‘Why agriculture matters for India’ is the first session of ‘Future of Agriculture’ series which has been organised by SIES College of Arts, Science and Commerce and Free Press Journal (FPJ) in association with NSE, NCDEX Investor (Client) Protection Fund Trust, and East West Seed.
The panellists in this session included (in alphabetical order) Dilip Rajan, MD, East West Seed India; Arun Raste, Executive Director, NDDB; and Simon Thorsten Wiebusch, COO, Bayer Crop Science. The session was moderated by RN Bhaskar, Consulting Editor, FPJ and the opening remark was delivered by Uma Maheshwari Shankar, Principal of SIES College of Arts, Science and Commerce.
RN Bhaskar: Good afternoon. Nice to have all of you here. I would like to begin by requesting Principal, Uma Maheswari to give a welcome note.
Uma Maheswari: Thank you, Mr. Bhaskar. I welcome all of you. It gives me an immense pleasure to welcome you for this wonderful forum. To begin with, my sincere appreciation to the Department of Mass Media of our college for this kind of a collaboration with Free Press Journal. This initiative is a formidable step towards having a collaboration where students can have an excellent exposure. The panelists that we have chosen are going to contribute and share their views and brilliance that students are looking out for.
The topic that we have chosen is whether agriculture matters. This question becomes so important, especially to Indians since we have a long history – about the agricultural land of ours and the connection that we have. The present generation who are especially getting into mass media and the other kind of field, need to have a better understanding and good clarity on the subject. This will be a wonderful step, which will make a lot of matters easy, meaningful and fruitful to the country.
This panel discussion is one of the sessions from the on-going series that we have planned with Free Press Journal until August. I would like to thank Free Press Journal for having chosen our college to collaborate with and our staff members and my colleagues Dr. Vaneeta and Ruchita who have taken important steps towards making this programme a success. I once again take this opportunity to welcome those who have come in hundreds and thousands today to watch, I take this opportunity to welcome each one of you for this forum. I am extremely happy that Mr. Bhaskar will be the moderator of the session. We are eagerly looking forward to this discussion to unfold.
Vaneeta Raney: Thank you, Principal ma’am. After your welcome address, we are definitely going into the further learning process about agriculture.
RN Bhaskar: I would like each of the panelists to spend a few minutes talking about their views, and then we start interacting among ourselves. After the introductions, we invite questions from the audience. Dr. Vaneeta Raney will ask questions to the panelists along with me. Could we begin with Dilip Rajan.
Dilip Rajan: Thanks for the warm welcome Bhaskar, SIES and Free Press Journal for hosting this webinar. It is indeed my privilege to share and contribute along with my esteemed panel, Arun and Simon.
Today's topic ‘Why agriculture matters for India’ almost seems like a rhetorical question. I would start by stating that agriculture has always mattered for India, and has always been a key contributor to India's growth story. And would slightly reframe this question to ‘Why does it matter in this era of COVID-19’. Since Independence, India has seen recession thrice — in 1958, 1966 and 1980. The reason was the same each time — it was the monsoon factor that hit agriculture.
Now and then, agriculture was a sizable part of the economy. We are undergoing yet another recession. The difference this time is that we could more likely be bailed out largely by agriculture. In the past it was the causative, this time around it can be the cure for our economy. Let me put that into perspective with a few statements. This is an unprecedented crisis that COVID-19 has brought forth which will lead to global recession, financial instability, unemployment and food security — India is not immune from that as well.
Having said that, agriculture could be that silver lining. It can be a bright spot in the overall gloomy economic outlook by the World Bank and IMF. They are now projecting the Indian economy to grow less than 2.8 per cent for this fiscal year. Now this is from the highs of 7-8 per cent. Experts believe that agriculture alone could give India's economy — the overall GDP a boost by 0.5-1 per cent. This is very significant.
Agriculture can also resuscitate India's stalled economy and infuse the much required demand into the system. While it is true that agriculture contributes anywhere between 15 and 17 per cent of our GDP, a primary rise in rural demand will be the key to revive not only the economy, but it will also provide food security. Agriculture also provides jobs for half of the working group in the country and with the reverse migration, this will probably be even higher. But more importantly, it provides livelihood sustainability for our entire nation.
The question is how do we cash in on agriculture to revive our economy at the COVID-19 times. India is a smallholder farmer country. Smallholders will need support not only to enhance their productivity, but also to market the food they produce. Doubling farmers' income will require addressing issues such as access to credit, insurance, post harvest technology and investment in agriculture.
