Agritech – Dutch Uncles

Cornext : Creating Disruption in Fodder Supplies using the Silage Bale Technology

Shalmoli Sarkar — Wed, 08 Dec 2021 12:55:47 +0000

Recently, in 2021 a hike in the milk prices by reputed dairy brands such as Amul, Mother’s Dairy, etc., raised distress among the common masses since milk is the most consumable beverage in India. A probable reason for this hike in milk price can be attributed to a shortage of green fodder.

India’s milk production accounts for one-fifth of world milk production, so is its livestock population. However, the fodder supplies have been inadequate to suffice the increasing cattle population.

According to a report titled ‘Revisiting National Forage Demand and Availability Scenario’ from Indian Grassland and Fodder Research Institute, the fodder deficit is upto 29 percent in the availability of feed including fodder. Ideally, for an existing livestock population of 535.78 million around 14-17 percent of land should be dedicated for cultivating fodder, whereas only 4 percent is utilised for the same. Moreover, the small and marginal farmers are unable to grow their fodder since they own no land of their own.

The report also reveals India’s livestock milk productivity to be 20-60 lower than the global average. The cattle feed alone constitutes 60-70 percent of milk production costs, which is why the dairy companies are hiking the prices of milk.

Realising a gap here, entrepreneurs Madhav Kshatriya, Amarnath Sarangula, and Feroz Ahmed took an integrated approach to solve the inadequate fodder supply to help the dairy farmers- by setting up Cornext.

What is Cornext?

Founded in 2015, by entrepreneurs Madhav Kshatriya, Amarnath Sarangula, and Feroz Ahmed Cornext is an agritech startup that aims to solve India’s green fodder deficit by becoming the country’s leading silage supplying company. Cornext’s major offering is its low-cost high-quality forage solutions and producing silage, haylage, and animal nutrition for dairy farms. Initially, it began as a 250 cattle dairy farm in 2012 and eventually has transformed itself into one of the largest silage suppliers in India.

‘‘

According to a report from Indian Grassland and Fodder Research Institute, the fodder deficit is upto 29 percent in the availability of feed including fodder.

The silage bale technology and the deficit of green fodder

According to the report from Indian Grassland and Fodder Research Institute, India’s green fodder deficit stands at 11.24 percent. Moreover, scanty rainfall and erratic climate further widen the deficit of green fodder. To bridge this, Cornext is focused on developing a fodder ecosystem using disruptive technology i.e. silage baling to help the Indian dairy farmers. Silage is high moisture, highly nutritious, and ready-to-eat green fodder produced under natural fermentation i.e. anaerobic conditions in a silo, hence the name. Silage ingredients comprise grass, corn, maize, and other crops that are chopped into small pieces and stored. After the silage is stored it undergoes fermentation in multiple phases and takes around three weeks for completion. The process of fermentation improves the dry matter intake and creates an easily digestible feed.
Baling is wrapping compacted and inoculated grass in polypropylene sheets. The sheets should provide an airtight environment for the silage so that the fermentation of the grass occurs without oxygen.

This green fodder can be preserved for days in case of prolonged droughts or sporadic rainfalls, the supply of green fodder to the cattle will not be disrupted.

The making of fodder entrepreneurs – Cornext’s franchise model

Cornext is encouraging the rural youth to become fodder entrepreneurs by introducing its franchise model in the animal nutrition space. Through this model, it is introducing e-commerce to the doorstep of the dairy farmer through its e-marketplace FeedNext- a mobile app that will be a one-stop-shop offering low-cost quality feeding solutions such as baled silage, TMR (total mixed ration), fortified hay, mineral mixtures, feed supplements, etc.
The additional advantages of the rural entrepreneurs associated with this model will be to get a buy-back guarantee for three years and receive training and technology support.

What lies ahead for the agritech startups wanting to foray into fodder supplies and management?

A report from the National Nutrition of Animal Nutrition and Physiology finds that India’s green fodder will be a 40 percent deficit by 2025. Therefore, the Government is taking efforts to ensure that the livestock sector emerges as a more inclusive and sustainable agriculture system. Currently, disruption in the fodder sector is essential to ensure that milk productivity is not hampered, therefore such kind tech disruptions in the fodder supplies will be highly welcomed.

The post Cornext : Creating Disruption in Fodder Supplies using the Silage Bale Technology appeared first on Dutch Uncles.

The Face of the Indian Agritech Sector by 2025

Aakash Sharma — Thu, 05 Aug 2021 15:05:08 +0000

Based on technology, regulation, investment and other related interests, India’s agricultural sector is set to face rigorous transformation. As per a report by consultancy firm Bain & Company titled “Indian Agriculture: Ripe for Disruption”, agribusiness, agricultural supply and related businesses in India will be valued at around $30-35 billion by 2025. The report is based on in-depth correspondences with different stakeholders, including industry experts in agriculture, farmers, and agritech start-ups.

The Indian agricultural sector is passing through a critical phase where it can overtake the traditional approach and develop, process and market food with the help of new technologies. Conventional farming practices will change and improve over time, and the entire agricultural value chain will build a unique value pool of $ 30-35 billion in the years to come.

‘‘

As India recuperates from the devastating impacts of COVID-19, which disrupted an already damaged economy, the $370 billion agriculture sector is pegged to undergo a complete change on the back of significant technology and regulatory changes.

Indian Agritech Sector

The increased technological awareness of farmers is expected to be fostered by high internet penetration and high mobile connectivity, thereby fostering the development of the Indian agritech industry. The government has also performed an essential role in developing the sector by creating incubators, providing grants and using public-private partnerships.

India is the third-largest recipient of agricultural technology funding after the United States and Germany and the third-largest hub of agritech start-ups after the United States and the United Kingdom. In 2020, India received $329 million in investment from PE / VC companies, with an astonishing combined annual growth rate of ~53% from 2017 ($ 91 million) to 2020 ($ 329 million).

Farm Laws and APMC Reforms – Boosters for Indian Agritech Businesses

The report from Bain & Company indicates that the three land reform bills passed by the government in September 2020 encourage investment in direct farmer purchase by the corporate, free movement of food items from production to consumption centres and private investment in storage.

The government aims to double farmers’ wages by 2022 by expanding agricultural production, institutional and technological reforms, and effective post-harvest management. In 2016, the government launched the e-NAM (National Agriculture Market) online trading platform for agricultural products. The platform integrates all members of the Agricultural Produce Market Committees (APMCs) mandis to form a single national online marketplace for farm products.

