Pinduoduo invests in agri-tech innovation to boost rural revitalization in China

Pinduoduo invests in agri-tech innovation to boost rural revitalization in China

Staff Writer
Staff Writer
Pinduoduo Content Team
July 11, 2020

· Advanced technology will enhance agriculture productivity and offset challenges

· Global teams work on hi-tech solutions at PDD’s Smart Agriculture Competition

The world’s most populous country, with 1.4 billion mouths to feed, is relying on digitization and advanced technologies in agriculture to enhance production of food crops, tackle food security issues and improve the livelihood of its farmers.

China is investing heavily in agri-tech and scientific research, using technology to increase crop yields and productivity in a sector that contributed 7.1 percent to its GDP in 2019. The coronavirus crisis this year highlighted food security concerns and heightened the need for technological infrastructure within agriculture in China, where poverty alleviation is one of the main objectives for 2020.

Podcast: Agritech investment trends in wake of Covid-19

Digitization of the agriculture sector has become a key focus as remote farming areas lack advanced technological processes to streamline operations, shorten supply chains and increase production cycles of crops.

Abandoned by the Youth, adopted by entrepreneurs

The older generation in China’s farmland lacks the wherewithal for digital transformation, and many of the youngsters have abandoned the countryside for the cities.

China needs to modernize its agriculture sector to overcome the challenges of limited arable land, water scarcity and a rapidly ageing population, said a leading expert on agriculture.

A pomegranate farmer selling his produce on PDD.

“Ageing is getting more serious by the day,” said He Dongjian, a professor at Northwest A & F University. “Who will till the land in the future? Who will solve the problem of feeding of 1.4 billion people?”

Companies like Pinduoduo (PDD) have stepped in to help train a generation of “new farmers” who are e-commerce savvy so as to improve market access for agricultural produce, especially for those living in impoverished counties.

“What we found in our field work is that many of these ecological farmers are what we call new farmers because they are different from traditional farmers as they are well educated farming people with urban background, and are getting involved in farming as entrepreneurs,” said Zhenzhong Si, research associate at the Waterloo University in Canada, during an interview on The Agri Matters podcast.

These “bottom up initiatives” like food-buying clubs or community-supported farms help complement the state-led “top down” policies and measures, include we look at various ecological farmers markets, according to the researchers from Waterloo University.

Podcast: What can China do to emerge as a leader in sustainable and organic farming?

China is expected to be an “aged society” by 2026, with more than 14 percent of the total population aged 65 and above. Most of the 190 million that do agricultural work are getting older, said He, who is also an adviser for a global competition organized by PDD to find agri-tech solutions that boost productivity in poverty-stricken farming areas in China.

He also pointed out that the U.S. uses a mere 1% of its labor to produce the equivalent of 77% of China’s food supply. But unlike the U.S., the farmland in China is scattered and not consolidated, making it difficult to achieve the economies of scale necessary for industrialized farming.

PDD brings in advanced Agri-tech

The Smart Agriculture Competition is one of many initiatives by PDD to engage top talent in developing scientific and technical solutions for China’s agriculture industry. Global teams have three-and-a-half-months to grow strawberries using artificial intelligence and machine-learning algorithms, giving the scientists an opportunity to compete and share know-how with expert growers.

Read: Global teams vie to grow best strawberries in Yunnan, China

Of the 17 teams that were shortlisted, four have progressed to the finals where they will face off against another four teams of traditional farmers. In the final round, which will span over four months, the teams will be tasked with growing strawberries in the Yunnan highlands.

PDD's Smart Agri Competition site. Photo by Mugong

The technology teams competing with farmers comprise of experts in strawberry planting, plant and crop nutrition, image recognition, environmental control, and algorithm engineering. In order to create the ‘farmers of the future’, the teams are expected to come up with advanced agri-tech solutions to ease challenges faced by local farmers.

“Through this contest, we will be able to discover more industry talents and produce results that will have an impact across the field,” said Cao Weixing, the dean of the Smart Agriculture Research Institute of Nanjing Agricultural University and the former deputy minister of the Ministry of Natural Resources.

The winning team will get research funding from the Pinduoduo Agritech Research Fund, help with implementation at a Duo Duo Farm in Yunnan province and further academic and commercial support.

PDD is on a mission to help the farmers in impoverished counties by providing them with education and training so they could sell their produce directly to online consumers. During the coronavirus outbreak, the company used its team purchase model to aggregate demand from more than 600 million consumers on its platform, and saved crops from rotting in the fields.

Watch: How Pinduoduo is able to lower the price of onions and aggregate demand for farmers

The value of produce from impoverished counties sold on PDD, the largest agricultural e-commerce platform in China, rose 130% to 37.3 billion yuan in 2019.

PDD also provides local cooperatives and farmers with insights on consumer preferences so that they can better plan and market their products. The company, which has a 34% market share of China’s online agricultural produce, saw its agricultural product sales reach 136.4 billion yuan (US$19 billion) in 2019, a 109% increase year-on-year.

Cloud agriculture and farmer education

Tsinghua University, too, highlighted the role played by PDD in alleviating poverty in remote areas of China through “cloud agriculture” in a report.

PDD’s focus on improving information, intelligence and scale — referred to as the “three transformations” in farming by Tsinghua researchers — will transform the short shelf life of agricultural products and increase geographical limits for rural businesses, according to the report.

Farmers undergo training with Duo Duo University.

“We feel that farmer organizations, e-commerce companies, startups… these will become the new kind of participants in the supply chain going forward,” said Parmesh Shah, the World Bank’s Global Lead for Rural Livelihoods and Agricultural Jobs in a podcast interview on the Agri Matters Podcast.

Podcast: World Bank’s Parmesh Shah emphasizes the need for digital transformation for farmers

PDD’s Duo Duo Farm initiative helps farmers learn how to sell directly on its e-commerce platform. Its Duo Duo University programs provide training sessions to equip farmers with important skills, including an understanding of e-commerce, finance, business operations and online marketing.

A recent example of helping educate farmers was an eight-month course held by PDD in conjunction with the Chinese Academy of Engineering in the Lancang Lahu autonomous county in Yunnan province. The New Farmers were trained on how to plant simple crops like potatoes, improve their agriculture techniques and also find new markets for their products.

About 70% of the 60 that graduated from the training course have completed their creation of their online stores on PDD, running businesses selling ethnic food, costumes and other local specialties.

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PDD also organized a three-hour online training session on July 5 in another impoverished county on the Daliang Mountains bordering the Sichuan and Yunnan provinces. The aim was to teach participants the skills required to start and manage an e-commerce business.