Ag Trends 2020

On Feb 26, 2021 0

Higher-income for farmers, diversified crop production, increased output, and higher value addition for produce are essential to take Indian agriculture to break the year-on-year growth barrier at 3 to 4 percent. Globally, economies with a strong competitive advantage in field crops, oilseeds, horticulture, and nutrition-focused crops have further enhanced their competitive advantage, duly deploying high investment in research, and focusing on market-relevant products increasing consumption and global demand. The pace of innovation in crop improvement and value addition has been more rapid in the last decade due to understanding of genomic diversity for crop improvement and process technologies for value addition that are safe and environmentally superior. Over the last two decades, Indian enterprises in the farm input sector lagged in technology significantly. Our productivity in key cereal crops other than wheat has lagged considerably behind several countries. Bangladesh has higher productivity for rice, and China has significantly higher productivity for many crops, including maize. In horticulture, though we are a significant producer in volumes, the consumption is mainly domestic and in low value-added forms. Our apples are less consumed in Southern, Eastern, and Western markets of India than imported apples from the USA, Chile, New Zealand, and other regions. Our apples are primarily exported to Nepal and Bangladesh. We produce a high citrus volume, but our process industry almost entirely imports citrus concentrate from South America for citrus-based beverages and value-added products. The bulk of our citrus varieties are not quite suitable for concentrate production.

Where have we lagged in our journey to bring contemporary farm products to markets with a global competitive advantage? The stagnation and deterioration of the competitive advantage may be attributed to:

Lack of investments in genetics improvement: The public research in genetic improvement of a wide range of crops is affected by meager investment in research of crops is affected by meager investment in research. India grows over 40 crops of economic importance, and our competitive edge is currently limited to a couple of tropical nature crops. The meager public research funding is distributed to all these 40 crops with a lack of modern genetic tools adopted in several of these crop improvement programs. The private sector seed companies embarked on a substantial investment in crop improvement with the cotton crop, hybrid maize, and other row crops but were constrained in carrying this forward with the aborting of the development of GM traits along with the abandonment of Bt Brinjal and other transgenic crops by the national regulatory system. Molecular tools globally have triggered doubling crop productivity in less than a decade for several crops. With the deployment of molecular tools in genetic improvement, the US and other regions have demonstrated a significant spurt in productivity with crops resilient to critical stress factors arising due to climate change impact.

In the crop protection segment, we focus on mostly off-patent generic molecules. Plant protection microbes are significantly getting to the fore due to the understanding of plant and non-plant microbes providing bio-stimulant and insecticidal properties and enhancing output traits. While we have seen a couple of Indian companies having patented proprietary activities, getting these products approved for their application is a long-drawn process. It has been easier to register with Central Insecticide Board, products approved elsewhere and generics rather than to register inventor inventor products from homegrown companies.

Other climate-change mitigating innovations such as solar irrigation systems are slow to be adopted. However, the policy planners have pronounced strong commitment to such an initiative without resource commitment to bring rapid adoption of solar irrigation systems at the farm level.

In the sphere of value addition, we see a spurt of early-stage companies making efforts to adapt to contemporary technologies compared to established large entities. However, their ability to raise capital for real assets and to manage to secure the working funds needed to place their products in the market is significantly limited. A tenth of investment in e-commerce companies focused on food supply has been invested in post-harvest value creators.

We have attracted considerable investment in farm-focused digital technologies and linking solutions that connect farmers to markets. Ubering fresh produce to market is needed, but the entry of many players in this segment will create high mortality in this segment without any significant investment in post-harvest assets. Asset light models for post farm aggregation and delivery is not materially going to enhance the value chain enhancement. Digital farm technologies can be truly effective if appropriate yield-enhancing input materials are accessible by farmers.

While on-farm solutions with digital technologies are adopted at a demonstration level rather than a commercial level, the lack of policy on drone application and high dependence on China for securing drones and sensors has impacted the ability to adopt these innovations at large scale. A new paradigm with large enterprises investing significantly in post-harvest technologies and digital tools is needed to gain from the application of digital technologies in the realm of farm input and the value chain. These limitations point to the necessity for Indian agriculture innovators to adopt contemporary innovation and to support innovators to bring products to markets with ease of regulations and encouragement for innovation to be applied in the marketplace. We have no scientific competency shortage, but taking science to market is possible only when their application’s hurdles are removed. We need to recognize that any life science innovation is short in its lifespan, with continuous innovation required to stay competitive.

We believe that there is no shortage of innovation to gain a competitive advantage in Indian agriculture. However, achieving the fruits of such innovation lies in the freedom to apply innovation and acceptance of the reality that we need to leapfrog in our quest for higher productivity in market-relevant product portfolios.