What does the future hold – Tips for Indian Agritech Start-ups

India’s agricultural science and technology sector offers dynamic and untapped development potential. The industry has reached this critical point and is of great interest to investors around the world. Agriculture is seen as the backbone of India’s economy. Agricultural technology plays a vital role in helping farmers digitise their entire supply chain and embrace new-age technologies like the Internet of Things (IoT), analytics, big data, artificial intelligence and other advanced technologies.

New entrepreneurs and budding agricultural entrepreneurs (‘agri-preneurs’) can benefit from technological advances, legislative changes and increased investment, as well as the transformation of the Indian agricultural sector. Businesses need to add significant value and create sustainable solutions that are easy to use for many farmers and affordable for ordinary farmers, even in remote areas.

Stakeholders should take inspiration from the experiences of countries such as the USA and Israel to build a robust agricultural technology policy framework in India. This will help include all market players such as agrarian communities, agricultural technology companies, processors, and many others, thereby driving the sector and its entities to success.

The post The Face of the Indian Agritech Sector by 2025 appeared first on Dutch Uncles.

3 Indian SMEs Among The UN Best Small Business Winners

Aakash Sharma — Tue, 03 Aug 2021 03:35:08 +0000

Three India-based companies are among the winners of the United Nations’ $100,000 prize competition, promoting businesses with stimulating, diverse and practical solutions to improve healthy and sustainable food access. Fifty small and medium-sized businesses from around the world were recognised as the ‘UN Best Small Business of the Good Food for All’ competition, organised in conjunction with the United Nations Food Systems Summit.

From cafes to agricultural cooperatives, digital start-ups to veterinary clinics, many companies entered the competition. These SMEs proposed new and bold solutions to improve the nutritional system.

UN Best Small Business Award

The United Nations Food Systems Summit ‘Best Small Business: Good Food for All’ competition selects the best small and medium-sized enterprises (SMEs) worldwide that transform the food system for a better future.

‘‘

The competition aims to find out which small businesses have a more sustainable and inclusive food system and how they can support their sustainable business operations.

Selection process for UN Best Small Business

The UN asked small businesses worldwide to find healthy foods that are good for the environment and the community and create jobs for the local population. They were also invited to share ideas and suggestions on how their countries and economies could maximise their positive impact.

Eligibility criteria:

The company may have between 5 and 250 employees and
Businesses need to be involved in some aspects of the food supply chain and value.

The summit highlighted award winners as the “Best 50 Small Businesses: Good Food for All”, and awarded $100,000 in prize money. Being an UN-led initiative, each submission in the event will help inform global leaders of the priorities and resources these businesses require to succeed.

The UN selected each winner for:

How their business provides healthier, more sustainable and affordable food to the communities they serve;

The strength of their future vision; and

How well they communicate about the current and future impact of their business.

Winners from India – who are these SMEs?

The Indian winners are Edible Routes Private Limited, Oorja Development Solutions India and Taru Naturals.

Edible Routes Private Limited

Kapil Mandavewala founded Edible Routes to give customers easy access to natural and local agricultural products. The company’s business model offers delivery in one hour, covering 220 households. It has its own courses and workshops that teach people to grow their own food and become a community-supported agricultural system.

Oorja

Oorja is an agriculture company based on the farming-as-a-service (FaaS) model, which operates at the crossroads between sustainable agriculture and renewable energy. It invests in, installs and maintains agricultural photovoltaic (solar power) systems. It sells irrigation, grinding and cooling tools to farmers to shift from diesel to solar energy. Oorja was founded by Amit Saraogi and Dr. Clementine Chambon and has a team of 18 people in India.

TARU Naturals and Organics

TARU Naturals and Organics was founded by Ruchi Jain and is a grassroots company consisting of 10,000 small and medium-sized farmers in India. It is a fair trade network that connects farmers with markets for healthy, clean and natural products. The company is committed to ensuring the self-sufficiency of all ecosystems in the agricultural value chain. It deals with climate-resilient farms, post-harvest technologies, value-added products and market connections.

Significance of such awards – what can others learn?

Small businesses are the hidden gems of global food systems, managing at least half of the food economies despite crises like the ongoing COVID-19 pandemic. Competitions like ‘Best Small Business: Good Food for All’ and respective acknowledgements help the corporate world and ordinary people understand the challenges small businesses face.

These also push the community to work together towards ensuring such businesses remain at the heart of efforts to improve the future of ground reality and daily life. In this UN Best Small Business event, half of the winners are youth, and nearly half are women; this alone is enough of a booster for the youth and the ‘unconventional groups’ to jump into the business world and help make a positive change.

The post 3 Indian SMEs Among The UN Best Small Business Winners appeared first on Dutch Uncles.

Taru Naturals, Mumbai’s Social Entrepreneur Brings Another Green Revolution

DU Desk — Sat, 31 Jul 2021 03:34:22 +0000

Taru Naturals, a company working with small scale farmers and 10,000 tribal communities across India. Encouraging age-old wisdom and sustainable agricultural practice, Taru Naturals, a start-up company, aims to establish market linkages for farmers. Founded in 2016 by a Mumbai-based entrepreneur Ruchi Jain, it ensures a steady source of income, and also brings farm fresh organic products to our tables.

Taru Naturals was among the three India-based enterprises that won UN’s global competition of ‘Best Small Businesses’. By providing inspiring, diverse and impactful solutions for improving access to healthy and sustainable food, the start-up gained a lot of popularity.

Taru Natural’s Development Model

The company’s development model includes a complete process of sourcing and distributing.

At first, a leader within the farming community is identified as a point of contact. Farmer meetings are held for future training sessions.
Farmers are then trained for three days on regenerative farming, agriculture business models, marketing, value addition, farming techniques. Along with technical training they are also taught leadership skills, resilience, meditation, yoga, nutrition and health.
The farmers are then assessed on the basis of their training and learning and then the documentation and information for organic is collected. All the certification procedures are done by Taru executives.
Post the training programme, community leaders start working with farmers and brief them about sustainable agriculture practices. The farmers are made aware of the mobile technology and are taught how to use a smartphone.
Market linkages are built and monthly stakeholder meetings are conducted for follow ups.
Slowly the procedure moves towards making farmers independent by doing various activities and making them aware of the climate adaptation, agriculture business models, self-sufficiency, community living, etc.
At the final stage of the development model a farmer producer organisation is established for the farmers group to get an on-ground experience of scaling their market and coordinate the supply chain.

