Seeding Success: An Innovation Overdrive
Agriculture is a dominant sector, which is crucial for India’s food and nutritional security. The immense contribution of Green Revolution in easing poverty proved that agricultural development has a direct role in improving the livelihood of the people and the society.
Agriculture is facing multiple challenges across the world, and India is no exception. Smaller landholdings and lesser area for cultivation, climate change, energy crisis, loss of biodiversity, weak extension machinery, rising input costs, inadequate storage infrastructure, etc, are major impediments in realising the potential of agriculture.
It is imperative to promote competitiveness and upgrade our agricultural systems, including technological aspects. This is crucial for the Indian agricultural landscape, and will be pivotal in improving productivity and increasing profit.
The sector needs massive investments in order to streamline distribution mechanisms and logistics. Thanks to the varied scope of the farm produce and extensive supply chain structure, India has emerged as a very significant agro investment destination.
Since 1980s, agricultural innovations in India have rapidly increased. According to government data, biotechnology innovations went from zero in the 1990s to five genetically modified (GM) traits in hundreds of GM cotton cultivars by 2008. Pesticide registrations went from 104 in the period 1980–1989 to 228 during the period 2000–2010. Agricultural machinery and agricultural processing industries also witnessed rapid transformation, and private investment in agricultural research grew tremendously.
Bt cotton has been the first, and only, widely commercialised biotech crop planted in India. It was approved for commercial release in India in 2002, and farmers grew about 50,000 hectares of it in the first year. Adoption increased rapidly over the next years. By 2008, 7.6 million acres were planted in Bt cotton, representing 82 percent of all cotton planted that year.
The ever expanding demand for agricultural products and India’s tryst with globalisation in 1991 generated demand for innovations so as to enhance productivity. Both Indian and foreign institutional investors are making big investments in agriculture and agribusiness. Biotechnology and the strengthening of Intellectual Property Rights (IPRs) further provided impetus to research and innovation.
The seed industry, in particular, leads the pack when it comes to innovation. The Department of Agriculture has recognised several new cultivars over the last decade. The role of biotechnology is worth mentioning. Many new hybrids of field crops and vegetables have emerged.
Both the government and the private sector have invested in extensive Research and Development (R&D) in the agricultural machinery industry. Small and medium sized tractors have emerged, and efficient and less expensive micro irrigation systems are boosting agricultural productivity.
Agricultural growth in developing countries is credited to extensive research and innovation. Agribusiness is making substantial investments in research and producing innovations, which are extremely important to farmers. Due to private innovations, agricultural productivity and incomes are witnessing impressive growth.
There has been a rapid increase in the export of cotton, generic pesticides and agricultural machinery. Economic liberalisation pursued by India since 1991 allowed large Indian corporations, business houses, and foreign firms to invest in agriculture and agribusiness.
Modern day agriculture is not merely confined to mass production; rather it must be aided by technology and intensive marketing. The production, processing and marketing stage must be infused with technical capacity to address issues and concerns related to the conservation and management of agricultural resources.
Industrial revolution had a profound effect in the farming process, and encouraged the invention and manufacture of other labour-saving farm implements and machinery. Take a look:
Plough: A Makeover
The world changed when a plough that could plough deep and turn over heavy clay soil was invented. The invention of the heavy plough made it possible to harness areas with clay soil, and clay soil was more fertile than the lighter soil types. It represented the same advantage for regions where the soil was difficult to cultivate.
Some then, there have been many changes in plough design. The reversible plough now dominates because of its simplicity and ability to produce level fields. All ploughs now feature hydraulic turnover systems for indexing and hydraulic change-over valves for automatic cylinder stroke direction. Hydraulic reversal is also assisted further with main frame alignment. This allows the plough frame to swing in line with the tractor to prevent the rear wheel or bodies from hitting the ground. It also improves stability and reduces the high forces imposed on both the plough and tractor.
Agricultural tractors are the most important and widespread machines. It is a vehicle particularly crafted to exert traction at slow speeds, for the purpose of hauling a trailer or machinery used in agriculture. Several innovative attachments came into existence that enhanced the utility of tractors. These include front end loaders, mowers, box blades, spreaders, tillers, plows, trailers, etc. The added advantage is that most of these tractor attachments are interchangeable, so they can be used with different machines.
Seed drill allows seeds to be easily planted deep into the earth instead of on top, thus saving them from being washed away.
Thanks to improvement in design and efficiency, today steam powered threshing machine harvests and threshes the crop in the field in a single operation.
Water is a scarce commodity. Moreover, an unpredictable monsoon in India and an increasing demand for food production has fuelled the need for innovation in irrigation. Drip irrigation is a water saving technology that enables slow and regular application of water directly to the roots of the plants through a network of economically designed plastic pipes and low discharge emitters. The technology maximises crop productivity and protects the environment through conserving soil, water and fertiliser resources.
