Challenges and Opportunities in Agriculture
Food and agriculture systems today are unsustainable for both people and the planet. They operate at a high environmental cost, waste large amounts of product and leave many producers in emerging markets at or below the poverty level. Stakeholders across sectors and regions have recognized the urgent need for a fundamental transformation of food and agriculture systems. Such transformation will create sustained social value and provide greater equity to the most disenfranchised.
Agriculture is a high-priority sector of the Indian economy, with 58% of all households dependent on it, directly or indirectly, for their livelihoods. The sector is at a critical juncture, with multiple challenges across the value chain. Although the adoption of digital technologies can contribute to addressing some of the challenges, success in the sector has been isolated and not scaled sufficiently.
Challenges faced by the agriculture sector include the following: – Small and marginal farmers (86% of farmers) own less than two hectares, leading to unstable farm incomes and poverty;
- Unsustainable agricultural practices, resulting in soil degradation and water stress;
- Lack of datasets at farm, farmer and field levels, leading to high cost of services;
- Gaps in market linkages, leading to challenges in price discovery for farmers and price volatility in the market;
- Lack of food processing, lack of infrastructure framework close to farm gates, increasing wastage;
- Challenges in financial and digital inclusiveness;
- Poor farm mechanisation leading to affordability challenges.
Emerging technologies driven by the Fourth Industrial Revolution, such as the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), Big Data, drones and blockchain, are disrupting many industries, driving rapid and massive change. So far, the agriculture sector has been slow to harness the power of these technologies. Low adoption levels of emerging technologies in agriculture are due in large part to the complexity of the sector, which includes small farm sizes, a lack of telecommunications infrastructure in rural areas, high regulatory burdens that drive up costs, and revenues constrained by customers’ limited ability and willingness to pay.
Technology disruption
Agricultural systems in emerging economies are riddled with inefficiency and unaffordability. Fourth Industrial Revolution (4IR) technologies are making it easier to tackle some of these issues. Improvements in the performance and cost of computing power, storage, and bandwidth have led to the growth of digital technologies. Taken together, these technologies can accelerate innovation, reduce costs of solutions, increase transparency, enable consumers to make informed choices, and promote evidence-based policy-making. They are also transforming how innovations are being conceptualized, designed, and commercialized, and fundamentally changing the way businesses operate. Emerging technologies, such as AI, blockchain, drones, IoT and big data analytics, have the potential to enhance productivity and efficiency at all stages of the agricultural value chain, boost farmers’ incomes, increase farm productivity while reducing waste, and enhance supply-chain efficiency, transparency and sustainable resource use.
The key objectives of emerging technology interventions in agriculture include the following:
- Sustainable farm incomes through better connected farm-to-market supply chains;
- Financial and digital inclusion for smallholder farmers;
- Safety and trust in food systems;
- Real-time monitoring of environmental impact;
- Improving productivity and efficiency through farm mechanisation;
- Managing food wastage through digital enablement of storage and logistics infrastructure;
- Smart risk management of nature-related uncertainties.
However, emerging technologies are likely to introduce new challenges. They can create unintended consequences, including data breaches and a lack of digital inclusiveness, which must be considered and addressed in advance. Their beneficial effects may be unevenly distributed, potentially deepening the divide between rich and poor. Harnessing the positive effects of technological innovation and avoiding potential downsides will require deliberate and coordinated efforts by investors, innovators, and policy-makers.
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