Food Security : Private Sector can help Drain the Price and Gain the Output through Smart Farming

 

Agriculture is not only about food, it’s about life. Agribusiness is all about optimizing profit in an inclusive way so that everyone in the line of production benefits, most importantly the producers: farmers

In developing countries like India, majority of farming is with small scale farmers and they are the most vulnerable to output shocks. The worst is, that set of people who produce food are the ones who suffer for want of food. 

The much talked about inclusive growth, has been elusive in capitalist economies as small agricultural players are left out of the growth, not to say much during recession. The economic divide between rural and urban life is apparently wide with the velocity of growth being far less in the former, when they are overly depended on agriculture for livelihood. 

Food security is threatening in a big way with explosive growth in middle class which is fuelling huge demand for nutritional food. With constant threat from climate change and disruptions in productivity the food prices are vulnerable to increasing prices making it less affordable even to middle class dampening their prospects of prosperity.

Capital rich Private Sector has to come forward to invest heavily on agricultural technology to support small farmers on reducing the impact of uncertainties and natural disruptions. 

 Climate-Smart Agriculture:

Climate-smart agriculture seeks to increase productivity in an environmentally and socially sustainable way, strengthen farmers’ resilience to climate change, and reduce agriculture’s contribution to climate change by reducing greenhouse gas emissions and increasing carbon storage on farmland. A more climate-smart agriculture is needed as agriculture is significantly affected by, and has been a significant contributor to, climate change.

For every  degree Celsius of global warming, grain yields are projected to decline by 5 percent.

Yet agriculture has the biophysical potential to offset about 20 percent of total annual CO2 emissions.  More effort is need to raise productivity, improve resilience, reduce GHG emissions, and enhance soil carbon storage.

Raising agricultural productivity can reduce pressure for land-use change, such as reducing deforestation driven by agricultural expansion of food, fiber, and fuel.  Raising productivity should become a dominant focus for Private sector through investments in technology and research enabling agricultural output increasingly seamless.

Strengthening farmers’ resilience will help adaptation to the increasing frequency and intensity of droughts and floods, together with longer-term temperature changes. Improving land and water management, better weather forecasting, early warning systems and risk insurance, and developing new technologies such as drought- or flood-tolerant crops can improve climate resilience.

Increasing carbon storage in farmland will also help mitigate climate change. Actions to enhance carbon storage can also improve productivity and resilience leading to a triple-win of higher productivity, more resilience, and greater carbon capture in soils. This includes techniques such as mulching, inter cropping, integrated crop-livestock management, conservation agriculture, and agro-forestry. The potential for carbon storage is highest on degraded lands

 

The private sector can moot a responsible agricultural investment model which will have its objectives of making sustainable profits for all the stakeholders, becoming reality.  The larger objective should be to make access to food for all at affordable prices and technology should support for the cause through mitigation of risks surrounding the farming industry.

World Bank Group has come with  broader principles governing RAI (Responsible Agricultural Investments ) and Private Sector  can have similar objectives like  

To invest in technology supporting small farmers on their productivity

To strengthen food security to all

To make it Viable economically and resulting in durable shared value

To generate desirable social and distributional impact, but not to increase vulnerability

To be sensitive to environmental impacts and responsive to usage of resources

To achieve higher output thus reducing food prices to meaningful level

To ensure sustenance to all stakeholders involved in agricultural productivity

With ever increasing demand for nutritional food on account of increasing population and affordability, agricultural productivity in developing nations has to increase substantially in order to achieve food security to all.

The major challenges to output through natural disruptions, climate change risk and production inefficiencies can be mitigated through effective utilization of technology which can help small scale farmers mitigate crop loss risk.

Access to Information technology and scientific tools will help farming sector to increase their output and prevent crop loss due to natural risks thereby achieving food security and affordable food a reality.

Food security at meaningful price can be the best that can happen for building nations wealth.

