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A framework for implementing information and communication technologies in agricultural development in India

A framework for implementing information and communication technologies in agricultural development in India
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  A framework for implementing information and communicationtechnologies in agricultural development in India  N.H. Rao  National Academy of Agricultural Research Management (NAARM), Rajendranagar, Hyderabad 500 030, India Received 29 August 2005; received in revised form 7 January 2006; accepted 8 February 2006 Abstract Knowledge is an increasingly significant factor of production in modern agriculture. Information andCommunication Technologies (ICTs) can accelerate agricultural development by facilitating knowledgemanagement. Based on an evaluation of several ICT initiatives in rural India, a framework to guide policy andimplementation of ICTs in Indian agriculture is proposed. In this framework, agricultural development is visualizedfrom two perspectives, a rural incomes and livelihoods perspective at the farm level, and a sustainability perspective at the regional level. The implementation of ICTs is proposed in three unique institutionalenvironments: (i) closed vertical supply chain network for agribusiness enterprises, (ii) an open chain network withdynamically evolving partners and supply chain situations for the public, non-governmental and multilateralorganizations, and (iii) a spatial data services network to address natural resources management and sustainabilityconcerns. Each environment is assessed to identify its appropriate business models centered around ICTs, requiredtechnologies, scope for up-scaling the models, and required institutional and policy initiatives. In the future, as ICTinfrastructure grows and connectivity and hardware costs decline, the critical constraints are likely to be thedevelopment of appropriate policy and institutional environments for the creation and delivery of information andknowledge to the end users. Significant policy, institutional networking and capacity building initiatives will berequired at various levels to overcome the constraints and effectively integrate ICTs into the agriculturaldevelopment process in India. D 2006 Published by Elsevier Inc.  Keywords: Information and Communication Technologies (ICT); Agriculture; Rural incomes; Sustainable development 0040-1625/$ - see front matter  D 2006 Published by Elsevier Inc.doi:10.1016/j.techfore.2006.02.002  E-mail address: Forecasting & Social Change 74 (2007) 491–518  1. Introduction The agriculture sector in India accounts for about 24%of its GDP, 15% of the total export earningsand employs about 56.7% of the country’s workforce[1].It is an important source for generating demand for industrial goods and services, and rural domestic savings are a major source of resourcemobilization in the national economy. The sector plays a key role in ensuring national food security, andin the process, national security as well. For these reasons, agricultural development has a strongmultiplier effect across the economy. There is increasing consensus that, in a globalizing economy, along-term economic growth agenda for India is feasible only if it has agricultural development that raisesrural incomes as its central concern.Further intensification of agriculture would be required in future to meet the demands generated bythe growing population and increasing incomes. This can lead to significant environmental impacts likedepletion of surface and underground fresh water resources, deterioration of soil and water quality, soilerosion, loss of biodiversity and even climate change. d Future agricultural practices will shape, perhapsirreversibly, the surface of the Earth, including its species, biogeochemistry and utility to society.Agricultural practices will determine not only the level of the future food production but also to a great extent the state of the future environment  T [2].Agriculture in the 21st century will therefore be an extremely diverse industry driven by the twinconcerns of raising rural incomes and ensuring long-term sustainability of its natural resource base. It will involve a diversity of economic activities that affect a far wider range of stakeholders than ever  before, including consumers, farmers, government, industry, and the society at large. A long anddiscontinuous supply chain, inadequate policy support, limited infrastructure for storage, transportationand marketing of agricultural produce, limited opportunities for value addition, and inefficient information and knowledge flows have constrained agricultural development in the past in India, andhave been the principal causes for low rural incomes. The agricultural development agenda wouldtherefore require planned interventions at all links in the agricultural supply chain—delivery of farminputs, increasing productivities and input use efficiencies through efficient management at the farmlevel, lowering post-harvest losses in handling and storage, providing for storage and transportationinfrastructure and for processing farm outputs into higher value foods[1].Every activity in this chain involves the creation, processing and communication of information. Farming will, therefore, have to beintertwined with information and communication technologies (ICTs) across the supply chain to attaintargeted outcomes and impact.ICTs are a range of technologies that integrate information technology devices like personalcomputers with communication technologies such as telephones and telecommunication networks. Boththe range of the technologies and their convergence with conventional media is expanding all the time.ICTs can become key enablers of the agri-food sector by making dynamic and real-time global levelexchange of data, information and knowledge quick, interactive and easy throughout the agriculturalvalue chain. Their effective deployment can lead to increased agricultural competitiveness