Agro Inputs Encompass

Introduction

Agro inputs encompass not only crop related inputs like seed, fertiliser, and crop protection products but also seedlings, feeds, and machines which support crop and allied production. The availability, accessibility, quality and price have been major issue in this sector from the farmer perspective. There are issues of lack of availability of major consumable inputs in adequate quantity on time, reliable quality, especially in seed and crop protection products and feed. This dimension of agribusiness hits the farm production subsector hard as poor input quality and economics compromise the entire agribusiness sector especially farmers and output users whose costs go up and benefit is reduced. But, it is important to recognise that in agribusiness sector, the agro-input sector is the most crucial even to attend to concerns of food quality, food safety, and cost competitiveness. On the other hand, agoinputs are crucial for small farmers in terms of yield enhancement, cost cutting, and better quality production for better price realization.

In the recent past, there have been many experiments in the ago-input sector in terms of new distribution and marketing channels and some players have attempted to deliver total solutions to farmers including farm and allied inputs. These new channels range from marketers own outlets to supermarkets to franchised outlets besides traditional mainstream channel of selling through distributors and dealers/retailers. The major ones include: ITC’s Choupal Sagar, Khushali Krishi Kendras of Hydric, Champion Agro, and Mana Gromor of Coromondal Group. They also operate in/across different states of India. There are also agri start-ups like Green Agrevolution and Zamindara Farm Solutions which also attempt the same objectives for small farmers. Further, there is another parallel trend of custom rentals of farm machinery which started in Punjab during late 2000s and has spread quickly across many villages supported by the state government to cut down cost of cultivation for small 2 farmers. Besides, there are many private initiatives in this space (custom rental of farm machinery and equipment) where it is being attempted as business model and the only way to promote cost effective mechanisation in smallholder dominated context.

But, there have been no independent studies on the rationale, organisation and performance of the new models in comparison with existing channels with the exception of a few studies on the agricultural machinery rental services provided by PACS in Punjab. The performance of these new channels needs to be assessed in terms of farmer relevance and benefit from an institutional perspective in terms of inclusiveness of and effectiveness for small farmers. Also, most of the documentation on these models is in the form of teaching cases and not research papers or documents.

Objectives

In this context of changing institutional landscape of agro-input marketing and selling, the study:

1. Explores the distribution channels and business models of innovative agro-input players in India as institutional innovations.
2. Examines the smallholder inclusiveness of such channels and the nature and the level of effectiveness in helping the farmers access better inputs and services.
3. Identifies major issues and challenges in delivery of input services across regions and types of farmers.

Major finding of the innovative channales

Agri machinery rental services in Punjab

By examination of the business models of the two custom rentals models of machinery and equipment in Punjab which works on franchise basis shows that there is plenty of demand for such services from small farmers in general and from other categories of farmers also for some costly machines which cannot be owned at the individual farmer level. The use of PACS has been an 8innovative move on the part of the PSFC as it is a local level member based agency which is known for its farmer linkage as it also supplies fertilizers and working capital loans to member farmers. The farmer level analysis of their services across types of farmers both ZFS, local individual sources, PACS and other combinations shows that across all cases, farmers are generally happy using services though in some cases there are issue of price of service or timely availability as the sowing or harvesting windows are short. However, the inclusiveness of the models both co-operative and private is less than desired though Punjab has higher average land holding and more so in cotton belt where the cases studies were carried out.

Agri input super markets in Uttarpradesh

K3 outlets were inclusive of small farmers and were more inclusive than traditional channels and helped farmers achieve higher yield, lower costs of production and better resource management though they were still plagued by shortage of fertilizers as there is government allocation of fertilizers every season. But, still the K3 stores need to do better to get more loyalty which was limited only to a small percentage of buyers right now. This could be partly due to implicit interlinking of credit and input markets and partly due to lack of output linkage with farmers which takes them to other channels. The success of K3 in the state where larger players like HKB and TKB failed is interesting and has lessons for making such chain stores viable by keeping costs low and focus on farm inputs and services with sustained scale up.

The Green Agrevolution Private Limited (GAPL) as an agribusiness start up to facilitate farmers with better inputs and extension and markets in Bihar used franchising model under which it ran 11 outlets or centers called Dehaat across four districts which catered to a total of 4000 farmer members with each in a 10-12 km. radius covering 15-20 villages each with services like soil sample analysis, crop selection, and technical support during the season and marketing of produce. All 11 Dehaat centres in 2013-14 were franchises with GAPL.all the farmer who were the purcharing from the the Dehaat explained that there is the reduction in the cost of production up to 10 to 15%.

Working model of itc choupal sagar and hariyali bazaar

With its model mall in a Madhya Pradesh village proving a success, the cigarettes-to-hotels major ITC is set to build more hypermarts for rural India to replace age-old kirana or retail shops. ITC's Choupal Sagar, as the hypermart in Madhya Pradesh is called, is connected to the company's e-choupal network.