There is a need to change the narrative from just food security to more of a nutrition security, and from just farm productivity to raising farmer's income. Perhaps it is time we start calling it agri business and not agriculture. It is a slight nuance, but it changes the perspective. There has to be a concentrated and coordinated effort to promote farming as an economically-viable profession for the marginal farmer, migrant workers and more importantly, the youth.
COVID-19 is an effective multi-factorial. Today, plant-based nutrition is considered as a more sustainable system of production and consumption from the environment and nutritional viewpoint. Now, this also fits well with the Sustainable Development Goals of responsible consumption and production.
We as consumers have signalled our eating habits which change permanently. We would prefer eating more at home, more vegetables and fruits, and growing our own food in our kitchen or homeland. What does this require, a totally different product and service innovation, knowledge transfer for these stakeholders, and perhaps different business models to us as consumers.
Technology will completely disrupt the agri-value change. It will drive higher productivity; and create new channels to market. This pandemic above all has shown us the immense value of digital tools. Agriculture cannot be left behind anymore. India will need to adopt a systemic application of digital tools for both, production and timely supply.
We all know about SMS — Sanitiser, Mask and Social Distancing. The SMS will also apply in agriculture. Social distancing and safety norms are here to stay for a long time. This could mean drop in labour density and automation in farming. So the key takeaways that I would like to leave here: After years and perhaps decades of augmenting production and ensuring food security, today, India is embarking on a very different path, with pronounced focus to cash in on the era of surpluses and to alleviate agrarian distress.
India will need to break new ground by deploying solutions that are rapid for sustainable and resource-efficient growth. It will make the agricultural sector, an intellectually-satisfying and an economically-gratifying profession.
Lastly, the path to sustainable agriculture and food security or to agrarian prosperity lies in the hands of the educated youth. If you choose to take up agricultural production and other related activities based on integrated application of science and the social wisdom, our untapped democratic dividend will become our greatest strength.
I would conclude by saying that as the largest enterprise in the country, agriculture has always mattered for India. The year 2020 could very well become 1991 for agriculture — with India’s robust demand; attractive opportunity; the timely policy support that both our federal and state governments are providing and the unique competitive advantage that we have.
I am personally pleased to see the renewed focus in the sector — the facilitation by both the public and private sector and above all the interest from non-traditional players. When we increase rural demand, our economy revives, as it provides food security, jobs for more than half the country and the livelihood sustainability for the entire nation. I pass it on to the next speaker.
RN Bhaskar: Our next speaker is Arun Raste, who is the Executive Director of NDDB and anyone who wants to look at the milk revolution or even vegetable revolution and now the oil seeds revolution has to look at NDDB. Arun, can we have your views?
Arun Raste: Good afternoon, everybody. It is a pleasure to be here this afternoon with Simon and Dilip. There are two things. I realised that as we know agriculture is not more than a 1,000 year old. If you start from Adam and Eve, they just had an apple to eat. They were more dependent on horticulture than anything else. We are going back to horticulture what Dilip was saying now.
People were nomads and hunters. Then we started a little bit settling, and it was just about a few 1,000 years ago that we came into agriculture. For the next 700-800 years, there were no major changes in the sector. And then about 200-300 years ago, industrial agriculture came into existence — that was a major shift from the earlier agriculture to industrial agriculture.
If you see predominantly for the last 1,000 years, there has been hardly any change as far as the agriculture practices are concerned not only in India, but globally. That is one thing which we should know as compared to any other industry or sector is considered. There has hardly been any change as far as the production is concerned.
On the production side, there were a couple of other changes which impacted not only agriculture but others as well. For instance, pesticide, insecticide, chemicals etc were the changes in production. So, that was one impact of agriculture on the environment. It also led to soil erosion and possibly water depletion.
When I was young, it was south and east of India where rice was grown. But today, if you look at the major rice producing regions of the country— they are Punjab and Haryana, which never ate rice or which never produced rice. Rice was grown there because there was plenty of water. If you look at the water tables, the aquifers level from where the groundwater comes, is already in black. This means the groundwater is already depleted there.
The kind of agriculture that has been practiced over the years was possibly unscientific. This was mainly because the demand of the population was ever increasing. The land was limited, water was limited, and the population was increasing. Thus, we had to use every single resource at our command to feed our hungry people. So that was the stage we were in and then the Green Revolution came possibly. Today, at least we are self-sufficient as far as our food needs are concerned as a country.
We are probably the second largest grower of fruits and vegetables in this world. We are the largest dairy producer in this world. We are the second largest pulses producer in the world. However, the share of agriculture in the economy has gone down. It has gone down from 40 per cent about 50 years ago, to about 15 per cent.
