Digital to Define Agri’s Future

Digital to Define Agri’s Future
The agri economy in India, which accounts for almost 18% of the GDP and provides employment to more than 40 per cent of the population is at a crossroad. The classic compositions of agri commodities, which are compiled of fragmented markets, opaque prices and manual operations are quickly becoming irrelevant as global supply chains are increasingly integrated, transparent and data driven.
The size of the opportunity is enormous, but the cost of not doing it efficiently is enormous. It is estimated that post-harvest losses in India are more than INR 90,000 crore a year mostly because of the inefficiencies in the storage, logistics and coordination.
A sector well prepared to digital transformation
Agri commodities offer a special situation since the digital adoption is not imposed by them, but rather by nature they are within the operating model of the sector. The commodity standardisation, high transactions frequency and the growing requirements of traceability are evidence of a fit to digital systems.
Simultaneously, the ecosystem is producing enormous quantities of data, crop trends and weather swings, mandi arrivals and worldwide pricing indicators. However, these are far less efficient at transforming this information into practical information. As a matter of fact, digital transformation building blocks are available.
Digital momentum: First mover advantage, unrealized potential
India has already embarked on its digital transformation of the agri ecosystem and multiple interventions are proving to have a real effect.
National Agriculture Market (e-NAM) has established a common national market through the integration of more than a thousand mandis. This has enhanced price discovery and market accessibility especially to the farmers who were formerly limited by the localised demand. On the same note, other forums such as the National Commodity and Derivatives Exchange Limited (NCDEX) have made commodities trading more transparent and more risk controllable via the digital futures markets.
However, such efforts, although they have an effect, are rather isolated.
From fragmentation to platform-driven ecosystems
The change that is happening in agribusiness concerning the agri commodities is the discontinuation of fragmented and linear chains of values to digital platforms.
This change is being brought about by three structural changes:
• Platform-based access to market: Digital marketplaces are facilitating real time price discovery and reach across geographical limits.
• Data-driven decision-making: AI and analytics are turning raw data into useful insights to use in pricing, demand forecasting and risk management.
• Layered services: Trading, logistics, warehousing, and financing are becoming more and more united into flawless digital experiences.
With all these elements coming into place, the sector will be on the path of becoming one where efficiency, transparency and scalability are inherent to the sector.
A defining decade for agri commodities
The agri commodities industry will be changed in the coming decade. Digital technologies will not just solve the old issues of inefficiency but will give a new meaning to the process of value creation, exchange and scale.
For India, this is a strategic chance to have globally competitive, resilient, and inclusive agri ecosystem, which uses technology to empower all stakeholders, including farmer to enterprise.