through cutsin production and transaction costs, raising production efficiencies and farm incomes, conserving naturalresources, and by providing more information, choice and value to stakeholders.ICTs have transformed the face of agriculture in many developed countries. Most agriculturalactivities in these countries are now based on the use of web-linked interactive databases for obtaininginformation on weather, natural resources, quantities of products demanded, credit, and government  programmes, as well as technical knowledge. In fact information has become a fourth critical factor of   N.H. Rao / Technological Forecasting & Social Change 74 (2007) 491–518 492   production (land, labour and capital are the first three) in developed country agriculture. Thistransformation has taken place in the context of high literacy rates, well-developed infrastructure for telecommunications, roads, electricity, transportation and markets, adequate scope for value addition to processed foods, and easy access to ICTs in a supportive policy environment. In many developingcountries including India, many of these conditions apply only partially. But not including ICTs inagricultural development planning can have serious negative consequences for the rural economy in aglobalizing world. Understanding and implementing ICTs in developing country agriculture depends onrecognizing that knowledge is an increasingly significant factor of production and that ICTs canaccelerate agricultural development by facilitating knowledge management.The overriding objective of this study is to examine how ICTs can contribute to agriculturaldevelopment in India by raising rural incomes while keeping the sustainability concerns in sight.Specifically, the study develops a conceptual framework that can guide policy and implementation of ICTs in agricultural development by considering the various issues from two perspectives:(i) raising rural incomes through raising agricultural productivities and efficiencies, lowering input and transaction costs, and post-harvest value addition, and(ii) ensuring sustainable development of agriculture to protect the natural resource base of agricultural production for future generations.It will be seen that the incomes perspective focuses on farm level production and marketing processesand can be addressed by both the public and private sectors through different institutional processes. It requires public support in some vital information categories, rural infrastructure, and agricultural policyinitiatives in marketing and trade. The sustainable agricultural development perspective operates at theregional level as it addresses information issues related to the flow of natural resources and inputs at bothfarm and regional agroecosystems levels. The primary role here is for the public sector, non-government,and research and development organizations to provide for characterizing and monitoring naturalresources, environmental conditions and socioeconomic impacts. Thus, the first perspective has arelatively short term and an essentially economic focus, whereas the second takes a more long-term viewof sustainable agricultural development by integrating economic impacts at the farm level with the broader environmental and social impacts of agricultural development. 2. ICTs for raising rural incomes The question of deploying ICTs in agriculture needs to be examined from both supply and demand perspectives[3]. The supply side is concerned with issues related to access of ICT-based services in ruralareas. The demand side is concerned with the information-dependent nature of farming and relateddecisions. The different aspects of the two perspectives and the status of implementation in India isexamined to assess the role of ICTs in raising agricultural production and rural incomes. 2.1. Access to ICTs—the supply perspective The supply side perspective is concerned with both technical and organizational aspects of providingaccess to ICT-based services in rural areas across the agricultural supply chain. The technical aspects  N.H. Rao / Technological Forecasting & Social Change 74 (2007) 491–518 493  include connectivity, computers and peripherals, software and applications, and capacity building of farmers and other users in rural areas. The organizational aspects include the creation of anorganizational structure for developing and maintaining the technical infrastructure, provision of services, and capacity building in using ICTs in rural areas. Broadly two types of organizationalstructures have emerged in India, one based on the corporate agribusiness model and the other based on public sector or non-government organization (NGO) service models. The former focuses onincorporating ICT use into the overall corporate business strategy. The latter adopts a rural informationcenter based approach to provide access, and network sources of knowledge, information and servicesfor the rural populations. For both models, the ICT infrastructure for internet connectivity andcommunication is critical for the success of the business strategy.A national information infrastructure initiative was launched in India after the creation of a Ministryof Information Technology in 1999. The initiative aimed to create a seamless web of interconnectedinformation networks, computers, and databases that will link homes, work places, businesses and public institutions together. It embraces virtually all modes of information generation, transmission anduse. By the end of 2002, the basic telecom services network provided for about 45 million workingconnections, including 450000 public phones in villages, with a teledensity of 4.4 telephones per 100 population[1]. The network is expanding rapidly and by 2004, the total number of connectionsincluding mobile lines was 74 million corresponding to a teledensity of 7 per 100 population. Totalinternet subscriptions have grown from 5 million in 2000 to over 16.5 million by 2004, a vast majorityof which is in urban areas. There are more than 550000 route km of optical