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Analysis

A Farming Story With A Tech Twist

Aug 16, 2018 by Avanish Tiwary
A Farming Story With A Tech Twist

Every Saturday, Kiran Kotha, 31, a software engineer, along with his wife, travels 13 kilometres to a nearby farm, Ramadhootha, to harvest his weekly quota of vegetables from a 600 square feet of farm-land that the couple has rented from a farmer.

This weekend he’s carrying a large bag filled with seeds that he hands over to Manjunath N, the farmer he has rented land from. “All the seeds are from my hometown of Guntur (Andhra Pradesh),” he tells Manjunath. One of the prized possessions in the hoard of seeds is the indigenous Guntur red chilli.

There are at least 1120 people in Bangalore who have rented out farmlands in the city’s outskirts with the help of an agri-tech startup, Farmizen. Started in 2017 by Shameek Chakravarty, Sudaakeran Balasubramanian and Gitanjali Rajamani, Farmizen provides a platform where city dwellers can rent a piece of land and grow a variety of organic vegetables of their own choosing.

A techie by profession, Chakravarty is passionate about the condition of farmers in India. Ask him why he is knee-deep in the agriculture sector and he launches into long conversation concerning the plight of Indian farmers, soil conditions and how we are eating chemical-laced food on a daily basis.

According to Chakravarty, agriculture is the only business where almost all the risk is borne by the farmer but what he earns is not more than 10-15% of the pie. “Apart from the risk, it also becomes irritating for the farmer because they can get easily exploited. Suppose the truck person who was to transport the tomatoes to the market doesn’t turn up, the tomatoes will go bad and the farmer will lose his income,” he says.

According to a 2018 report (PDF) by Centre for Study of Developing Societies (CSDS), 76% of Indian farmers want to do something else other than farming.

Farmizen works with farmers on a 50-50 revenue sharing basis. Farmers are responsible for providing land, water, electricity and labour. Farmizen focuses on the aspects the farmer may not be competent enough to handle. “We take care of everything that is ancillary to growing crops but are equally important. Operations such as providing organic seeds and saplings to farmers, finding buyers, tech, marketing and delivery of produce is all taken care by us,” says Gitanjali Rajamani, co-founder, Farmizen.

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Manjunath N at his farm on the outskirts of Bangalore. Courtesy: Avanish Tiwary

“For a farmer, growing is the fun part. When it comes to taking the produce to market to sell, it turns into a horror film for him,” says Chakravarty. All the farmers at Farmizen are organic growers. Chakravarty believes that for long enough, people have been encouraging farmers to put chemicals in the field as “no one wants to buy tomatoes that have holes in them.”

Tech-enabled

On a regular basis, Manjunath examines his land carefully. He has rented out three of his seven acres with Farmizen. He pauses alongside a brinjal plant and takes a few quick photos. “The leaves are wilting for some reason. Once I upload its picture on the app, the people from Farmizen will tell me what to do,” he says. A team of horticulturists advise and give daily tasks to each farmer on the app depending on the condition of crops.

Manjunath’s wife, Bhavani, who also works with him on the farm, tells me, “He rarely goes to the farm without the Farmizen app open on his phone.”

Although Farmizen is primarily an agriculture-centric business, the role of technology is at the core of how it functions. Be it customers renting the land, choosing which crops to grow or Farmizen’s in-house horticulturist instructing farmers what to do, almost everything is done through the Farmizen app.

Chakravarty says he wanted the communication between the buyer and farmer completely transparent and structured. “The role of technology is huge in doing so. We think of ourselves as cab hailing service Ola. Just like an Ola driver has a separate app from the rider’s app, our farmers too, have a different app,” he says. The farmer’s app doubles as an instructor as well, regularly assigning farmers their daily tasks.

Every time Manjunath completes an assigned task such as spraying neem oil (an organic pesticide), he updates it on the app. “My customers get to know immediately that neem has been sprayed on their plants. It’s a live update system,” Manjunath says proudly. Using the app, customers can choose what to grow from a list of vegetables. They also get an update every day on their app about the condition of the crops.

