eFarm's efficient supply chain pays farmers better

Agriculture suffers in India in spite of the fact that a vast majority of Indians depend on it. Government interventions in terms of minimum support prices, farmers’ markets as well as technology interventions like mobile-based update on weather and soil quality have resulted only in piecemeal success, if any, in improving the farmer’s income. When Venkata Subramaniam, an IIT graduate, chose to leave his job in the IT industry and decided to use his skills in the ailing agriculture sector, he found that the single biggest factor that works against the progress of the farmers is the lack of a reliable market. As a result, he founded eFarm, a social enterprise and an end-to-end agricultural supply chain platform that sources the produces from the farmer and supplies to the food-based business houses like restaurants in Chennai. From his first-hand experience in selling vegetables in local markets, Venkata Subramanian believes that providing an organized supply chain for the farmers and by optimizing it, he can source the farmer’s produce at a higher price, supply it for cheaper to his customers and still make profit.

eFarm operates by identifying the production details from their pool of farmers, as well as the customer’s demand in advance, matching the demand and supply using simple IT-driven order matching system and supplying the produce, sometimes after some value addition like cutting or peeling. This seems fairly simple and commonplace. However, in the business context, it scores over the conventional mandis in that, while mandis supply only in bulk (say 40kgs) eFarm supplies the quantity that the customers request, which not only minimizes wastage, but also reduces the cost for the customer.

Since its founding in 2008, eFarm has won the IIM-Kozhikode Whiteknight business plan contest in 2009 and participated in a couple of others apart from catching quite a bit of media attention. In an interview to The Hindu he outlined a few unique ways in which eFarm improves the livelihood of the farmers. He says, since farmers don’t sort their produce according to quality, middlemen cheat the farmers by undervaluing the quality of the produce and hence paying them lesser. Similarly, since farmers don’t weigh their products accurately using standard weights, middlemen easily cheat them by under-quoting the actual weight.

 eFarm, provides them standard with standard weights, teaches them to grade their produce at source and teaches them to calculate the minimum price they can demand for their produce in the market. In return, farmers allow eFarm to set up a rural collection center where the farmers will sell the requested quantity of their produce to eFarm. Further they would also share their plans for production which would help eFarm get an idea of future supply.

HowDoesItWork.pdf

View more presentations from efarm123

eFarm not only helps the farmers but also helps physically and mentally challenged people, by providing job opportunities. For example, their IT-enabled infrastructure that eFarm uses the match the demand and supply is run by the physically challenged and they provide jobs for mental health outpatients from The Banyan to do peeling and cutting of vegetables.

Inspired by the Mumbai dabbahwala’s for their achievement in optimizing the supply chain, eFarm’s own endeavor in earning profits for themselves and the farmers by optimizing the supply chain seems to be paying off since they have been reported by livemint.com to have broken even in just three years of operation.