Aakhya Weekly #81 | What if Farmers Started Selling Produce Online?
In Focus: How FPOs in India are Leveraging ONDC to Boost Farmer Incomes
By Saptak Ghosh
Post Independence, the Indian agricultural landscape has witnessed a significant transformation. From a subsistence-based and labour-intensive system to a modernised, capital, and knowledge based one, the structural transformation and the intensification of the agricultural sector, coupled with buoyant growth in the past few years, points to the success story, thanks to a series of government initiatives.
The farmer producer organisations (FPOs), a consortium of primary producers, has been instrumental in supporting the farmers – big and small - on a plethora of areas ranging from input procurement to market linkages and has served as a backbone to the sector. However, to take things to the next level, the farmer organisations in the country are integrating with ONDC or the Open Network for Digital Commerce, a first-of-its-kind e-commerce platform, rolled out by the Government of India to further democratise e-commerce in the country. This article aims to shed light on how the onboarding of FPOs in this digital platform can bring about an unprecedented change in the agricultural landscape with the ultimate aim of benefitting the farmers in any part of the country.
ONDC – A game-changing platform
The Government of India rolled out the Open Network for Digital Commerce (ONDC) on December 31, 2021, with a view to establish a cohesive digital platform that would cater to all stakeholders within the commerce ecosystem. This initiative focuses on fostering seamless connectivity among buyers, sellers, and service providers with an overarching objective to not only enhance transparency in transactions but also streamline the exchange of goods and services.
The significance of ONDC for the agricultural sector can be felt especially in areas where farmers frequently encounter issues such as unfair pricing, limited market access, and inadequate information dissemination. ONDC aims to empower farmers by providing a digital infrastructure that addresses these obstacles by facilitating a direct and crucial connection between producers and consumers. This collaboration can result in a more equitable marketplace, where farmers are in a position to negotiate fair prices and have a strong foothold in the commerce landscape.
FPOs-ONDC bonhomie—enhancing incomes from produce
At the very heart of the agricultural value chain, Farmers Producer Organisations (FPOs) act as the engine of agri-innovation in the country. These bodies play a pivotal role in the aggregation of produce, consolidation of bargaining power, and establishing improved market linkages in e-commerce platforms for small and marginal farmers across the country. Over the years, FPOs in India have strategically positioned themselves to wield their influence over many key issues in agriculture, including exploitation of farmers, thereby contributing to the overall empowerment of farmers – big or small.
Integration with ONDC, therefore, enhances FPOs’ capabilities by disrupting traditional barriers to farming across India. Through this digital framework, FPOs will have the means to foster a marketplace that is both equitable and efficient, and can streamline operations, connect with a broader consumer base, and navigate new-age market dynamics as well. Therefore, a solid bonhomie between FPOs and ONDC could fix India’s several agricultural sector problems, and most importantly, boost income for the farmers in an unprecedented manner.
An Improved Market Access
ONDC’s steadfast commitment to India’s farmers by facilitating their access to digital architecture markets has been remarkable. It acts as a gateway in offering them a robust platform to exhibit their agriculture produce to a broader audience. This expanded visibility enables farmers to seamlessly navigate the digital commerce landscape and engage directly with various stakeholders, ranging from retailers and wholesalers. Therefore, through this improved market access and direct engagement, FPOs can negotiate favourable terms and prices without the traditional constraints imposed by the intermediaries.
Ensuring Price Transparency to Farmers
One critical challenge in the agricultural sector has been how farmers often grapple with unfair pricing structures. Hence, pricing transparency is the need of the hour. ONDC has the potential to alleviate this concern by offering real-time information on market prices. Once this crucial data becomes accessible to FPOs, it will empower them to engage in informed negotiations for fair prices on behalf of their members.
Furthermore, by providing instantaneous market price trends and crucial information, the ONDC would empower FPOs with the tools necessary for equitable negotiations, thereby fostering an environment where farmers receive fair compensation for their agricultural efforts.
Empowering Farmers by Facilitating Access to Digital Markets
In June 2023, Google Cloud and ONDC announced the launch of open-source solutions, enabling buyers and sellers to onboard onto the ONDC network.
To further enhance inclusivity in digital commerce, the partnership is expanding its reach to empower Farmer Producer Organisations (FPOs) in selling their agricultural produce online. This extension aims to provide farmers with additional revenue channels, irrespective of digital literacy, geographic location, or economic status. Thus, the initiative aims to democratise access to online markets, ensuring that all farmers can benefit from the opportunities presented by e-commerce.
The Road Ahead
ONDC therefore, has all the potential to be a game-changer, significantly altering the landscape for the FPOs in India in the coming days. Through integration of FPOs with this digital platform, farmers are successfully navigating and overcoming longstanding challenges in the agricultural sector. It is, therefore, safe to say that ONDC has led to the establishment of an inclusive and equitable marketplace by fostering transparency, financial inclusion, and greater efficiency in the agricultural supply chain. The collaborative synergy between FPOs and the ONDC serves as a compelling example of technology’s transformative prowess in empowering those essential to India’s sustenance.
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