A Tech-Led, SMB centric solution for an efficient agricultural value chain: Why We Invested in FarMart

Image credit: YourStory

The complex interactions and transactions between farmers, retailers, aggregators, and traders form the foundation of the colossal agri-economy that accounts for almost a fifth of India's GDP. Within this vast ecosystem, agri-input retailers play a vital role. There are over half a million such SMBs serving India's 140M+ farmer-base, selling them seeds, fertilizers, pesticides, insecticides, farm implements, providing advice, and on occasion, even extending informal credit.

However, the lack of any tech-based solutions focused on this audience means these merchants still encounter significant inefficiencies with regards to digitising their workflows, customer engagement, and retention. They do not have a formal database of their farmer clients and cannot engage or communicate with them after a physical or in-person transaction. This is also another reason for the low degree of differentiation among multiple merchants in the same vicinity.

FarMart, a mobile-based, B2B agri-supply platform founded by Alekh Sanghera and Mehtab Singh Hans, provides a technology-led, product-centric solution to these persistent and fundamental issues. Not only does the app give farmers access to information and digitisation tools, but also partners with select merchants who act as "˜aggregation agents' for a farmer's harvest. These partner retailers aggregate produce from several farmers in their vicinity and help get them better price realisation and faster payments through FarMart's back-to-back agreements with large institutional buyers. All this with no capital expenditure, infrastructure development costs, among others.

FarMart's eventual goal is to make the entire value chain more streamlined and profitable by leveraging technology, increasing trust within agribusiness networks and tapping into the potential of under-utilized assets.

So, FarMart helps agri-input merchants to digitise and organise their customer database: register farmers, raise digital invoices, communicate changes in inventory, and provide curated news advisory services to farmers through a user-friendly, multilingual mobile app. It helps digitise workflows efficiently, which also increases fill rates, allowing effective communication with their customers, creating catalogues, and finally, enabling access to demand from institutional buyers at better prices.

As more and more farmers and agri-SMBs come on the platform, FarMart offers a way for all parties to match demand and supply better. Farmers can discover, connect and maintain relationships with retailers outside their known networks or immediate vicinity, and retailers can reach smaller farmers, offer deals and customise their services, creating a win-win situation for all stakeholders.

Jitendra Kumar Maurya, the owner of Maurya Beej Bhandar, Barabanki in Uttar Pradesh, is an agri-products retailer which sells seeds, pesticides, fertilizers and small farm equipment. He estimates a turnover of Rs 36 lakh (~$50,000) per year but isn't sure of the exact number because he doesn't have a proper system for calculating and recording his accounts. He started using the FarMart app in Jan 2021.

Since then he says " I have added over 550 farmers to my contacts over the last 5 months. Most of these are farmers that I sell to or/and already know but I previously didn't have a system to record, manage and market to them. I send out 1-2 SMS to most of my farmers weekly, from festival greetings to product stock, and use up all the 1500 SMSs on the app; I even try to get more free SMSs by winning FarMart quizzes!

I have a better relationship with my farmers now and over 400 have visited my store repeatedly since January. COVID-19 broke my business. I had a lot of unsold stock because of the lockdowns and the marketing feature helped me sell quite a bit of it to my farmers. I was able to give them discounts and bring them to the store. I lost some money because of COVID but, thanks to FarMart, I didn't lose my customers."