Smallholder-led Agricultural Transformation Summit
Andhra Pradesh, India
November 17, 2017
Thank you for that kind introduction. It is an honor to be here today with the Chief Minister, the Agriculture Minister, the Principal Secretary of Agriculture, other government officials, farmers, and students.
I was excited to receive the Chief Minister’s invitation because he is as enthusiastic about the role of technology in agricultural transformation as I am. We are also both big fans of digital dashboards, though I’m not sure everyone here appreciates them quite as much as we do.
But the most important thing isn’t just that Chief Minister Naidu believes the future of Andhra Pradesh depends on the future of its smallholder farmers. It is that he’s translating this belief into action. On everything from improving roads and connectivity to investing in micro-irrigation and digital soil mapping, Andhra Pradesh is taking bold steps to transform its agricultural sector.
To take just two examples, AP recently broke ground on its Mega Seed Park, the first of its kind in Asia, to produce more high-quality seed. And the new e-seed distribution app, D-Krishi, will help farmers access quality seeds in a timely manner and ensure the government’s resources are being wisely used.
These are the kinds of innovations that will help achieve the Chief Minister’s goal of sustained, double-digit economic growth in AP over the next decade.
Everyone in this room shares the goal of a prosperous India. And so, we must also share an interest in the process of agricultural transformation. When I say transformation, I am referring to a shift — from agriculture based merely on subsistence — to agriculture that is run like a business to be efficient, and profitable, and that meets the needs of producers and consumers.
Let me share a few statistics. You may be familiar with some of these, but they set the context for what I’d like to talk about today.
More than half of India’s population works in agriculture.
In rural India, three-quarters of working women make a living in agriculture.
Just under half of India’s population suffers from malnutrition.
And, over 300 million Indians live below the poverty line.
These might seem like distinct data points, but in fact they are closely related. It is the hundreds of millions of smallholder farmers who are most likely to be malnourished and impoverished. And it is smallholder women farmers who are so often trapped in subsistence farming.
It is this nexus that explains why agricultural transformation is such a highly leveraged investment in the future.
If we can help smallholder farmers be more productive and earn a good living, then — to adapt a phrase — we can kill three birds with one stone.
First, we can turn the largest economic sector in this country into a dynamic source of growth instead of a drag on the economy.
Second, we can make sure that this growth is inclusive—that it not only leads to a higher gross domestic product but also lifts people out of poverty, especially the millions of women farmers.
Third, we can produce enough nutritious food to support a healthy and well-educated labor force for the future, when the Indian economy will depend even more on highly-skilled workers.
What I just described has been the recipe for economic transformation across Asia — in China, in South Korea, in Japan. It will also be the recipe for India’s economic transformation.
To catalyze this chain reaction, we have to focus on two things: increasing the productivity of smallholder farms and farmers and connecting them to markets so that they can prosper from their hard work.
In the case of crops, I think about increasing productivity in two ways. The first is developing better varieties of seeds to improve yields, nutrition, and tolerance to stresses such as flooding, drought, and other effects of climate change.
For example, scientists at IRRI — the International Rice Research Institute — developed a flood-tolerant version of the popular rice variety known as “Swarna” that can survive full submergence for more than two weeks. “Swarna Sub 1” is now being used by millions of smallholder farmers, especially in Eastern India.
But many smallholder farmers in India still use seed varieties that are decades-old, so they are not realizing the benefits of newer, higher-yielding and more resilient seeds.
In fact, the Rice Monitoring System project in Eastern India analyzed samples from thousands of farms to show that farmers were swapping out rice varieties at an even slower rate than we thought.
Modern plant breeding techniques, including DNA analysis, can double or even triple the annual increase in crop yields and lead to hardier varieties. IRRI and the Bangladesh Rice Research Institute have already proven the effectiveness of these approaches in their work modernizing rice breeding programs.
AP is already a major seed producer for India and South Asia, and it is well-positioned to become a hub for seed innovation. AP doesn’t have to look far to find the know-how to capitalize on this opportunity. It can leverage local expertise in GIS and its world-class IT sector — along with low-cost commercial software and DNA testing services — to develop better varieties more quickly.
