Owning/selling a farm land is not an easy process like diving into a real estate property. The process comes with a host of issues. Besides, people, especially in urban areas, have started showing interests in buying small farms for weekend farming or fresh farm food, but they find it difficult to locate and buy. Taking the first mover’s advantage, SFarmsIndia launched an online platform for buying and selling agricultural lands in India. This start-up came at a time when there was no liquidity platform to buy/sell agriculture lands as most of the reality portals were focused on listing urban properties or houses/flats.
Founded by Kamesh Mupparaju and Linus Lindgren in 2018, this Hyderabad-based start-up, however, goes beyond listing of agriculture properties. It is called ‘Fraction Trading’.
How ‘Fraction Trading’ works?
SFarmsIndia makes an agreement with the seller (Agri-realty developer) to issue fractions by digital land contract against their lands. Agri lands are divided into the smallest divisible fractions called small farms. This helps Agri reality developers to liquidate their big land parcels by means of these small farms called fractions.
Each Agri land is assigned with a seller/digital contract and divided into 5 to 8 fractions per acre. The buyers are flexible to buy these fractions. This enables medium to small income groups to acquire lands easily. After owning the fraction, people can sell it directly through the trading platform.
This innovation has three major advantages—Buyers are able to buy the smallest fractions of the Agri land. Second, since the buyers can contact the sellers directly, it eliminates the middlemen. Third, sellers can list and liquidate their Agri lands very easily by offering these small farms.
Giving rise to innovation: Bringing ‘fractions’ together
Another proposition that comes out of the platform is multi-layered farming at the back of fractions as the system allows individuals to buy small pieces of agricultural land. In simple terms, multi-layer farming is the practice of growing two or more crops in the same piece of land. With the help of the platform, multiple people are indirectly being brought together on a single big piece of land through fractions.
It is important to note here that small farms, through land contracts, are the primary USP of SFarmsIndia. Most of the big land banks/land parcels in India are barren lands, which are non-cultivated lands, and most of the farmers in India hold small farms that are cultivated and quite the opposite of the western countries. The small farms are productive in nature, and the start-up aims to convert these barren lands into produce lands.
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The start-up came at a time when there was no liquidity platform to buy/sell agriculture lands as most of the reality portals were focused on listing urban properties or houses/flats.
This early-stage start-up has the opportunity to tap at least 10% of the estimated $15 billion Indian Agri realty market. The start-up also plans to come up with a mobile app like Zillow in March 2021 through which buyers can find the Agri land nearby.
What is in it for me?
There is a huge opportunity for partnership/ independent services here as buying and selling of agriculture lands come with a host of other services which can be outsourced.
This would include platforms/companies offering licensed surveyors, document writers, legal experts or farm management solution firms/start-ups.
