Govt readies database to ease farm economy
The Union government is in the process of developing one of the largest publicly funded digital databases — an offshoot of a set of laws passed recently to open up agricultural markets in the country — to make over 120 million Indian farmers visible online to agribusinesses, such as insurance firms, credit companies, seed sellers, logistics operators, and supermarkets.
The project to digitise the farm economy, called Agristack, will create a digital profile of cultivators, their farm holdings, climatic conditions in the area, what they grow, and average output, details which will be mapped to the 12-digit Aadhaar biometric ID, which almost every Indian possesses, said an agriculture ministry official who asked not to be named.
He added that these data points will go on to create a far more intricate framework that will offer big opportunities to farmers and agribusinesses alike.
According to Census 2011, India had 118.9 million cultivators. Nearly half of all Indians depend on a farm-based income, and there are slightly over 140 million agricultural land holdings in the country.
The farmers’ database will be available to the private sector along with a “monetisation model” being worked on, the official cited above said.
The health ministry’s National Health Stack, which is already in place and provides a digital ID to everyone, is a similar digital framework usable across public and private sectors to boost health care delivery and investment.
The project will link farmers and farm collectives to their land parcels with cadastral details, such as farm size, satellite imagery, land titles, credit history, produce grown, quality of output, and machinery used, among others.
“There will be data standardisation that will on-board information from satellite imagery, Internet-of-Things devices, and data already available in private and public domains,” the official said.
Agristack is meant to bring a host of services directly to a farmer’s doorstep, while arming agribusinesses with marketable information. For instance, credit companies may find it easier to lend to farmers with a reliable credit history, and insurers may customise products according to a farm’s climatic zone. It may also enable financial firms to precisely estimate how much loan a farmer needs, based on cost of cultivation.
A 2019 Reserve Bank of India report warned that Indian farmers, on average, were taking on more farm loans than they actually needed for cultivation, possibly to meet non-farm expenses, pushing them into debt traps.
The idea of the database is also to link blossoming food supermarkets with farmers directly, let export firms pinpoint locations that best grow the products they need, and for granular data to allow machinery firms, which make everything from tractors to harvesters, to market farm-appropriate equipment. Though the government already runs one version of electronic trading, called e-nam, a majority of farmers still transact with buyers through intermediaries. The government last month passed three laws to allow agribusiness to freely trade farm produce, permit private traders to stockpile essential commodities for future sales, and lay down new rules for contract farming.
Farmers in some states, particularly Punjab, are protesting these changes, fearing the reforms could erode their bargaining power and weaken the minimum support price (MSP) system, which offers growers an assured price. The government has given assurances that there are no plans to scrap its MSP policy, but the farm groups are asking for this to be written in the law. Three Congress-ruled states — Punjab, Rajasthan and Chhattisgarh — have passed laws in their respective Assemblies to override these central laws. That move, however, may yet be open to legal interpretation.
Some farm activists say such a database raises questions about the extent to which a government should have access to personal information. “There are of course issues of data integrity and privacy. Farmers are the most vulnerable link in any interface with the farm economy by any kind of business, and we have to be conscious of this in this new initiative also,” said Kavitha Kuruganthi of the Alliance for Sustainable & Holistic Agriculture (ASHA), a group opposing the farm reforms.
The official, however, contended that the recent reforms were being backed by robust policy initiatives to boost investment, one which is the Agristack database. According to official data, capital investment in the farm sector has been stagnant with less than 2% compound annual growth rate over the past five years. The share of private investment fell to nearly 83% in FY17 against 88% in FY14.
A digital farm economy could give the sector a shot in the arm. “A farmers’ database is most overdue and welcome. The private sector cannot do this because there are costs that are not recoverable,” said Pravesh Sharma, the founder Kamatan Farm Tech Pvt Ltd. Sharma said the database would help to “deepen institutional capital, credit reach and pave the way for smart agricultural solutions”.