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Viable Agriculture for the Next Century
Economic and Environmental Sustainability: The Balancing Act
“If your plan is for one year, plant rice. If your plan is for ten years, plant trees. If your plan is for one hundred years, nurture people.”
― Confucius, a Chinese philosopher
This simple yet profoundly powerful thought set us thinking about the changes we need to make to continue farming for the next 100 years and beyond.
Farmers and the agrifood industry in general have to produce enough food to feed ten billion people by 2050 amidst reducing arable land, deteriorating soils, changing weather patterns and increasingly scarce natural resources.
While this big picture is clear and the challenges are acknowledged, the industry is subsumed by “keeping the lights on” and making enough money to survive in the difficult market. This is no criticism of the industry; it is just a statement of fact.
There are no clear incentives for the farmers and other supply chain players on the primary production side to tackle and invest in the solutions which will address long term challenges like soil health and climate change.
So, how do we ensure that agriculture remains a profitable occupation whilst also caring for the environment?
Are farmers and the supply chain equipped to play a balancing act of financial viability, profitability and addressing long-term challenges? Are financial institutions and investors willing to invest patiently for the long term?
Not entirely, we reckon.
The agrifood supply chain often pursues one goal at the cost of the other. At the top of their minds is their own survival due to wafer-thin margins. The industry thus chooses options that save them money in the immediate term yet damage the environment gradually but surely in the medium to long term.
With this reality in mind, we decided to work on sustainability at two levels: environmental and financial. While there is a large body of knowledge present on environmental sustainability, there’s little insight on how to achieve it with financial sustainability.
When we set out to build FarmSetu, we wanted it to be a full-stack agritech platform ensuring both, the environmental and financial sustainability of the agricultural sector. The dictum we followed was, “What’s good for the environment is good for the agri-business”.
Soon enough, we realised it’s easier said than done - especially when dealing with smallholder farmers in India, many of whom are challenged by a lack of agri-education, awareness and lack of skills necessary to tackle the current challenges.
The three big questions we had were: how to make them pain-aware, how to change their mindsets and how to upskill them?
The Broken Commercial Model
The current commercial model in agrifood supply chains is broken. This model focuses completely on access to “cheap food”.
We firmly believe that there is no such thing as cheap food. Someone else in the supply chain bears the cost. Often this is the farmer, the environment or both.
In India, the pressure is on the farmer to grow crops without a proper thought process and without planning for the development of the supply chain. There is no regard for specifications of the produce, production cost and margins, crop rotations and post-harvest activities like grading, sorting, packing and marketing.
Farmers are merely growing crops for the sake of growing and hoping that someone will buy from them for the price they expect.
Even as farmers contend with a higher per unit area output, the impact on soil and other natural resources is beyond measure and often beyond repair. Excessive agrochemical usage leads to infertile soil and alteration of its physicochemical properties such as pH and texture. Mutation in certain pests and diseases and pollution of groundwater sources due to pesticide residue percolation are other side effects. Consuming residue-laden fresh produce often has carcinogenic effects on human bodies.
Not following the package of practices diligently, erratic irrigation scheduling, underestimating the importance of weather conditions and poor operational rigour are some other causes of long-term damage to the environment.
The greatest limitation of the current commercial models is short-term profit-making over longer-term sustainable rewards. The uncertainty around agriculture owing to unpredictable markets (impacting the demand) and climate change (impacting the supply) encourages such ‘myopic behaviour’.
Ill-conceived commercial models with wrong incentives have ominous consequences.
Because the breakdown of the commercial model is systemic, the response to building a new model must also be systemic. The only way to do this is to take a hundred small steps over time rather than take one giant leap.
Our first small step was to create a digital tool to train and upskill the farmers and other individuals working in the supply chain.
Having built the tool, the next step was to identify the subject matter experts and create crop-specific, challenge-specific short, practical training courses.
We had to evolve a model that built the farmers’ knowledge, skills and awareness through training programmes and gave them the necessary tools to succeed with technology use. While we spoke of making farming financially sustainable, we were pursuing environmental sustainability ‘under the bonnet’.
Innovators and Early Adopters
We knew from experience that no farmer wanted to be a guinea pig for experimentation. To counter the inertia and enable change, we actively sought out ‘opinion maker’ farmers who would appreciate and wholeheartedly support sustainability as their key success metric.
Managing radical change in agriculture is tough. Any change in agriculture is met with the inertia of years of legacy practices, processes and approaches. Besides, crops take their time to grow and there’s no way one can go against Nature’s pace to rush through technology implementation.
