March 30, 2021
The Indian government has proposed a bilateral exchange with the Philippines involving agricultural technology and fintech (financial technology) believing that vital technologies revolutionizing small farms in India can benefit Filipino farmers.
On top of initially extending a $50,000 to the corn sector, Indian Ambassador to the Philippines Shambhu S. Kumaran said India can exchange technologies with the Philippines that are in the forefront of improving how small farms operate.
“We like to invite you to a discovery of India’s agritech ecosystem. We’ll look at a bilateral workshop so you will see this vibrancy in India. And India will see the positive developments in agri-tech in the Philippines. This will be a two-way street,” said Kumaran at a Philippine Chamber of Agriculture and Food Inc. (PCAFI) business meeting.
The bilateral meeting which may be co-organized by PCAFI and Indian Embassy may be held “sometime later this year.”
Philip L Ong, PCAFI chairman, this fintech venture with India may involve PCAFI’s own Agrifood Hub Project. The Agrifood Hub is also involved in technology that links farmers with the market.
Since its launch in July 2020, it has so far linked 37,343 farmers and 315 farmer groups, primary traders, and cooperatives to markets involving 109 municipalities.
It had posted over the internet through its website, www.agrifoodhub.com and hotline 09178215408, a total of 980 food and crop requirements and matched these requirements with 924 sellers. It has received 56 information requests and generated 55 active buyers per month, Ong reported.
Kumaran said the Indian government has already touched based with Philippines’ Finance Secretary Carlos Dominguez for a possible agritech and fintech exchange.
“An Indian company allows banks to use geospatial data, satellite data to make informed lending decision. You have the software, the tool which gets all data in a region. It allows banks to cut the risk and understand where and when credit dispersal is viable. They will have constant stream of data,” Kumaran said.
Because of this agri technology, an e-bank raised “half a billion dollar using this tool that brings about the revolutionary changes that I talked about.”
Indian fintech companies are not big, but they address the critical gaps in technology.
“We offer to Philippines the possibility that DBP (Development Bank of the Philippines) could have this tool without having to procure it. It will be free-of-charge. The revenue model allows that the creditors and software companies, all have the benefit from using the technology.”
Right now banks are afraid to lend to agriculture activities as they don’t have mitigation strategies and risk assessment tools to determine what is viable. But this software makes that possible.
From only a few agritech startups in 2013, India had 1,000 agri-tech startups as of 2020.
These agritech startups are engaged in projects like addressing water stress and crop stress in farm production. They advise farmers on what crops to use.
The possible replication of an Indian financing system called “Viability Gap Fund” (VGP) has also been proposed by the Philippine Maize Federation Inc. This is to finance post harvest facilities critical to storing the corn production of farmers, according to PMFI President Roger V. Navarro.
The VGP was put up in India to fund viable projects by “unviable” proponents, meaning small and medium farmers.
Navarro said that the fund may come from the fund that form penalties from the Agri-Agra Law. The penalties, he said, amount to billions coming from penalizing banks that do not allocate 10 or 15 percent of their loanable amount for agriculture or agrarian reform funding as mandated.
As of 2019, given compliance of all banks, this agri-agra law fund would have been P1.384 trillion, according to the Department of Agriculture (DA).
Kumaran affirmed the need for the VGF in the country.
“We should have smart public policies. Food security is an absolute non-negotiable. We have lots of small and marginalized farmers in India. They find it hard to access common assets, so government needs to come in,” he said.
Kumaran said the bilateral meeting will have technical engagements, presentations, and contact building. It will create platforms for conversation.
Kumaran noted that while having been import-dependent for food in the 1960s, 1970s, now India is the largest producer of food grain. In addition to feeding its 1.3 billion population, it also exports some surplus.
These are India’s other proposals:
- A partnership on training of skills where India may conduct “pilot projects for modest funding from india.”
- Strong dialogue on market access considering Philippines is a big garlic importer, while India is a garlic producer.
- Solar energy production. A lot of irrigation canals in India are now used as areas for lake solar panels. These supply of energy is used for farmers’ needs, and any excess electricity goes to the national grid.
- Exchange in integrated farming strategies. Here, waste generated from farming is used for other farming processes (energy generation). This helps in combatting climate change and its adverse effects.
- Partnerships in organic food production. (Melody Mendoza Aguiba)