The lack of sufficient and relevant advancements within technology has long made the farmers suffer the consequences of information asymmetry. Lack of technology to determine the communicable quality assessment of the produce, lack of technology to provide real-time and broader market linkages have led to post-harvest loss through deterioration of quality or a colossal supply-demand mismatch; all of which affects the price realization for the farmer.
Traditionally, these markets have operated where sellers-buyers are physically present at one location. The underlying reason is that there is no way for the seller and buyer to objectively communicate the quality of the Agri-produce being traded. Physical presence is used to ascertain the quality of produce. Fundamentally, this necessity of physical presence has limited the ability of the markets to equate supply-demand based on quality and geography.
The onset of COVID-19 forced all physical markets to close down, leading to huge losses for farmers as they couldn’t find markets to sell their produce and resulted in consumers paying a hefty premium in retail. This shortcoming has acted as a catalyst in bringing sweeping changes within the sector with ground-breaking technology applications to empower farmers to ascertain the quality of their produce and access broader markets at the click of a button. These applications have also made the process of traceability, warehousing, logistics, and access to formal credit much easier, potentially opening up several export routes for the farmers.
Constant technological advancements are crucial to creating an equitable and symmetric trading market between the buyers and the sellers. As per research reports, technology-aided innovations (Agri-tech) will drive the next green revolution in the country. According to a recent EY study (2020), the Indian Agri-tech market is still in its nascent stage with a paltry 1% penetration by value. EY estimates that it could grow to US $ 24.1 billion at 90% + penetration in five years. These numbers make us certain about the hidden potential of this sector.
Integrating the agricultural and technological sectors has had a positive and lasting impact on all the beneficiaries and the farmers. The different ways in which they benefit are;
Communicable quality assessment and digital market linkage
Communicable Quality Assessment technology will help create an inclusive food value network that helps bring buyers from all over the globe and sellers come together. The network helps eradicate the need for on-location auctions and trade, which helps bring geographic expansion and market outreach. This fusion allows the farmers discover the right market for the quality of their produce and get the most appropriate and fair price offer from the buyers.
Traceability and transparency
Digital information recording gives farmers an easy way to manage their inventory, follow GAP and therefore be able to supply to export-oriented trades and larger corporates. Digitization helps bring trust and dependability.
Eradicating post harvest losses
By shortening the time to market and ready access to logistics helps eradicate post-harvest losses to a great extent.
The rejection rate on the buyer side immediately goes down when there is access to a larger market where buyers wish to buy the product. Through objective and fast quality assessment, they can ascertain that they will get the same quality of produce delivered that they have bought.
Technology has begun to scratch the surface of the agriculture industry. It is a matter of time now that it will revolutionize the way agriculture trade occurs. The trade will become as simple and as efficient as buying clothes from an e-commerce portal.
Author - Saurabh Saxena is CEO & co- founder of Praman.ai