Changing face of Agrochemicals Sector

Agrochemicals are one of the key inputs in agriculture for crop protection and higher crop yields. India ranks fourth in agro-chemical production after the US, Japan and China and has a great opportunity to make itself a global manufacturing hub for agro-chemicals. The sector also demands extensive data to be provided by the companies to meet the regulatory guidelines and to remain competitive. To meet this demand, the companies are exploring outsourcing testing and manufacturing to CRAMS (Contract Research and Manufacturing Services) for economic as well as strategic purposes. However, on the other side, there is also an increasing concern associated with the negative impacts on the environment and health caused by large amount of agrochemicals applied to produce different crops worldwide. Research and Development companies are transforming their activities to provide a more holistic approach to provide solutions integrated with improvements in application technology such as nanotechnology. The agrochemical companies are also developing products based on biochemicals/biologicals that can provide an alternative or supplement to traditional chemical pesticides and provide new modes of action. These developments may raise new questions but provide unique opportunities to reduce potential environmental impacts.

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New Approaches to Manage the Supply Chain

Agriculture supply chains are extremely complicated mainly due to the involvement of the fragment networks. Each stage of the supply chain demands accountability and multiple decisions by the players. To facilitate monitoring of the different stages, block chains are being implemented by major companies which uses a centralized system that is accessible, ensures storing and synchronization of data across multiple sites, geographies and organizations at consensually agreed nodes. All changes in the documents are immediately updated across all nodes, which makes tracking easier. This ensures traceability and accountability at all the different nodes of the supply chain. The traceability of the various players in the supply chain will enable tracing the product’s movement from farm to fork and in turn increase visibility and profitability.

To ease the farmers’ burden for agricultural supply chain, the Government is trying to strengthen farmgate infrastructure which will provide impetus to the agri-food value chains. It has started its initiatives such as, e-Nam created for unified national market for agricultural commodities.

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Emerging opportunities in crop production

Agriculture is the main source of food for the world’s population and is affected by various factors such as dynamic policies, economic resources, market situations, quality of seed and environmental conditions. Innovative approaches are required to feed the increasing population and also to meet the challenges of reducing arable land, increasing demand for more sustainably grown food, and the threat of climate change. Cereals are considered as the most important source of the total food consumption. However, researchers are trying to unlock the potential of alternative crops which provides opportunities to build spatial and temporal heterogeneity thereby enhancing resilience to biotic and abiotic stresses and also has a tremendous opportunity to build alternative food systems. Few of the alternative crops include Amaranthus, Buck wheat, Moringa, Faba bean, etc. These crops can contribute to food and nutrition security of the country. In addition, crop biofortification also plays an important role in addressing the challenges associated with nutrition security. Choosing new crops with promising marketing outlook can be advantageous and help contribute to the crop production systems.

Innovations in AgTech

Agtech is revolutionizing agriculture. Combining technology and agriculture has positively impacted crop productivity, postharvest operations, marketing and improved profitability for all stakeholders. Artificial intelligence (AI) offers tools which have proved to increase farmer revenue. Various software to monitor soil and crop health, sowing and harvesting and providing protection from pests are the key areas in which the farmers have benefitted through AI and Agtech. Modern AI based technologies are also being used in seed value chains and are facilitating cost-effective solutions for the industry along with improving operational efficiency across seed business operations. Remote sensing is another technology which is transforming agriculture. It facilitates data collection from complex landscapes and also enables timely estimations of crop related data such as soil health, pest and disease identification, irrigation management, etc. and helps in forecasting and preparing for the same. The current COVID-19 situation has demonstrated the need and the opportunity to invest in such upcoming and promising technologies. This growing market offers a lot of potential which will benefit the industry as well as the farmers.

Policies and Regulations Impacting Agriculture

COVID-19 may have brought in turmoil in economies of scale, but it has also triggered the urgency to prioritize and actively deploy several regulatory initiatives to drive changes in the sector. Several regulatory advancements and changes have been put forth by the government in the last year to drive growth and build in a more resilient system. The banning of large number of popular pesticides and increasing trend of Bio-pesticides registrations indicate the changing dynamics of the agri-input industry. With regulations in place for the biostimulant industry, farmers will benefit from genuine products and will help in improving the farm yields and thereby drive growth in the industry through encouraging investments in the innovative product development. The newly proposed pesticide management bill aims to regulate the pesticide market by ensuring safe production, distribution, storage, and disposal of effective pesticides. Though this aims at removing the spurious pesticides from the supply chain, but concerns related to addressing technical assistance to farmers on pesticide usage remain unaddressed. While in case of the new Seed Bill, the increase in magnitude of crop registrations will be a major challenge with more than 100 crops from different agro climatic zones and hundreds of seed companies with their Research and Development. Although the government hopes that the new Farm Bills will help in improving farm gate prices triggered through competitive markets and higher private investments in the food supply chain, the bills require few regulatory and statutory provisions to optimize its full potential.