there) are concerned about the child: so always want a product which doesn’t harm the child’s skin for instance. They do not want to change it 15 times a day: convenience of the parent also matters. But, rest assured, if a choice has to be made between the health of the kid and the convenience, the former always wins. So, this system is sustainable.

Can that be said about development?

No. The development professionals, philanthropists and organizations, mostly, have their hearts at the right place! But, it is always the individual initiatives and issues that get funded. “Funding is generally a populist decision”…

If the state of life of some people depends on populism, it ain’t sustainable.

How to make it sustainable?

Three ways:

1. What if my well-being affects your business? Won’t you like to make sure that I do well? You would! If it is in the interest of private businesses (specially large organizations), if the development of a region becomes important for the creation of a market or the creation of raw material base or the whole supply chain, it becomes sustainable. There have been many activities by companies like ITC (e-choupal), BASF (Sumriddhi) or PepsiCo (EthioPEA) that have utilized this model. For example, in EthioPEA, a joint project of USAID, WFP and PepsiCo, in Ethiopia, chickpea production has to be amplified to create a nutritious base for low cost ready to use food supplement for famine affected area. The agri-business is being developed in the process. But, PepsiCo wants to make Ethiopia its raw material base for chickpea for its hummus business and other health products. This I call short term sustainability.

2. The second option is: the practice used by adoption agencies, especially in US. A kid is adopted by a family. If, the agency is not satisfied, it can de-allocate the kid from the family and put her/him up for adoption again. This is harsh! But, in the development sector, the field organization has to keep innovating and connecting issues popular with the public sentiment and the corporate needs. This is just a cycle of PPPs. This approach can make the “short term sustainability” a little longer life. But, depends too much on the philanthropy of the development agency.

3. The better, but, the long term option is: Give a man a fish and he’ll eat for a day. Teach a man to fish and he’ll eat for the rest of his life.

 

A true sustainability can be achieved if these three are used together. The first way, gives the project a kick start. Now, the development process has started. But, the people need to be taught fishing. So, that has to start after the kick start. But, the funds should not stop before the development process has reached a stage where the original people have reaped benefits out of it. So , the second way has to be used to extend the support to development.

Databases, Analytics & agri -II: Agricultural micro-database, dynamic record sharing and agri-intelligence

This is a sequel to the entry “Agriculture database and analytics” dated 23rd September 2013. Here, I present a case for close record sharing between a farmer and intelligence/advisory group/ agricultural think tanks/government institutions and show a glimpse of what wonders this can do. Raaju is a farmer from junnadganj area in India. He has been growing wheat/rice for years because of the assuring ‘minimum support prices’ set by government.  But, it has not been profitable for him for the last two seasons. So, he meets Raghu, a bigger farmer and an agro-facilitator for a govt agency in the area. He takes Raaju’s case to the agency where they look at the location of Raju’s farm, its crop history, the latest soil report, the farm site characteristics, the various inputs (fertilizers, pesticides, irrigation) records (the timing, product description and quantity used), the various facilities available (irrigation type, machinery available, labor available) and took into considerations the general weather/climate situation mostly prevalent during the crop season, matched it with the various growth stages and respective crop requirements during these stages, to come up with a small list of crops that Raaju can grow.

Raaju chooses to grow Cotton. The agency is aware of his choice and so notifies him about the suggested sowing date and the activities that have to be performed to prepare the land and the seeds for sowing. Once these activities are done, Raaju just presses the field ‘done’ in a record sharing app on his phone. This registers an entry into the status record maintained by the agency. Next, the farmer gets an alert just before the sowing date of the crop. The farmer gets notifications for weed, pest & disease management. He is also advised on every issue that he shares through ‘pic sharing’ or ‘raising ticket’. Guided by the best practices for the crop and the region, personalized to his farm’s needs, he is able to adopt newer methods of farming.

