IN the post–Covid-19 world, agriculture will see major shifts. There can hardly be any doubt about it. Developing countries like Pakistan with archaic agricultural practices will have to make revolutionary changes.

Many challenging trade-offs will have to be made — for example, between absorbing jobless people and boosting productivity, between ensuring food security and growing food exports. Modernising agriculture and creating reliable online marketing of agricultural produce cannot help much in making such tricky trade-offs in the beginning. But in the long run, it will help enhance productivity to expand the domestic economy and compete efficiently in export markets.

Even today as the entire world battles with the Covid-19 pandemic, we need better use of digital technology in marketing to make supply chains more efficient amidst lockdown constraints.

In the past two decades, the use of production technology in agriculture has seen a gradual rise though it remains wanting on several counts. But agricultural marketing remains predominantly traditional. The use of IT-based marketing solutions and presence of online marketing platforms are too limited.

Pakistan needs IT-enabled integrated supply chain platforms that operate across the full spectrum of the supply chain of food grains, fruits, vegetables, poultry and fisheries

Agriculture Marketing Information Services (AMIS) of the Punjab Agriculture Department, introduced during the previous government, is keeping farmers and commodity markets informed about the latest developments.

But in the absence of a similar service in the other provinces, farmers and commodity markets across Pakistan are not benefiting as much as they need, though AMIS claims it provides online information on countrywide estimates of crops and their real-time prices.

This interactive online platform allows eligible users — mostly members of agricultural market committees of Punjab — to upload changes in the prices of farm produce and the arrival of crops in markets. Tech startups in agriculture could have been encouraged to work with AMIS to promote online marketing of commodities had there been a unified policy framework in place.

In Pakistan’s agriculture, online agricultural marketing has just started picking up and needs policy and financial support from the government for survival and growth. A limited number of online businesses, some of them owned by large local or multinational companies, are engaged in the marketing of inputs, fodder, crops, live animals and farm and animal care services.

But their operations are not covered under a single policy document. A majority of them raise funds on their own, some of them from abroad. A group of startup entrepreneurs made a presentation regarding this state of affairs to the National Assembly’s standing committee on agriculture in March. During that meeting, lawmakers agreed to do the needful. The Ministry of National Food Security and Research should now engage all stakeholders to frame a policy on promoting online marketing in the agriculture sector.

The State Bank of Pakistan (SBP) should also encourage banks to cover such start-ups in the recently announced concessional financing schemes. Online agricultural marketing companies can be given access to collateral-free loans meant for SMEs with a ceiling of Rs5 million if banks cooperate. The policy of treating them as candidates of venture capital finance has somehow failed to cater to their needs. That is why many of them continue to raise funds from global and regional chains of venture capital firms or become part of foreign online marketing companies.

Sometime ago, the Pakistan Agriculture Coalition — a non-profit organisation sponsored jointly by some banks and insurance companies plus manufacturers of agricultural inputs, food spices and leather products — started online trading of red chilli. To make it happen, it joined hands with Agility Logistics, SGS Pakistan and the Pakistan Mercantile Exchange (PMEX). Even before that, the PMEX offered online contract-making facilities to the producers of rice, sugar, wheat and palm oil. But that remained limited primarily to price discovery and futures trading of commodity stocks.

What Pakistan needs now are IT-enabled integrated supply chain platforms operating across the full spectrum of the supply chain of food grains, fruits and vegetables, poultry and fisheries — and not mobile applications of limited scope. Such apps keep coming up, but they primarily help commodity traders connect with a wider circle of customers. Building digitally integrated supply chain platforms requires end-to-end, long-term, institutional logistics and financing support. Such platforms should ideally work in crops, horticulture, poultry and fisheries on the pattern that is practised by local and multinational companies involved in corporate dairy farming.

Ricult, a digital company founded in 2016 by a team of Pakistani entrepreneurs, is one good example of online marketing of agricultural produce. The company that had to raise seed money of about $2m from abroad is sort of a joint venture between Pakistan, Chinese and Thailand. It has developed links mainly with big rice producers and buyers of the three countries. What Ricult does for export marketing, other online firms can do for domestic markets as well. And what it does mainly in rice marketing, others can do in the marketing of wheat, sugar cane and maize as well.

Agriculture and food departments of provincial governments need to take the initiative. Banks and insurance companies need to come forward to support it, just like they have supported the private sector’s Pakistan Agriculture Coalition (PAC).

What makes the PAC a well-integrated agricultural platform is that its partners include key players of the agricultural economy — banks such as National Bank and Habib Bank, insurance company like Adamjee, inputs manufacturers like ICI Pakistan and Fatima Fertiliser and consumer brands such as National Foods and K&N’s.

Provincial governments, growers of major crops, input makers, banks and insurance companies, logistics companies plus commercial warehouses, millers and food makers, large retail houses and IT startups can join hands and set up digitally connected supply chains and marketing platforms. If all of them come up with concrete plans to revolutionise the marketing of food crops and food products, institutions like the World Bank and Asian Development Bank will surely be willing to co-invest in terms of both finance and technical expertise and technology.

The monitoring of operations of such well-integrated supply chains and marketing companies will be relatively easy in times of national emergency. And relying on them for exports will be less problematic. — MA

Published in Dawn, The Business and Finance Weekly, May 4th , 2020