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IoT Adoption in Indian Agriculture: A 2020 Landscape
IoT Adoption in Indian Agriculture: A 2020 Landscape

April 29, 2021

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Agriculture is a core pillar of India's economy, along with services and manufacturing, having contributed 16% to the national GDP and USD 420+ billion in GVA in 2019. 44% of nation’s workforce is employed in this sector, and India is the 9th largest agri-exporter to the world. In 2019, our exports were north of USD 42 billion, as our production achieved a record output of food grains and horticultural crops at nearly 300 MTs of each. During COVID-19, when most sectors declined, agriculture registered record positive growth and helped sustain rural lives and livelihoods.

Yet, the biggest employer, of all sectors, is struggling with historically low resources in terms of land, labor, liquidity, and digitalization. Less than 1% of the total farmlands use a tractor, since 87% of the farms are <3 acres in size rendering mechanization unviable. Result - one of the lowest annual farmer incomes globally, at USD 1,700 per farmer and fast declining farmer income growth rate (lower than India's per capita GDP of INR 1,65,765 per year or USD 2,338 at conversion of INR 70.9 = USD 1). Effectively, farmers are stuck with low productivity per unit land and even lower profitability.

 

Primary Challenges with Indian Agriculture Value Addition

The twin challenges of low productivity and declining profitability across the Agri value chain emerge from very nascent levels of basic farm mechanization in India, which stands at less than 1% of farmlands using tractors or basic pumps and agricultural tools. While the various government initiatives - PM's 7-point agenda to double farmers' income by 2022, multiple state-level programs, and several farm2market initiatives have taken root, globally, it has been proven that government effort delivers much faster and significant results when combined with technology adoption. Some of the best-performing transformation stories globally suggest a parallel shift in more mechanization, as well as, use of Internet of Things (IoT) technologies in farming. 

 

Role of IoT and the State of Adoption in India

NASSCOM and Cisco collaborated on a study of the Agri value chain to discover the extent of technology adoption in the sector, primarily the use of IoT enabled solutions. The study, titled “IoT Adoption in Indian Agriculture: A 2020 Landscape,” highlights the major gaps and opportunities with IoT-led digitization of Indian agriculture. Key observations from this survey of over 220 agricultural solutions providers, end-user farmer cooperatives, Agritech startups, and several government entities provisioning financial and non-financial resources in the agriculture sector, indicate the immense potential of the nascent, but emerging, IoT adoption in Indian agriculture. 

Globally, IoT in Agri adoption will grow 3X in 6-7 years, through 2025, with better economics and effectiveness of solutions.

 

NASSCOM’S IoT Adoption Index Reveals Massive Gap In Awareness Vs. Use Across the Agri Value Chain

  • IoT Adoption Index is a weighted score of IoT technology awareness, level of implementation, realized RoI, and potential scale-up efforts across the value chain  pre-harvest and post-harvest stages

  • Between 27%-37% overall adoption, the index indicates a very low adoption rate, with a 3X drop between knowing the technology and implementing it

  • IoT-led technologies offer the biggest benefits of eliminating human error in data capturing, delays due to passive recording by making data available in real-time, and enabling analytics to be performed to provide preventive alerts and guidance that help save effort and avoid loss in a big way

  • Biggest gaps in usage of any advanced IoT solutions beyond point sensors is the biggest limiting factor is scaling up the technology and its visible and replicable impact - mainly due to significant resistance to change by the farmers and limited RoI available to solutions providers

  • The study further illustrates with several case examples, the initiatives by enterprises through solutions and CSR programs, by Agritech startups, and the various state governments. 

 

Tech-Driven Self-Sustaining Agri Transformation Will Need Coordinated Ecosystem Action Across Governments, Agri Enterprises, Startups, and Tech Solution Providers

  • More AgriTech innovation CoEs on lines of STPI models; advanced R&D on high-yield inputs

  • Cluster-led development; focus on lowest cost tech and highest RoI with capital infusion

  • Dedicated farmer training; more formal Agri education avenues

  • IoT integration into existing farm tools, greater post-harvest and value-chain digitization

  • Market-linked real-time visibility of cost of inputs and product pricing

 

The report offers perspectives on how various ecosystem players can partner and bring their strengths together to build mission-grade scale into the various pilots being tested across the nation. India is likely to become one of the biggest consumers of IoT technologies in the next 5-10 years, and agriculture stands to gain immensely.

For our in-depth work, do download the report. Let us know your thoughts, feedback, comments, and ideas for the next stage of research in this area. 


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IoT Adoption in Indian Agriculture - A 2020 Landscape - April 2021 - vF.pdf

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Namita Jain
Deputy Director, Research

Researching technology for actionable impact since my 12 years in tech strategy and advisory

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