Kerala-based startup Athey Nallatha supports local farmers with technology investments in blockchain
For a country that has been hoisted for the last 74 years on the backbone of our farming economy, the latest farmers' protests bring the trepidations and despair of farmers into glaring light.
A corollary of the farm bills introduced last year, the vitriol and protests have made Athey Nallatha examine the scope and possibilities of the new farm bills while ensuring that we do our part in guaranteeing fairness and security to the local farming community who have been the relentless support in our endeavors.
The major Farm Bills introduced last in the Rajya Sabha last year are: (1) the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, (2) the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 and (3) Essential Commodities (Amendment) Bill. While the first bill allows farmers to sell their produces outside the government-regulated markets or mandis, the second gives farmers a stipulated framework for contract farming. The Essential Commodities (Amendment) Bill seeks to remove cereals, onions, pulses, and others from the list of essential commodities, which means there will be no stock holding limits unless in special cases like famine, war, or natural disasters.
Challenges of Indian farmers
Father of India’s green revolution, M.S Swaminathan once said "If agriculture goes wrong, nothing else will have a chance to go right in the country." India today is a global agricultural powerhouse and one of the top three major producers in the world yet the plinth of this achievement – the farmers – have only seen a modicum improvement in their circumstances. Beyond the farm laws, the issues that plague the farming communities are many. Just a few decades ago, 75% of India’s GDP was contributed by farming and today, the number is shrinking to 15% yet, it accounts for over 58% of the population who depend on farming for livelihood. News articles of farmer suicides are the grave reality of the debt-ridden farming community who fight for a living amidst droughts, input shortage, the poor price for produce, and exploitation. It is indisputable that reforms must happen, and they must happen fast. In an increasingly globalized and digitalized world, farming needs revolutionary overhauls to remain sustainable, competitive, and profitable. Yet, the newly minted Farm Bills aren’t the entire answer to these pressing problems.
The benefits and Caveats of Farm Bills
Our honorable Prime Minister Smt. Narendra Modi, speaking on the farm bills said that it was the “first time in decades that the Centre has framed laws that would benefit farmers and workers and that they are needed for 21st century India”. While each of these inter-connected reforms promises to weed out middlemen, brokers and transfer the direct benefit to farmers, the apprehensions as pointed out by farmers organizations like Bharatiya Kisan Union (BKU) and agricultural bodies like the All India Kisan Sangharsh Coordination Committee (AIKSCC) bring forth the intricate complexities underlying in each of the three progressive reforms.
The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill in ceteris paribus condition allows farmers the luxury of options for selling and earning profits beyond government-managed mandis. Farmers can benefit from the saving on cess fees, brokerage charges, and marketing expenses but the farmers also fear eventually losing on government guaranteed Minimum Support Prices (MSP) and that may lead to price exploitation.
The Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 gives farmers the right to enter into contractual farming agreements with agribusiness firms and retailers, giving them new opportunities and access to better inputs and technology. On the downside, with no legal redressal in place, corporates may stand to dominate the farmers and arm-twist them into selling for lower prices, in the absence of MSP.
The Essential Commodities (Amendment) Bill, 2020 can help in bringing private investment and FDI to the farming sector but it is also an opportunity for corporates to hoard commodities and influence prices by manipulating supply & demand in the market.
How can blockchain ensure the much-needed transparency
While the government has promised provisions for facilitation and promotion of farmers through the farm bills – there is widespread ambiguity about the exact nature of these provisions, processes, anti-trust laws if any, that are in place. In this negotiation of state Vs. market, farmers view corporate’s newfound authority, in the absence of government protection like APMC (Agricultural Produce Market Committees) managed mandis and definite assurance of Minimum Support Price (MSP) to be their greatest threat. It is a strong possibility that without government and legal protection, the farmers might be forced to sell their produces at a smaller price with big corporates exploiting them by stockpiling and controlling prices.
As the legislature takes its course to ensure the grievances of the farmers are addressed, we at Athey Nallatha have decided to take the first step towards promising absolute transparency and accountability to our farming community. Through Blockchain technology insertion in our operations, we now assure the farmers of Fair Wages (an empirical equivalent of MSP) and moreover, they can also examine the entire value chain to be assured of its fairness. The farmers can also be guaranteed of:
Trust & Transparency: In Blockchain technology, the blocks are unalterable, transparent records that are accessible to everyone in the network including farmers. The farmers can witness the complete value chain of our production right from sourcing raw materials from them to our pickles being relished by our customers.
Lowered corruption chances: Blockchain is a digital ledger that is supported by a decentralized structure. No single entity like the government or the organization is in charge, so there are lowered chances of corruption and price manipulation.
Traceability: While the Essential commodity Bill amendment opens the possibility of hoarding, with blockchain our farmers can track the process flow to see the commodities procured from them turning into finished goods. This farm to fork traceability can also help our farmers in forecasting the demand and supply of our products and plan their harvest yield accordingly.
Fair price: With blockchain, Athey Nallatha hopes to do away with middlemen, third-party vendors and excessive transaction costs and the direct benefit of this will go to the farmers, who can be assured of fair price and can also compare it to the price incurred at every point in the supply chain to determine price competitiveness and fairness.
Easy adaptation for farmers: Though with abundant scope, Blockchain is a highly intuitive technology that can be easily adapted by farmers to gain perspectives and appreciate the autonomy they enjoy, along with easy and faster clearing of settlements from the company.
To bolster our blockchain initiatives, we have also identified local farming communities that will benefit from upskilling and vocational training in blockchain and other emergent technology. And we hope that with the government's active support, we will be able to herald a new era of digitally empowered farming in India.