AG LEADER STORIES : Data is the Answer!
Updated: Jan 31, 2019
Bishwanath Kabi is a farmer from Naranpur Village, Keonjhar Sadar District, in rural Odisha. He received one acre of land as ancestral property after subdivision of his father's land among his siblings. He has passed Standard 10, is married to Savitri Devi and has two daughters aged 9 and 6. Bishwanath has been a farmer since completing his 10th standard education.
In the year 2012, he had taken an additional 0.7 acre land on lease to fulfill his livelihood needs and taken Rs. 9000 loan from a cooperative bank at an interest rate of 12% per annum in the form of cash and had purchased fertilizers, seeds and other inputs worth Rs. 3000. Unfortunately, 2012 was a severe drought year that resulted in a complete yield loss, and this was followed by two more drought years that crippled his livelihood and his ability to repay the loan amount which has now climbed up to Rs 37300 so far.
Despite his difficulties, he has paid two installments of Rs. 1244 in the year 2017 and 2018. He lives under the threat of having his land auctioned by bank officials who frequently visit his house to recover the pending loan amount. To ward them off he has resorted to borrowing Rs 6000 from a local moneylender at a 60% annual rate of interest during the year 2018. Additionally, his wife has taken Rs 5600 from a local self-help group and is repaying the loan through selling some home-made products like papadum (papad) and pickle. Unable to cope, he is thinking of having the bank auction his farmland and becoming a landless farmer.
Bishwanath's (true) story above illustrates the agrarian distress in the country particularly among small, marginal and landless farmers. As a nation, we are failing a large part of the population and scheme after scheme fails to find its way meaningfully to the end farmer - be it Kisan Credit Card or the Pradhan Mantri Fasal Bima Yojna (PMFBY). Intentions are good, and many new schemes are in the works such as the Rythu Bandhu scheme in Telangana and the Kalia scheme in Odisha, yet there seems to be little alleviation of the problem. In some cases, the schemes do not even cover landless farmers. In desperation and with political compulsion as the last straw, the country has to resort to farm loan waivers, which typically doesn't reach the landless farmer anyway as they are outside the formal credit system, besides periodically destroying market-based systems.
A potential solution to this lies in the creation of technology-based holistic solutions. Our research at Dvara shows that smartphone access and usage in rural India is increasing and data costs are plunging. The country's technological prowess is already acknowledged globally, and efforts at digital banking and payments are advancing. Why can't such a potent combination of technological advances in artificial intelligence, agronomy, and remote sensing be combined with smartphone-based delivery mechanisms to provide seamless financial inclusion and other farm extension services?
What are the correct incentives to data sharing needed for such a holistic solution? For instance, a key input to help farmers like Bishwanath is mid-resolution multispectral data that can aid in assessing his actual need for credit and insurance, and basis which offer him customized advice. This data is available with the National Remote Sensing Centre (NSRC) but is not available as a public good. Similar data in Europe and the US is available free of charge. Seed and fertilizer companies have many programmes as do NGOs with farmers across the country and drones in aggregate have probably covered much of the agricultural land in the country. What will make them share data to bring about a data-based financial inclusion and livelihood revolution that can help farmers like Bishwanath?
The technology is there. The delivery mechanisms are in place. The reach is there. What is needed is a market-driven means of partnership to share and use data, with Industry and the Government as key stakeholders.
Samir joined Dvara Trust in February 2018 as Executive Vice Chair to take on responsibility for the strategic direction of the Dvara Trust’s mission of financial inclusion and portfolio management of group companies. He has over two decades of experience in building institutions and market infrastructure.
Prior to joining Dvara Trust, he was the Managing Director & CEO of NCDEX, India’s largest agri focused commodities exchange. During his tenure, the exchange had transformational impact on India’s agri economy through various technology and digital initiatives. He also worked closely with the warehouse regulator WDRA and the capital markets regulator SEBI to launch National E-Repository Limited (NeRL) to provide India’s first repository services for electronic negotiable warehouse receipts, which farmers can use to avail formal sector agri credit.