New Delhi: With promises of minimal farm wastage, better income for farmers, and ensuring nutritious fruits and vegetables on your plate, an entire ecosystem of agriculture e-commerce portals is beginning to take shape in India.
These new companies deploy technology such as artificial intelligence (AI) and drones to inject efficiency and expertise all along the supply chain. It starts with providing farmers with important inputs to help bolster the quality of produce, and ends with bringing them to the consumer as quickly as possible.
Some of the leading firms in the agriculture e-commerce sector include INI Farms, AgriBazaar, Monks Bouffe, and Crofarm. At the crux of their operations is an attempt to end the thousands of crores worth of post-harvest losses farmers suffer every year, to ensure better prices for farmers, and lower costs for buyers.
Speaking to ThePrint, the companies said they have succeeded in drastically reducing post-harvest losses to as low as 1-5 per cent, from 30-40 per cent, depending upon the perishability of the crop.
It has helped make farming more profitable, they added, and eliminate the middlemen depriving farmers of their due returns.
Farmers working with the firms agree this has had a big impact on their earnings. Two banana farmers told ThePrint their produce is now selling for up to 100 per cent more. For one of them, the association with an online mandi has resulted in an upgrade to producing out “export-quality” bananas.
Also Read: China’s digital farmers are making agriculture more profitable
Cutting post-harvest losses
The Economic Survey 2021-22 pegged post-harvest losses at Rs 44,000 crore (at 2009 wholesale prices). Of this, 4-6 per cent of the losses pertained to cereals and pulses, 7-12 per cent to vegetables, and 6-18 per cent to fruits.
The survey attributed the losses to the current mandi infrastructure, which it said elongates the farm-to-fork process because of out-of-date infrastructure like manual weighing, single-window systems, and lack of modern grading and sorting processes.
This waste leads to massive losses for farmers, especially when there are bumper harvests of perishable commodities like fruits and vegetables. Taxes and cesses levied by Agriculture Produce Marketing Committee (APMC) mandis cut into farmers’ earnings, the survey stated. Only a small proportion is invested into the development of the mandis’ infrastructure, as a large portion of the tax goes towards middlemen, it added.
The Annual Report of the Ministry of Food Processing Industries (2018-19) quoted a study by the Central Institute of Post-Harvest Engineering & Technology (CIPHET) that estimated annual post-harvest losses of major agricultural commodities at Rs 92,651 crore (based on 2012-13 production data, at 2014 wholesale prices).
The study also noted that most of the waste occurs in fruits and vegetables.
The solution to this lies in adequate processing facilities, and this is something the agri e-commerce portals say they are aiming for.
What these companies offer
Some online mandis seek to offer a platform to connect buyers and sellers and organise auctions for sales, while others market fruits, vegetables and other farm products under their own brand.
INI Farms describes itself as an ag-tech company that controls “entire operations in chosen products from farming to consumption”, including farm-level aggregation and managing the supply chain, while Monks Bouffe works with farmers to derive “value-added” products like peanut butter.
AgriBazaar is a trading marketplace “transforming the agri value chain through technology”. Crofarm aims to connect buyers and sellers, with a promise to deliver from farm to fork in less than 12 hours.
INI Farms, active in eight states, exports most of their procurement and majorly deals in fruits. To maintain crop quality and reduce waste, INI Farms has built cold-storage infrastructure at nine sites. The company picks up the yield from the farm directly in mobile pack houses and brings it to their cold storages or packing houses, and continues the transportation process from here.
In Andhra Pradesh, it has been working on a Public-Private Partnership (PPP) model.
“In Andhra Pradesh, we work with the government on a PPP model, where the government actually mobilises the farmer. We provide technical know-how, educate them about the production and post-harvest technique,” said INI Farms founder Pankaj Khandelwal.
Providing technical know-how is also part of what AgriBazaar does. “AgriBazaar has crop advisory teams that provide in-depth insights on soil health based on past analysis. These experts are adept at predicting weather conditions using tech such as artificial intelligence (AI) and drones,” said co-founder Amith Aggarwal.
“It helps farmers minimise crop wastage due to natural factors such as heavy rainfall, drought, etc. Moreover, with such technological assistance, farmers can have a better idea of when to plant and harvest a particular crop for the highest-quality yield.”
Mumbai-based Monks Bouffe said it has restricted waste to 1-2 per cent.
“The wastage is negligible, farmers wrap it in gunny bags and put the produce in state or private buses, we then receive them in Mumbai. Wastage isn’t more than 1-2 per cent,” Monks Bouffe co-founder and CEO Gaurang Motta said.
Infrastructure set up by these companies reaches some of the remotest places.
Shashank Guwalani, 30, who oversees the operation of a 2,700-member farmer producer organisation (FPO) — a company taking care of the business activities of a network of farmers growing the same or similar produce — in the Moaist-hit Dantewada region of Chhattisgarh, says associating with such organisations like Monks Bouffe has helped farmers in the region earn better than what the government offers.
