India bats for bilateral exchanges on agritech, fintech, intelligent financing
THE Indian government has proposed a bilateral exchange with the Philippines involving agricultural technology (agritech) and financial technology (fintech), believing that vital technologies revolutionizing small farms in the South Asian country can benefit Filipino farmers.
On top of initially extending $50,000 to the local corn sector, Ambassador Shambhu S. Kumaran said India can exchange technologies with the Philippines that are at the forefront of improving the way 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,” said Kumaran at a Philippine Chamber of Agriculture and Food Inc. (PCAFI) business meeting. “And India will see the positive developments in agritech in [this country].”
The bilateral meeting is earmarked to be coorganized by PCAFI and the Indian Embassy. It may be held “sometime later this year.”
Philip L Ong, PCAFI chairman, said this fintech venture with India may involve the organization’s own Agrifood Hub Project, which is also involved in technology that links farmers with the market.
Since its launch in July 2020, PCAFI has so far linked 37,343 farmers and 315 farmer groups, primary traders and cooperatives to markets involving 109 municipalities. It had posted through its web site agrifoodhub.com a total of 980 food and crop requirements, as well as matched these requirements with 924 sellers. Ong reported that it has so far received 56 information requests and generated 55 active buyers per month.
Data for loans
KUMARAN said the Indian government has already touched based with Finance Secretary Carlos G. Dominguez for a possible agritech and fintech exchange.
“An Indian company allows banks to use geospatial [and] satellite data to make informed lending decisions,” explained Kumaran. “[They enable] banks to cut the risk, and [also] understand where and when credit dispersal is viable. They will have constant stream of data.”
The envoy shared that because of this agritech, an e-bank has raised “half-a-billion dollars using this tool that brings about revolutionary changes.” He said that Indian fintech companies are not big, but they address critical gaps in technology.
“We offer…the possibility that the DBP (Development Bank of the Philippines) could have this tool without having to procure it,” Kumaran commented. “It will be free-ofcharge. The revenue model allows…creditors and software companies [to] benefit from using the technology.”
Currently, banks are hesitant to lend to agriculture activities as they are yet to have mitigation strategies and risk-assessment tools to determine what is viable. But the said software makes that possible.
The Indian diplomat shared that from only a few agritech startups in 2013, India had 1,000 as of 2020. These are engaged in projects such as addressing water stress and
crop stress in farm production. They advise farmers on what crops to use.
Agri-agra Law
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 corn-production storage of farmers, according to PMFI President Roger V. Navarro.
The VGP was put up in India to fund viable projects by small and medium farmers.
Navarro said the financing may come from the fund that form penalties from the Agriagra Law. These, he said, amount to billions coming from banks that do not allocate 10 percent or 15 percent of their loanable amount for agriculture or agrarian reform funding as mandated.
As of 2019, given the compliance of all banks, the Agri-agra Law fund would have been P1.384 trillion, according to the Department of Agriculture.
Kumaran affirmed the need for the VGF in the country: “We should have smart public policies. Food security is an absolute nonnegotiable. 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 noted.
The ambassador said the bilateral meeting will have technical engagements, presentations, and contact-building. It will create platforms for conversation.
He noted that while having been importdependent for food in the 1960s and 1970s, his country now is the largest producer of food grain. In addition to feeding its 1.3 billion population, it also exports some surplus.
India’s other proposals included: (1) A partnership on training of skills where India may conduct pilot projects for modest funding from the said country; (2) Strong dialogue on market access, considering the Philippines is a major garlic importer, while India is a garlic producer; (3) Solar energy production, as 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; (4) Exchange in integrated farming strategies, where energy generation from farming waste is used for other farming processes. This helps combat climate change and its adverse effects; and (5) Partnerships in organic food production.