The best harvest time is suggested by the agency. Once that’s done, he is guided even in primary processing. If Raaju had mentioned in record sharing that he has facilities for harvesting, he is guided with the best practices. Otherwise he is directed to a local primary processor.  Also, he is advised to take a harvest quality test. This will help him getting the right price for this produce.

Now, comes the sales time, when he actually reaps the benefits. He gets information on the various Mandi prices around him and an estimate of the cost of transportation. He is also apprised of the profitability he can achieve if he chooses to sell in each of the Mandis. Once the choice is made, the farmer is helped in finding a logistics help at a cheap rate.

This collaborative approach helps Raaju to achieve higher yield, better quality, but, most importantly, higher return on his investments, increasing his earnings and economic status in actual terms. Armed with this guidance every season, Raaju has now more realistic expectations and does not over leverage in debts or invest in crops of lower returns.

Now, the bigger question that we look at is: is this feasible? What ensures the impartiality of the advising agencies? Is this system sustainable? Or needs philanthropic grants which mean philanthropic style of management? Recent push by government for GM seeds and subsequent farmer suicides because of large crop failures has highlighted these and many more questions. To the answers to these questions please read the entry “Huggies and farming”.

The challenges of making agriculture sustainable

This post reflects my understanding of sustainability in agriculture. Here, we discuss three major ideas: what is sustainability? (Rhetorical! Isn’t it?), how do we move towards a mass sustainable agriculture practice? And, what are the factors one has to juggle en-route this destination: A list of factors posing challenges to sustainable agriculture? Each factor will discussed individually in more detail in the coming posts…

Sustainability can be understood as an ecosystem approach to agriculture. Sustainable agriculture should, ideally,

• Satisfy human food and fiber needs

• Enhance environmental quality and the natural resource base upon which the agricultural economy depends

• Make the most efficient use of non-renewable resources and on-farm resources and integrate, where appropriate, natural biological cycles and controls

• Sustain the economic viability of farm operations

• Enhance the quality of life for farmers and society as a whole

A movement towards sustainability can be visualized in three milestones:

1. Use of site-specific, constant knowledge backed farming: Using the right practices and the right inputs. This will reduce any further damage to the ecology of the farming site along with a possible increase in yield. Healing of ecological damages (e.g., soil replenishment through right kind of crops) can also start at this stage.

2. Movement from

   1. Soil:

      1. harmful inputs like chemical fertilizers and pesticides to organic substances and bio-pesticides

      2. Practices to slow soil erosion and water run-off like growing wind breaks and using no tilling farming.

      3. Soil replenishment through mixed farming or soil amendment (growing nitrogen fixing crops like chickpea or livestock etc.).

   2. Water: use of drip irrigation or other practices for the judicious use of water

   3. Use of renewable sources of energy on farm

3. Enhance:

   1. The economic situation of the farming activity

   2. The environment quality and the natural resource base upon which the agriculture economy depends

But, in practice, what are the factors influencing agriculture and what challenges they pose?

1. Right knowledge of practices and short term earning intent of the farmer

2. Land

   1. site issue

   2. soil issue (nutrient, oxygen and moisture)

   3. location issue

3. Right Fertilizers in right amount (solution: SSNM)

4. Right seeds (biased interventions)

5. Weather dependency

   1. Climate change

   2. Rain dependency for irrigation  (rainfed areas)

6. Markets:

   1. Quality of produce

   2. Post- harvest processing facility

   3. Storage facility

   4. Connect to market

   5. Price information

   6. Logistics

7. Crop protection:

   1. Knowledge on pests

   2. Timely detection/prevention

   3. Right pesticides in right amount

8. Biased interventions by governments and private companies

   1. Untested GM seeds led to heavy losses to farmers in India

   2. Disclosure of information on GM crop requirements (hidden costs & Losses due to unsuitable treatment to the crop)

   3. Government

      1. Restrictions on trade

      2. APMC (marketing) restrictions

      3. MSP, export duties

9. Support Functions:

   1. Banking (loans)

   2. Insurance

   3. Hedging: pre-selling : no contract abiding system

10. Final product demand