StartUp Circle: How AgriTech Farmpal manages the supply chain for farmers in India?

The COVID-19 lockdown brought new challenges for farmers. Thus, Agritech startups are taking initiatives to mitigate the impact of the lockdown on farmer incomes and the agricultural sector. In many cases, farmers are finding it difficult to sell their harvested produce. Farmpal is Pune based agritech startup connects farmers to businesses directly. It has launched new collection centres to help farmers maintain their daily income and to provide consumers with easy access to fresh produce.

Thus, CIOl took the opportunity to talk to Puneet Sethi, Co-founder of Farmpal. Here is an excerpt of the interview.

1. How does the platform Farmpal work?

Farmpal’s mission is to organise the post-harvest supply chain so farmers have better access to alternate markets. This way, they get a fair price for their products which increases their incomes. More broadly, they reduce inefficiencies across the supply chain so all stakeholders get the benefits. With this vision, we started building on the idea of Farmpal in 2017. We connect farmers directly with end consumers in the urban areas.  The company uses technology as an enabler to manage the end to end supply chain including all logistics. A mobile app at the front end connects with the farmers and our customers. This is backed by a powerful ERP solution at the backend that helps us streamline inventory management, order cycles, supply-demand forecasts and analytics for all other functional areas.

When we started work on Farmpal, our key promise to farmers was to offer them a premium price for their product and help them avoid or minimize wastage. We can offer them premium prices because the technology eliminates at least four to seven middlemen from farm to fork.

Also, our technology helps us forecast demand accurately which helps with planning for supply accordingly. This, in turn, enables us to guarantee a certain demand to our farmers, at the pre-specified quality. Farmers receive a better price, and also save costs on transport, logistics, commissions etc, by avoiding selling in the mandis.

2. How did you come up with the idea?

Farmpal’s 2 of the 3 co-founders come from farming families. They have seen the agri supply chain up close and experienced personally the hardships that our farmers face. With their education, qualifications, they had always nurtured this thought of doing something that brings about a change in the supply chain and enables a better livelihood for the farmers.

In the traditional model, post-harvest supply would take 36 to 40 hours to reach the table, incurring 25 to 30 per cent wastage. We have been able to reduce that to 12 to 15 hours, with close to zero wastage as we have built Farmpal Collection Centres located within five kilometres of their farms as opposed to travelling long distances to the markets. This reduces time and wastage, which in turn helps them sell more products at a better cost.

3. What are the challenges that you have faced while introducing a tech-based initiative to a relatively less tech-literate farmer?

Initially, there were some challenges in getting farmers, especially in the more rural areas accustomed to using tech for say receiving information about prices, demand and also setting up accounts for digital payments. Given the phone and data penetration in the past couple of years, we could mitigate some of these challenges. Additionally, we use a hybrid approach of tech and local outreach for building our farmer ecosystem. We hire our collection centre personnel locally. They are also tasked with reaching out to farmers and maintaining ongoing relationships to ensure consistent supply and availability.

4. "Sell directly to buyers." Aren't these buyers majorly wholesalers?

For Farmpal, buyers are local kiranas, local vegetable vendors, supermarkets, hotels/restaurants and more recently society clusters.

5. How scalable is your solution? And what are your post-covid plans?

The opportunity and scale in the Agri space are vast due to the volume and consumption in the post-harvest cycles. Currently, we are working with farmers in Maharashtra and MP. Our supply operations are focused in Pune and Mumbai. So there is a major opportunity to scale this model further to Western India and beyond.

We set our supply chains in such a way that we can leverage the same to supply quickly to other parts of the country. With extensive use of technology to enable the entire supply chain, it is possible to expand our services to a much larger area.

Post-Covid plans include setting up of more collection centres in Maharashtra and other States; making further inroads to Mumbai in terms of retail supply and distribution, followed by cities in Gujarat. We are also growing our B2B2C segment with deliveries directly to societies and other collection of residents via a “partner” model where these local partners serve as an intermediary to manage the customer dynamics while Farmpal focuses on supply.

6. What is your alignment with Government's e-mandis? 

Currently, there is no alignment per se with Government e-mandis. Our model itself is similar to the thought process behind e-mandis. Like, we have transparency in the pricing and farmers earn a higher share, through the use of technology.

7. How do you predict demand?

Farmpal has historical data for 2+ years. Additionally, the Agri sector, especially the post-harvest side is very well researched and documented in terms of numbers, trends and patterns in terms of both production and consumption. Farmpal leverages a lot of this data both our own and publicly available to predict / forecast demand and supply patterns

As our volumes grow and historical data grows with it, we can do a deeper dive into the trends/patterns such as production and demand for specific seasons, months and even specific days of the week. All this data is fed to the AI engine and algorithms, along with certain other conditions to forecast the demand and then enable matching supply through an integrated farmer database where we store farmer information – profile, landholding, type of produce, harvest cycle, capacity etc.

8. Tell us about your business growth.

We incorporated our business in October’17 and launched operations in January’ 18. Since then, we have connected with over a thousand farmers in Maharashtra. Today, we have our collection centres across 5 locations in Maharashtra and 2 distribution centres in Pune. We supply fresh vegetables and fruits to over 300 Kirana and retail stores in Pune; to all big supermarkets – More, Star Bazar, Big Bazar, Big Basket.

Our customers also include some premium brands from the HoReCa (Hotels, Restaurants & Caterers) segment. Additionally, to reach the end consumer directly, we have partnered with platforms like Dunzo & Swiggy. We have also piloted a new segment during these Covid-19 times – direct supply to societies or a collection of the customer in a local area through a “business owner” model.