Some Indian firms are purchasing world rights to a technology, while others are becoming important innovators in other countries by exporting technology developed in India. Hybrid rice cultivars are being exported to Bangladesh and Southeast Asia and Indian small tractors are being exported to the United States, Africa among other countries.
The private sector has grown rapidly, and the structure of the seed industry has transformed substantially in the last two decades. Indian firms have sought overseas investments in order to establish or upgrade biotechnology laboratories. Advanta, Kaveri, JK Agri Genetics are firms that raised money through initial public offerings on Indian stock markets, and a few have obtained funding for expansion through private equity and venture capital financing. Apart from public investments in R&D, there have been significant investments by private sector in biotech research.
Lately, there have been significant changes in domestic and global markets. Today, there are tremendous opportunities for farmers and agribusiness entrepreneurs. The demand for high value primary products is on the rise owing to a host of factors: rising incomes, rapid urbanisation, and modern technology.
The penetration of mobile phone networks and Internet-linked kiosks in the nook and corner of India has redefined agricultural marketing. AgMarkNet, operated by Ministry of Agriculture, collects price information from wholesale markets nationwide and disseminates it through the Internet. There has been a marked improvement in market information, and farmers, agri entrepreneurs, wholesalers and retailers are ultimate beneficiary. Increased interactions between farmers and processors have brought new dimension to the rural agricultural markets.
A well developed agribusiness sector can be a strong link between the farm sector and the consumers. Agri-logistics refers to the collection, aggregation, storage and transport of agricultural produce from the farm to the consumer and all intermediate levels such as the processing facility (factory), market (mandi) and retailers. The capacity building is essential to cater to the size of the Indian market, and higher levels of per capita food consumption. Innovation is a sine qua non to keep a check on humungous food wastage in India. The perishable nature of products makes it imperative to have adequate storage facilities, and efficient transportation and distribution networks.
It is crucial that innovations must take into account needs, lifestyles and consumer behaviour of the rural population. Apart from being innovative, the pricing, promotion and distribution must appear attractive and relevant.
Here are some of the innovative models used by India Inc:
• HUL Project Shakti
Hindustan Unilever Limited (HUL) has been proactively engaged in rural development since 1976. Project Shakti, launched in 2001, has been successful in integrating business interests with national interests. The project has created income generating opportunities for the rural population.
• Godrej’s Aadhaar and Manthan
Manthan supplies animal feeds for dairy and poultry. Supermarket Aadhar retails agricultural inputs such as fertilisers, pesticides, animal feeds and small implements along with FMCGs, appliances. It also provides technical guidance, soil and water testing services.
ITC Limited set up the Agri Business Division for the export of agri commodities. Today, it is one of India’s largest exporters. It launched e-Choupal initiative in 2000 in Madhya Pradesh, and now it covers several states. e-Choupal is the single largest Information Technology (IT)-based intervention by a corporate entity in rural India, delivering real-time information and customised knowledge to the rural India. It has ensured better quality, productivity and facilitates access to higher quality farm inputs at lower costs for the farmer. By creating a direct marketing channel and eliminating wasteful intermediation and multiple handling, it substantially reduces transaction costs.
Innovate in Agricultural Loans: RBI to Foreign Banks
Indian central bank has emphasised that higher priority sector targets for foreign banks should bring new skills in farm and SME lending, which public sector banks could pick up.
At a banking summit co-organised by Yes Bank two years ago, former RBI Deputy Governor KC Chakrabarty remarked: “We require foreign banks in the country and also in agriculture. They can bring in product innovation in lending to agriculture and SMEs rather than derivatives. Private lenders and foreign banks would bring in a revolution in agriculture finance as they did in retail and technology, helping public sector banks learn in the process. Similarly, competition in priority sector lending would also make public sector banks improve.”
The Way Forward
Innovate. Innovate. Innovate! Technological change has been instrumental in revolutionising agricultural growth in India. The Green Revolution that ensured food security for our growing population shows the way forward. More and more investments on R&D will lead to high productivity and improved economic performance. India has proved to the world that food security can be achieved through scientific agriculture, and embracing modern day technologies.
Rural marketing endeavours have to be seen and implemented as investment for better tomorrow. Successful company will be the one which meets consumer’s expectations through products offered at affordable cost and still is in a position to earn decent return on investment because of its strong, efficient and intelligent distribution channel.
Technological support to new strategies and innovative solutions is the need of the hour. The World Bank aided National Agricultural Innovation Project (NAIP) to conduct agricultural research is a step in the right direction.