Young people do not find agriculture as a fancy occupation. The youth don't want to go and work in villages or rural areas or be near the soil. Automakers Mahindra & Mahindra in Mumbai export about 9,000 tonnes of grapes every year. For the last 15 years, Mahindra’s have started exporting grapes to Europe, Canada among others — these are places that have strict compliance and certification needs.
What did Mahindra do? They mapped the supply chain, focussed attention on farmers, and were very transparent. In a sense, what they achieved in 15 years was increasing the income of farmers five times. The same grape farmer witnessed their income go up five times. There is limited land and water. So, to reboot our economy post-COVID-19, we need to reboot our agriculture. Firstly, we require a lot of young minds with new ideas to come into agriculture.
Second, we need to look at the demand side of agriculture. About 20 or 25 years ago, when Pepsi and Coke came into India, they did not have the kind of potato which they wanted. Thus, they started contract farming at that point of time. They gave seeds and contracted farmers to only sow potatoes for them. It was certain kinds of potatoes which were being used by them. For instance, Dynamix Dairy produced a particular quality of cheese for McDonald’s. Such demand-driven agriculture needs to be promoted going forward. That was the second part of it.
We are the second largest grower of horticulture crops and vegetables, but if you look at the export share of India in the global market it is just about 2 per cent. Even small countries like Thailand, export much more than India. Thanks to COVID-19, our balance of payment this month was in our favor. Otherwise, we keep on importing petroleum products and we keep on sending our dollars out.
To gain dollars, we will have to enhance our economic security. We need to be what China is to industry — the food basket of the world. When I was young, probably the global population was just about 4-4.5 billion people. Today it is 7 billion. So the number of people is going up.
The demand for nutrition security is going up. It is probably India that can feed the world. India is the only country in the globe where we have right weather that supports growth of varied types of crop.
The next change is the way we use water — for the simple reason that water is not abundant. It is very limited and it needs to be used judiciously for our future generations as well as for our present needs. Without going much into government policies, I would like the government to keep out of this and encourage more younger talent to take agriculture in their hands.
RN Bhaskar: And now we come to Bayer, India. A Bayer for me when I was a young boy was always a pharmaceutical company. It was only later that I came to know they are very strong players in agriculture. And they are now very strong players in every aspect of agriculture, whether it is pesticides, nutrients or even seeds. And so we thought it would be good to have someone from Bayer and we are delighted to have Simon coming in. He is the Executive Director of the company, and with a wide experience in seeds and agriculture.
Simon Wiebusch: First of all, Uma, Bhaskar and the Free Press Journal, thank you for the opportunity. Bayer in India is actually a very Indian company. We have been in the country for more than 120 years. We are backward integrated, we have production, and are even listed here.
We are a multinational and spend 80-90 per cent of our efforts on Indian agriculture. It is important to mention that because sometimes there is this discussion between multinational focuses.
Now, let me try to do two things here. One, I would like to go a little bit into what we have been observing around COVID-19. Second, I will also try to give a little bit of flavor on the back of what Arun was saying that would India be in a global food supply chain.
One thing is very important to see that from the day of lockdown, it took less than seven days for the government to realise that agriculture needs to be supported.One would be sitting here and saying it is self explanatory, that it is essential.
I am talking about agriculture or agribusiness throughout. It is because the crunch in the supply chain was bound to potentially cause a health crisis to end up being a hunger crisis in a country like India.
It was impressive to see how quickly we got the agri chain working in the country compared to some other countries. It was also impressive to see how digital pilots actually became mainstream in terms of continuing to serve the country and the farmers in this country.
It is now the time for young people to look into agriculture. Not only is it going to be the only economically growing area of the country, but also it is going to be a sexy employer. It is true agriculture in many ways is still very traditional in India, but it does not necessarily mean Indian farmers are backward. But I think in many ways, we have not been able to make the market connections and manage the risks that farmers face in a manner for them to really be ready to invest into future technologies. I believe this is changing. There were some major policy decisions made. I do agree, the government should only regulate what needs to be regulated. In this environment that we are in, it is actually important for the government to set the right parameters and potentially pull themselves out from areas they are not needed. For instance, the recent decisions on the mandis — now that is where huge opportunities opened up. But we should not underestimate the risks, the mandis were consolidators. So, anyone who wants to buy produce in the country needs a consolidator. That is where the Farmer Producer Organization (FPO) comes in — these being organisations making profit which need to be professionally managed. So there is an opportunity in rural management. There is a need to staff smart people in these FPOs that have economic understanding; are able to run these new entities; and make those market linkages.
