Horticulture 4.0: The Plant Factories For Agricultural Exports
Twenty five years back, we launched a communications revolution, bypassing the land-based telephony technology. India jumped to move into a satellite based cellular Technology. Today, we have a mobile subscriber base of over one billion compared to 33 million land- based connections at its peak. The low cost of mobile telephony has enabled even the rural poor to take advantage. The same technological revolution, which jumps several stages at one time is required in agricultural sector if we desire to reach and even exceed our export targets..
In the recent past, with every VUCA event such as Covid-19, the most affected economy is rural. Not only migrant remittances dried, they returned home to put an additional pressure on household resources. Rural supply chains have taken a hit and the households further pushed into indebtedness. These setbacks are in addition to the usual cycle of flood and drought. This needs re-thinking.
In India, marginal farmers with less than two hectares of land account for 86.2% of all farmers, but own just 47.3% of the arable land, not enough to farm marketable surplus as well as contribute to exports. This is forcing jobless rural youths to migrate for income generation. Going forward the next decade, the indicators are that manufacturing jobs will decrease due to automation. We lost world markets in the labour intensive industries such as garments and leather, with consolation that jobs in service sector will increase, but largely at low-skilled levels such as online & food aggregators delivery force.
In spite of its vast agricultural output, India ranks 10th within countries representing highest agricultural exports. We were ranked No.14 in export of fresh vegetables in 2019 and rank No. 22 in export of fresh fruits. Small countries like Belgium, Italy, Netherlands, etc. export much higher value of agricultural goods than us. Tiny Ecuador, which is located at two times the distance from Japan as India, exports twice as much. Our exports, from high of $ 42.51 billion in 2013-14 went down to about $33 billion in 2019-20. Vietnam has overtaken India in cashew exports, once our monopoly. Sri Lanka and Kenya have threatened our tea exports while Uganda has made inroads in our largest coffee market, Italy. The competition is intensifying, as over 40% of African arable land that is presently uncultivated is brought under the plough over the next decade.
The government has made a good progress in agricultural reforms and now it must focus on using technology to multiply our exports of value-added products. With the climatic conditions getting unpredictable, groundwater table at dangerous low levels, we can, only hope to raise domestic production through raising yield and protecting our farmers from uncertain weather conditions, adding predictability.
In such a scenario, how can we create win-win conditions. We have to bring the fruits of technology to the marginal farmers to raise our exports to $60 billion by 2023 and $100 billion by 2030, as envisaged by our national planners with added usage of Technology.
We must change our mindsets and start using the term ‘farm factory’ for cultivating certain value-added products. Fruits & vegetables use less water and their profitability is higher than cereals & cash crops. The consumption of vegetables is going up in the US and other advanced countries and Covid-19 has accelerated. According to Nielsen 2019 food trends, poor cauliflower is today international chefs’ top delight. It is also seen on pizza topping to rice replacement.
Apart from a huge potential market in fruits & vegetables, we possess the world’s largest resource of medicinal plants. Here too, we have floated on the surface and our exports are hardly $700 million, compared to China’s $10 billion. Both these sectors alone have huge potential in conversion to value-added products in frozen vegetables and extracts of medicinal plants. Both these sectors will gain huge customer base post covid19. Now is the right time to take the lead in increasing organic supply to the world.
The marginal farmers, without technological support can never escape sustenance farming. Holland, with an area about 1% of India, is the world’s second largest agricultural exporter. There is a focus on intensive, but sustainable farming, which is not only highly efficient in yield and wastage but also contributes to social responsibility. Netherlands export is not limited to neighbouring countries but is sent far and wide. It exports eggs to the American market, which itself is a large producer and exporter and apples & pears to Vietnam, Thus, it is profitable for farmers and constitutes 83% of its GDP. Much of the production takes place in polyhouses, hydroponics and vertical farms, the farm factories of the future. No doubt, these are capital intensive projects and beyond the financial capacity of small farmers but as a nation, we have all the elements in place to begin a journey to mirror Holland’s success.