Although, Manjunath is impressed by what the app can do, what was more impressive to him was when he saw a small drone hovering over his farm. “That was the first time I had seen something like that,” he says.

Apart from farmers keeping an eye on the crops, Farmizen uses drone surveillance as well to check on crops, plant beds, etc. “Every week, we send drones to take pictures of each bed, which is then analysed by horticulturists. These pictures also go through a very basic machine intelligence test to ascertain whether a plant is in the flowering stage or if there is a pest attack,” Chakravarty explains. Seeing the results, different tasks are automatically created on the farmer’s app.

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Picture courtesy: Farmizen

The rise of agri-tech

In the recent couple of years, there have been a handful of startups that are trying to make agriculture a lucrative sector to get into. Farmizen raised USD 300,000 in seed round from Venture Highway, Indiffi co-founder Alok Mittal, and a few other angels.

Karthik Natarajan, founder of Farmily, now a defunct agri-tech startup, said raising funds is difficult for an agriculture-centric startup. "If we had secured USD 5 million we probably would not have to shut shop," Natarajan says. Similar to Farmizen, Natarajan's Farmily tried to connect farmers to the buyers, but could not work the unit economics of handling delivery and marketing.

However, former partner at Canaan Partners, Alok Mittal and one of the investors in Farmizen, believes agri-tech is not very capital intensive. "Farmizen's subscription model is very interesting as it makes customers feel to have partial ownership of the farm. It also ensures the customers would stick for long-term," Mittal says.

According to data compiled by Venture Intelligence, a total of 11 investments in agri-tech startups were closed in 2017 with an investment of USD 37 million as compared to 10 in 2016 entailing an investment of USD 27 million. In 2015, nine such deals were closed with a combined investment of USD 15 million.

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The problem, Chakravarty says, is that everyone is trying to fix one aspect of the problem only. “There are different startups that are attacking different inefficiency part. NinjaCart will say I am going to look into the distribution inefficiency, another will say we’ll take care of cold storage, etc. Even if we solve all these inefficiencies food and soil will be compensated.” NinjaCart partners with farmers enabling them to directly sell their produce to shops.

Chakravarty and the team believe if consumers are not made an integral part of fixing the problem in some way, the food system can't be truly made better. Farmizen subscribers who pay a fee of Rs.2,500 for one plot of land receive the produce from their land every weekend. (The price is fixed no matter what you grow.) Customers are also encouraged to visit their farm on weekends and experience harvesting their produce on their own. Kotha who earlier used to spend around Rs.2,000 every month says he doesn't mind paying Rs.500 more. "I like coming to the farm to see how everything is growing. After seeing the farm I feel assured that all the produce is organic, as they say it is,” Kotha says.

Life-changing

Kotha hails from a farming background and claims to know the risks that a farmer takes. He says for a farmer, uncertainty of income is the biggest concern. His folks have their own farm in Guntur where paddy and lemons are grown. “I am not sure what Farmizen is gaining from this but the farmer’s risk has reduced to almost negligible,” he says.

Before working with Farmizen, Manjunath said he’d earn Rs.50,000 per month, which has now increased to Rs.150,000. “Now, I don’t have to worry about the sale of the produce I grow. The bigger change is that my income is not unpredictable anymore,” Manjunath says.

There are 16 farmers with whom Farmizen has partnered with in Bangalore, Hyderabad and Surat. It claims to produce 35 tonnes of vegetables per month on 25 acres of land. All the farms are in 30 kilometre radius of the the city's periphery. Chakravarty believes there is ample opportunity to grow within this periphery itself.

Currently, the company has just one pricing and one revenue model, but Chakravarty says soon he we will look into newer models. "We are also looking at bringing fruits in the subscription model.”

In terms of competition, Chakravarty is not worried now. He says the ones who claim to be running a ‘farm-to-fork’ model actually store the produce before shipping. “Here all the produce is delivered within three to four hours of harvesting. That is the true farm-to-fork business model,” Chakravarty says.

Avanish Tiwary

Avanish Tiwary is a Bangalore-based tech journalist. He focuses on emerging Indian startups and unicorns. He can be reached at avanish.tiwary@thepassage.cc.

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