Massive Urbaization and Middle Class Growth in CHINDIA : SME's Opportunity

The middle class explosion and demographic composition will enable the East displace the supremacy of the West as we will see China out powering US and India moving past Japan in terms of growth in the coming decades. To understand the shift in balance we need not require much of economic analysis, but simple look at the map we can see the weight of the population on a small circle in the eastern part of the planet which can tell the story in a big way. 

Organizations can see opportunities in the map than in any other thing. Reaching out to the consumers of “CHINDIA” (China and India) through any means can be the simple solution to make money. How can you strategies your innovation, technology and market making will all depend on how we can position ourselves to the gigantic animal called CHINDIA Consumers. 

We have imagined few critical business opportunities for companies which can come with innovative solutions to reach out on mass consumption market. 

·        Water

·        Organic  Farming at Home

·        Waste Management

·        Circular Economy

·        Equipment on Lease

·        Bundling of Domestic Infra

Water: Firms would use newer technologies like Ozone to recycle and reuse water with higher possibilities of purification, thus reducing the demand for new water. This can be a big money spinner as water security will be a major challenge and organizations providing door step solutions can reduce the impact of negative energy the economy can have on account of water crisis. 

Organic Farming at Home: Food inflation is a major dampener to the wealth creation of the nation. With consistent migration of people from rural areas and shrinking arable lands, urban world have to adapt to cultivation. Farming at roof top and garden management can be outsourced to organizations which can help cultivation of vegetables and fruits at lower prices. Urban farming can be a business model which can give rise to global player’s exploiting big opportunities.

Waste Management: Investment of money into this can never become waste and it can turn gold. Mining of high value products from waste streams through micro fluidic technologies will become a sort out business and enterprises can make early move on this to create scale. Recovering of gold, silver, lithium and other rare earth metals from electrical and electronic effluent will be highly profitable business. Residual waste treatment can help creating heat, energy and fertilizer for consumption. 

Circular Economy: Circular flow of major global raw materials, such as polymers, steel and glass would be a decisive step in itself, allowing re-used and virgin materials to become interchangeable. This opens up the economic potential of the circular model leading to 40-50% savings eliminating “recycling” leading high demand for virgin materials. It would also enable products and supply chains to be designed optimally around materials which are consistently re-used – in turn unlocking greater value in refurbishment, remanufacturing and the shift from product to service provision.  

Equipment of Service: Enterprises will start looking at the experience of the software services business and would replicate the model on equipments as service. Companies can help small businesses to get access to advance equipments with remote operational capabilities in order to enhance their productivity demands. Connecting the manufacturers of high technology machines and enabling access of the same to small business will throw open new avenues of business on both ends and the enabling enterprise can make a healthy earning out of the same. 

Bundling of Domestic Infrastructure: New market can be created for some of the domestic infrastructure products like Solar power, LED lights, water recycling, energy storage, information’s and communications for less affordable people if the same can be bundled and sold on a low cost model. Economies of scale have to be achieved through supply of infrastructure packages to the millions of households. 

The power of people and massive urbanization across major cities in the eastern part of the world will throw open opportunities for new models of business. SME’s should move forward on these lines quickly and take advantage through connecting to the consumers with innovative ideas. There is money there to make and we are sure global players will come and sweep through the market with their muscle power. 

Conventional business models will continue to throw challenges in terms of productivity, pricing and customer expectations. Adapting to the changes and working on continuous improvement will be the solutions for sustainability. While large size organizations can invest on technology and resources to meet the market demands the smaller ones will suffocate in disruptive conditions. 

Small enterprises can collaborate with one another and come with concepts which can help them to reach out to local markets and provide access to products at optimal cost. Business strategist and Change Managers should also look at extending support to SME’s on developing models which can connect them to consumers through different products at affordable prices.
Adaptability to Technology and Innovation will be key for SME’s Sustainability and Scalability.

T Margabandhu

M/s Marggo India