‘‘

Taru Naturals not only focuses on sourcing organic products but also connects the small-scale farmers with the market and empower them to earn a steady income.

How Taru Naturals is Bringing Green Revolution?

The entrepreneurial goal of Taru Naturals is to promote sustainable living and bring a change in the society. By empowering and safeguarding the small-scale farmer communities, the start-up has already achieved many of the sustainable development goals.

The organic food market has seen a rise in the market over the past few years. This has led restaurants to collaborate with firms like Taru Naturals and zama organics to bring the fresh food and staples on the table. Taru Naturals partnered with Cafe Zoe and made the organic products affordable for the masses. By building a farmers’ market and providing farmers with resources and technology to enable organic farming, the start-up is bringing another green revolution in India.

Projects and Product Line

Taru Naturals initiated Project My Organic Gurukul to incorporate a healthy and sustainable way of living as part of their education curriculum. Under this project young minds are taught about the core values of nurturing, nature, resilience, sustainability, and compassion. The project is a step towards providing a healthy, organic, and sustainable future with Taru products.

The start-up’s product line includes sweeteners, whole grains, pulses and millets, heirloom rice, spices and herbs, oils, nuts, seeds and ghees, premium flours, breakfast flakes, cereals and mixes (as Taru Breakfast), immunity boosting teas, jams and honeys, and much more. It also deals in kitchen garden essentials for keeping your garden organic and pesticide free.

Insights For Other Startups in This Space

Startups in the organic farming space should take away a major quality of promoting sustainable living from Taru Naturals. It not only focuses on sourcing organic products but also connects the small-scale farmers with the market and empower them to earn a steady income. The start-up focuses on educating the farmers and making them smartphone ready. Taru Naturals is building a self-sufficient value chain ecosystem for farm produce, interfering with climate resilient agriculture practices, clean post-harvest technology and value-added products.

The post Taru Naturals, Mumbai’s Social Entrepreneur Brings Another Green Revolution appeared first on Dutch Uncles.

Opportunities for Agritech Start-ups

Abhilash Bapanasha — Mon, 26 Jul 2021 09:10:19 +0000

With about 150 million farmers and majority owning less than two hectares of land, the Indian agriculture sector needs to adapt innovations to become sustainable and profitable for farmers. Crippled with many challenges like climate change, water stress, deterioration of soil health and price volatility, a farmer with average land holding of about one hectare is hardly left with a surplus for productive investment into new age solutions. Fortunately, agritech start-ups driven by entry of high-quality entrepreneurs and increasing investor interest, have come to the aid with innovations in improving farm economics. In all probability, agritech will continue to attract venture capital in the foreseeable future while trying to solve multi-dimensional problems prevalent in Indian agriculture including low productivity, sub-optimal efficiency in supply chain and lack of access to markets, institutional credit, crop insurance, quality inputs and market linkages.

‘‘

I really worry about start-ups who spend eighty percent of their time fundraising and twenty percent of time building business. It should be the other way around.

In order to highlight the opportunities of agritech start-ups in the Indian context, Mr. Hemendra Mathur was the speaker for MentorED, our weekly live 45-minute workshop where industry veterans share their knowledge and experience and discuss topics that are apt and relevant to the start-up and small business fraternity. A PGDM from IIM Ahmedabad and Bachelor in Engineering from Rajasthan Agricultural University, Mr. Hemendra Mathur is currently the Chairman, FICCI Task Force on Agri Start-ups and Venture Partner of Bharat Innovation Fund. He is the co-founder of ThinkAg – a platform for accelerating the adoption of innovations in the agriculture space. He has authored many papers on the subject and speaks regularly at conferences pertaining to the food and agribusiness sector as well as the start-up ecosystem.

In brief, the session had the following takeaways for the audience:

Current status of Indian Agritech
Ecosystem support available for start-ups
Innovation themes and opportunity areas
Learning from other agritech entrepreneurs

Innovation and Young Entrepreneurs: Key Drivers for Growth

Mr. Mathur started his highly informative presentation highlighting the status of agricultural sector in India, “It is a very vast area, as we know agriculture is one of the key pillars of Indian economy contributing to almost 15 to 17 percent of the GDP and almost 50 percent of the population continue to depend on the agricultural sector. I think one of the key drivers for growth in agriculture at least for the next decade or two will be innovations and these innovations are going to be driven by young entrepreneurs who are joining the sector.” In an encouraging ecosystem that has picked up momentum in the last three to five years, the agritech start-ups have come to the aid trying to solve problems across the value chain from pre-production to production to post harvest.

Although the Indian agritech start-up space is almost a decade old now with the first names popping up in 2011-12, several of them are building interesting models considering the needs of small and marginal farmers who constitute eighty-five to ninety percent of the farming community in the country. As of the present day, there are more than a thousand agritech start-ups in the country and Mr. Mathur is hopeful of that figure to grow to ten thousand in the next ten years. Terming the sector as a resilient one that had even bowed down unlike several others during the pandemic, the perception of investors has also changed. “I think investors are becoming more and more amenable to invest in the sector and as we speak about more than a billion dollars has been invested in the sector in the last eight to ten years. Out of that maximum amount has come in the last 18 months. I am sure as we go along this number is going to change and again my prediction is, we are going to get at least a 10-billion-dollar investment in the next 10 years.”

Considering the supply chain, Indian agriculture exhibits a highly fragmented scenario with concerns like high water stress, degrading soil quality, unavailability of labour coupled with low mechanisation. Similarly, inadequate storage, processing and transportation facilities cause a significant amount of food loss which makes the supply chain very inefficient. “If you look from a farmer perspective, one of the biggest challenges most of the farmers in India end up selling their produce at the nearest mundi (market yard) which is typically thirty to fifty kilometres from the farmer’s field and it is not necessary he gets the best price from that market.” Thus, there is an urgent need for logistic solutions to discover more buyers.

