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“Agri-infra fund will expand exports, ensure consistent supply & pricing”
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Monday, 17 August, 2020, 08 : 00 AM [IST]
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Pioneering Ventures is an agri-food platform company based in Switzerland and India. Its objective is to transform the Indian food by re-engineering its production and supply. In India, under the PV umbrella, FarmLink as well as Desai Fruits Venture (DFV), are its successful portfolio businesses. It is also one of India’s largest exporter of bananas. In an email interaction, Anuj Todi, India business head, Pioneering Ventures, provides Nandita Vijay with the scene and challenges hampering the Indian agri-landscape. Excerpts:
In the last six years, tell us about the journey of FarmLink and how have you handled the issues hampering Indian agriculture sector?
India is one of the world’s largest producers of fruits and vegetables, with an ever-increasing domestic demand for fresh produce. Yet, India’s farming sector remains fragmented and riddled with challenges related to scalability, quality, sustainability in farm practices and efficiency in supply chains to reduce wastage and reach the consumers optimally. At PV, we aim to tap into India’s vast potential as a food supplier to the world, by transforming the food ecosystem from farm to fork. To do this, we address each link in the value chain: harvesting, collection, storage, processing, supply chain and marketing in a holistic and inclusive way.
In the last decade, DFV and FarmLink have established a pan-India operational footprint, developing a transparent and strong connect with our 6,000+ farmer community. We enable farmers to grow high-quality, high-yield produce with tech-enabled, sustainable farm practices. Our control over the entire food supply chain from farm to market ensures preservation of quality and minimal wastage, so that our customers get consistent supply of best-in-class fruits and vegetables through the year. Through this approach, we have been able to improve livelihoods of our farmer partners and even encouraged them to become entrepreneurs, training them and helping them secure financial support to expand their operations in agri value chain.
How has FarmLink worked around issues such as low yield and wastage across the value chain?
We address the issues of low yield and wastage by focussing on all aspects that lead to farming protocols, crop quality, harvesting and storage practices, processing and transport.
One of the key initiatives that has helped us successfully reduce wastage and improve yield is farmer training and awareness. Both DFV and FarmLink conduct year-round farmer awareness sessions and certification trainings, to address the gaps in crop protection, sustainable farm practices, crop interventions to improve and preserve quality of the yield. Our partnership with Bayer CropSciences at FarmLink has helped us train and certify farmers in crop protection. Our most recent training was conducted in January 2020, where we covered sustainable farm practices in growing high-quality grapes at Savlaj, Sangli district, with over 250 farmers participating. We have enabled farmers to establish vermicompost units and embrace bio-fertilsers and bio-pesticides, replacing chemical fertilisers and pesticides to achieve savings of over Rs 300,000 per farm.
To improve storage and transport, we have meticulously developed an integrated value chain. There is a network of tech-enabled collection, transport and storage facilities across India. Working closely with farmers, supply chain partners, regulatory authorities at ports, APMCs etc., we have successfully reduced produce wastage by around 40 per cent over the years.
How do you view the importance of traceability in food supply chain?
Traceability of food has become more pivotal and relevant in the current context of Covid-19. Traceability benefits everyone across the value chain. The consumers get assurance of safety, quality and origin of the product. For the regulators, traceability ensures prompt action in cases of public health issues. For companies like us, traceability makes supply consistency and quality compliance easier. Farmers reap the benefit of traceability due to improved value of their products, through safety, quality assurance and location details for specific geo-tagged products such as specific variants of mangoes or rice. At PV level, we are in the final stages of launching our own tech-enabled traceability solution.
The Union government recently announced a slew of reforms for the agri sector, which of these are most useful in the current context?
The recent declarations by Central and state governments to improve farmer livelihoods are positive steps. Reducing farmer dependence on APMCs, removal of certain agri products from the Essential Commodities Act and Operation Green’s extension to cover more agri products will enable farmers to get better prices for their produce and incentivise investment and credit access in agriculture sector. The plan by Central government is to bolster agriculture infrastructure creation through Rs 1 trillion or Rs 1 lakh crore. This agri-infra fund will help create a larger network of temperature-controlled storage and transport facilities, thus expanding exports and ensuring consistent supply and pricing for domestic consumption. We look forward to hearing further details on these policy implementations from the Central and state governments.
The shift in your business model to bring fresh produce directly to consumers, how has that worked out so far?
Our direct selling platform at FarmLink has witnessed an unprecedented growth in the past quarter due to increasing urban demand. We have begun doorstep delivery of fruits and vegetables in safe and hygienic way in Mumbai, Thane, Navi Mumbai and South Mumbai. Given the pandemic phase, this convenient and safe way to shop for fresh produce has been well-received. Plans are to expand the platform through digital and off-line channels.
How have you ensured operational continuity in post-Covid-19 world? Has there been an impact on operations and how have you mitigated that?
Barring the first couple of weeks immediately after Covid-19 restrictions in India, we have seen no significant impact on our operations. Our products come under essential services, allowing uninterrupted business operations. In fact, our sales and margin growth has strengthened further over the past two quarters.
The credit for this success can be ascribed to the close and positive connect with our farmer community. Whether at DFV or FarmLink, we continue to protect the interests of our farmer partners irrespective of market vagaries. This reassured them to strengthen the relationship. Even after the markets started showing the initial Covid-19 impact, we continued to buy from farmers at agreed-upon prices and quantities. As we foresaw, the demand bounced back after the initial dip and our efforts paid off.
What are the expansion plans you envisage to garner growth in the near future?
Both DFV and FarmLink have clear plans to scale up domestic distribution capabilities. We will build a strong presence across all supply channels and develop direct sales platform. Plans are to champion select fruits in growth categories, bring best technologies and global know-how to enhance taste, quality and yield.
Your thoughts on the current state of supply chain sector in India?
While the government initiatives are in the right direction to enhance supply chain infrastructure, there is still lack of adequate storage facilities at the farm level. This means farmers have to sell the produce at a low price if there is bumper production. There is no way for him to pace his selling.
Building an integrated network of collection and storage centres as well as tech-enabled transport facilities is the right solution. There is a need to connect the farmers to the appropriate links in supply chain and improve their access to new markets. With rapid digital transformation in agri business, this is well within reach. Digitising the food ecosystem from farm to fork will enable us to gather vast amount of data, improve traceability, develop analytics and predict trends to benefit the farmers and consumers simultaneously. Also, rapid and wide adoption of international standards for food safety and quality assurance like Total Quality Management (TQM), including ISO 9000, ISO 22000 will help Indian farmers and supply chain partners to realise the full export potential and cater to the evolving taste and preferences of domestic consumers as well.
How receptive are PEs and VCs to Indian agriculture sector today? Would DFV/FarmLink scout for more funds? If yes, for what and when?
The unprecedented growth in investments in agri-startups and businesses clearly shows the transformation in India. From Internet of Things (IoT) to big data and AI, we have seen a lot of tech-enabled positive disruption in the way the sector works. As a result, the global VC community has shown interest. However, we need to take a balanced view of these developments because many of the sector’s challenges still need to be addressed and only the sustainable business models that bring in holistic change will see a path to scalability and profitability.
So far, availability of funds has never been an issue for us - we will continue to raise capital at the right time to fund our growth plans across ventures.
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