After a decade of persevering amidst a crop of ‘disruptive’ agtech startups in India, we chose to be consultative and collaborative.
Guided by Everett Rogers’ ‘Diffusion of Innovations framework’, we focussed on ‘innovator’ and ‘early adopter’ farmers. In the rural Indian socio-cultural milieu, these farmers are often opinion-makers. Many ‘follower farmers’ decide their actions based on what these opinion makers do.
These ‘opinion maker’ farmers demonstrate the following pattern:
Have some sort of education in agriculture
Have spent years experimenting, trying new ideas, failing and then improving
Are tech-savvy people comfortable with using the Internet
Take a data-driven, objective approach to decision-making rather than a gut feeling
Have a propensity to treat upfront expenses as longer-term investments
Are willing to sacrifice immediate savings for long-term sustainability
The Digital Packages
Before getting farmers to use technology, we decided to show them the big picture. Educating farmers about the technology, its usage and the outcomes thus became a core task for our team. We were mindful to not overwhelm the farmers with an ‘information deluge’ lest they resist. Farmers by nature are action-oriented and we had to be careful about offering the right portions of knowledge for farmers to consume on the go.
We evolved ‘smart farming digital crop packages’ in partnership with agri-enterprises and the subject matter experts we work with to inculcate a culture of ‘learning and doing’.
Farmers and other users of the app can consume these short-duration, skill-based training courses at their leisure. To reinforce learning, users cannot skip any part of the course. Nor can they ‘fast forward’ their way through the course. At the end of each part, a small optional assessment is provided to enable quick revision of the studied concepts.
Our carefully curated and proven subject matter experts retain sustainability at the core of our digital crop packages. For example, Dr Ankush Chormule, a sugarcane expert, starts his course with a comprehensive focus on soil. His agronomic practices have yielded over a hundred tonnes of sugarcane per acre while caring for the soil and the natural environment.
The message is clear: Get farmers and the supply chain to focus on the optimum utilisation of available resources by preventing excess or shortage of inputs like water and agrochemicals, implement the best practices that the subject matter experts have shared and focus on the longer-term than the immediate term.
“The course was really exhaustive in nature – it taught me the right manner and the depth of tilling to the correct amount of inputs to be used and when. The course answered all my queries. The subject matter expert is not only a PhD in agricultural science but also a champion cane farmer with a consistent 100 tonnes per acre record for many consecutive seasons.”
But this isn’t enough.
We want to ensure that farmers are immediately implementing whatever they learn in their fields. Hence, our digital packages also include the necessary digital tools to help farmers record their crop data, operations and observations, check weather conditions and access real-time market intelligence. These packages set us apart from our market contemporaries and helped our farmers ‘walk the talk’.
What do farmers get in our Smart Farming Digital Packages?
Knowledge: Latest crop-specific knowledge and technical information through an intuitive mobile app
Communication: Two-way communication with the subject matter expert/agronomist
Weather: Seven-day weather forecast for the farmers’ plot locations.
Courses: Skill-based, short-duration training from cultivation and tillage to high-yield harvest delivered in a practical, easy-to-grasp language.
Advice: In-season agronomic, procurement and market advice in audio, video and text formats from recognised experts
Tracking: Overview of the entire field, geotagging of plots, recording operations and observations of crop growth progress from planting to harvest, problems and observations possible.
Profit and Loss: A broad plot-level profit and loss statement accounting for production costs and income information.
Agrochemical Literacy: Complete digital information and availability of appropriate fertilisers and crop protection products for various crops.
Trading: Connect with the agri-enterprise for supplying quality produce, delivery, settlement and digital record of the trade.
Traceability: Complete QR code-based digital traceability of seeds and saplings used for planting.
Steps to Sustainability
It’s easy to mistake the SetuFarm app for yet another ‘book of records’ software. It is anything but that. It is the gateway to our ‘Supply Chain-360° ecosystem’. We want to educate, enlighten and empower (necessarily in that order) farmers and other users with carefully curated products and services. Once onboard, the user needn’t look elsewhere for the full spectrum of his/her farming needs.