Company officials said 30 more Choupal Sagar hypermarts could be in the offing over the next 18 months. It will cost the company around Rs 50 million ($1.14 million) for each of these hypermarts that would sell everything from fertilisers to hair oil and tractors to needles. ITC's e-choupal network covers over 5,000 e-choupals and three million villagers in 31,000 villages.

A farmer coming to sell his produce through the e-choupal can also buy anything he wants through the same network. ITC has e-choupal networks in Madhya Pradesh, Rajasthan, Uttar Pradesh, Maharashtra, Karnataka, Kerala and Andhra Pradesh. Its Choupal Sagars are malls that double up as shopping and facilitation centres for farmers. They provide training, investment advice, agricultural expertise and even facilities like banking.

About Hariyali kisan bazar

In rural India, farmers historically had limited access to quality input items for both their fields and homes. Indian conglomerate DSCL has undertaken a Rural Business Initiative to address this issue, establishing a chain of retail outlets throughout rural India geared toward farmers and their families. Through its growing network of stores, DSCL is able to establish relationships with farmers and provide them with a host of agricultural services, including improved crop inputs, agronomic support, fuel, banking, and consumer goods. The outlets also buy back some of the farmers' production at harvest time. In utilizing the products and services offered by the stores, farmers are able to improve the quality of their crops and access a network of helpful resources in an environment that was once considered completely tangential to the benefits of agricultural research and technology reaped in other parts of the world. DSCL strategizes about how the company can also benefit from these freshly forged connections with India's rural millions.

Two such examples of innovation in the rural agricultural sector are the much talked about ventures of ITC and DCM Shriram Consolidated Ltd. (DSCL) called Choupal Sagar & Haryaali Kisaan Bazaar respectively. Chaupal Sagar is a rural retail shop & warehouse with a size of 1500 – 2400 Sq m. Harayaali Kisaan Bazaar is a chain of centres across the rural landscape of the country aimed at triggering a qualitative improvement in Indian agriculture. Each centre is spread over 3 to 4 acres of land, in hinterland locations, offers to farmers.

The knowledge of warehousing and rural retail and their precision in execution has been brought to the forefront through their exceptional work for Chaupal Sagar and Haryali Kisaan Bazaar.

Godrej aadhar retail formats

In a bid to strengthen its hold on the farmer, the country’s largest consumer base, Godrej Aadhaar, the rural retail initiative of Godrej Agrovet, has launched two new formats. The large format stores have been opened at Mancher and Alephata on the Pune-Nashik highway in Maharashtra, taking the Aadhaar tally to 18 nationally. To increase its rural reach, Godrej Agrovet, which set up Aadhaar a year ago, is moving away from being a standalone outlet to hub & spoke model.

Spread over 10,000 sq ft at Mancher and 3000 sq ft at Alephata, the stores offer complete agricultural solutions and products for the farmers, along with a range of commodities including food, grocery, apparel, footwear, home appliances, furniture, kitchenware and hardware for the daily requirements of the farmer.

As part of its one-stop shop for farmers, it also has banking, postal and pharmacy services. “Over the years we have realised that rural India has a huge market with a significant potential for growth and we believe that Godrej Aadhaar, with its unique value proposition, has a tremendous potential to grow in the segment.”

Tata Kisan Kendra (TKK) is an initiative by Tata Chemicals Limited (part of the Tata group) with the following objective: “To provide the farmer with a package of inputs and services for optimum utilization of balanced primary nutrients; plant protection chemicals; water; seeds; post-harvest services; and to develop a genuine partnership with the farmer”. It is one of the initiatives taken up by big business groups aiming towards improving the quality of life of Indian farmers. TKKs are designed to be one-stop centers for all agricultural problems. They thus offer a wide range of services. They provide the farmers with trusted agro inputs such as seeds, fertilizers, pesticides at affordable prices. They also provide the facility for farmers to lease out farm equipment and implements, enabling farmers to use modern machinery even if they can’t afford it. They maintain a library of journals and magazines to help keep the farmers upto date with the new techniques and latest developments. Also they provide agronomy services such as soil testing, soil mapping and fertilizer testing. Training coupled with demos is also provided to the farmers by faculty members from universities and government institutions working in the area of agriculture. TKKs also have the provision for facilities such as crop insurance and other credit facilities. It is currently active in the states of Uttar Pradesh, Punjab and Haryana. An interesting feature of this initiative is that it not only focuses on better information, equipment and knowledge to the farmers regarding agriculture, but also aims at an overall development for the farming community. To be a member of TKK is a matter of pride and is based on factors such as literacy, land owned, age and progressiveness of thought. Training regarding farming is also provided to the farmer’s wives. Moreover, they are also taught about health, hygiene, child-care and things such as embroidery and sewing. There are also certain student awards for the children. Exhibition halls at these centers organize educational, social and also entertainment events in order to build better relations between farmers and their families. TKKs are a great example of support to Indian agricultures which have improved and enhanced themselves with time. GreenSky India salutes this campaign and sees this initiative as a role model for development in Indian agriculture

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