Digitization in Today's Economy

This week’s case deals with an interesting challenge for farming in India. ITC sought to digitize the agricultural sector to “to enhance the competitiveness of the agri [sic] value chain by empowering farmers through access to information and markets.” This reminds me of two unique ways that such digitization is occurring now.

First of all, new container ships – known as reefers – are capable of chilling food for extended periods of time, which has enabled the shipment of farmed goods to new destinations. According to a recent article in the Wall Street Journal, these new vessels have capabilities “that monitor the atmosphere inside the container and control the amount of carbon dioxide, oxygen and nitrogen to prevent early ripening. Shippers have live visibility of the cargo through satellite tracking.” Similar to the development in digital infrastructure sought by ITC in the case, agricultural shippers are now able to access new markets across vast distances. Produce can be stored for longer periods of time, which helps to resolve the “inefficient supply chain” referenced by ITC. These new shipping methods also support the public interest, though less directly than ITC’s e-Choupal. Produce and other healthy, fresh foods are now accessible to people in areas which were previously underserved with nutrition.

Another recent development in digitization of agriculture is the use of unmanned drones to collect data and generate actionable insights for farmers and other agriculturalists. One of the biggest challenges for farmers is nitrogen deficiency of the soil. A leading drone company, DJI, has manufactured a drone and the associated Smarter Farming Package of software that helps alleviate this issue. Based on results published in a case study of DJI’s software package, farmers can quickly and efficiently eliminate nitrogen deficiency using the software and the drone, saving $9.80 per acre per year. While this isn’t a staggering amount of money, it does add up over hundreds of acres and several years.

While ITC’s approach in the case was novel at the time, there are now many different market participants that are advancing the pace of digitization in the agricultural industry. This should enable lower costs for farmers and other producers, and it should also expand the availability of nutritious food. Taken together, this can have significant impact on the wellbeing of everyday people.