Delivering groceries at your doorstep is going to be more permanent than some people are assuming at this point. That means the supply chain has to be more robust and over time a lot of discussion will be on quality, healthiness and nutrition. It is very important to realise that India is a self -sufficient country in terms of grains. But we should not believe that we are nutrition sufficient based on how we feed the 1.3 billion plus people in the country.
Coming back to the original question, why is agriculture important and why does agriculture matter in India? The simple answer to that is there is an ever-growing population in the country and they deserve to be better fed.
RN Bhaskar: Bayer is more Indian than multinational. But that is true of most German companies that are there in India. They have been one of the most profitable segments of Indian industry.
I have two questions. The first point is there are talks about growing food shortage the world over. Point two, when I look at India, and what India has done, and what is possible to be done, in the field of agriculture, I believe that this is a scare a bogey. And if you apply our mind there should be no food shortage at all, over to you now.
Simon Wiebusch: There are two things to it. Foods and nutrition are two completely different aspects to look at.
You could argue that there is enough food to go around. We talk about obesity around the world, etc. So that is true, still what we don't take into consideration when we take a look at the long-term is how things are changing — how food habits are changing; how people move up the nutritional ladder; how pressures on farming grow, etc. The way we grew our food yesterday will not be economically and socially viable in the future. We need to put a price on water. We need to put a price to land. In the case of India, we need to put a price on human labour which takes social aspects into consideration and not just, rupee per hour. It will change things significantly. If I look at it from purely Indian point of view, we must concede that today, in terms of the resource input. And I am specifically also referring to the human cost.
We are actually efficient — on how we produce. If we get this fixed, we can be the exporter and the breadbasket for everyone. But first we need to fix India. Rest will fall into place.
Dilip Rajan: I would like to concur with almost everything that Simon has mentioned. The only other thing I would add is: while it is true there hasn't been much of a seismic shift in agriculture. But moving forward, it is not about food security but about nutrition security which is number one.
Number two: There is a need to understand that the resource constraint is going to continue. So, India will need to adapt to newer technologies faster — whether you call it precision agriculture or circular agriculture.
From a nutritional standpoint, if you look at the guidelines of WHO. Even today, the consumption of vegetables and fruits in India is below the international standards. So, on the one hand, you have malnutrition and on the other hand, there is obesity. India has a significant amount of malnutrition. The question is how do you balance this out. I do not believe food security will be a constraint. The narrative has to move towards making this much more viable and ensuring that we are able to draw more with less.
Arun Raste: I agree with both Simon and Dilip. But I want to add a couple of other points.
First, as we compare India to the rest of the world. And what the rest of the world is looking at now — being vegetarian or being vegan. In India, traditionally 50 per cent or more of the population is already vegan. For them getting their nutrition security would be a challenge for us.
Second, land is limited. But we need some more resources to take care of today's 7 billion or maybe tomorrow's 10 billion. So one resource which globally has not been looked at for supporting agriculture is the sea.
Things like Aquaponics — will be the future of agriculture in India. This should be in harmony with nature. Can we look at the sea and aquaponics as new frontiers for us? This would probably appeal to the younger generation — it gives you excitement, ability to experiment, and abundant water. Fortunately, we have a long coastline which at the moment is not utilised at all. Hopefully, the government doesn't have any clue on what to do about it. If people take up this initiative, there is one area which could be explored in future.
RN Bhaskar: The government raises the security flag everytime one talks about the sea. Let me ask you one more question before I turn questions over to the audience. The speakers spoke about better usage of resources and the panelists have talked about water — being a critical resource. So, how do you think the government could be persuaded to look at measurement and to look at water policy for agriculture. Open to you all.
Arun Raste: It is a matter of habit. When I was young, I remember I used to travel by train from North India coming to Maharashtra on my summer holidays. We used to carry our water and then refill water at the railway stations. But today, I buy my water while I travel. I don't mind paying some Rs 20 to buy a bottle of water. So, it is a matter of habit. If consumers today are willing to pay for water, over a period of time, if politics does not come in even the rural consumers will start paying. Once consumers start paying, it might get extended. Industry as it is paying for water.
Consumers are paying for water in urban India and gradually in rural India as well. I know in my own village, we pay to the local Municipal Corporation for half an hour of tap water if our well runs dry. So, in rural India, it has started. In Argentina, there was a sort of revolution against the water taxes or selling of water by the government. Over a period of time, there will be a need to monetise water in the sense that you need to put the cost of water as one of the input costs, earlier we do that, the better it will be.