We follow a six-step model to encourage regenerative farming practices:
Data: From no data to highly structured geo-tagged and time-stamped data
Localisation: Using data to trigger localised, near real-time in-season agronomy advice
Patterns: Mapping patterns and trends through splicing time series to understand seasonality and the relationship between various data points
Benchmarks: Evolving sustainability benchmarks in line with global client expectations
Delta: Monitoring for variances, causality and correlation involving multiple data points
Guidance: Course correction to farmers through intensive training, advisory and plot visits
While we do not begin with sustainability as the end goal, we have embedded the steps above in our processes such that sustainability is de rigueur in our technology platform. This approach is also laying the foundation to evolve a real-time data-driven ESG dashboard.
Executing at Scale
To implement these digital crop packages at scale, we turned to our anchor customer - Sahyadri Farms based in Nashik, Maharashtra, India. This is a farmers collective having over 18,000 smallholder member farmers owning over 30,000 acres of land and exporting fresh produce to over 42 countries.
Fresh from their fundraising from blue chip impact investors like Proparco, Incofin, FMO and Korbys, Sahyadri Farms has set in motion an ambitious sustainability programme covering a hundred per cent of their farmers and land under cultivation.
Sahyadri’s discerning end-consumers, just as its bulk buyers, care a lot about the origins of their fresh produce and whether it is grown with sustainable and regenerative agricultural practices. They pay a premium for sustainably sourced produce. Besides accounting for Global GAP compliance, we will soon start embedding the sixteen sustainable agriculture practices [SAP] within our platform.
Therefore it becomes all the more important to track farmer activities throughout the value chain. The data thus collected helps build a referenceable data repository at the farmer level and even at the plot level. This repository sets the scene for introducing sustainability based on the prevalent state of each individual plot.
Our Customer Success team together with Sahyadri’s team, maximises its outreach to farmers and educates them about the SetuFarm app at village-level meetings where farmers congregate to learn about the app. We encourage the self-service approach where farmers learn by doing. Our team guides farmers wherever they face onboarding or activation problems.
We regularly follow up with farmers to remind them about recording data, check whether their app is working fine, update to the latest version and learn what their unarticulated needs are. This consolidated feedback is shared directly with the product managers who evolve mandates for our software engineering team.
With FarmSetu, we are putting together the building blocks of our sustainability reporting dashboard from scratch. This will help us improve decision-making regarding ESG & sustainability initiatives and drive value for investors through enhanced ESG ratings and reporting transparency. What makes FarmSetu unique from other solutions is the definitive mindset shift that it’s bringing about in our farmers.
Sustainability for our farmers isn’t just another compliance and reporting chore. Rather, it is a conscious change in their approach that is also reflected in their farm operations. With FarmSetu’s streamlined data collection & analysis, we are well on our way to evolving one of India’s most purposeful ESG initiatives.
Abasaheb P. Kale, Chief Sustainability Officer
Sahyadri Farms Post Harvest Care Ltd.
At the heart of our efforts is a constant push to encourage farmers to use the SetuFarm app daily. Through numerous farmer outreaches, our team strives to inculcate a conscious behavioural change in farmers. We want farmers to check the app at a minimum of three critical moments daily viz. first thing in the morning, around lunch and finally at the close of business.
It is therefore imperative that our app becomes the ‘single source of truth’ for farmers. With sustained data recording by farmers and increasing usage, we get high-quality, validated, geo-tagged and time-stamped data. The more data points a farmer records, the sharper our offering gets. In effect, the app fine-tunes its guidance based on the farmers’ direct and indirect inputs. We diligently capture each farmer’s usage patterns to know the duration and quality of their interaction. Accordingly, we focus on areas where the app usage has gone down or needs attention.
As an additional incentive, the more farmers use the app features, the more loyalty points they earn. These points can be redeemed for tangible in-app purchases. All these efforts help us nudge the farmers towards building a habit which in turn helps drive agronomic practices eventually yielding sustainability.
Sustainability isn’t a sprint but a marathon. It calls for intense upfront efforts and investments whereas visible results are seen only over time. Scalable sustainability has to be introduced at the very beginning of an agri-enterprise’s business plan. Para-dropping the sustainability function is neither feasible nor advisable.
So far we have onboarded five thousand farmers and have a mandate from our agri-enterprise clients to onboard 15,000 more in the next 6 to 8 months in a complex agricultural market like India.
We are now seeking partners to realise our vision of delivering data-driven sustainability at scale. We would love to work with partners experienced in funding and guiding large-scale sustainability projects in emerging economies.
To sum up, we’re looking for partners who agree that ‘what’s good for the environment is good for the agri-business’.
We hope you found this post useful. FarmSetu is the ideal technology platform to execute large-scale agricultural sustainability opportunities in emerging markets like India. Talk to us to know more.