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| RESCUING FARMERS’ THROUGH E-COMMERCE | | |
Dr. Parveen Kumar, Dr. D. Namgyal
Agriculture in India is the backbone of every economic activity, still hiring about 50% of workforce and contributing about 14 per cent to the country’s Gross Domestic Product (GDP). From subsistence to traditional agriculture and from chemical intensive green revolution of the seventies to organic agriculture of the present times, country has made rapid strides in this sector. Agriculture now is the digital age. The digital technologies have reduced the time lag and done away with the physical presence at a specific place. These are also finding a favour with the farming community. Just with a click of mouse or by the touch of a finger, farmers can take all the information and use that for their advantage.
Farmers in India are often exploited by middlemen and often this result in the loss of their rightful earnings. A farmer puts in tremendous efforts in harvesting the crop and is entitled to reap the monetary outcomes of the hard work which very often the farmers’ does not get. Besides the loss due to middlemen, the agriculture produce in India is also subjected to various kinds of post harvest losses.
A NASSCOM study of 2019 revealed that Indian farmers suffer a post harvest loss of rupees 93,000 crore. Technology has the remedy for all this. Technology adoption can help with optimization utilization of produce. If deployed thoroughly, it can help in reducing post harvest wastage by improving market efficiency; give a boost to agricultural content development and its upgradation. Moreover it can significantly increase the reach of agricultural products thus leading to increased cross boundary selling and produce can also be sold across boundaries.
This has been made possible by e-commerce. E-commerce ensures that the farmer is not exploited by the middlemen and post harvest losses are avoided.
In agriculture, e-Commerce refers to the buying and selling of agriculture produce as well as services between parties involved. It also involves payment accomplishment of the goods and services via an online platform (electronic means). People also call it internet retailing. Electronic National Agriculture Market (e-NAM) constitutes a perfect example of e-commerce in the realm of agricultural marketing in India. It can be differentiated with popular e-commerce as it only involves B2B trade where general e-commerce involves mainly B2C trade.
Agri e-commerce presents a range of economic benefits to farmers, communities and the wider society, in the form of improved income and livelihood. Agri e-commerce services reduce post-harvest wastage by improving market efficiency. The transparency and efficiency followed by e-commerce companies helps to avoid this post harvest loss and eliminate some of the unnecessary middlemen resulting in inventory reduction which makes it easier for farmers to sell their produce to consumers at competitive rates.
For instance, farmers selling fruit and vegetables through Frubana in Colombia record post-harvest losses of 3%, compared with the average of 58% for farmers that sell through traditional channels. Moreover, growing mobile operators and increasing internet connectivity helping to boost the market.
Back in 1991, the internet had less than 3 million users around the world and its application to e-commerce was non-existent. In 1999, an estimated 300 million users accessed the internet and approximately one quarter of them made purchases online from electronic commerce sites, worth approximately US$ 110 billion. According to the World Trade Commerce (WTC) report, this year, global business to consumer e-commerce sales is set to pass the US$ 1.25 trillion mark. E-commerce has been hailed by many as an opportunity for developing countries to gain a stronger foothold in the multilateral trading system.
E-commerce has the ability to play an instrumental role in helping developing economies benefit more from trade. Unlike the requirements necessary to run a business from a physical building, e-commerce does not require storage space, insurance, or infrastructure investment on the part of the retailer.
The only pre-requisite is a well designed web storefront to reach customers.
E-commerce allows for higher profit margins as the cost of running a business is markedly less. Another advantage provided by e-commerce is that it allows for better and quicker customer service. In some cases, customers could have direct access to their own personal accounts online and can avoid calling companies on the phone. This thus saves both time and money.
One of the best and successful examples of e-commerce in agriculture in the rural India is the initiative of Indian Tobacco Company (ITC). The ITC e-choupal; where village internet kiosks set up by ITC are managed themselves by the farmers called as Sanchalaks who provide information on weather and market price, facilitate the use of farm inputs with the enhanced knowledge and take informed decisions to purchase farm produce from the source.
The ITC e-choupal eliminates wasteful intermediation and multiple handling thereby reducing transaction However, lack of awareness and non-availability of the internet in a rural area, connectivity/latency issues and technical difficulties are some of the major restraining factors for the growth of E-commerce in agriculture. Some other companies doing e-commerce for agriculture are Amazon, Inc., Alibaba Group, Yihaodian, COFCO Group, SF Express, Benlai, TOOTOO MEDITECH, CO., LTD, Godrej natures Basket, Supermarket Grocery Supplies Pvt Ltd (Big Basket), Grofers India Pvt. Ltd. Ninayo, FarmFresh, among others. Amazon Retail India Pvt Ltd (ARIPL), the wholly-owned food retailing venture of the Amazon, Inc., is currently working with dozens of farmers in the region and the company has created a cold chain hub in the vicinity to supply fresh produce to sell online through its Amazon Fresh and Amazon Pantry.
Of the several issues faced by Indian agriculture, e commerce has the potential to solve problems of high level of fragmentation in the supply chain, large volumes of produce traded and quality and costs of products. Another indirect advantage of this would be empowering farmers especially those who are not in a position to negotiate better prices for their produce. |
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