Agri-fintech: The Next Big Opportunity for Agritech Start-ups

Mr. Mathur also mentioned that only about thirty percent of Indian farmers have access to institutional credit and the rest have to pay as high as twenty-four to sixty percent of credit per annum. He stated, “Just imagine the cost of capital is so high which makes the whole farm economics look very vulnerable. So, can we improve the excess of institutional credit to the farmers and that is where I see a very interesting intersection of agritech and fintech, I call it agri-fintech.

I think this is the next big opportunity in the sector.” Again, data figures out as a scarce commodity in the entire agricultural value chain where it fails to meet the requirements for decision making. “That is where I see a huge application potential for data sciences. I think agriculture is another area which is heaven for data scientists, there’s so many variables and you can do so much with it which can essentially help in decision making for the farmers as well as for other value chain members.”

The mentor listed down seven opportunities in his presentation for the audience and thereafter he elaborated on each of them. The seven opportunities are:

Access to Quality Inputs
Farm to Fork Market Linkages/Post Harvest Management
Access to Financing (Agri-fintech)
Data & Advisory
Mechanisation
Novel Farming
Platforms

Mr. Mathur underlined the nitty gritty of the Indian agritech ecosystem. He is thrilled at the promising presence of many high-quality entrepreneurs, supportive incubators and accelerators to whom he insists to connect. “One area which I feel is catching up is the village ecosystem. None of the agritech models are going to scale without participation from village level entrepreneurs. Because a farmer is not going to trust a person who’s coming from Bangalore, Delhi or Mumbai. He is going to trust someone who is there in the rural area. So, I think that it is very important that we build the local ecosystem, create opportunities for rural entrepreneurs.” He believes that entrepreneurship and agritech go hand in hand and it will create millions of jobs in the rural areas. Furthermore, Mr. Mathur also listed down some of the key incubators who can be reached out for assistance.

‘‘

You should be obsessed with what problems farmers are facing. You need to have a farmer-centric approach. Unless you are solving for him you will never be able to create a scalable solution.

Agritech start-ups must focus on creating value

He concluded his presentation citing his own experience as a mentor, advisor and board member in various forums. “One thing which I really like about agritech start-ups is – it is a learning for everyone who wants to be in this sector and that a lot of them have a high degree of resilience and a frugal approach. Do not burn cash in farmer and customer acquisition but create value, as farmers are not looking for discounts, they are looking for value.” That appears as a unique trait of Indian agritech start-ups exhibiting a mortality rate of less than fifteen percent.

The supply chain of agritech being longer, there is a higher scope of unit economics utilisation. “I really worry about start-ups who spend eighty percent of their time fundraising and twenty percent of time building business. It should be the other way around. You should be spending less than twenty percent of your time fundraising and eighty percent time on building business, product development, hiring team, etc.”

He also highlights that most of the start-up founders come from a technology background and not agriculture. “Agriculture in India is a multi-dimensional problem so you need a multi-disciplinary approach.” He insists on a bridge approach whereby a holistic team works with multiple skill sets and which also understands technology, data science, behavioural sciences, meteorology among others in addition to agriculture.

Audience Asks

How do you encourage the youth to see the future in agriculture when a general notion seems to attribute it as a traditional sector?

People will laugh at me if I say that we are going to see reverse migration in 10 years. But that is the truth, people like you and me who are fed up with city life will migrate to villages, run farms, produce and sell. The reason I am saying it is because technology will help it. Probably we do not like traditional agriculture the way it is done but there are so many tools now available where you can go and manage very efficiently.

All said and done in agriculture, unlike the notion that we have, the gross margins at the production end are very good. If you add the cost of inputs labour and everything you can still make a thirty to fifty percent margin. Unfortunately, those margins are eaten up by the interest cost, by the food losses or by the price shocks that you see. So, I am very bullish that agriculture is the future not just for rural India but for urban India.

There is a good example that people with urban background and urban thinking have ventured into rural areas which demonstrates that there is a role for youth, not necessarily rural youth but also for urban youth to look it as a potential opportunity to create value and I can tell you it is going to be very satisfying career for people like you.

On what factors do you assess and agree on a tech starter for deciding to invest in?

I think first and foremost, from an investor perspective, the solution has to be scalable. Whether we like it or not, technology has a role to play and when I say technology, it does not mean just digital technology, it can be biotech or foodtech, it could be some other, but I think technology has to be integral. It need not be proprietary or patented but scalable. What is that differentiator in the business which can make it scale and answer typically is in the use of technology. I am not saying over-invest in technology but you should be clear how it will drive scale.

Second, of course, is the composition of the team. You need multiple skill sets, so do you have those skill sets in the team or do you have the ability to hire those skill sets is the biggest challenge for the sector. Today it is not capital, it is talent. That is where a start-up which has scaled and a start-up which is struggling to scale – the difference is talent.

Third is, you need to demonstrate unit economics. Everyone in the supply chain has to make profit. Since the supply chain is elongated and complicated, the unit economics at multiple levels becomes a bit of challenge but again with use of technology I am sure that can be solved and that’s where we will see models scaling faster.

Last but not the least, build a gross margin strategy. That is where I see a lack of articulation or lack of strategy in the ecosystem. Even now most starters have figured out how to scale but how to build a profitable business is still a question mark. You need to figure out how you unlock value so that it becomes a sustainable and profitable venture.

A Unicorn in Agriculture: To Create Wealth for the Ecosystem

With over 25 years of experience in venture capital, private equity, management consulting and investment banking, Mr. Mathur has invested in several early stage agritech and mid-sized companies in the agricultural supply chain. From his experience he stated, “You should be obsessed with what problems farmers are facing. You need to have a farmer-centric approach. Unless you are solving for him you will never be able to create a scalable solution.

To me, a unicorn in agriculture means someone who has created wealth of a billion dollars for the ecosystem not necessarily for his own shareholders which means creating wealth for the farmers for the local entrepreneur, for the entire value chain rather than creating wealth for yourself. And that’s why I always say there are already multiple unicorns in the sector because they have created wealth for everyone, not just for themselves.” The mentor is hopeful of the next decade as one for agriculture and that it will be disruptive!

The post Opportunities for Agritech Start-ups appeared first on Dutch Uncles.

Crofarm, On a Mission to Streamline Farm-to-Fork Supply Chain

Mohit Pandey — Fri, 23 Jul 2021 12:30:09 +0000

Who does not want to set up a farm in their backyard and get fresh vegetables daily for healthy intake of resources? Or better, would it not be great if we could get fresh vegetables directly from the farm, as per our demands and delivered within a day? It is like taking a big step towards a healthier and hassle-free lifestyle, avoiding even stepping out of the house, while still getting the freshness straight from the farm delivered at doorsteps. Crofarm is doing just that.

