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Weaving Bales with Bytes: A Case for Cotton Digitalization

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Cotton has been a profitable crop for the past 7000 years otherwise our ancestors would have dropped it. It is one of the most sustainable fibre. For a very long time, India was known for cotton fabrics, while the rest of the world clad in wool. Today, cotton is cultivated in about 80 countries around the globe. India ranks no. 1 in cotton production, contributing to 33.23% in the total area of the world. One in every four hectares of cotton grown around the world comes from India.

The role cotton plays in an agricultural-based economy like India can’t be overlooked. With the advent of better hybrids, fertilizers and pesticides in the post-Green Revolution years (the late 1960s), the yield increased multi-fold and cotton farming prospered in the sub-continent. This surge in supply, accompanied by the changing consumer preferences from tailor-made to readymade garments and popular media influence boosted the cotton textile industry and has created job opportunities for millions of people involved in cotton supply and trade.

The Challenge

In the past few decades, due to bad agricultural practices, degradation of soil and climate change (uneven weather, prolonged droughts, heavy rainfall, etc.), the crop and its cultivators are facing major distress. Due to increased uncertainties and lack of proper knowledge to deal with them, it is not only becoming hard to continue growing cotton, but also sustaining good profits for the smallholder farmers. Fall in individual profits is also associated with poor post-harvest practices like not cleaning and grading cotton properly. Farmers, in expectation, to get better prices for less yield to compensate by neglecting quality, which increases wastages in the yarn and fabric manufacturing stages for the industries. Therefore, it becomes a loss equation for manufacturers and wholesalers as the poor raw material causes rejections and increased return orders.

Since the inception of the COVID-19 crisis, we have witnessed a lot of breakdowns in the supply chains across the different industries. The textile industry, being a highly unorganized sector was also affected by various problems of production, raw material prices, logistics issues, non-availability of skilled workers, working capital and cash flow, reduced imports/export orders, besides restrictions. The limitations on public gatherings and restricted movement of goods have made it hard for farmers to bring their crop to the warehouses and cotton marketplaces. Unavailability of quality seeds, fertilizers and crop protection inputs during the peak of COVID-19 last year delayed the sowing time for many producers. Failing to produce the crop on time, the farmer loses the chance to ride early high prices, had to pay more interest on loans availed from the moneylenders and the risks for crop quality management increases. With no clear view of the complete supply chain and lack of partnership among the involved agencies, uncertainties in the cotton industry have risen in these challenging times.

India is one of the largest exporters of cotton. The average domestic price of cotton is cheaper by around 14% during the current cotton season as compared to the international cotton price. As the coronavirus (COVID-19) is an ongoing global situation, exporters are reluctant to take overseas orders fearing payment uncertainties, cancellation of the orders, shortage of staff, and the situation worsens as India get hit by the second COVID-19 wave.

Prior to the independence, almost all the cotton grown in the country was organic. Today, organic cotton shares 1% of the today cotton cultivated in the country. However, this 1% organic cotton contributes to 56% of the global organic cotton supply. With increasing awareness for sustainability, climate justice and degradation of natural resources, consumers across the globe are making sustainable choices and looking out for brands that are now taking concrete steps to reduce the negative anthropogenic effects. The challenge is also to incentivize producers to move back to sustainable farming practices when high yield and better prices are the North Star for them.

Our Solution

In this quest to serve a larger farming community, Farmsio reached out to a Mega FPO Federation of Cotton Growers with a network of 100,000+ farmers and 100+ Farmer Producer Organizations (FPOs) in Andhra Pradesh, Maharashtra, Gujarat, Orissa and other cotton-growing regions of the country. There are about 8000 FPOs in India, with a major share of FPOs (approx. 4000) are in Maharashtra.

Farmsio conducted a thorough survey and due diligence with the members of Mega FPO Federation Team, board directors of different FPOs, cotton traders, exporters and the farmers (men and women) to understanding the underlying problems and how can they be solved. The survey centred around all the common problems that were predominantly present in the value chain from farm to factory as well as the new ones instigated by the pandemic crisis. The main challenges we came across were more managerial than technical in nature.

Members of the FPOs had difficulties understanding the compliances, creating business plans, reaching new markets, information on government support and schemes in their region, maintaining a proper book of records. The survey pointed out an increasing inclination of the farmers to digital mediums like a smartphone for accessing information, compared to other mediums. Amidst the pandemic, the farmers were actively using digital payments on a day-to-day basis. Farmsio segregated the problems into the collective (FPOs, SHGs, trade organizations, etc.) as well as individual requirements (farmer, field agents, etc.) and designed farmer and FPO-centred solutions. The findings led to the conclusion that there is an evident need to build a smart platform that provides a solution for the entire cotton value chain from pre-harvesting to post-harvesting to the product reaching the buyer’s warehouses. Working directly with the cotton producers, Farmsio built a comprehensive, FPO-centred, sustainable solution that caters to all the needs of the FPO in cotton production and trade.

FPOs are supposed to be run like a business unit and require access to the marketplace, recordkeeping, group information extension, information on current market prices and trends, Good Agricultural Practices (GAP), Farmer Support, etc.

Farmsio Platform integrated all these features along with the cutting-edge technologies like

Complete digitalization of farmer and farm records,

Creating sale intention to allocate buy/sell slots to farmers and make the process efficient,

Procurement modules to facilitate cotton trade, provide information on crop quality to buyers along with pictures/video of the crop.

Traceability modules to minimize risks associated with transportation and provide a real-time and complete monitoring of the value chain to the warehouse.

Accounting modules for FPOs to remove dependency on hiring accountants in distant villages,

Marketplace feature to provide market linkages and access to crop inputs.

Query module for group/individual farmer queries.

Large-scale pilots are now being successfully implemented with 45 FPOs in the four districts of Maharashtra to test the effectiveness of this digital platform. This sustainable platform has enhanced the active participation of member farmers and has provided them with better market linkages and access to verified crop information. The solution improved the overall operations of the FPO Federation and have seen tremendous growth in active queries from the farmer members for improving their crop profitability through the platform.

For more details on how to overcome the challenges in the sustainable Climate smart farming methods, you can Contact Farmsio to adopt the latest trends and technology for agriculture through the farm management software.

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