Uma Maheshwari Shankar: On the same line, I would like to add how do you justify the quality of the water — trust the water supply even for a payment that they make.
Arun Raste: It is a matter of habit. As I said when I was young, I used to go to the tap at the railway station.
Uma Maheshwari Shankar: Yes, all of us have carried water.
Arun Raste: No, I mean I used to drink water supplied at the railway station.
Uma Maheshwari Shankar: Yes, absolutely.
Arun Raste: Without a filter or without a RO filter, I find it very inconvenient to drink that water. It is a matter of psychology.
Uma Maheshwari Shankar: We do not trust the water now.
Arun Raste: In a place like Mumbai,where you are sitting at the moment, possibly the BMC offers clean water. If you look at Singapore, the fresh water is not the new water but toilet water which is recycled.
Uma Maheshwari Shankar: The trust is gone.
Arun Raste: Yes, so you need to bring the trust back and the trust cannot be brought. So, there the role of the media comes into place.
Dilip Rajan: How do we look at water? There are countries like Israel and others which are into cutting-edge technology.
If you look at water in India, some crops like rice and sugar cane in particular are known as water guzzling crops. There is politics around it.
As media, if you were to change the narrative to the carbon footprint of vegetable or plant base which is lesser, it will be helpful. For instance, if you were to say that for every kilo of rice that India exports, India is exporting 2,000 liters of water — this is what it takes to grow one kilo of rice — then the narrative changes.
We need to really look at it. We are still in an infancy stage to talk about water taxes. It comes back to agronomics, micro-irrigation and providing that particular benefit is the very good starting point. But we also need to structurally look at what kind of crops are consuming the water; to balance out and if you were to do a little bit of shift to vegetables or other crops, you are significantly reducing the water consumption.
Simon Wiebusch: Last year, we were talking about water. If there was no COVID-19, we would have started talking about water and the delayed monsoon around this time. Right? It is one of the topics that we quickly forget.
I have not heard people talk about the water (problem) this year as the monsoon is on time and we have had above average rainfall this year et cetera. So, I am very much in the favour of putting price on water as people around the world are measuring carbon footprints.
In India, there are still interesting approaches to subsidising electricity and fuel for pumping water. This is the case even in the areas where groundwater is low. So, you need to put a price on the water even in the rain fed areas. It is the question of water management as well. How do you make sure that when you have abundant rain, you do not let it flow to the Arabian Sea rather collect it. I think it takes a lot of rethinking, reshifting, combining it, putting a price on it to measure carbon footprinting.
A lot of people are so keenly talking of exports. Exporting basmati rice has a lot of merits, while exporting commodity rice at a lower price than intervention price to the farmer is not a good idea. So, other countries like Indonesia or Vietnam make noodles out of this rice and have a longer value chain. It is also not a good idea especially when you put the price of water on top of it.
The young people need to look at ways to extend the value chain for agriculture in the country. How do you go into processing? How do you make sure that the cheapest of the cheapest commodities ends up being super expensive when it is in the supermarket and has a brand promoting it. The best example in this case is rice. I spent a couple of years in Southeast Asia. So, I know rice is a profitable crop, just not for the one who produces it. Adding to it is the government intervention and politics, which make the crop more attractive even though it is a resource guzzling crop and super inefficient. We need to ask if these policies are right.
That is where the water should be priced and policies should be tweaked. Or at least try to not incentivise in the wrong direction in terms of the cropping footprint for the country. We can grow everything here. So, why do we waste so much land producing very low value grains.
RN Bhaskar: Absolutely. We will be dwelling on this in our subsequent sessions farmer distress and we have to have welcome policies differently.
Vaneeta, you have got a lot of questions with you, wherever you can please direct the questions to our panelist.
Vaneeta Raney: Your idea for an ideal supply chain role model for India that not only ensures the right price for the agriculturist, it also actually is an idea for an end consumer, but you also please take care of the employability of the manpower involved in the same chain. Therefore, is there any way or mechanism by which you can get rid of this system of political interference which is acting as a middleman in manipulating the prices and devoting the obnoxious margins?
Simon Wiebusch: This question is full of landmines. I think what is important is to somewhat look at where India is unique and can literally build new models which pull people into the business. You should see what Mahindra has done with grapes. The exporting of grapes was successful. The company builds infrastructure around the crop which is world class.
Mango, especially Alphonso mango, have takers in the form of a huge diaspora of Indians around the world who would happily want access to the Alphonso mango. I see an opportunity there.
