“When tillage begins, other arts follow. The farmers, therefore, are the founders of human civilization.” – Daniel Webster, Renowned American Statesman
After the great transformation of IT sector with the implementation of Software-as-a-Service model, India is going to witness a transformation in the ailing agriculture sector.
Well-known as agrarian economy, India has the second-largest arable land globally with its 160 million hectares, succeeding the United State of America. Despite this, the sector is facing a depriving state. Around 70 per cent of Indian population is totally dependent on agriculture. Sadly, they comprise of small farmers who barely hold one hectare of land holding, struggle to make ends meet and depend on loans for their day to day farming.
Alarmingly low rate of productivity in this sector is due to various structural challenges, including heavy dependence on rainfall for irrigation, small-farm land holdings and lack of access to technology and real-time information.
What is Farming-as-a- Service?
Farming as a Service offers innovative, professional-grade solutions for agricultural and allied services via a subscription or pay-per-use model. Some solutions by FaaS are organized, efficient reinventions of existing practices, while others are brand-new tech-driven innovations.
The first FaaS category is farm management solutions, which offer information sharing, analytics and precision farming tools. Information management between farmers, government, corporates, financial institutions and advisory bodies fall under this category.
Production assistance is the second category of FaaS, which offers on-farm resources to aid production. This involves equipment rental, labour services and utility services.
The third and final FaaS category offers access to markets—platforms connecting farmers with suppliers of agrochemicals and consumers of their farm produce.
These solutions have been adopted globally to provide a gateway to innovations across the agriculture value chain.
High Impact Model of FaaS
With a clear perspective of an efficient and productive future of Agriculture sector, both the Government and the private players are inclining towards the effectiveness of Farming as a Serving. Basically, FaaS provides affordable technology solutions for efficient farming. It converts fixed costs into variable costs for farmers, which makes the techniques more affordable for a majority of small farmers. The services are available on a subscription or pay-per-use basis in three categories, which are crucial across the agriculture value chain:
Farm management Solutions: Information sharing, analytics and precision farming tools
Production assistance: On-site resources to aid production, such as equipment rentals
Access to markets: Virtual platforms that connect farmers with suppliers of seeds, fertilisers and other agrochemicals, as well as consumers of their produce.
Nonetheless, the model also has a vast social impact on the rural agrarian economy in which small and marginal farmers are the primary beneficiaries.
Farming as a Service in India
FaaS bears a lot of potential to the forever-ailing scenario of Indian Agriculture. With the arrival of FaaS, India has witnessed an increase in number of start-ups and an influx of funds to the sector. Total investor for FaaS in India is currently $105 million to $115 million, which undeniably looks promising. The number of startups evolving to growth stage funding has increased as investors become more confident in the viability of these business models and the returns. It has seen to become a global trend as FaaS based start-ups have gained popularity as investors have invested millions of dollars into it.
The majority of the investments in start-ups that offer farm management solutions that are primarily influenced by developed markets with high mechanisation. Many start-ups are in the digital or technology space, which is already attracting investments from tech giants.
In addition, both the central and state governments have taken initiatives regarding this new innovation of agricultural technology. The government is actively pushing FaaS-based services through customer hiring centres (CHCs) and soil testing. The government’s focus on increasing institutional credit to farmers, improving infrastructure (such as investment in cold storage areas) and promoting digital transactions will also expand FaaS-based solutions.
Looking the Way Forward
FaaS can definitely help address the problems like inefficiencies across the agricultural supply chain, such as low productivity, lack of farm mechanisation, access to markets and data asymmetry.
FaaS will encourage product innovations such as multipurpose agricultural equipment and tools for real-time data capturing and analysis. FaaS has the potential to spark an economic and social revolution by improving the status of small and marginal farmers. Coordination between all the direct stakeholders (start-ups, investors, governments and corporations) and indirect stakeholders (local entrepreneurs, implement suppliers, agronomists and IT vendors) is critical for the success of FaaS. Addressing the key structural challenges, such as the lack of infrastructure, technology and financing, the resistance from the ground level and regional differences, is critical to realising the concept’s full potential. In the future, all the FaaS solutions—farm management solutions, production assistance and access to markets—are expected to converge into a single model, as the end customer is the farmer.