“We procure fine rice at Rs 2,100/quintal while the government MSP is Rs 1,888/quintal for Grade A rice. It’s a particularly tense zone in the country, and the landscape is also not very favourable to farm,” he added. “So, we compensate our farmers well, and associating with such organisations has only helped in greater price realisation.”
Dantewada district comprises 239 villages and 143 village panchayats. The FPO, in collaboration with e-commerce aggregators, sets up makeshift godowns within the villages for procurement.
Motta said Monks Bouffe “helps eliminate the middleman by dealing with the farmers and then selling the same produce directly to the consumer on their website or through bulk sales/white-labelling for other brands”. “The reduced wastage also helps us keep the price under check,” he added.
Lower cost is a benefit Varun Khurana, co-founder of Crofarm, the umbrella brand for OTIPY, a Delhi-based e-aggregator of fruits and vegetables, also boasts of.
“Our products are cheaper by 15-20 per cent than the ones available on different platforms in the market. And the system works well because both the farmer and the consumer benefit from it. Farmers prefer our platform because there’s greater transparency,” he added.
Khurana said OTIPY works on a 35 per cent gross margin, which they extract from the cost saved due to reduced waste. While OTIPY does not bear cultivation risks, it takes the onus for storage.
Apart from the price factor, this model of making the farm-to-fork chain more efficient also adds additional value to the food chain, said Khurana. “Since our process from the farm to your plate is faster, so there’s more nutritional value in the food that you get from us. Over 24 hours, fruits lose 30 per cent of their nutritional value in vitamins and minerals,” he added. “So, the fruit you buy from us is more nutritional.”
Also Read: Covid crisis has shown India’s food policy must have buffer stocks at community level too
Better prices for farmers
The reduced waste, elimination of middlemen and further assistance by these companies are believed to be helping farmers get up to two times more for their produce.
Anil Patil, a banana farmer from Nandurbar district in Maharashtra who works with INI Farms on over 1,000 acres with other farmers, said they are now earning up to Rs 400-500/quintal more.
“We started the business with INI Farms in 2017. Before that, we had to sell to traders at the mandi for local consumption as our product was not export grade,” he added.
“It (association with INI Farms) has resulted in an increase in the banana’s price by Rs 400-500/quintal. Earlier, the price of our products used to be Rs 700-800/quintal, now it’s Rs 1,400-1,500/quintal, with a minimum of Rs 1,250/quintal.”
Patil said INI Farms provides technical assistance at every stage, such as bud injection and deflowering, to create export-quality products. “Bananas are a 20-30-day crop from farm to fork. INI Farms provided the technique to increase its lifespan. They even help us in packing with mobile pack vans and premium boxes,” he added.
Another banana farmer, Venkat Ramji Reddy from Anantpur district in Andhra Pradesh, offered a similar account. “Before INI Farms, we used to get Rs 6,000-8,000/tonne. Now, we get Rs 11,000-12,000/tonne, even Rs 25,000/tonne, as our products are export quality now,” he said. “More than prices, it’s about producing good products and transparent business without mediators.”
Aggarwal of AgriBazaar said the “farmers receive payments in their bank accounts upon the delivery of goods through our award-winning platform, Agripay”. “The platform offers end-to-end secure transactions for both buyers and sellers,” he added. “The payment terms are agreed upon during the transaction between both the parties and is time-bound, taking care of the farmers interest,” he said.
Among other things, AgriBazaar helps farmers procure loans from a wide range of banks and NBFCs.
Organisations also help farmers make smoother transitions, wherever necessary.
“Organic farming is more expensive and so are the crops. If you were to shift to organic today, you’ll end up spending Rs 4,000-Rs 5,000 more a month on your ration bill. But it’s our vision to make the price competitive in the next 4-5 years. For this, we’re penetrating the market at every level. Building the capacity to sell B2B and increasing our buying power in total, relying on economies of scale,” Motta said.
Agriculture experts say the companies are a welcome initiative with their promise of better earnings for farmers and a boost to infrastructure.
“If price realisation for farmers is higher, and these companies are contributing to the improvement of infrastructure, then it’s a good idea,” said Siraj Hussain, former Agriculture Secretary and fellow at the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT).
However, he added, “the model needs refinement and scaling up”.
“Right now, all these ventures are small and regional and don’t enjoy economies of scale. So, unless they deal in a commodity with a longer shelf life and a higher price, like mustard, I don’t see how profitable these ventures can be.”
(Edited by Sunanda Ranjan)
Also Read: Dubai sets up trading platform to connect Indian farmers to UAE food companies
All these startups are private firms which are helping farmers… Still some ppl think 3 farm laws will destroy farmers