I can confidently say India, you have a brand there. You also have customers abroad, but today the country is unable to deliver in Bombay to the standard that somebody would expect. So, if you were to build an ideal supply chain around that then there will be an opportunity. It is, to my mind, one of the easier crops to produce and handle logistically in the right manner. And that is where I would start.
I would not look at the commodities at this point at the vote winners, if I may say so, because you were talking about politics. I would look at niches that can be quickly profitable. It is an area where you will get a lot of farmers and people around you interested to participate. Then cold storage, pack houses, etcetera, all will come automatically.
Dilip Rajan: It is a very interesting question and there are multiple parts to it. Not only supply, which is a big problem, there is a post-harvest loss of roughly 30 per cent in India. So, there is lower productivity which is compounded by post harvest loss.
Clearly, there are a couple of challenges. So, to disseminate reliable timely market information to the farmers. There are structural issues with the supply chain. There are supply and demand forecasting issues.
I am going to try and steer away from the political milieu. But the fact of the matter is, there have been three recent ordinances that have come out. One you heard was about the mandis; and the second one was reevaluating the essential commodities Act. The last one was the government expanded from tomato, onion, potato to most of the crops, which allows the farmer to now find a market where he can actually sell his produce. Now, clearly, the mandis had a role in price realisation in aggregation. Farming is limited by the land that the farmer owns, but selling his produce should be limitless — that is one part. The other part is the farm to fork idea is gaining interest — not just because of COVID-19, to make this idea a reality.
2020 will be the start of the fastest technology adoption in farming. The government will need to step back and let the farmers do what they wish to. But again, you require young people to really bring this forward. There are a lot of gaps in the value chain. But one you start building this ecosystem, you will see the difference.
There has to be a connection to agriculture. Ambani spoke about the new technology, 5G, such technology will help in making price discovery easy. The farmer has a choice in where he wants to sell the produce. But there are governments that are also trying to figure out how we do not give them a choice in producing. So, we need to get the supply in tandem with the demand.
Arun Raste: I will not get into my own sector, but I am inclined to say that the agriculture sector needs to learn from some other sectors and some other successful examples. So other than my sector, I would like to talk about Fabindia. Now, what has Fabindia done? All the women, today, vouch for any product which is sold in Fabindia.
Now, these are handicrafts made by rural producers. If they are produced in their own markets probably, in their own surroundings would have fetched probably 1/10th of the price at which the Fabindia product is sold in Bombay, or Delhi, for that matter. So it is a social enterprise. It is a new way of doing business. It is a new way of marketing.
Can we have many more people in agriculture and related sectors who are more of William Bissell who can market to a particular segment of the society what they need, taking into consideration the production needs and orienting that production needs to suit the market requirements. That is number one. So, William Bissell is something which is coming up very fast.
There is another sector which is hugely successful in India and Bangladesh that is the microfinance sector. The success of the microfinance sector is the woman force in this world, who were never taken into consideration as an economic addition to the rural economy. They have come into the rural economy as productive assets and they are generating income which they are locally spending. The question is how do we process things and increase the local consumption in local areas? So the wastage could be arrested and farmers' income could be increased. That is the second part of it.
The third part is how to restore some balance in terms of our usage of natural resources.
That is the question which possibly the younger generation and media need to ask people who are sitting in power.
Vaneeta Raney: Another question is would calling farming, agribusiness bring an alternate perspective and hinders all the farmers from supporting it. Perhaps, considering the stringent mindsets of the farmers of India, is it validating?
Arun Raste: You are sitting in Mumbai, and Maharashtra had a tradition, which was called Bara Balutedar. So, Bara Balutedar were 12 people who were artisans. So people like a carpenter or a goldsmith or a cobbler, others used to provide services to a farmer on a yearly basis without charging him anything. At the end of the year, the farmer would reap the harvest and he would pay all of them.
In this scenario, he was not a businessman, but he used to settle all the businesses with whatever barter system, which was prevalent at that point of time. He used to settle all his dues at one point of time. So he was a businessman in that sense. Even traditionally, this was prevalent across the country at that point of time.
The business for the sake of business is not a bad idea. What does the business do? They are trying to enhance their own income. If the farmer is having a mindset where he or she tries to enhance his or her own income, I don't think it is going against the interests of the farming community. They should be businessmen, and they should have imbibed this business mentality in their own production system.
So today, if I see that everybody is growing one particular crop, then probably the market for that will be limited and the prices will deplete. So therefore, I should be looking at something else, and ultimately that is a business sense for me. But Indian farmers do not do it. So, we require that business sense to come into our farming. So, agribusiness is the perfect word.