This agri supply chain start-up buys fresh fruits and vegetables directly from the farmers and supplies them to the online and offline retailers in a cost effective manner.

Crofarm: The Necessity of a Direct Farm-to-Fork Supply Chain in India

The agricultural sector in India, even though being massively unorganised, employs around 50 per cent of the workforce of the country and accounts for 18 per cent of the gross domestic product (GDP). It is still astonishing to see that due to the absence of transparency, more than 90 per cent of the agricultural produce is eaten up by the middlemen who are well entrenched in the system, leaving very little for the farmers. Additionally, 20 metric tons of the harvest is lost due to an inadequate supply chain.

In 2017, India ranked 100 in the Global Hunger Index (GHI) out of 119 countries. This also results in the wastage of about 7 per cent of the total food produced in a year – which is worth about Rs 58,000 crore. When we understand that farmers are indeed the backbone of society and agriculture is the biggest sector of the economy, farmers’ plight due to the layers of intermediaries denying them a fair price for their produce becomes more visible.

Due to these reasons, Varun Khurana and Prashant Jain took the responsibility onto their shoulders and started towards solving the problem by streamlining the supply trade, removing the middlemen and establishing an efficient trade relation between farmers and retailers by incorporating Crofarm in May of 2016.

To ensure a better price for both sides, Crofarm serves as a platform to form a relation between the farmers and the retail market, building direct trade. Also, by reducing wastage and offering better value of their produce to the farmers, Crofarm is friendly and meaningful for both the farmers and the retailers. By optimising the logistics of supply chain management using AI-enabled proprietary tools, Crofarm supplies to big retail chains like Big Bazaar, Reliance Retail and online stores like Big Basket, among others.

In 2020, Crofarm shifted from a farm-retail business to become a B2C platform using Otipy, which is a community-based platform that helps connect the farmers directly to the consumers, bringing the freshness directly to the doorsteps. After this new strategy and integrating WhatsApp to their business structure, the company gained more authenticity and helped the farmers and consumers build a direct connection removing the need of retailers as well.

The Founders: Bringing Crofarm to Life

The problem and the inefficiency of the ‘mandi system’ always bothered founders Varun and Prashant. This made them start their previous business venture in 2014 – Greenbox – which was a smartphone-based grocery delivery platform. Later, the platform was acquired by Grofers which was building a supply chain directly from the mandi to consumers. Varun joined as the Chief Technical Officer of the app while Prashant was the Vice President of Operations.

While working at Grofers, they understood the problems of the supply chain system and wanted to create a direct link between the farm and retail entities. Therefore, after leaving Grofers, Varun and Prashant spent time across the major farming states like Haryana, Uttarakhand and Uttar Pradesh meeting vegetable and grain merchants, understanding their problems and figuring out the inefficiencies of the supply chain that gets their fresh harvest to the public. Through all the research, they were able to build the platform, Crofarm, with the aim of eradicating the problem and hassles of a mandi.

‘‘

Crofarm helps farmers get their fair share by removing the middlemen and also by providing the retailers with freshness from the farm.

How Crofarm Brought in Much-Needed Innovation of the Supply Chain

The revenue model of the business is pretty simple – procure the fresh fruits and vegetables directly from the farmers and deliver them to retailers or consumers, with the company getting their commission for the delivery. This direct trade makes the system transparent and easy for both the farmers and the consumers. On every sale it makes, Crofarm is able to get a commission ranging from 15-20 per cent depending on the quality of the produce.

Starting with a $1.5 million seed funding from Pravega VC and a couple of angels including Rajan Anandan (MD, Google India) and Jitendra Gupta (MD, PayU India), the founders have been able to raise around Rs 15 crore in the venture. In 2018, the company raised Rs 5 crore pre-series A round from Factor[e] Ventures and other existing investors, and planned to raise another round soon. Since its integration with WhatsApp, the company has been able to cater over 5,000 daily orders from over one lakh registered customers across NCR.

During the fiscal year 2019, Crofarm, after directly serving the consumers, managed to grow its sales by nearly 2X to around Rs 11.26 crore compared to fiscal year 2018 when they posted a top line of Rs 6.7 crore. In FY20, the new business model showed its true efficiency, when the company was able to raise a little over Rs 24.4 crore which is nearly 2.2X of their sales in FY19.

The company had to expense around Rs 30.72 crore in total in FY20, growing by 86.8 per cent from the total expenditure in FY19 of Rs 16.4 crore. Since the demand for their services increased, the majority of these expenses, around 72 per cent, incurred in collecting farm produce, which grew by 2.15X from Rs 10.31 crores in FY19 to Rs 22.15 crore in FY20.

Expansion and Consumer Satisfaction

Focusing on the growth of the employees is also the biggest target of a company. Crofarm’s employee benefit expenses grew 47.4 per cent from Rs 2.5 crore in FY19 to nearly Rs 3.7 crore in FY20. The company also incurred around Rs 4.44 crore in operating expenses during the same period.

With current supply in cities like Gurgaon, Noida, Mumbai, Bengaluru and Delhi, Crofarm is also planning to raise $10 million this year to expand Odipy, the farm-to-fork chain, more in tier II and tier III cities of the country. The company had already raised $2 million in 2020 from Inflection Point (IP) Ventures and the Smile Group.

Not just driven by economic motives, Crofarm also helps in supporting social causes. In 2020, the platform was able to produce a robust fresh produce category supporting over 2,500 women and stores as resellers. This group earns a commission of more than 9% of all group sales, which is the highest across all social commerce brands in the country.

With the use of AI powered engines for better traceability, transparency and hassle-free designs, Crofarm has been able to make its place known in the agricultural industry of India as the most trusted and reliable brand. The growth of a company is always dependent on factors like employee satisfaction, economic growth and satisfaction of the customers, and Crofarm has been able to provide a surplus of these values in their venture.

‘‘

In 2020, the platform was able to produce a robust fresh produce category supporting over 2,500 women and stores as resellers.