fibre, of which about 450000km was laid by the public sector telecom organizations. Rail, power and communicationcompanies are continuing to invest in laying fibre optic cable, across the country. As a result, the fibreoptic based connectivity is available to almost every taluka (small town) in India[4].Despite this expansion, the telephone network still excludes vast rural sections of the country and the b last mileconnection  Q  remains a major problem. This means that the existing telephone infrastructure effectivelycarries information over long distances at relatively low cost up to the small town level, but becomesexpensive and inefficient when it branches out into the villages. This is because the low density of users in rural areas has deterred investment in providing connectivity to individual villages andhouseholds.Much of the supply side organizational strategy in deploying ICTs in rural areas has focused onsolving the problem of last mile connectivity. Broadly three approaches have been attempted. Themost common means of internet access is through fixed telephone lines using dial-up in areas wherethe telephone network has penetrated. The other two means are wireless technologies and VSATterminals where the telephone infrastructure is poor. The telephone dial up access provides for throughput of only about 10kbps on an average, whereas wireless and VSAT offer scope for  broadband access. While both VSAT and telephone dial-up access are fairly standardizedtechnologies, wireless connectivity has been the subject of considerable experimentation in therecent past.In addition to connectivity and access, availability of computers and peripherals is the next important component of the supply perspective for providing access to IT-based services in rural areas. As a result of rapidly falling costs and standardization of technologies, dealing with this component has becomerelatively simple. It is now possible to fully equip a single computer rural internet kiosk for less than Rs50000 (US $ 1250). With the availability of low cost Simputer (developed by the Indian Institute of Science, Bangalore), a cheap hand-held computer that allows users to handle sound files and e-mail  N.H. Rao / Technological Forecasting & Social Change 74 (2007) 491–518 494  through icons on a touch-sensitive screen, the computer costs are expected come down sharply (to Rs10000 or US $ 250). This component of the ICT supply chain is by far the easiest to implement andstandardize and its costs are only likely to come down in future.The applicationssof tware for IT-based services and the capacity to use them, however, present moreserious difficulties[5]. This is because they are also linked to the demand perspective (the range of  products and services that are demanded), the degree of networking between organizations that providethe services, and the ability of the rural people to use the information infrastructure and services. Theyalso depend on the capacity of the public, private and NGO organizations to design and developdatabases and content that are relevant to the farmers and other rural users. 2.2. ICTs based services—the demand perspective Farmers make critical decisions throughout the year. These decisions include those based onchoice of inputs (crop varieties and seeds, water, power, fertilizers and pesticides) and market transactions related to them, farm operations (tillage, sowing, water management, fertilizer management, pest management, harvest), post-harvest operations and transactions (storage, transport,marketing, processing, etc.) and others. Further, at the level of households, a number of non-farmdecisions are made related to consumption, savings, investments, education, health, etc., whichimpact farm operations. Typically farmers rely on accumulated experience and the support of localorganizations (e.g., input suppliers, rural credit agencies, extension services, NGOs) for informationrelated to both farm and non-farm decisions. They also receive information from radio andtelevision broadcasts by experts and professionals from more distant sources. Together, these formthe local knowledge system accessible to a small farmer for taking decisions (Table 1). Often, this system is inadequate and many decisions are made with limited information. The decisions are alsosubject to high transaction costs and time delays. The role of ICTs in such a scenario is to providetimely information, increase choice, reduce transaction costs, and contribute to improving theefficiency of decision making to raise rural incomes and improve the quality of life of the rural populations. 2.3. Implementation of ICTs—cases and lessons It is a truism in the ICT industry that to achieve effective solutions, it is necessary to address the fullvalue chain: the set of products and services that taken together satisfy the industry’s and customer’sneeds[6]. In agricultural development also ICTs must be deployed to deliver total solutions for the sector and not simply provide point or partial solutions. Further, in the context of implementing ICTs in ruralIndia, it needs to be kept in mind that the decisions and activities within farms and households are takenin a specific institutional environment which includes public, private and other organizations. ICT-basedinterventions in such conditions must also therefore simultaneously alter the institutional environment through efficient networking of different agencies. Alternately, they must achieve sufficient scale andscope across the entire agricultural value chain to impel changes in the institutional environment on their own[3]. This depends on the ICT infrastructure (supply perspective above) and the organizationalstrategy adopted for integrating the infrastructure for creating and networking with other organizations or individuals, and providing IT-based services for farm and household level decision making (the demand perspective).  N.H. Rao / Technological Forecasting & Social Change 74 (2007) 491–518 495
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