Time has come for innovations in Indian agriculture, NCML CEO Gupta says

Sanjay Gupta, MD & CEO, NCML

The time is right for technology-led innovations in Indian agriculture to give a much-needed boost to farming, according to the chief executive of the country’s largest post-harvest solutions provider.

“India has the world’s highest arable land; there is not much you can do to expand it,” Sanjay Gupta, managing director and chief executive officer of National Commodities Management Services Limited (NCML), told Moneycontrol in an interview.

“The next phase will be one with better predictability, better inputs, better technology, better seeds, pesticides, forecast and better price discovery and risk-hedging mechanism,” Gupta said.

He added: “Agriculture was always a laggard in terms of technology. But now I believe the time has come for agriculture also. Technology interventions, startups will definitely have a positive effect.”

NCML offers a bouquet of services along the entire supply chain in the commodity space, including commodity handling and risk management.

The company operates over 700 warehouses and is also building silos for the Food Corporation of India. NCML also runs a network of accredited labs and provides funding through its Non-Banking Financial Company (NBFC).

Indian agriculture is caught in a complex web of controls, subsidies, and restrictions that are legacy issues.

The vast farm sector employs more than half the workforce in the world’s second-most populous country but makes up only about 15 percent of its economic output.

About half the farmlands still depend on the monsoon for irrigation. Changing rainfall patterns and frequent heat waves have threatened farm output in recent years.

While the exchequer subsidies several key inputs, including fertilisers, and promises procurement at a remunerative price, it also curbs exports from time to time and places several on land use and farm trade.

Meanwhile, farm productivity has plateaued, and large-scale farming is difficult as land holdings are scattered. The government’s push to reform agriculture markets through legal amendments has stalled.

Still, there is scope for improvement, the NCML CEO said.

“Owing to small land holdings and heavy dependence on external factors like rainfall, etc., decision making by the farmers faces many more constraints compared to developed countries, therefore all the effort should be made to neutralise uncertainty surrounding agriculture.”

Predicting yields

The government is supporting the use of technology to boost production, lower costs and reduce imports.

The need of the hour is to adopt technology-based modern farming techniques, Prime Minister Narendra Modi said October 17, calling on farmers to be judicious in the use of resources like water and other key inputs.

The government has also formed a committee comprising representatives of the central and state governments, farmers, agricultural scientists and economists, to look at making the Minimum Support Price (MSP) regime effective and transparent and also to examine zero-budget farming and changing crop patterns.

While many agri-startups have entered the market in recent years, promising efficiencies across the sector, an NCML subsidiary is working on a model to predict crop yields.

The company has weather data for 15 years as well as granular crop cutting and quality data. AGCON, the NCML unit, uses remote sensing technologies for estimating crop acreage.

It also monitors crops using weather, satellite indices, machine learning and artificial intelligence models and on-ground data.

The company is developing models for the state-run Mahalanobis National Crop Forecast Centre to predict crop yields. For this, it is using satellite imaging and historical data.

“Our model will be very efficient. This model should be launched in one or two months. The government will take it, run it, validate it and they will decide whether to roll it out countrywide,” NCML’s Gupta said.

Market size

He assesses the total addressable market size for agtech crop risk management at Rs 1,500 crore with a gross potential of over Rs 6,000 crore. The market is growing at a compound annual growth rate of 25 percent.

Besides 12 years of data from a network of over 4,500 automatic weather stations across India, AGCON has gathered more than 450,000 geo-coordinates of more than 12 crops across over 250 districts.

“With the advent of advance technologies like satellite imaging and mapping, drone-based surveillance, etc., we believe that large-scale crop prediction will be a reality,” Gupta said.