How Crofarm Dealt with Maintaining Quality and Its Place with the Competitors

India being one of the largest producers of fruits and vegetables, maintaining the quality of the farm produced freshness is a challenge that all agricultural sector companies face. Around 30 per cent of the wastage of the produce happens because of inadequate logistic support and inefficient supply chains. One of the biggest advantages that Crofarm was able to take was using cold storage for perishable vegetables and protecting them from moisture. While commodities like potato and onion can have a higher shelf life, leafy vegetables like spinach, methi etc., require a certain moisture level to ensure maximum life.

The Food and Agriculture Organisation (FAO) stated that due to the lack of good refrigerated storage space, vegetables and fruits worth around $8.3 billion, which is about 40 per cent of the total produce of the country, get wasted. Additionally, if the commodities have to get transferred through various vendors, middlemen, mandis, the amount of food wasted is increased substantially. In NCR, Crofarm promises to deliver vegetables from farm-to-fork within 12 hours. This makes sure that there is a lesser need for storing commodities and delivering them fresh.

With major competitors like Bijak, BlueCart, Agrowave and AgroCenta, Crofarm is constantly applying new technology and techniques to keep up with the increasingly competitive market. Keeping in mind the separate requirements of each part of the supply chain, five separate engines have been created to help in the efficiency of the supply chain.

Here are some of the technologies that Crofarm employs:

Procurement Engine: It is made for the farmers for better traceability of the produce and its quality. This app also helps farmers in complete transparency of their POs and payments.

Distribution Centre Engine: It uses AI-based demand prediction based on historical data-efficient procurement. It also helps in tracking the shelf life of the vegetables by alerting in case of aging inventory.

Transport Engine: Providing optimal routes to reduce delivery time and real-time tracking of the delivery vehicles.

Reseller App: Uses AI powered CRM enabling better communication and tracking customer orders and deliveries, while also earning incentive on sale.

Consumer App: It is filled with catalogues and offers a simple interface to place orders and track delivery.

With the introduction of AI based technology, Crofarm has been able to take big leaps ahead of its competitors, therefore, building its proper place in the market.

Crofarm: the Present and the Future

After recently extending services in Bhiwadi, Crofarm is constantly taking big steps to cater to more and more cities of India. With the introduction of the new farm bills by the Indian Government, which present farmers with an alternative platform to sell directly to a retailer without going through mandis, Crofarm’s Odipy will work with the farmers to create a level playing field. With the asymmetrical information system of the agricultural sector, where the farmers had no knowledge of the price of their produce, now with the help of these new emerging agritech platforms, they will be able to negotiate well with their customers. Moreover, by the elimination of the gulping middlemen, the farmers can now establish their own stand in the chain.

Varun and Prashant’s aim to provide a solution to the plight of the farmers by incorporating Crofarm and giving them a platform of their own now seems to be taking big steps in every part of the country. By giving the farmers an assured price, bringing efficiency into the supply chain and reducing wastage of the commodities, the company has already proven to be a contributor to the ‘Atma Nirbhar Bharat’.

For more inspiring stories, check out our Inspire Section!

The post Crofarm, On a Mission to Streamline Farm-to-Fork Supply Chain appeared first on Dutch Uncles.

Indian Agritech Venture Capital firm Omnivore to Launch US$150 Million Fund

Shalmoli Sarkar — Thu, 08 Jul 2021 05:35:05 +0000

For the past few years, the agriculture space, most underserved with innovation and technology, is witnessing a 25 percent growth of agritech startups year-on-year, focussing on clearing age-old bottlenecks by developing better market linkages, improving productivity and yield, and building better farm infrastructure to the 150 million farmer community.

According to industry body FICCI ( Federation of Indian Chambers of Commerce and Industry), India is home to 450 agritech startups and has received venture capital funding of $545 million since 2014.

The influx of startups in agritech can be attributed to India’s questionable food security as the traditional methods of farming are inadequate to feed India’s growing population that requires technology interference.

Realising the potential in the agritech space, the Indian agritech venture capital firm Omnivore is going to launch a US$150 million fund to aid entrepreneurs and startups focussed on everything from predictive crop insights to AI-powered precision farming. This funding launch is the third since Omnivore’s inception in 2010.

What is Omnivore?

In 2010, where online shopping startups were booming in India, the agriculture space contributing 16 percent to GDP was yet mired in its traditional farming practices.

Startups in the agritech do come up with a promising start or idea but meet with a sad fate early due to lack of monetary support as the general VCs are reluctant to support them.

This led Mark Kahn along with Jinesh Shah to form Omnivore in 2010 to become India’s first agritech-focussed venture capitalist company.

‘‘

According to industry body FICCI ( Federation of Indian Chambers of Commerce and Industry), India is home to 450 agritech startups and has received venture capital funding of $545 million since 2014.

How will this Funding Benefit Agritech Startups and farmers?

With the increasing population and climatic conditions turning erratic owing to rising industrial pollution, India in a few years might face the dire consequences of food security. This signals the need for large-scale technology intervention to resolve various pre/post-harvest agri-chain woes, boosting healthy production and revenue, and therefore it will be a major driver for startups to plunge into this space.

This funding launch from Omnivore will help agritech startups to build more full-stack models and internet-led services spanning the supply chain from agricultural inputs to finance to market access using technologies of SaaS, IoT, and AI.

The advanced agriculture mechanisms from agritech startups will help local farming be profitable since more than one-crore farmers use services and products built from Omnivore-funded startups.

Agritech Startups Funded to Date by Omnivore

Omnivore, since 2011, has funded 30 agritech startups that are touching the lives of more than one crore farmers and manages a capital of Rs 950 crores.

It has funded startups belonging to four subsectors, some of them are listed below:

Precision Agriculture and Post Harvest: Dehaat, AgNext, Intello Labs, Fasal, Tartan Sense, Arya, Pixxel
B2B Market agriplaces: ReshaMandi, Aquaconnect, Bijak
Direct Farm-to-Consumer brands: Doodhwala, Clover, Stellaps technology
Rural Insurtech: GramCover

Insights for the agritech startups from Omnivore’s funding Boost

Increasing the profitability of farmers by increasing yield by strengthening tech capabilities monitoring crop growth, climate and disease detection.
Reducing farming input costs and costs of finance
Building income resilience of farmers by boosting rural insurtech startups that will help a farmer get better credit and insurance.
Developing a better marketplace eliminating the intermediaries to help farmers sell produce at appropriate prices.

