How digital agri value chains
invoke transparency and trust

Since the dawn of the 21st century, global agriculture trade has witnessed a remarkable increase. Between 2000 and 2014, the sector saw an annual growth rate of 8 per cent in real terms. In comparison, it recorded an annual rate of just 2 per cent growth in the preceding decade.

As boundaries blur and the trade landscape expands, customers are demanding greater transparency in the supply chain.

They need real-time supply chain visibility to trace the movement of their purchases, minimize the chances of disruption and address quality issues at the initial stages.

Digital platforms cater to the new demands of changing agri-trade dynamics. These platforms offer unparalleled efficiencies for stakeholders across the ecosystem. Their advantages include access to new markets, streamlining of resources and ensuring information symmetry across levels and networks.

In the following section, we examine the role of digitalization in facilitating greater transparency across the agri value chain. We also assess the impact of the factor in creating new opportunities for all stakeholders.

  • For the farmers, digitalization offers unmediated access to broader markets. Online price discovery augments transparency in transactions. Besides, digital lending can help in curtailing the farmers’ dependence on local sources of production credit and sell their harvest for the best price.
  • Digital platforms enable buyers to track down the origination of their purchases. It provides them with real-time insights on the location of the farms and the quality of the goods sold. Further, purchasers are assured of the authenticity of transactions.
  • Digital trading platforms employ blockchain technologies to collect and store data. The data collected on the cloud-based ledger cannot be modified, manipulated or misrepresented. Thus, digital trading platforms represent the ‘true picture’ of the status of agri-trading – from details of the crops grown, methodologies adopted, inputs utilized, etc. These insights help governments and policymakers to identify problem areas and draft remedial policies.
  • The online availability of verified information enables third-parties to connect with stakeholders of the agri-trading system. As a result, consultants such as financial services providers, farm equipment manufacturers, input providers etc. can significantly reduce the time to deliver services to farmers and buyers.

All the above factors point to the potential of digital platforms to evolve into the most preferred mode of connecting farmers and sellers. Despite the several advantages, online agri-trading platforms will scale to their potential only when users trust them unreservedly. In fact, developing trust in digital platforms is critical to driving customer loyalty and large-scale adoption.

To evoke trust in the supply chain, service providers should promise privacy and security to users.

Customers should be assured about the safety of their information and money while transacting on digital platforms. Further, features such as an authentic rating system help in deepening the trust factor. Unfiltered ratings of farmers and buyers empower decision-making across all levels of trading.

A large section of smallholder farmers in India is not technology-savvy. Ongoing, dedicated training sessions should be conducted to enable their participation in digitalized trading. And although farmers are encouraged to use digital platform for trading purposes, they should have access to inperson expertise at all times. Further, the platforms should employ simple language to guide customers through complex processes.

March 13, 2020 2 MIN READ
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