The agriculture has been the backbone of the Indian economy for decades, while it’s share has eroded continuously over past few decades because of industrialisation and urbanisation.
More than half of the Indian population is engaged in agriculture and allied activities while contributing less than 16 percent of country’s GDP. The contribution of the agriculture sector in the Indian GDP already declined from 19.34 percent in 2001-02 to 15.79 percent in 2013-14. Moreover, as per census 2011, India has approximately 119 million cultivators and this number is decreasing by approximately 2,000 every day.
This trend is worrying and will create a natural stretch on the agriculture sector in the future. The rising cost of farming has made it a loss-making affair for the smallholder farmers leading to large-scale despair, pain, agony hence flight from being cultivators to industrial labour.
Farmers have been at the receiving end for a very long time due to the rising challenges stacked against them in the agriculture. One such challenge plaguing not only Indian agriculture but across the developing world is Spurious Agriculture Inputs.
Spurious Agriculture Inputs – A Structural Problem
Judicious usage of agriculture inputs in general and agrochemicals in particular is very important for the sustained growth of Indian agriculture and economy. There is a significant share of non-genuine or spurious agriculture inputs in the Indian market, which can be counterfeit, illegal, adulterated or sub-standard.
These products are inferior and are unable to deliver the outcome efficiently to the end user, the farmer. Further, some of such products while do deliver the stated outcome but significantly harm the soil and environment. These products are also responsible for high toxicity in the food we eat as they are unregulated and profits are the driver, not the food security.
The growth of spurious agriculture input products is adding more pain to agriculture ecosystem. Apart from crop loss, damage to soil fertility & environment, and compromising food security use of such products also leads to loss of revenue to farmers, agriculture input companies and government.
By conservative estimates, India suffered a loss of 11 million tons out of 275 million tons of food grain production in 2016-17 because of spurious agriculture inputs. Further, it is negatively impacting Fruit and Vegetable exports market, worth USD 2 Billion.
In light of this, India’s position as one of the top food producer and exporter in the world is also at stake. There is no denying that the damage through such products is multi-fold and the spurious agriculture inputs pose a significant threat to various stakeholders especially farmers and manufacturers.
Key reasons behind the proliferation of spurious agriculture inputs are lack of awareness amongst the farmers, difficulty in differentiating between genuine and non-genuine products, supply chain inefficiencies, law enforcement challenges and influencing power of point of sale players, i.e. distributors/retailers.
The maximum impact of spurious agriculture input is in “Crop Protection” market segment because of its obvious vulnerability due to higher unit cost and ease in fooling the system.
Spurious Crop Protection Product Economy
The Indian crop protection industry is estimated to be more than USD 5 Billion in FY’17 and is expected to grow at a CAGR of 12% to reach USD 7.4 Billion by FY ’19. Out of this, the domestic market contributes more than 50 percent.
To understand the menace of spurious crop protection products and to assess its impact, FICCI conducted a nationwide study to understand the situation of spurious (non-genuine / illegal) products in 2015. The study revealed that spurious pesticides market constitute USD 525 Million in FY’13 which was 25% by value and 30% by volume of the domestic crop protection industry. Further, the study also indicated that this market is expected to grow at approximately 20% per year in value terms and if the problem is not addressed it can reach to approximately 40% share by value in the crop protection industry by FY’19 in India.
The total spurious crop protection product market in India would be more than USD 1.5 Billion in FY’19.
Blockchain, To Counter the Counterfeits
The technology advances today suits counterfeiters as they can easily produce packaging material similar to or better than that of genuine products. However, if the technology has created avenues of a problem, it also has also enabled solutions.
A technology-based solution is one of the strategies to counter the problem. Various studies and scholars have attempted to propose technology-based solutions to combat spurious agriculture inputs products in the supply chain.
The most practical manner to solve this menace is to create a technology platform of Trust, Transparency, Efficiency and Accountability which can ensure the flow of only authenticated product across the supply chain.
In simple terms, we need to create a supply chain network for agriculture inputs industry powered by blockchain. It must be an integrated platform for farmers, retailers, distributors and manufacturers to ensure seamless integration and sharing of transaction information with each other. It must ensure and/or promote digitization of the supply chain and hence is able to track both the product and contextual data of the product throughout the network. The network must use the power of technology to make data capture and sharing possible among players who have a conflicting interest in the supply chain.
Authentication solutions based on blockchain like AgriChain have multiple benefits as they provide Tamper-proof Products, Product Authentication and Accountability and Tracking and Tracing of Product till it’s consumption. Further, such solutions unlock lot of value for multiple stakeholders
Protection against, counterfeit, mislabeling, mixing and duplication frauds
Get expert insights with their agriculture input historic data from the network
More efficient supply chain means economic products
Better yield and quality of output
- Eliminate losses in revenue and trust due to counterfeit, mixing and duplication
- Visibility in the supply chain on near real-time basis increases efficiency
- Helps in weeding out players who indulge in mixing fraud
- Enables in demand prediction based on the collection of historical data
- Government & Regulator
Safeguards revenue by eliminating tax losses
Ensure better image globally for promoting Sustainable Agriculture
Complete Supply Chain
Seamless communication channel among supply chain players
Best practices get encouraged and reduce errors and frauds like mixing and duplicates become more and more difficult
Better management of inventory based on historical data
Increased efficiency with a reduction in waste and better transportation practices
Faster business relationship building among players
Overall efficiency and transparency paves the way for the price reduction of the product
About Author – Deepak Pareek
Deepak is focused on leveraging cutting-edge technologies including Big Data, Artificial Intelligence, Machine Learning, Deep Learning, Blockchain and IoT in Agriculture, Education, Healthcare, Governance, E-Commerce and Platforms/Ecosystems domain. He is a technopreneur with extensive expertise in Business Planning & Development, Technology & Innovation, Investments & Venture Capital, Strategy & Analysis, Start-ups & Mentoring, Growth Hacking & Product Management, Technology Roadmaps & Business Models, and Advisory & Consulting Services. A well-published author on technology and business.