India's Farmers Could Be Making More Money Soon, With The Help Of Clever Agritech Startups
Prime Minister Narendra Modi’s government plans to double an Indian farmer’s income by 2022, which directly addresses the agrarian crisis in India and paves the way for the introduction of new initiatives to improve a farmer’s income.
While technology and startups form a critical part of urban India’s narrative, agriculture remains a mainstay for India’s rural population that currently constitutes almost 70% of the nation’s 1.2 billion. While it is the primary source of livelihood for more than 58% of the population, the industry is plagued with a variety of problems including the use of outdated equipment, improper infrastructure, and farmers unable to access a wider range of markets with ease while making just limited profits on crop sales.
One of the more pressing challenges of the sector is infrastructure. The National Institute of Agricultural Management states that supply chain management in India is fraught with problems mainly due to the outdated habits of the agricultural industry. Now, a wave of agritech startups are addressing supply chain management and enhancing the sector’s marketing infrastructure, key developments that will eventually raise farmers' incomes.
Technology replacing middle men in Indian agriculture
Gurgaon-based Kisan Network is one of India’s few agritech startups that allows farmers to directly sell to businesses, effectively eliminating the middle man from transactions and allowing farmers a fair opportunity to control profits. Cofounder and CEO Aditya Agarwalla saw that Indian farmers are constantly under pressure to spend–be it on farming supplements or technology--but their avenues to make money were very limited. “There is a huge information barrier in rural India, which limits farmers to their nearest traders to do business. Through our app, farmers can trade from across the country.”
Through the Kisan Network app, farmers can upload information about their crops and advertise on the network for free. Kisan Network then matches the farmer with a buyer, and takes care of the entire supply chain process right from sorting, grading, packaging, processing and delivery. This helps cut down on extra expenditure that a farmer would normally have to incur, explains Agarwalla.
Promises about strengthening financial support to the agrarian community have been dominating India’s financial budget plans for years now, but the rural community needs measures that would enhance their market reach and eventually ensure better profit margins.
Just like Selvakumar Varadharajan and his wife discovered. The couple were stymied that they could not find high-quality affordable milk in a major metropolis like Bangalore for their two-year old daughter. “That’s when it struck me–Indian farmers are desperate to earn competent prices for their produce, while urban Indians struggle to find farm-fresh produce at affordable rates in cities," said Varadharajan.
This led to the genesis of Layman Agro Ventures, a Coimbatore-based agri startup that supplies farm-fresh produce to Indian towns. Varadharajan's market research led him to discover that farmers were buying agricultural inputs at retail price and selling their output at wholesale price, drastically reducing their profit margins. Moreover, they had little technological support that would help find customers beyond their nearest traders.
This prompted the 36-year old agripreneur to come up with a solution where farmers make up to 25% profit on procurement and can purchase inputs at wholesale prices. This way, around 80% of the consumer price was getting funnelled back into the rural economy. Layman Agro Ventures now supplies fresh vegetables, fruits and milk directly from farms to 40 apartment complexes as well as leading hotels such as JW Marriott, Lemontree, Accor Ibis and Radisson Blue, in Coimbatore. Laymen Agro Ventures is growing at 30% every month and the startup enjoys a customer 95% retention for its delivery of farm fresh milk.
Varadharajan’s business model is also helping unemployed or under-employed village youth gain meaningful and well-paying jobs, his attempt to limit rural-to-urban migration. Now, he plans to take his model to another fast-rising south Indian town, Madurai, and eventually to Pune and Ahmedabad as well.
Government using agri startups as a means to help farmers
The efforts of these startups have been bolstered by the increasing involvement of the government to tackle farmer issues at the grassroot level. Prime Minister Narendra Modi’s government plans to double an Indian farmer’s income by 2022, which directly addresses the agrarian crisis in India and paves the way for the introduction of new initiatives to improve a farmer’s income.
In September 2017, Union Minister for Agriculture Radha Mohan Singh explained that it was imperative to work with India's agri startups, which are working on providing farmer-friendly solutions.
More recently, the national budget significantly focused on improving India’s agriculture sector, with measures to improve agri marketing and price standardization. One of the most widely lauded moves was to keep the Minimum Support Price (MSP) of kharif (monsoon) crops at 1.5 times their production, in a bid to ensure the farmer makes a profit. Other farmer-friendly measures include establishing a $306 million integrated Agri Market Infrastructure Fund and increasing interest-friendly credit measures for farmers to purchase equipment.
Startups like Kisan Network and Laymen Agro Ventures are already working on providing better prices to farmers and enhancing marketing outreach, but according to entrepreneurs in this space, it's just a first step to achieving a broad solution. Agarwalla says, “It is exciting that the government is actively addressing market accessibility of the farming community. Government impetus in the form of policies and budgets help startups like mine reach more rural pockets and impact more farmers positively”.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
Around The World