Indian farming sector has, traditionally, been plagued with challenges such as lack of access to proper guidance and technology, with farmers having to rely on sheer guesswork and experience. However, all this is changing as many agritech startups are entering the space, with the aim of assisting farmers and increasing the yield and productivity of their farms. One such startup, transforming the farming practices for farmers in Maharashtra, is BharatAgri.
In a conversation with Mr. Siddharth Dialani (Co-Founder), BharatAgri’s and what can only be described as a truly insightful discussion, we attempted to understand their brainchild, BharatAgri’s positioning in the industry and his take on what the future entails for the agritech sector.
Edited excerpts from the interview:
Q. What was the idea behind establishing BharatAgri? Which pain points in the agribusiness value chain does the company solve?
When we started BharatAgri, the whole idea behind it was that the productivity of Indian farms is very poor. If we see the most common crops like rice, wheat, sugarcane, etc., even in these, our productivity is 1/4th or 1/5th of international standards. This is also, one of the reasons why the incomes of farmers in India is too less. When we entered this sector, we observed that many existing government agencies and private companies provide advisory to farmers but it is very generic. For instance, a farmer growing onion in Maharashtra and one growing onion in Madhya Pradesh received same advice, which was very surprising. Agriculture is a very scientific process but unfortunately, in India, it not seen that way and is based on a lot of guesswork. So, that is what we wanted to do, using science to help increase productivity. The scientific advice provided by various government bodies is generalized and does not take into account the soil condition, climate, etc. This thought gave birth to BharatAgri because we wanted to give personalized advisory at farm level, not just regional level.
Q. What is the core business model of the startup? What are the services offered by BharatAgri to the farmers, both under the paid subscription and the free usage?
We basically to provide personalized consultancy to farmers .We collect a lot of data from the farms and based on the data, we provide farmers with a systematic calendar. The calendar guides farmers as to what should they grow and how should they grow. We charge them for this calendar. We are the only company in the country that has been able to monetize advisory as a subscription. The most beautiful part about this is that 100% of our sales are coming online. We don’t have any on-ground team that is convincing the farmers to buy our subscription. Our BharatAgri app is very popular, farmers use the free version and then upgrade to the premium version. Till date we have sold more than 50,000 subscriptions on the app and continue to sell 3,000-5,000 subscriptions every month.
Our personalized calendar, that I mentioned, is dynamic and changes based on changing climatic conditions. There are many companies in the space giving weather predictions to the farmers. However, we are the also the only company providing actionable advice based on weather predictions. We also monitor the standing crops using satellite images at a resolution of 10 meters * 10 meters, which is very small when it comes to agriculture. So these three offerings, personalization, dynamism and real-monitoring are available under the paid subscription. Before they pay, they have access to various articles, government schemes and news, weather prediction, etc.
Q. Which geographic area are you currently focusing on? How many farmers/customers are you currently working with?
We are currently only focused on Maharashtra and in December last year we also started working in some districts in Madhya Pradesh.
Q. You mentioned that the company does not have an on-ground team and all the subscriptions are sold online, which is very interesting. How exactly are the farmers, then made aware of the mobile app and on-boarded on the platform?
We have many individual influencers all across Maharashtra, who are local village people and are kind of famous there. They generally make a lot of Tik-Tok and Youtube videos including 40-60 second farming videos. We have some exclusive tie-ups with them where in their farming videos they mention about BharatAgri. The farmers are very active on these social media platforms including Facebook, Whatsapp, Youtube, Sharechat, Moj and Tik Tok, when it was there. The farmers then download the app and start using the free services.
Q. What are the major challenges faced by BharatAgri or in general, by companies in the precision farming space?
One of the biggest challenges we faced when we started out was convincing farmers to pay for our services. Our government has created an environment where farmers are habitual to free services and advisory from government agencies and some funded organizations. What we have realized over the last 1-2 years is that we can largely segment Indian farmers in three categories. The first is the traditional/non-progressive farmers that constitute to 50% of the farming population. They usually grow crops like rice, wheat, pulses and don’t even own a smartphone, so we do not target them. The remaining 50% of the farmers are semi-progressive and progressive, who own at least one smartphone in the family, are slightly educated and generally grow fruits & vegetables. They understand the need for science in farming and are willing to pay for our services. A lot of our challenges got solved once we identified these segments and our target audience.
Q. As per our research, the Precision Farming, Farm Advisory & Quality Management segment which includes SaaS, Farm Digitization & Data Analytics is estimated to be around INR 100-150 crores. Do you agree with our estimates? What growth rate do you expect for the next 5 years?
