How to make digital transformation of agriculture work. Lessons from Telangana

Awoman in red sari looks at her crops in India's south: Agritech delivering data-driven services in India is estimated to potentially add $50-70 billion to the agriculture sector by 2025.

Agritech delivering data-driven services in India is estimated to potentially add $50-70 billion to the agriculture sector by 2025. Image: Digital Green

Gim Huay Neo
Managing Director, World Economic Forum
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  • Agritech delivering data-driven services in India is estimated to potentially add $50-70 billion to the agriculture sector by 2025.
  • Agriculture’s digital transformation still has much work before it reaches its potential but the south Indian state of Telangana can demonstrate crucial lessons.
  • A successful model for harnessing agritech requires the central and state governments to play an enabling role for the private sector to deliver effectively.

Globally, technology is shaping the future of food and agriculture but their total digital transformation will still take some time, especially in the Global South.

Telangana, however, can demonstrate some valuable lessons as the South Indian state is integrating agritech as a critical lever to transform the agriculture sector and creating policies and public infrastructure to deliver agritech services to 100,000 farmers by 2025.

Public infrastructure, partnerships, programme and policies

India is the fifth largest economy in the world. Around 85% of its farmers are smallholders, producing 51% of the country’s agricultural output. At the same time, there are more than 1,000 agritech start-ups in the country.

Agritech delivering data-driven services in India is estimated to potentially add $50-70 billion to the agriculture sector by 2025. Like many other emerging sectors, central and state governments have been supporting Indian agritech, such as incubators, start-up seed funding, government-backed venture capital, tax holidays, exemptions and other incentives, to scale their solutions.

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Even with such proactivity, Indian agritech are yet to achieve its huge market potential. The aforementioned data speaks volumes of the ecosystem challenges that agritech services face, such as small landholding patterns and the unorganized nature of the sector, making it costlier to identify, educate, onboard, serve and sustain a farmer. Thus, policies must also focus on enabling an ecosystem that makes agritech service delivery cost-effective while safeguarding farmers’ interests.

Constituted in 2014, Telangana is the youngest state in India. In 2021-22, agriculture contributes 18.3% to the state’s gross value. It is also a priority sector for the state government’s efforts to drive rural development and the local economy by increasing farmers’ incomes while making agriculture more efficient and sustainable – scaling and mainstreaming agritech is a key part of its strategy.

Against this backdrop, Telangana became the first state in India to adopt a Public Private Partnership (PPP) framework in partnership with the World Economic Forum to scale digital agriculture in the state. The Forum in India has two initiatives focused on agriculture and food systems - artificial intelligence for agriculture innovation (AI4AI) and the food innovation hubs that aims to transform agriculture sector leveraging agritech and innovations.

Public private partnership framework

The PPP framework has four pillars:

  • Agri value chain transformation.
  • Agritech sandbox.
  • Agriculture data exchange (ADEx).
  • Agriculture data management framework.

While the focus of the value chain transformation and agritech sandbox is to develop the ecosystem to scale the adoption of agritech services, the last two pillars are focused on developing digital public infrastructure and policies to enable the efficient use of high-value data to fast track the development of customized services for farmers.

Public Private Partnership Framework.
Public Private Partnership Framework. Image: World Economic Forum

Agri value chain transformation

Project Saagu Baagu is a prime example of agri value chain transformation focusing on easing agritech services delivery to the end customer through administrative and policy support and digital public infrastructure, including ADEx and agritech sandbox. A salient feature of the project is service delivery specific to challenges in a value chain.

The project was initiated in 2022 and is being implemented by Digital Green with support from the Bill and Melinda Gates Foundation. Now, more than 7,000 chilli farmers in one district have accessed four agritech services, including AI-based advisories, soil testing, produce quality testing and e-commerce – all in the project’s pilot phase.

Quality testing report of chilli from farmers who are part of the Saagu Baagu project.
Quality testing report of chilli from farmers who are part of the Saagu Baagu project. Image: Digital Green

The government plans to scale existing and additional agritech services in phase II (from 2023 onwards) to 20,000 chilli and ground nut farmers in three districts. The digital public infrastructure will also be introduced in Phase II; in Phase III (by 2025), the target is to reach 100,000 farmers in the state.

Agritech sandbox

Agritech services include access to financial services, e-commerce and advisories. Of these, advisories are the most high risk as the wrong advice adversely impacts a farmer’s income. To date, most advice has consisted of standardized advisories based on established practice or dynamic advisories that respond to a particular variable, such as weather or pest infestation.

However, emerging digital technologies, such as artificial intelligence, the internet of things, blockchain and stereoscopy, are disrupting traditional advice dissemination by creating local, customized and quick advisories for on-farm production and quality testing. However, unlike conventional advisories based on a structured validation system, an independent institution does not validate advisories generated through emerging technologies. Therefore, the agritech sandbox has been envisioned to safeguard against the risks to farmers who act on such advice, while encouraging innovations.

The agritech sandbox is a controlled environment provided to innovative technology-led entities for limited-scale testing and certification of a new product or service from the perspective of conformance to norms and standards relating to the agriculture domain, technology and applicable regulations.

Agriculture Data Exchange (ADEx)

Conceptualized through multi-stakeholder consultations, ADEx envisioned transforming the agriculture sector through increased, trusted and responsible data sharing.

The Government of Telangana, with the Forum (Centre for the Fourth Industrial Revolution India) and the Indian Institute of Sciences, is developing an open-source technology platform to create an ecosystem of data providers and consumers so that users can discover and exchange data with the delivery of digital services to farmers in mind.

In the initial phase, ADEx will work on use cases, namely, soil health advisory, pest prediction, daily market prices, and credit assessment.

Agriculture data management framework

The agriculture data management framework is a first-of-its-kind, comprehensive data management framework for the agriculture sector to ensure the responsible development of the data-sharing ecosystem.

It adheres to the 3P approach – protecting users, preventing harm and promoting innovation. After much consultation, the policy provides data rights, metadata management, accountability procedures and guidelines for access control and defining a role for the grievance addressing officer.

A replicable format

Telangana’s experience highlights the need for governments to play an enabling role and consider non-financial yet high-impact areas to help scale agri-tech services.

A focus on value chains and geographies is also needed to ensure efforts are focused, organized and outcome-oriented. The investment in digital public infrastructure is a cost that governments must incur. However, their returns are exponential as they impact both the private sector and the end farmer, increasing their productivity and income.

The Telangana example shows that PPP is viable for other states and countries facing similar ecosystem challenges.

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