‘Farm factories’ are used to grow certain types of crops, which are grown in temperature, moisture and nutrition-controlled environments, assuring high organic yield while at the same time limiting threats from environmental externalities. These facilities require up to 90% less water and land resources. The farmer benefit by raising high value, high yield quality products without export rejections, nil chemicals and losses due to climatic conditions, pests etc. The farmer entrepreneur can pay off capital loans with ease. The country can increase and diversify its export basket. The main recurring expenditure is electricity and water. To reduce power bills, solar powered farms can be installed with reliance on grid only as an auxiliary. Since water, though in small quantities are required throughout the year, common tanks can be constructed and filled during monsoons.
Some agriculturists have shown that if one has a 1000 sq. ft plot of land, vertical farming on it yields a harvest equivalent to 3,000-4,000 sq. ft of plot. Moreover, with a crop cycle of 3-4 times a year and the profits are substantial as compared to open farming. Farmers have grown 17 tonnes of turmeric in one acre of protected farm compared to 8-10 tonnes in open field. Studies have shown that is possible to earn up to Rs.15 lakhs per acre.
Many organisations such as Urban Kisaan, Suregrow, Kisano, CRAFT and TSCoE havestarted offering consultancies, equipment and training. So far, these technologies have been adopted by techno-entrepreneurs and some progressive farmers. With favourable laws governing contract farming already in place, the government should create an enabling environment where techno-entrepreneurs can partner with and make long-term investment in lands owned by clusters of marginal farmers. In many states, subsidy for polyhouses is available for up to 80% of the cost. However, it is beyond the capability of marginal farmers to take advantage to such technology intensive farming. The government should energize the farmers Producer Organisations to bring entrepreneurs and farmers together.
The government should first target those areas, which have become unfit for cultivation due to soil salinity and farmers are in dire straits. Overuse of groundwater and chemicals has depleted water and cultivable soil resource in many parts of India. Over six million hectares of such land is lying unutilized in India. Just as an example, we export Rs.700 crores of gherkin (A variety of cucumber) pickle to European countries. This is an ideal crop for plant factory and we can without much effort, increase exports to Rs.2000 crores. There is a vast market for other products too.
There is a vast fast-growing market for natural plant products as for use in food products, cosmetics, food supplements such as curcuma extracts from turmeric, lemon oil, aloe vera, etc. An ayurvedic tea has just been introduced in Japan with Indian herbs and Ashwagandha sales have doubled in the USA in past two years. At least seven Indian medicinal plants are listed in US top 40.
With increasing demand, the cost of production of such factories and installation will go down substantially. Such facilities would create jobs for rural unemployed throughout the value chain. VC and NBFC funds which have started trickling in such ventures will also come forward to finance such activities after the successful demonstration of these technologies in scaled up facilities.
Our nascent home-grown agritech start-ups, using tools like Artificial Intelligence, big data, drones have started introducing innovative solutions in farm productivity, supply chain and market linkages. Even companies like Microsoft has seen the potential and has launched its Agritech Startup Program.
It is time for creation of a nodal agency to integrate these developments in diverse areas to scale up our export production and increase our agri-products, primarily value-added exports from world no. 14 to world no.6 within 10 years.
Many large companies such as Mahindra & ITC are already active in agri-exports and they can utilize their CSR revenues to set up training centres for farm factories and further make buyback arrangements. Clusters of such farms can support industries such as freezing & packing of vegetables, distillation of medicinal extracts & oils etc. at site. Our future lies in organic, sustainable frozen food exports which is miniscule at present.
Further, increasing the use of temperature-controlled reefer containers can allow areas distant from ports also increase value-added farm exports. Besides, reefer containers take products to distant markets such as UK, Japan, Australia and China at a lower cost than air cargo and with little transit loss.
Horticulture 4.0 is a win-win concept which will create sustainable income for marginal farmers, allowing them to come out of perpetual indebtedness and create jobs for rural unemployed. We can then take our rightful place in the global agriproducts trade.
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