This looks like a good ballpark estimate. As per my understanding, Cropin would be the leading company in this segment basis revenue. In terms of market growth, I expect the segment to grow around 60% year-on-year because this is a very young segment. Farmers are currently not very habitual of paying for such services. But as the penetration is improving, more farmers in future are expected to pay for the services. Even at BharatAgri, we have seen a 30% month-on-month growth in the last 8-9 months.
Q. What are the trends or technology interventions that the Agritech industry or specifically the Precision Farming segment might witness in the future?
In rural areas, the internet penetration is growing at 40% Y-o-Y. Right now, out of the total 140 million farmers in India, our estimate is that 30% own a smartphone. In the next decade, we will see 100 million farmers using internet for the first time because of Jio and availability of cheaper smartphones and internet. The first few apps they download will be social media and some short video apps but the second set of apps they will download will be related to agriculture. However, it is one thing to get the apps downloaded, but the agritech platform that will be able to engage them the most and get small digital transactions out of them, will win. I believe that platforms that believe in future technology and integrate digital payment systems in their apps will succeed in the future. As farmers will start using internet and smartphones, I foresee that companies such as PayTm and PhonePe that are much ahead of us, will help them adopt to digital payments and agritech startups will bank on that.
Q. How has Covid-19 impacted the overall agritech industry?
In my opinion, Covid has acted as a catalyst. Earlier, even we at BharatAgri, were selling our services offline, through distributors and an on-ground team. But after the lockdown was imposed and our teams couldn’t move out, we had to innovate and hence, we completely shifted online. We integrated a digital payment system, started convincing the farmers that the quality of the services will continue to remain the same and also integrated the satellite technology. This helped us completely pivot our model and position ourselves as a tech-based, online company. We thought that the same thing will happen for the overall industry, unfortunately, others have gone back to the old ways of doing business including on-ground teams and cash payments. The overall focus on agriculture has however, increased during the period from the government and the general public.
Q. How is the investment scenario in the industry like currently? Does BharatAgri have any plans for raising more funds in the near future?
Investment in Agritech is very hot right now. All tier-1 VCs have made at least one investment in agritech and are looking for more startups. Even new VCs are looking for adding one agritech startup in their portfolio. There is also a lot of international interest, Bill & Melinda Gates Foundation is regularly looking at late stage India agritech startups. Talking about BharatAgri, we recently raised funding from 021 Capital, which is founded by Binny Bansal. We are not raising anymore investment right now, but surely in the next few months.
Q. What plans does BharatAgri have for the future in terms of new service offerings or geographical expansion?
As per our vision, we are not just an advisory solutions company but evolving into a full-fledged platform wherein the farmer is hooked to the platform for advisory but is also looking for support services. Once a farmer receives advisory, as a next step he wants the prescribed seeds, fertilizers, etc. So going forward, we see ourselves integrating with agri e-commerce players such as Agrostar, Bighaat and Gramophone wherein the farmers can place order on our app, which will be fulfilled by these partner platforms. This closes the whole loop, where we are not coming into picture only for the knowledge but also getting the deliveries done. Interestingly, we have already started such pilots with Bighaat and Gramophone. Even though they are considered are competitors, but in reality, they are our partners, serving thousands of our farmers and also paying us a commission on successful orders, as we actually generate the lead for them. So in a way, we are evolving into an aggregator all because of our engaging user base. We also have around 12 companies such as seed manufacturers and other input suppliers, who are advertising on BharatAgri’s platform. So we are continuously evolving and in the future, this can be extrapolated to integration with even insurance and finance companies. And the long-term vision is that companies such as Ninjacart and BigBasket will procure produce from BharatAgri farmers. In a way, we are trying to build a holistic platform where the farmer can setup an online shop and doesn’t have to go anywhere.
Q. What factors should a company take into consideration before entering the Agritech industry or in particular the precision farming/SaaS segment?
Honestly, we are ourselves are learning everyday and not really in a position to give out advice. Before Covid, we were on a completely offline trajectory but soon we realized that the solution is not foolproof and pivoted to an online model. So, we are also on a learning trajectory. However, one advice I can give is that a lot things can be learnt by directly living with the farmers for at least a year. That’s what me and our other co-founder actually did, leaving our city homes and renting a place in a village for a year. So that gave us a lot of insights about what the ecosystem lacks and what is to be done. Any new entrepreneur will also need a lot of patience as this a little bit slow industry.
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