Transforming Business with Digital Technology in India’s Oil Palm Industry

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The oil palm industry in India has laid a solid foundation for the future, having experienced various challenges and difficulties over the past 30 years and brought about 4.0 lakh hectares (lh) to smallholder farmers (SH) under cultivation of oil palms through a micro-irrigation system without touching the cor forest successfully. Now the industry has transformed into an integrated industry from production to processing.

However, industry and researchers have to deal with various challenges such as climate change, water availability and its resources, soil fertility and productivity, etc. The Indian Institute of Oil Palm Research (IIOPR) in Andhra Pradesh has developed the following palm oil mobile apps and digital apps:

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

  • Development of an oil palm site suitability assessor through a computer-aided decision support system (DSS). This helps various stakeholders and policy makers to quickly make appropriate decisions regarding site selection for oil palm cultivation since the agro-climatic requirements for oil palm cultivation are confined to certain regions/states of the world. country.

  • A static Android mobile application on oil palm water requirements has been developed for the benefit of farmers in Andhra Pradesh, Tamil Nadu and Karnataka. It will help farmers to monitor water requirement and control water application for crop effectively.

  • Processors should start issuing a soil health card via the mobile app (after on-site soil testing through a mobile soil testing lab) to oil palm growers so that farmers can use judicious and economical fertilizer application.

Refine stakeholder interest

Strategic discussions must start now within the company and industry in India to move towards effective digital applications both in the field and in the factory. Through digital governance, we can improve — agricultural productivity, promote financial inclusiveness, increase efficiency in the delivery of government programs and subsidies, improve process technologies, and more.

The interest of all stakeholders (farmers, processors, government agencies and consumers) must be finely tuned and balanced. Processors are expected to enhance upstream linkages and services more effectively through digital transformation compared to the established model of public-private partnership (PPP) through contract farming in the states of Andhra Pradesh, Telangana , Karnataka and other oil palm producing states.

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

However, it is possible to effectively introduce digital applications to these services with the aim of providing meaningful engagement with raw material suppliers (oil palm growers provide fresh fruit bunches).

Few palm oil processors have already developed the Farm Management System (FMS) for farmer integration. This includes the farmers registration number/inquiry number, name and address, GPS location of the location of the farmer’s plots and the locations where the farmers supply the Fresh Fruit Bunches (FFBs) .

Thanks to the FMS, there is complete traceability of all farmers. There is a need for a continuous campaign among oil palm growers to raise awareness about the quality of FFBs based on maturity standards through introduction and demonstration at the collection center using a scanning machine automatic image-based, after successful factory test. , 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 need to focus on today’s efficiency for future growth. Standardization can lead to automation and operational efficiency improves further. Once the bottleneck and inefficiencies in the whole process (field)/operations (factory) are identified, apply the digital technology in place by looking at examples inside and outside the oil palm industry.

Probably, palm oil processors should think about and undertake a profound transformation of their business model from a B2B model to a new “B2B2C” model in the future, with the objective of providing services to end consumers. If so, the business needs to rely more on the digital revolution.

If the two models co-exist, allocate resources carefully. The existing business model is making enough money now, but still creating new revenue streams from existing primary and secondary products and by-products/biomass, like empty fruit bunches, shredded fibers, effluents palm oil factories (POME – solids and liquids), through new connection with customers by developing value-added products.

We must ensure that we produce environmentally friendly products for the general benefit of society, the environment and the economy.

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

Former CEO, Oil Palm Plantation, Godrej Agrovet Ltd

Published on

June 19, 2022

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