Vaneeta Raney: How do you see the progress of agricultural research?
Simon Wiebusch: First of all, when you talk about research, it is true that an increasing amount of research today goes into digitalisation of agriculture, globally. There are different drivers to that. One of them is clearly how do you optimise the ecological footprint of farming. You can only do that with the help of sensors, the Internet of Things (IoT) and ultimately machine learning and that is where the large agriculture industry is moving.
You go into environments. For instance, Europe — for good and bad reasons in the case of ecological standards — sets a very high bar. Thus, as a farmer you need to be in a position to justify your agronomic interventions. This is only possible if your agronomic activity is digitised and is basically traceable.
Now a lot of people may be thinking, how does it apply to small holders in India? This is going to be a boost for India. There are a couple of things which we underestimate. Look at the demographics. About 20 years ago, we would have been sitting here and saying we have achieved self-sufficiency in grains. So, we can feed the nation. But there was a lot of talk around how we educate the rural parts of India. Today, 90 per cent of farmer's children are school educated to a point that a high percentage would even be going into cities and into universities.
If you ask the kids of South Asian farmers what they want their kids to do — 80 per cent will tell you I want them to be doctors or take up any other profession but definitely not farming. That means the structure of farming and the physical intervention of farming must change. I am increasingly of the opinion that you will see more weekend farmers that do farming offsite. So, you witness farmer’s kids passing out of the university and working in Bangalore, for that matter in an IT company, but you will not give up the farm that your parents have back in the village. But you might be sitting and managing that farm with your smartphone.
One of the biggest issues that we as an industry has been facing very often is that it is just not economical to interact with every single farmer. We have 130 million farmers in the country. But actually you will find East West Seed, Seminis, Bayer, Syngenta and UPL very often talking to the same farmer. There are some farmers we don't talk to because they are too far away and given the economic potential it is unviable to have that interaction.
Now think of digital as a means for a zero-cost touch point. COVID-19 has been a super catalyst. My three and a half thousand people that are out there talking to farmers everyday cannot visit them physically. But, I speak with one lakh farmers a day as Bayer via digital tools. Three months ago, I would have told you this is impossible.
Dilip Rajan: Simon covered a lot of ground. So let me specifically go back to the R&D standpoint. Companies like East West Seed and I believe the rest of them are looking at advanced agronomics, as you get into this connected agriculture using sensors. Then there is IoT and blockchain.
Particularly from an R&D standpoint, we are looking at gene editing, molecular-based breeding among others. In the early stage of precision robotics, we were looking at bringing in technologies not just in seed production and breeding, but across the board.
In the last 100 days, what was considered to be impossible has taken place. We have connected with over 1.5 lakh farmers now. Urban India is well connected, while rural India is not well connected. But during this pandemic, we were surprised that farmers were interacting with us — two ways. We were also getting insights which we never had before — we did crop tours, e-detailing, among others.
Now, if you think about an agriculture company detailing to farmers, we have done it. For me, the connected farmer is the key. Initially, we thought there would be a lot of gaps. Our realisation is that it is now no longer the case. The technology is so pervasive. The only thing I have seen in the last 100 days is the resistance coming down very quickly.
Vaneeta Raney: How do we increase the contribution of agriculture in GDP?
RN Bhaskar: Basically, when you have other sectors going faster than agriculture particularly agriculture will have a lower percentage in GDP. There are only two ways in which it can happen. One is agricultural prices and value addition goes up in agriculture. The second is people leave agriculture. I think both are happening. You have to improve value in agriculture.
Simon Wiebusch: We are still looking at more than half of the working population being dependent on agriculture. With all due respect, post demonetisation, agriculture has become very difficult to put into figures. There is a lot of economic activity happening. The livelihood of this country depends more on agriculture than on manufacturing or other areas which might in terms of value-add seem to be important in GDP. But I think India is in many ways still very dependent on agriculture. I will not go by percentages, but I do see the value growth opportunities are unbelievable. I think that if you rather look at the classical management strategy — Blue Ocean — agriculture in India for my understanding is the area where the probability of significant success is.
Dilip Rajan: Just look at the number of times you are getting funding now for Agri Tech companies. Capital flow for such businesses for the first time since our Independence has started.
We need to change the thought that agriculture is not a farmer alone, the narrative that has been told to us for so many years. There is so much the word ‘agri business’ connotes, — there is organic farming through precision farming, sensor-based technology among others. The ecosystem impacts more than just a number on the GDP.
