ITC chairman Sanjiv Puri bets on 'smart agriculture' to build supply chain resilience

At a time when climate change in the form of unseasonal rains, heat waves and extreme winters are disrupting food chains as well as business models of consumer goods companies across the globe, ITC chairman, Sanjiv Puri, emphasises on the need for building climate resilient supply chains by investing in ‘smart agriculture’. ITC, he says, has till date done 2.9 million acres of smart agriculture. “It’s a package of practices that makes a crop more resilient to changes in extreme weather events. It is indeed encouraging to note from a study undertaken in the first phase that 70% of the villages have moved into a high-resilience, high-yield category. GHG (greenhouse gases) emissions of select crops have reduced by up to 66% while net returns for farmers have increased up to 90%.”

Built on the back of AI & ML, ITC has a full-fledged weather predictive tool that gives decadal information on likely weather changes over the next 30-40 years. The tool also gives micro and regional level weather-related information as well as suggestions to farmers on how to take care of their crops in case of a climate calamity. “Weather is broken down into different features such as temperature, precipitation, wind, hailstorms and other derivatives such as floods and droughts. These need to be at a micro location level, because it is not good enough to say what is happening at the state or district level. We work with agencies and companies who are specialists in this area. Someone is good at regional level forecasts, while some may have the capability of block level forecast. Our job is to synthesise all of these,” explains S. Sivakumar, group head (Agri and IT), ITC.

Since we live in times when cyclones and floods come with little notice, Sivakumar says the need of the hour is agility. “I may have a theoretical blue print of what I need to do in case of a flood or drought, but if the weather suddenly changes what can I quickly do. I may have to reach 100,000 farmers in a catchment who need to be communicated about a likely pest attack because of change in weather and therefore this is the preventive that we must take in the next 48 hours. The agility with which you are able to reach and act based on the tool kit you have developed is what matters,” he explains.

Similarly, if summer extends by two weeks or the heat wave increases by three degrees, there would be implications in the way cold beverages would be consumed, but one also needs to deal with the fruits at the beginning of the chain. “What are different things that I can do if there is a heat stress in a crop just at the time the grain is forming or fruiting is taking place? What are the practices that we need to follow to ensure that the particular plant is able to deal with the heat stress? Similarly, if there is excessive rain in a short period of time, the plants fall down. How do we ensure that the plants have enough strength to stand up when the wind and rain is behind us? You require a tool kit and this is where the knowledge comes in,” Sivakumar further explains.

ITC, says Puri, has undertaken climate risk modelling, using advanced AI models across 140 sites in agri value chains. “Based on decadal forecasts available through various agencies we have tried to forecast the risks at each site and across the value chain. Now we are taking mitigating steps. We cluster them on the basis of temperature, heat, stress and for each cluster design the solutions,” says Puri.

Making the other parts of one’s supply chain resilient, be it manufacturing or sourcing is equally important. Puri talks about the importance of localising one’s supply chain in order to protect oneself from global disruptions. “If you have vendors across oceans, geo-politics and climate change make you extremely vulnerable. In 2021, water level of River Rhine went down and that river is used for logistics. If you were buying stuff from there everything would have got hit. Therefore, you either you need to create localised supply chains or create multiple sourcing options.”

Building resilience also refers to the ability of smartly managing one’s natural resources. Puri cites the example of the water table depletion in and around Coimbatore, when factories were asked to shut down for 15 days. “We were the only industrial house that was allowed to operate because we were water positive. We were giving water to the community and there the logic was if we stop our plant then whatever we are feeding the community also goes. In all our sites that are water-stressed, we are getting our factories AWS (Alliance for Water Stewardship) certified. It is the gold standard of water management. We are moving beyond the fence to address issues at the community level. Resilience gives you the benefit as you are seen as a reliable partner.”

At a time when climate disruptions have become a way of life, building climate resilient supply chains is a must-do for businesses world over. It’s a matter of do or die.