The Mega Seed Park will also drive innovation — not only for higher-yielding hybrids, but also for varieties of regional importance, including more nutritious and resilient non-cereal crops like pulses.
Even with these advances, the local seed companies that market new varieties to smallholder farmers need to be confident that farmers will buy their seeds before they take on the expensive and risky process of introducing new varieties.
This brings me to the second way I think about increasing productivity: understanding what varieties farmers are actually growing in their fields.
In the U.S. Corn Belt, seed companies test new varieties on thousands of farms before they make the final choice on which ones to bring to market.
For public breeding programs in AP and other parts of South Asia, this step is often missing, so most companies only sell “tried and true” older varieties.
Imagine what could happen if every farmer in AP was growing the latest varieties bred for today’s environment and production system. A data feedback loop could help AP bridge the gap between innovation happening in its public breeding programs and the products farmers need to boost productivity.
Since nearly half of all households in AP rear livestock, we also have to think about productivity from that perspective.
One priority is animal health.
Diseases can wipe out flocks and herds, driving smallholders even further into poverty. For example, Newcastle Disease can kill three-quarters of the chickens in a flock during an outbreak. Through a partnership with Hester Biosciences, there is now a vaccine that costs just three cents a dose.
India is also pioneering vaccines and medicines for other costly livestock diseases, including some that spread to humans, such as porcine cysticercosis. This disease is endemic to India’s swineherds and is the most frequent preventable cause of epilepsy in developing countries. It also kills 50,000 people a year.
Another priority is animal breeding.
Consider the dairy sector. India is the world’s largest milk producer, but this success is owed to a very large number of animals producing fairly small amounts of milk. In AP, many of the indigenous cattle breeds owned by smallholder farmers produce only a fraction of the milk that’s possible. But crossbred cows could yield more than twice as much milk as the typical indigenous breed.
We are supporting the National Dairy Plan to increase milk production across India by 6 million tons annually.
One promising element of the plan is a partnership to introduce sex-sorted semen technology. With India increasing artificial insemination to 100 million doses annually, this means that not only are we breeding cows that produce more milk, but also increasing the proportion of female calves being born.
Of course, boosting productivity isn’t just something that plant breeders or veterinarians do in a lab. The innovations need to get from the lab to farmers’ fields. For that, digital financial services are key, because smallholders need to save and borrow money to buy seeds, fertilizer, and veterinary care. In the “old” cash economy, saving was insecure and borrowing was extremely expensive for most people.
India is the global leader in digital financial inclusion. The combination of a world-class biometric ID system, investments in public infrastructure like the NPCI’s Unified Payments Interface, the recent launch of payment banks, and a deep government commitment to leverage digital technology, is producing changes that were unthinkable just a few years ago.
Now, we have to be sure these advances help solve the challenges smallholder farmers face. For example, the current fertilizer subsidy program is very expensive and it promotes fertilizers that aren’t always appropriate for the farmers’ soil, so farmers don’t see big gains in productivity.
It’s great to see AP taking the first steps to fix these problems by delivering the fertilizer subsidy through digital transfers. Once farmers are biometrically verified through Aadhaar, they receive recommendations for the right amount of fertilizer for their crop depending on the quality of their soil and the size of their land. This helps farmers balance nutrients to revitalize their soil. It increases crop productivity. And, it reduces widespread misuse of fertilizer.
Direct transfer of fertilizer subsidies can be quite transformative in other ways. It will help government minimize leakages. And it will bring farmers into the formal economy. Once farmers are linked to India’s digital financial system, they’ll be able to receive social welfare and subsidy payments directly and save their harvest proceeds in secure, interest-bearing accounts, making it easier for them to buy seeds and fertilizer in the planting season. And, they’ll be able to send and receive money simply and safely, with the click of a button.
It’s also important for farmers to have reliable information so they can make the most strategic choices about managing their farms. For many farmers, this starts with understanding the ground beneath their feet—what crops will grow best in it, what fertilizer is required to make it more productive.
