FARM FRESH
Agritech companies are revamping the farm- to- fork supply chain. The big gainers are farmers.
MANISH MORE USED TO grow sugarcane and onions on his four-acre farm in Shiroli-Khurd village, 80 km from Pune, until a few years ago. But with sugarcane yields falling from 100 tonnes an acre to 40 tonnes, he, Ganesh Hande, Pravin More, and a dozen other farmers formed an informal group in 2014 and switched to more remunerative organic vegetables only to realise that taking their crop to market was a hard row to hoe.
“Government officials will tell you to go organic but they won’t show you how. And the problem was we had no idea where to sell and how to value-add”, says Manish. Till a chance encounter in 2015, agritech player FarmLink changed their fortunes.
Now each week, their 30-strong group supplies twoto-four tonnes of organic fruits and vegetables such as onions and beetroot to FarmLink’s distribution centre at Vashi in Navi Mumbai, from where the latter supplies to customers like Amazon Now, Vista and Star Bazaar.
“FarmLink has given us a plan to sow our crops. We allot one-two crops per farmer and they farm in a chain so we can supply the vegetable all year-round,” says Ganesh, who gets the produce sorted, graded, and packed on his farm, while Pravin transports it to Vashi. More importantly, their incomes have nearly quadrupled in the last two years. So, Manish, who is the lead farmer-aggregator, has bought five cows while Pravin has a new pick-up and Ganesh is considering schooling his daughter in Pune.
Cut to MRC Nagar village near Coonoor in Tamil Nadu, where 27-year-old Santhosh Kumar grows exotic vegetables like broccoli on his 10-acre farm. Until 18 months ago, Santhosh would rely on a relative to take his produce to the mandi in Ooty with little transparency on the price and quantity sold. But after tying up with Chennai-based WayCool Foods and Products, field officers grade and weigh his produce at his farm and a truck from its Ooty collection centre collects it on a sourcing run covering 500-odd farmers along the way.
And while earlier, Santhosh would worry about finding enough wholesalers as exotics sell in small quantities, now his offtake is assured. Also, unlike in the mandi where the trader dictated terms, Santhosh negotiates his price after checking rates on sites like Big Basket. “WayCool gives me a better price and pays me weekly so I don’t have to worry now,” he says. His income has gone up 10-20 per cent.
Marginal farmers like Manish and Santhosh may
in a minuscule minority amidst the overwhelming sea of farm distress enveloping the country today. But a host of new agritech players along with online and retail companies are reaching out to them by modernising and building new fruits and vegetables (F&V) supply chains.
From FarmLink in Mumbai and WayCool in Chennai to NinjaCart in Bangalore and Kisan Network and Crofarm in the national capital region (NCR) to online and offline grocers like Big Basket and Big Bazaar, they’re all eager to tap the opportunity presented by the Indian F&V market. In the process, they’re linking farmers to the market and disintermediating the traditional supply chain.
The opportunity is massive. After all, India is the second-largest producer of F&V in the world after China, and the 300-million-tonne Indian F&V market is estimated at over ` 4 lakh crore. Moreover, nearly 95 per cent of this is in the unorganised general trade, operating through local vegetable vendors sourcing from traditional mandis and multiple intermediaries.
“We believe there is potential to transform the value chain of all fresh-produce crops,” says Akshaya Kamath, Director, Pioneering Ventures, the Swissheadquartered incubator and investment fund that has founded FarmLink – and other agriculture-focussed ventures – in India.
That’s because if productivity is an input-side issue in the Indian farm sector and has received attention from input companies, on the output side, “there’s a massive challenge of wastage and inefficiencies because of multiple handling”, says Kamath, a former managing director of Syngenta India. Incidentally, Syngenta is the anchor investor in FarmLink.
According to various government reports, wastage levels in F&V range from 15 per cent to 40 per cent in India. And farmers get barely one-third of the retail price paid by consumers.
Undoubtedly, as Vipul Mittal, National Category Head, F&V, Big Basket, points out: disintermediating the supply chain isn’t a new concept as Mother Dairy showed with its Safal shops in the 1980s. In the early 2000s, agri-marketing firms like Desai Fruits and Vegetables – it was Pioneering Ventures’ first investment in India, and it pioneered banana exports – did the same. Modern retail led by Future Retail also integrated backward. But now, the new agritech players are emerging as dedicated F&V marketing and supply chain players. Even Big Basket, which set up its F&V supply chain three years ago, is extending it to serve B2B customers.
The players are building end-to-end supply chains to get, as Kamath says, “The right quality and quantity of fresh produce to the market in the most efficient way without wastage”. The idea is to compress the time from harvest to shop, improve farmer incomes, and reduce the retailers’ procurement costs.
“We want to ensure that farmers get 15-20 per cent more than what they’re getting from the market and that the retailer pays 5-10 per cent less than what he pays to the mandi,” says Thirukumuran Nagarajan, Cofounder and CEO, NinjaCart, which began operations in Bangalore in 2016. NinjaCart moves 200 tonnes of fresh produce a day, sourced from 4,500 small farmers, to 2,400 neighbourhood vegetable retailers in Bangalore, and it has entered Chennai now.
Adds Aditya Agarwalla, Co-founder, Kisan Network: “We want to set up a national platform for farmers. It’s about making the connection between the farmer and buyer and doing it real time so that the farmer doesn’t have to leave the farm and the buyer doesn’t leave the city.”
Big Basket’s Mittal says: “E-commerce by nature disintermediates on the customer side. At the same time, we were clear that once we got a certain level of volumes, we had to extend the chain to the back-end to bring in all the advantages of disintermediation.”
An Open Field
The players are bringing in diverse abilities to address these inefficiencies. In Chennai, WayCool is leveraging its experience of managing manube