Farmer producer company successfully implements farm-to-home model during lockdown
Connecting farmers who had surplus produce with consumers who lacked access to vegetables and fruits, a farmer-producer company in Karnataka bridges the gap, benefiting both
Amidst uncertainties and restriction on transportation of persons and farm produce owing to COVID-19 lockdown, on the one hand farmers had surplus produce and on the other hand, consumers had zero or limited access to fresh vegetables.
This situation has been witnessed across the country for almost two months now. However, there are many ongoing efforts among farmers and their organisations that attempt to forge a partnership and bridge this gap.
Mokshagundam Vishweshwarayya Farmer Producer Company Limited (MVFPCL) is in the town of Bagepalli in Chikkaballapur district, at a distance of 100 km from Bengaluru. MVFPCL has 903 farmer-shareholders from 45 villages, comprising 587 men and 316 women.
Incorporated in 2016, MVFPCL has been involved in the marketing of agri-inputs such as fertilisers, seeds, cattle feed and organic growth promoters to the farmers by setting up farmer producer organisation (FPO) outlets in the villages.
MVFPCL has been supplying fruits and vegetables to established modern retailers and well-known e-commerce players in Bengaluru. During the lockdown, MVFPCL helped farmers and customers connect by purchasing fruits and vegetables from 40 farmers and selling 5 tonnes of produce to 200 consumers in April.
Bridging the gap
Vrutti Livelihood Impact Partners and Fuzhio, an impact product marketing firm that promotes impact products directly to customers on behalf of small farmers and vulnerable groups, helped MVFPCL develop market linkages during the lockdown.
Sale of fruits and vegetables in progress facilitated by Vrutti team members while following precautionary measures and social distancing norms (Photo courtesy: Vrutti)
The directors and CEO of MVFPCL were quick to gauge the impact of the lockdown on their farmers. They approached Vrutti for advice. Chandrashekarappa, director of Fuzhio, saw an opportunity to supply fresh fruits and vegetables to gated communities in the city.
The stakeholders met immediately and decided to procure produce from the farmers of MVFPCL. The staff of the producer company was able to leverage the Fuzhio and Vrutti teams’ extensive network among the residents of these gated communities.
On March 30, a group comprising all the stakeholders was formed on a mobile messaging app. Fuzhio distributed a spreadsheet to residents’ associations of gated communities. Residents used the form to book orders and prepare lists of requirements for each day.
Fuzhio assessed the demand by consolidating data by location, apartment and quantity, and sent the same to the project staff of Vrutti and the staff of MVFPCL at Bagepalli. Since Vrutti staff had a presence in the field locations and a good rapport with the farmers, the operations quickly picked up.
The field team approached the local police station to get a vehicle pass; they also approached officials of the horticulture department, as their written consent was needed for MVFPCL to supply fresh fruits and vegetables to the city. Similarly, in the city, resident associations had to produce letters.
By connecting directly with consumers, the producer company helped many farmers sell their produce during the lockdown (Photo courtesy: Vrutti)
There was a significant reduction in transportation costs as MVFPCL has its own vehicle. They hired a driver and a few workers to assist during the operations. Everyone practised social distancing and wore masks and gloves during sorting, grading and delivery.
The team planned the timing for collection, packaging, transportation and delivery. Fuzhio, who kept the spreadsheet open until 8.30 p.m. earlier, kept it running until 11 a.m. the next day. This meant that the produce had to be collected the same night instead of between 6 and 7 a.m. the next morning.
The team members scheduled the sorting of produce in the morning so that they could deliver the same to residents in the city between 12.30 pm and 4.30 pm every day. This not only saved considerable time and effort but also resulted in the sale of 200 kg of fruits and vegetables such as bananas, potatoes, cauliflower, onions and carrots daily.
Following this, observing the demand, MVFPCL further bought 15 types of groceries from local traders and other FPOs in Chikkaballapur so as to supply to the customers in gated communities. This resulted in the sale of 20 to 50 kg of extra groceries per day, thereby providing additional service to the consumers.
Expanding the customer base
On average, the team supplies produce to about 30 customers every day, with maximum sales of about 400 kg of produce worth Rs 30,000.
The working capital requirement for MVFPCL is Rs 30,000 per day. There was negligible wastage due to pre-booked orders. The team accepted payment through various platforms and payment interfaces.
If the customers felt that the quality of the product was not up to the mark, the farmers facilitated a replacement. Thus, MVFPCL was able to retain its existing customers and get new ones with these practices.
Farmers’ feedback was contrary to the general perception that farmer members of MVFPCL did not make significant profit during these lockdown operations.
“Before the lockdown, I used to sell rose onions and cauliflower to local traders at a rate less than the market price. During lockdown, none of the traders came to buy the produce,” said Naresh, a farmer and shareholder of MVFPCL from Penumalai village in Bagepalli taluk.
A woman farmer sorts the potato produce collected in the field based on the pre-booked orders (Photo courtesy: Vrutti)
“During the lockdown, since we have been selling directly to consumers, I could sell for Rs. 13, what I used to sell for Rs. 9 to the local trader. This shows how much higher my income has been,” said Naresh.
Business expansion opportunities
Owing to its proactive approach, MVFPCL was able to identify an opportunity in these troubled times and was quickly able to implement a farm-to-home model. Partnership with resource institutions Vrutti and Fuzhio helped the company and ensured success of the initiative.
“This is a very good initiative. Based on this experience, the farmer-producer company should explore the possibility of the B2C model as a permanent channel,” said Narasimha Murthy, head of the Business Acceleration Unit at Vrutti.
The teams of Vrutti and Fuzhio have started employing a cluster route mapping approach to tap into a number of residential areas located on the outskirts of Bengaluru, as they see huge potential in supplying fresh fruits and vegetables after the lockdown.
Even after the lockdown is lifted, this experience will help MVFPCL strategise and cater to various segments, leading to long-term relationships with urban consumers. The experience gained during this difficult phase will hold the producer company in good stead as we move into a new world filled with challenges and opportunities.
Nikhila Shastry works at Catalyst Management Services, Bengaluru. She has a master’s in Livelihoods and Social Entrepreneurship from TISS. Sharmishtha Bose works at Vrutti Livelihood Impact Partners in Bengaluru. Views are personal.