AP’s Soil Health Card System has helped some farmers, but it takes a long time to do the lab work needed to produce the cards, so they haven’t reached enough farmers to make the kind of difference everybody is looking for.
As the Chief Minister knows, innovation in soil mapping can overcome this constraint.
One model is the African Soil Information Service (AfSIS), which combined satellite images with data collected from mobile phones to develop the first Africa-wide digital soil health map. This helped reduce the cost of soil analysis in Africa from $97 per sample to just $2 per sample. And the potential applications of this technology are far-reaching. A Moroccan fertilizer company, for example, used AfSIS data to develop new fertilizer blends for Africa.
Based on this new data about soil and other information, it is also possible to give farmers better advice about what crops to grow, when to harvest, and where to sell for the best price. The “m-Sedyam” app provides this kind of information to farmers in their local language.
And the innovative NGO, Digital Green, is piloting a new tool in AP that uses remote-sensing imagery and crop modelling to measure rice yields. This gives the organization real-time data about which parts of its extension services are working and which need to be adjusted.
If you add it all together, you have farmers with access to better seeds and improved livestock breeds, access to financial services to invest in these innovations, and information about how to make the most of their investments.
The next step is making sure that farmers who use these tools to grow a bumper crop or create a big dairy surplus can find customers to buy their produce at the best price and thereby increase their incomes.
Currently, that is a significant challenge. Smallholder farmers face many barriers, including a lack of reliable information about prices, economies of scale, and credit and financing.
Obviously, a single smallholder farmer doesn’t grow enough food to meet the supply requirements of a commercial buyer. There are lots of intermediaries that buy small quantities of products from groups of smallholder farmers. But they haven’t helped farmers realize major increases in their income.
Farmer Producer Organizations are starting to aggregate produce from small farms more efficiently and in a way that is ultimately controlled by — and transparent to — the farmers themselves. There are more than 1,000 of these organizations operating in India, with varying degrees of success.
For example, with our support, the World Bank program JEEViKA brought 4,000 women maize farmers in Bihar together in two producer organizations. They sold more than three-quarters of their produce through the groups, while the rest was sold at local markets in the traditional way. The pooling helped them get better prices, and they also learned more about the quality requirements of commercial buyers and started sorting their produce differently to fetch an even better price.
In the end, the farmers saw a 10 percent increase in their earnings, and that money was deposited electronically into each woman’s own account so that she had control over her money.
This is the kind of thing we need to do for women farmers everywhere — not only because ensuring gender equity in agriculture is the right thing to do, but also because it’s the smart thing to do. Research shows that when women have the same access as men to agricultural resources, production on the land they farm increases 20-30 percent.
Over the last half-century, India has made extraordinary progress in agricultural production. But it faces big challenges: a growing population, serious malnutrition, and the very real threat of climate change.
It is estimated that for each 1°C rise in temperature, India’s rice yields could drop as much as 10 percent. Wheat could fare event worse. This would be devastating for millions of smallholder farmers, as well as for India’s economy.
Addressing these challenges and achieving the government’s vision of doubling farmer income by 2022 will require advances in science and technology to boost productivity. It won’t come as a surprise that I’m a big believer in technology. But technology is only as powerful as the people who use it.
Here in Andhra Pradesh, you have a government that is committed to using technology in smart ways. Take the digital dashboards I mentioned at the beginning. By integrating a variety of data, they can provide a more accurate picture of the overall agriculture sector and help policymakers identify areas for improvement.
But that is just one part of Chief Minister Naidu’s vision for agricultural transformation. He understands that government must also invest in infrastructure and better access to markets and agricultural programs that ensure equity for women.
This is a pivotal moment in India’s history and in the future of Andhra Pradesh. By making smart investments in the right things and by leveraging Indian talent and ingenuity, I believe it is possible to increase farmers’ productivity and incomes at a speed and scale that rivals or exceeds Asia’s agricultural transformation.
No one is saying it will be easy. But with effective political leadership and the right tools, we can empower APs 14 million smallholder farmers to harvest their own agricultural transformation. A transformation that will improve life and livelihood for countless farming families and serve as a model for the rest of India and for the world.