New O4S raises Series A investment. To be announced soon. Read More

Tackling the rising Counterfeits in the Agri Inputs Industry in India – The Big Challenge

Authored By Arsh Kabir Singh Gujral, National Sales Head (O4S)

With the population of India growing at the rate of 1.1% per annum, the natural stretch on the average Indian farmer is enormous. India needs to produce a higher quantity of food from each farmland to be able to maintain self-sufficiency in the country’s increasing food requirement.
While there is a need for more food, there are several challenges which are choking the agriculture sector such as reduction in arable land, decreasing farm size, proliferation counterfeit agro-chemicals, and low awareness among farmers.
Among them the availability and use of counterfeit agro-chemical products has severe consequences of the lives of millions directly and indirectly. These products are purchased by farmers by the sole purpose of protecting their produce, but instead these are unable to control the pests or control them efficiently moreover cause considerable harm to soil and environment as well as production loss.
There are enough studies that emphasis on the gravity of the situation in the agriculture industry, and the urgent need of attention from the farmer associations, industry players, pesticide regulatory bodies and government in a time bound manner to curb its further proliferation. A recent study by CropLIfe International India stated that,
“India will overtake China to become the most populated country on the planet in 2024, according to a UN forecast, reaching 1.5 billion people by 2030. The expectation on farmers to feed the growing population is huge, but their efforts are being undermined by criminals. It is estimated that almost 25 percent of the pesticide market in India is counterfeit or illegal. Given Indian farmers spend $125 million just on pesticides every year, a significant figure is likely spent on illegal products that undermine stewardship efforts across the country.”
The repercussion of the pesticide counterfeit are significant. As per reports from the ICC, the use of adulterated products leads to the loss amounting to over 10.6 million tons of food every year. Meanwhile, samples of illegal products on food grain produce has the potential to threaten India’s position as one of the world’s leading grain exporters — worth $26 billion a year.
The effect of non-genuine / illegal Agri Inputs on the various stakeholders can identified as follows* –
  • Overall yield for farmers across the country in case of 25% non-genuine / illegal 7 products prevailing can reduce by ~4% (Analysis by Tata Strategic,2016). This implies ~10.6 million tons of food production loss in the current year.

  • Irreversible damage to environment by uses of unmonitored toxic ingredients in non-genuine / illegal products due to –

    • Degradation of soil through unknown illegal chemicals, thereby rendering it useless for cultivation of succeeding crops
    • Ground and surface water contamination caused by unknown toxic chemicals and heavy metals
    • Imbalance of natural flora and fauna and negative health impacts on humans and animals
  • India’s position as one of the leading food grain exporters in the world is fully at stake as the possibility of rumors or sabotage by other countries or rejection of Indian exports food items from developed importing countries would increase. In such a scenario, export of ~29 million tons of food grains worth ~ INR 1, 578 8 Billion (Department of agriculture and cooperation, Government of India statistics, 2016) is at stake

  • Apart from Food grains, export of ~ 3 million tons of fruits and vegetables worth ~ INR 88 Billion (~ USD 1.43 Billion) is also at stake due to non-genuine / illegal 9 pesticides (Government sources (APEDA))

* FICCI Study on the Impact of Spurious Products in the Indian Agri Sector, 2016

In this situation, it is critical that there is a greater focus by brands and the Government bodies around creating simple technology tools which utilize the current user behavior. These technologies need to be identified at the farmer level to empower and engage with them at scale and digitally connect with all the distribution partners in order to get visibility of the product movement. This will ensure that unscrupulous parties are not able to penetrate the distribution supply chain at any stage.
What needs to be understood is that our farmers are smallholder farmers who lack enough disposable income. Firstly, every purchase made by them result from the liquidation of the hard-earned cash; an investment which they make in order to provide for their families. With digital verification platform, farmers can be assurance that the purchase made is genuine. Farmers end up buying what they see and are told, “We are illiterate farmers; we seek advice from the vendor and just spray on the crop,” (Business Word, 2018)
Secondly, by garnering points on the system, the farmer can convert their loyalty points to a product of their choice later. For the Agri Input manufacturer this is a dream come true way to penetrate deeper, into the harder to reach Tier 3 & 4 markets by means of simple-to-use technology for the average farmer.
How would a farmer authenticate the product without network coverage? And even then, how would they order it in the first place? In the percent scenario we are on one hand limited by logistical challenges while on the other by the long adoption cycles taken by farmers. However, we have seen a gradual rise in the adoption and verification from the farmers and it is also strengthening our belief as the numbers speak for themselves.
Additionally, there is a great amount of work which is being done to enable visibility and engagement with the distribution partners through a defined incentive scheme to help the genuine product flow through these nodes and thus preventing the spurious goods to reach the market and finally into the hands of the farmers.
There will still be a lot of spurious nodes that might still try and penetrate the distribution chains, and it is only when empowering the individual players in the supply chain can we make the system more robust and transparent.
The fight has just begun, and we have a long battle to endure. It is just the tip of the iceberg that has been touched but it is in a positive direction. The awareness and the technology adoption are helping farmers re-establish control over their produce and giving the much-needed input for the Brands and the Government alike.
This is a continuous process and technology startups like us are fortunate to play a small part in this journey for the Indian Agri Inputs Sector — more as a partner in growth and evangelism for a better and brighter future for our farmers and the India Agriculture sector as a whole.