Transforming business with digital technology in oil palm industry in India 

The oil palm industry in India has laid a strong foundation for the future, after experiencing various challenges and difficulties over the last 30 years and brought about 4.0 lakh hectares (lh) through Small Holding (SH) farmers under oil palm cultivation through a micro-irrigation system without touching forest cor successfully. Now the industry turned into an integrated industry from production to processing.

However, both industry and researchers need to meet various challenges like climate change, water availability and its resources, soil fertility and productivity, etc. Indian Institute of Oil Palm Research (IIOPR) in Andhra Pradesh has developed the following mobile apps and digital applications for oil palm:

Mobile apps for oil palm cultivation practices, nutrient management, pest and disease management.

• Oil palm site suitability evaluator through computer-aided Decision Support System (DSS) developed. This helps various stakeholders and policymakers in taking appropriate decisions quickly with respect to site selection for oil palm cultivation since agro-climatic requirements for oil palm cultivation are confined to certain areas/states of the country.
• A static android mobile App on water requirements for oil palm was developed for the benefit of farmers in Andhra Pradesh, Tamil Nadu, and Karnataka. This will help farmers to monitor water requirements and control water application for the crop effectively.
• Processors should start issuing Soil Health Card through the mobile application, (after soil analysis on the spot through mobile soil testing laboratory) to oil palm farmers so that farmers could use the application of fertiliser inputs judiciously and economically.

Fine-tuning stakeholders’ interest

Strategic discussions should start now within the company and industry in India to move towards effective digital applications both infield and mill. Through digital governance, we can improve — farm productivity, promote financial inclusivity, increase efficiency in implementing government schemes and subsidies, process technology improvement, etc.

The interest of all stakeholders (farmers, processors, government agencies, and consumers) should be finely tuned and balanced. Processors should strengthen backward linkages and services more effectively through digital transformation against the established model of Public-Private Partnership (PPP) through contract farming in the States of Andhra Pradesh, Telangana, Karnataka, and other oil palm growing States.

The industry provides the services to farmers through extension service teams, like farmer registration process, active agronomic support, training and capacity building, arrangement of financial assistance through banks, and other areas of livelihood support.

However, there is scope to introduce digital applications towards these services effectively with the object of providing meaningful engagement with suppliers of raw materials (oil palm farmers supply fresh fruit bunches).

Few oil palm processors have already developed the Farmer Management System (FMS) for the on-boarding of farmers. This includes farmers’ registration number/ survey number, name and address, GPS location of where the farmer’s plots are, and places where farmers supply the Fresh Fruit Bunches (FFB).

Through FMS, there is full traceability of all farmers. There is a need to make a continuous campaign among oil palm growers to sensitise the quality of FFBs based on ripeness standards through introduction and demonstration at the collection centre with the help of an image-based auto scanning machine, after a successful trial at the mill, if possible.

It is also possible to undertake a geospatial risk assessment based on the location of the palm oil mill. This assessment provides potential environmental risks that may or may not be present in the supply base.

Bottlenecks, inefficiencies

We must focus on today’s efficiency for future growth. Standardisation can lead to automation and operational efficiency improves further. Once the bottleneck and inefficiencies in the entire process (field)/ operations (Mill) are identified, apply digital technology in place by considering examples within and outside the oil palm industry.

Probably, the oil palm processors should think and undertake a deep transformation of their business model from a B2B model to a “B2B2C” new model in the future, with the object to provide services to end consumers. If so, the company has to rely more on the digital revolution.

If both the model co-exist, allocate the resources carefully. The existing business model though makes enough money now but still creates new sources of revenue from existing primary and secondary products & by-products/ biomass, like empty fruit bunches, shredded fibres, palm oil mill effluent (POME — Solid & liquid), through new connection to customers by developing value-added products.

We need to ensure that we produce eco-friendly products in the larger interest of society, the environment, and the economy.

Last but not the least, penetration of technology for the business is needed of the hour and will help to improve productivity and flexibility. Adoption of technology will provide real-time information and impactful solutions to farmers and reduce the gap between the present and untapped future potential.

The former CEO, Oil Palm Plantation, Godrej Agrovet Ltd

Published on

June 19, 2022

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