The post Indian Agritech Venture Capital firm Omnivore to Launch US$150 Million Fund appeared first on Dutch Uncles.

ReshaMandi, Digital Supply Chain for Silk and Natural Fibres

Shalmoli Sarkar — Fri, 02 Jul 2021 13:59:35 +0000

The wardrobe of an Indian woman is said to be incomplete if a silk saree is absent. Be it a wedding, festival, or office conference the 3.5 to 9 yard long elegantly glistening fabric is worn and further compliments the beauty of a woman irrespective of her age.

But a handful of them are aware that behind this vibrantly coloured smooth fabric a herculean task goes in culturing of silkworms to extract silk yarns.

The Indian silk industry is plagued with challenges of price irregularities, absence of a proper market, high production costs, low productivity, lack of technology intervention, middlemen, and competition from Chinese synthetic fibres. According to The Central Silk Board, the sericulture industry employs around 9.1 million spanning 52630 villages. Such challenges affect the growth and livelihood of sericulture farmers. The existing gaps and irregularities in the silk industry drew the attention of Mayank Tiwari – an alumnus of NIFT, who later on went ahead to launch India’s first silk Agritech start-up, ReshaMandi in April 2020. ReshaMandi effectively deals with the concerns of sericulture farmers regarding poor market linkages, crop failures, and inconsistent quality in silkworm production using AI and IoT led tech intervention.

What is ReshaMandi and How Does it Solve?

ReshaMandi is a silk Agritech start-up that helps sericulture farmers improve the production and quality of silk using artificial intelligence, cloud platforms, and sensors all consolidated in an app. AI and IoT-led capabilities benefit the entire chain of sericulture stakeholders from the grassroots level i.e., weavers, reelers, farmers, and the business and retailers by offering a 360-degree solution in quality monitoring of crops, AI-led yarn grading, and market linkages. The platform works directly with farmers and retailers to help them get the market price for the former’s produce.

‘‘

The Indian silk industry is plagued with challenges of price irregularities, absence of a proper market, high production costs, low productivity, lack of technology intervention, middlemen, and competition from Chinese synthetic fibres.

How ReshaMandi is making silk affordable?

ReshaMandi is making silk affordable in the following manner:

AI-powered disease detection system producing high-quality silk yarn.
Reducing crop failures by effective monitoring of climatic conditions using IoT.
AI-enabled Renditta i.e., scientific cocoon grading of produce to avail the best market prices.
The presence of hyperlocal sourcing hubs reduces the logistics cost of farmers of selling produce which otherwise required long travel hours.

How ReshaMandi is Digitising Silk?

ReshaMandi’s self-developed plug and play technology and application works in two stages:

1st stage: the mulberry plantation

2nd Stage: silkworm rearing stage

The leaves of the mulberry plants are the food for silkworms which need to be of a certain desired quality at the formative stages of worm’s growth. ReshaMandi’s device sensors placed at the plantation collects data on pH value of soil, moisture, etc. that are sent to a cloud-based server that processes data and provides guidance and tips to the farmers for optimum irrigation and maintenance of the mulberry plant. Diligent monitoring ensures quality mulberry leaves for silkworms’ food resulting in healthy worms.

Now coming to the rearing beds, the sensor presents gauges and monitors four parameters namely light, air quality, humidity, and temperature. The sensors collect data based on which it sends customised notifications and technical advisory catering to each farmer on ReshaMandi’s app in the local language. The advisories sent on the app aid farmers to maintain optimum conditions for the best growth of the silkworms until they reach the cocoon stage that lasts for a month. The app also sends warning messages in case farmers fail to take timely steps.

How ReshaMandi connects the Network of Sericulture farmers?

ReshaMandi Super app connects the silk reelers to procure scientifically tested high-quality cocoons through its platform within a single click at a better price.The app enables retailers and businesses to connect directly with its one-click fabric listing. The platform is also integrated with fintech partners for digital payment gateways through a proxy.

What Lies Ahead for the Start-ups in Sericulture Vertical?

India is the second-largest producer of silk after China. Due to an unorganised supply chain and interference of traders as middlemen exploit the farmers and producers of the yarn leaving them with no choice but to accept the negotiated price of the produce which in turn makes the next production of silkworms unsustainable in the long run. Start-ups foraying in sericulture space will prove beneficial to the farmers as it will establish an organised ecosystem where the farmers will be able to sell their produce at appropriate prices, therefore, improving incomes and better budget for operating expenses.

The post ReshaMandi, Digital Supply Chain for Silk and Natural Fibres appeared first on Dutch Uncles.

Failed Agritech Startup, What Did not Go Right

Shalmoli Sarkar — Thu, 01 Jul 2021 03:35:05 +0000

The influx of Agritech start-ups in the past 4-5 years has changed the landscape of Indian agriculture that is considered to be one of the most technology-resistant and backward sectors. Farmers are removing the blindfolds of technology ignorance post understanding what these Agritech solutions have to offer, creating a viable business model improving the farmer’s income.

However, many of the Agritech enterprises, despite tasting success initially face hurdles to expand their businesses that finally end in closure. Here are some of the reasons why Agritech start-ups in India can fail:

‘‘

Many of the Agritech enterprises, despite tasting success initially face hurdles to expand their businesses that finally end up in closure.

Probable reasons for Agritech start-ups failing in India

1. Price wars with the retail giants

2020 saw conglomerates Tata and Reliance aggressively enter the retail space with an acquisition. Fresh produce and grocery are a lucrative segment where players are building their private labels of farm produce which they procure at cheaper rates and sell at predatory prices giving them good margins.

This hurts the revenues of major Agritech players with their USP as organic produce which they cannot sell at lower prices.

2. Lack of commercial guidance

The existing incubators and accelerators in India lack the expertise to guide farm-oriented start-ups, unlike IT, Health tech and e-commerce.

3. Not taking the D2C channel

In the current pandemic situation where big retail stores are operating erratically, it will not be wise for Agritech start-ups to opt for retail channels. Opting for a D2C channel will help the start-up gain complete control of the control chain.

A recent example is that Clover, a supplier of perishable fresh produce, changed its approach from B2B to B2C by adapting to the D2C approach in the pandemic. Clover could provide customers high-quality produce at competitive prices under a traceable supply chain. Clover’s sales grew 3 times in the Covid by turning to D2C.