Vaneeta Raney: Considering the government controls over supply of farm inputs and the price of outputs, other interventions can also be seen. Aren't we demotivated here? Where is the scope of future entrepreneurship?
Simon Wiebusch: Post-COVID-19, for a very short moment, we were really concerned that farmers would go for low risk and would basically go for government-procure crops. Farmers were moving out of vegetables, they were really trying to de-risk their business. Luckily enough, this has changed quite quickly. There are a lot of open markets out there. If you are looking at inputs in some areas, they are highly governmentally intervened, that would not be the area where I would seek opportunity. I would seek opportunity in the niche which is not regulated. It will also prove to the government that some things are possible. Everybody in this country is an economist, but there is currently a need to do that for political reasons or for social reasons.
For example, Telangana is going in and saying we want to manage better in how far what is grown here. Now, is this the best time? Is it the best way, it doesn't matter? But ultimately, you will be seeing government interventions on how I can reduce unnecessary outflows because the economy is tanking. The government is going to be looking at every euro or every dollar or every rupee and is not going to be happily procuring rice at twice the world market prices. I really see this as the time for things to change. There are a lot of areas in agriculture where you can grow today with zero government intervention.
Vaneeta Raney: Why do we tend to limit the discussions to only two issues — nutrition and safety. What about food safety? Don't you feel that there are a lot of chemical pesticides involved. So how do we go ahead with this? How do we overcome this challenge or problem?
Arun Raste: There is a branch of agriculture which is known as organic agriculture, which is chemical free, insecticide free and traditional agriculture which has been practiced. Post Green Revolution, non-traditional agriculture and organic agriculture did not go together. Therefore, organic agriculture is hardly probably in some percentiles of the total agriculture market. If you look at a small boy or a girl, and if you show him any packaging and they see a green mark they realize, this is vegetarian and the red mark is non-vegetarian. Going forward, possibly there will be more people who will be looking at vegan products or pesticide-free or organic food. Therefore, there will be demand for it.
Now the biggest drawback for organic is the cost and when you are growing it organically in small quantities, possibly it is priced higher. There is subsidy being paid for water, pesticides, insecticide, even for seeds. If you are doing organic farming then you are doing away with all the subsidies and therefore, your cost of production goes a little up. That is one.
Number two: There is something called fair trade which was very prevalent in the western world, where the consumer was willing to pay 10 per cent or 15 per cent premium for products which they wanted. At least 10 years ago, when the organic trend came in, people were willing to pay about 10-15 per cent more for organic products. So there is a demand. The demand for organic is there in urban centers at least in Bangalore and Pune. If that consciousness comes in the younger generation, then they will start demanding for organically-grown produce. Obviously, the farmer has to be compensated for whatever reduction that has taken place in his total production. If the consumer is willing to pay a little more, obviously, the farmer will be more than willing to opt for it.
RN Bhaskar: Very true. And in fact, when you talk about nutrition, it means nutrition, which is also healthy. So you can't separate one from the other. You have to make sure that it is safe. You can't have poisonous nutrition.
Arun Raste: It is important to note that I am a little bit concerned. With some of the discussions, there is no unsafe food out there. The fact of the matter is, even when you see some of the reporting of residues and exceeding even what they call maximum residue levels, it is never that you would find that the food is literally poisonous. I think it is just important to realise how things are sometimes blown out of proportion. The whole organic movement has its merits, especially around what I would call the feelgood factor and what people believe in.
When you look at a country where today we are already finding that our efficiency of input is low as it is, then where do you even have the yields to go down on average, this would be a huge problem.
Vertical farms, rooftop farming in cities, etc are generally done in an organic manner. But that also means that you are paying Rs 300 for a salad. So just be aware that this is an interesting area for people who are highly health conscious and can afford it. But we always need to balance it between what makes sense for the whole of the country.
Vaneeta Raney: Thank you to all the attendees. The objective of the webinar is an attempt to make India the food basket for the world. Definitely, this is going to create more dependency on agriculture and this is how we can contribute more towards GDP as well. And being media educators, we will definitely see to it that we see that our students are more inclined and interested towards agriculture. This also brings us to Agro journalism, which is going to be a future area altogether for them to study.
Uma Maheshwari Shankar: Thank you so much. It was an excellent discussion from all three of you. A lot of things to learn and a lot of things to unlearn from the students' perspective. The future ahead is going to be looking different, challenging, exciting. At the same time, as Vaneeta said that we are trying to coin Agro journalism, the clarity and the perspective should be in place. I think then the students can really make up some right decisions with all the thoughts that you all have shared with us.
RN Bhaskar: Thank you very much, everybody.