Vodafone says its new scheme can increase farmers' incomes by 560,000 crores!

Vodafone's Kisan Mitra will provide a spectrum of services for India's small farmers, simple mobile service interventions that can increase a farmer's income by Rs 8,000 per year.

Rashme Sehgal reports for Rediff.com

Vodafone has launched a Kisan Mitra initiative to enhance the productivity of India's small farmers.

This initiative, Vodafone believes, will enhance the income of 70 million small scale farmers by over Rs 56,000 crore (Rs 560 billion) a year.

A Vodafone study titled Connected Farming in India released on Tuesday, May 26, believes that simple mobile service interventions can increase a farmer's income by Rs 8,000 per year.

An average farming household presently survives on less than Rs 250 per day with most farmers having to struggle to feed and educate their families.

The Vodafone report highlights how mobile services can play a key role in providing agricultural information services including early warning of weather events, information on the best times to harvest and advice on crop techniques to enhance yields and also enable farmers to access simple and secure financial products and services using mobile money payment systems.

Access to micro-finance and quick and transparent electronic payment systems could enhance agricultural incomes. These could also be used as a form of receipt services to provide greater transparency in daily commodity supply chains, through use of registration and receipt services via the mobile, thereby eliminating fraud.

Mobile services are also be used by auditors to monitor quality, sustainability and meet certification requirements.

"The future of agriculture lies in bringing digital services to the farm as agriculture is increasingly becoming more and more knowledge intensive," Raghav Chandra, additional secretary and financial advisor, ministry of agriculture, said, while releasing the report.

India, the report highlighted, has emerged as one of the world's largest food producers with more than 200 million people currently estimated to work in agriculture. Around 100 million of them are farmers while the remaining work as agricultural labourers.

Around 62% of farmers own less than one hectare of land, significantly increasing their exposure to the effects of crop failure, pests, disease and volatile market pricing.

Vodafone has launched a Vodafone Farmers Club in six countries including India which will provide specific services that will include virtual marketplaces. Vodafone claims the club has achieved considerable success in Turkey with smaller farmers.

Launching both the report and the VFC, Vodafone's CEO for the Asia Pacific region Serpil Timuray said, "One-third of humanity relies on food grown by 500 million smallholder farmers with less than two hectares of land. Mobile has a critically important role to play in increasing agricultural resilience and enhancing quality of life for some of the poorest people on earth."

India is one of the world's largest food producing countries, with 68% of its population living in rural areas. Like many other emerging markets, India has a pressing need to improve agricultural productivity and food production as its population grows.

The report highlighted that India's economy and agricultural sector are in transition, with huge opportunities for growth and innovation. The transition from the rural to urban economy is taking place at a rapid place.

In 2011, agriculture employed 45% of India's workforce, down from more than 80% in 1951. This is anticipated to fall further to less than 35% by 2020 as more people seek employment in India's towns and cities, driven by the prospect of higher wages.

However, this still represents more than 200 million people working in the sector. As the service and industrial sectors continue to grow rapidly, agriculture's share of gross domestic product is in decline. However, it will remain a significant contributor at around 10% of GDP by 2020.

Vodafone believes agriculture will continue to play a very important role in the lives of many women with more than 60% of all employed women working in this sector. In rural areas, the percentage of women who depend on agriculture for their livelihood is as high as 84%.