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Digital Frontiers in Farming

Banking Frontiers in association with The Weather Company, an IBM business, organised a round table on the growing importance of digitization in farming:

The digital wave has enormously transformed all businesses, and the agri sector is no different. The prediction about returns from the sector gets the highest level of accuracy when mediums like satellites, drones, mobile devices, fuel pumps, commodity markets, exchanges etc., are used. The farmers can use these key information factors and then determine the success or failure of the crops. They can thus reduce risks and maximize returns.

After the green revolution in India nearly 55 years ago, time is now ripe for the next revolution as technology is ready to support it. What is needed is support from the ecosystem – from the corporates, banks, insurance companies, agri-companies and the government. All these stakeholders have already started their digital journey and it is now time to include the farmer for mutual benefit.

Himanshu Goyal, India Business Leader, The Weather Company, an IBM Business:

We are digital experts, but in agri technology, our company is learning from the markets. Most people don’t trust the weather accuracy. Named by ForecastWatch as the world’s most accurate forecaster, The Weather Company combines weather data from major centers around the world with information collected from thousands of personal weather stations and an enterprise-class Internet of Things (IoT) platform to create forecasts for 2.2 billion locations. These forecasts are supported by advanced machine learning algorithms and monitored by a team of more than 160 meteorologists to help improve accuracy and create better insights.

Our technology helps in getting live weather forecasts including parameters such as soil moisture and temperature for a given area. These insights are useful for farmers, traders as well as stock brokers. Technologies like Artificial Intelligence (AI) and Machine Learning (ML) help with precision weather forecasting.

This allows Banks to plan their lending strategy by correlating expected impact of monsoon on the season’s harvest output to make effective lending decisions and improve outcomes for farmers availing loans.

Avinanda Ghosh, CIO, Agriculture Insurance Company of India:

For decades, weather prediction is a dream for insurance companies in India. Most of the technologies are good, but how to use technology effectively for crop insurance is an important factor. Insurance companies are not sure in thinking about the benefit of the farmers. If we predict the weather, then we can put down the insurance premium and receive profitable business. For public sector insurance companies, the profit earned from crop insurance goes to the government. Private companies directly receive profit form crop insurance. Accuracy of prediction is beneficial for the farmers. The insurance industry works on unpredictability.

Weather prediction should be very deep, and it should accurately guide farmers and the insurance companies. If the prediction is too accurate, then it becomes like match fixing. So, the predictions should always have elements of unpredictability. Technology has helped in better weather prediction compared to earlier days. In 2002, the government launched an insurance scheme FISS, however this scheme closed within 2 seasons as there were no customers for the scheme.

Raja Mohan Kandlakunta, DGM – IT, IFFCO Tokio General Insurance:

We talk about farmers and think about their welfare and benefits, but we should also look at other factors of the industry. One of our promotors ‘IFFCO’ is into the fertilizers business for more than 50 years. The company is doing many things for farmers such as arranging Kisan call centres and other welfare activities.

Our probability team looks after crop insurance – they collect data from government sources and use it to predict the weather. It is mostly the risk team that is involved with the IT team to predict the weather forecast.

Rohit Dua, Branch Operations & Service Manager – Corporate, Bajaj Allianz General Insurance:

Punjab and Haryana are the farming states of India, so weather plays a crucial role in these states. Our top management takes major decisions related to crop insurance policies; we decide the premium parameters based on the rating given by the agencies.

Saket Pandit, Sr Regional Manager – Agriculture & Rural Department, Bharti AXA Genera Insurance:

There is 100% loss ratio in crop insurance and we are not earning any profits. Bharti AXA has an inhouse team for technology and satellite management and we have a separate risk team for underwriting claims. We get most of the customer data from the government; the accuracy of the data mainly depends on the state government.

Dr Sudhanshu, Deputy General Manager, APEDA, Ministry of Commerce

From the government perspective, we have taken initiatives to promote the exports under agriculture process; we have priority to increase merchandise exports. India is an agrarian economy and we are rich in plenty of resources. We look after 50% of the exports and rest 50% is covered by spice board, tea board, coffee board and other organisations. We are utilizing IT as a tool for exports.

We have run initiatives to increase the exports. For example, Indian grapes were considered poisonous in the European market. So, we have developed a robust monitoring protocol using IT strength of the country and set up the ‘Grapeplant’ system, with which we are able to monitor the entire supply chain of grapes. We were able to trace facts from the consumer to the farm level, at which farm the grapes are produced, at which back house it was processed, at which laboratory it was tested, etc. The system helps in finding areas in which there are many rejections for grapes, where excess pesticide has been used, what kind of pesticide was used and what quantity of pesticide was used. We also adopted this model for other products. This system has helped us in analysing the problem and to find a solution for it – this has built confidence about us among all the importing countries in the global market.

The government of India has recently announced the NDA export policy to double farmers income and to increase exports. Under the NDA export policy, a number of clusters have been identified. Individual farmers cannot afford the weather forecasting technology, but a group of farmers can afford it for farming.

Amit Bhole, Additional Private Secretary, Department for Promotion of Industry and Internal Trade, Government of India: 

Technology is not only used in agriculture but also in the extension activities. Blockchain is used in the extension activities and artificial intelligence can be used for research and development. Technology will play a larger role in the coming years; sky is the limit for using technology in farming.

Dr Manish Modani, Senior Meteorologist, Technical Sales Lead, India/South Asia at The Weather Company, an IBM Business

Insurance companies decide the annual premium based on the probability of catastrophic event occurrence in the year. The probability of the catastrophic event (eg. hurricane, thunderstorm, windstorm etc.) is decided based on historical occurrence of those events. In the case of live catastrophic insurance, Dr Manish Modani has been able to forecast the development and movement of live hurricane/cyclone by executing numerical weather forecast models operationally (probably first time). In addition, the output of weather models was used in risk estimation models to estimate the real-estate losses from the upcoming hurricane/cyclone. This way, insurance/re-insurance companies could go to market and get insurance business for live catastrophic events. This business duration was till the life of hurricane/ cyclone (max for a week).

Sunil Kumar Vohra, DGM, Bank of India

Proportion of NPA in corporate retail loans is 2.5%, there is 3-4% NPA in the priority sector loans. The corporates negotiate with the banks with very thin margins. In priority sector there is tailor made rate of interest, banks have wider margins. Banks prefer priority sector lending, till now banks are not using weather forecast for agriculture loans. The latest weather prediction technology provides near to perfect prediction about the weather. In future, banks can use the weather prediction technology for accessing the risk factor, particularly in the agriculture sector.

Dr V.K. Dubey, Director, National Cooperative Union of India

Weather prediction helps in planning for the loan division. Sometimes heavy rainfall destroys the crops, and in some cases, it is difficult to identify rainfall. Weather prediction helps to analyse the different parts of the country, which parts are dried up and which parts of the country received heavy rainfall. Weather prediction needs to be deep with perfect time and date, it is important for farmers and financial companies.

N Satya Narayana, Chief Executive, National Cooperative Union of India

The usage of technology depends upon the inputs, outputs and requirements received from the industry. It is difficult for the individual farmers to adopt weather prediction technology. Organisations need good IT budget to adopt these latest technologies; we are requesting the government to empower organisations to buy weather prediction related technologies.

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