4. Reluctant investors due to the slow turnaround of profits

Lack of funds leaves the Agritech start-ups cash strapped as it fails to lure investors since ROI in Agritech relatively takes time and does not meet market expectations. Also, add is the uncertainty in weather conditions which makes it a high-risk proposition for investors. Agritech innovations in India need patient capital and an ecosystem that has the appetite to programme these innovations for scale and success.

5. Lack of visibility

Supply chain visibility and efficiency are the keys to running a viable agriculture-based business. Given the perishable nature of the products and the sensitive timelines associated, every stage of the supply chain in agriculture comes with integration issues, security vulnerabilities, and other problems.

Therefore, the right technological intervention at the right stage of business will enable solutions that preserve product quality, reduce waste, improve traceability, transportation and storage.

6. Lack of technical know-how

Most Agritech start-ups lack the technical know-how about the health concerns of cattle or crop produce that lands them in major trouble causing low productivity levels.

Agritech players should collaborate with large technology players that can provide an innovative solution for instance MoooFarm a Gurugram based start-up collaborated with Microsoft to tackle mastitis using Machine Learning (ML) and helped farmers save US$500 million per year.

7. Low internet connectivity in rural areas

Several remote rural locations lack strong reliable internet connectivity preventing Agritech start-ups to apply smart agriculture techniques using IoT, Artificial Intelligence (AI), and ML at such places. Start-ups before serving the geographies must do in-depth research about the available internet connectivity.

8. Uncertain climate conditions

Hailstones, heavy rainfall, or drought impacts the crop produce directly affecting the revenues. Adoption of crop monitoring technologies AI and ML improves agriculture outcomes in adverse climatic conditions. With the right technology, a farmer can give each crop individualised care, utilise resources in exact quantities, and can grow more with less.

9. Logistics and last-mile delivery

Logistics and last-mile delivery is key to the operation of Agritech start-ups that do not find cold storage remote sensing and digitisation of field-level data as economically viable. Also, the backward integration of services in agriculture does not attract many investors thus leaving Agritech start-up with scarce facilities.

10. Expensive Infrastructure

Agritech start-ups end up investing money in establishing lavish offices, expensive cattle shades and other infrastructure which mounts debts. In the initial days, one should not spend money on infrastructure, only the necessities and essentials should be the building blocks.

Agritech startups are nascent in India. The idea that agriculture can be monitored using AI, ML and IoT devices is an alien concept to the farmers, therefore its gradual acceptance will lead to slower turnaround time for profits. Keeping in mind that not many investors are interested in investing in agritech, the startups should be wary of spending excessively on luxurious infrastructure. It will be imperative for startups to begin with the basic essentials of infrastructure and spend more on enhancing the tech capabilities keeping in mind the uncertain nature of climate the sector is heavily dependent on.

The post Failed Agritech Startup, What Did not Go Right appeared first on Dutch Uncles.

Starting a Dairy in India? These are the Rules and Regulations to Keep in Mind

Anju Nambiar — Sat, 26 Jun 2021 03:35:03 +0000

Rules and Regulations for Milk and Milk Products

The Food Safety and Standards Authority of India (FSSAI) has specific standards for branded and loosely packed milk in India. The nutrition profile of the milk product must adhere to the minimum percentages set by FSSAI for various compositions like Fat, Solid-Not-Fats (SNF), Proteins and Added Water. The percentages vary according to the following classes of milk and their designations. FSSAI’s milk standards vary from state to state.

Milk Classes

Cow/Buffalo/Goat/Sheep/Camel/Mixed Milk
Standardised/Recombined/Toned/Double Toned/Skimmed/Full Cream Milk

Milk Designations

Raw
Pasteurised
Boiled
Flavoured
Sterilised

Start-ups need to obtain the following licences and registrations before becoming operational:

Dairy Farm Licence
Trade Licence
Shed Licence
FSSAI Licence
Registering as a company and Registration with the Registrar of Companies (ROC)

Who is Regulating Dairy in India?

Since dairy products and milk come under ‘food commodities’, they are regulated by the quality standards set by BIS (Bureau of Indian Standards) under the BIS Act of 2016. Also, the FSSAI under the Food Safety and Standards Act of 2006 is responsible for keeping a check on businesses and is tasked with enforcing compliance of government regulations. Both these regulatory bodies work together to standardize the dairy industry.

The Prevention of Food Adulteration

Dairy products, especially liquid milk, are notoriously susceptible to adulteration. The most common adulterants in the Dairy supply chain include Melamine, Vegetable Oil, Maltodextrin, Detergent, Urea, Starch, Sugar, Salt, etc. The FSSAI Act of 2006 along with the Prevention of Food Adulteration Rules 1955 has set permissible levels of adulterants like ‘Urea’ which in some cases are naturally found in fresh milk. As per the regulations, urea in milk cannot exceed a limit of 70 mg per 100 ml.

Largest global milk producer – India and its tryst with milk

Among Indian agri-businesses, the dairy business is the biggest contributor to the economy with close to 4% share. India is the biggest global milk producer. Going back to the history of the private sector in India’s dairy industry, it was officially launched in the year 1970 through the ‘Operation Flood’ programme. This operation single-handedly took India from being a milk deficient country to being the world’s largest producer of milk, easily surpassing the United States.

The Indian dairy industry is exceptionally strong and wealthy. The current global milk production stands at 906 Million Tonnes and 22% of this is contributed by India. India overshoots the global average availability of milk per person per day by more than 100 grams.

‘‘

Since dairy products and milk come under ‘food commodities’, they are regulated by the quality standards set by BIS (Bureau of Indian Standards) under the BIS Act of 2016.

What’s in it for me?

Dairy tech start-ups are increasing in India and there is high scope for technology-based solutions in the Indian dairy scenario. Due to widespread adulteration, the demand for organic, chemical-free milk and dairy products has risen. Invest in dairy technologies like milk analysis and quality assessment solutions.

Provide subscription-based milk delivery services for an exclusive clientele since the demand is high during lockdowns. By being compliant with the quality standards, come up with a solution to tackle the adulteration problem in the dairy industry. There are niche markets to tap into in the Dairy Industry due to increased consumer awareness in India. Invest in clean, healthy cattle management tools, milking technologies and high-quality branding and packaging to attract niche consumers.

The post Starting a Dairy in India? These are the Rules and Regulations to Keep in Mind appeared first on Dutch Uncles.