In India, Agrichemical Distribution is No Easy Task
India is a land of contrasts. It has 16% of the world’s population, but less than 2% of the total land mass. And with an increasing population, the country has put a high emphasis on achieving grain production that can maintain pace with the growth of its limited farmland, says Anil Kakkar, VP Excel Crop Care and Vice Chairman, Crop Care Federation of India.
It is also highly fragmented: About 67% of India’s farmers are considered marginal, farming on less than 2.5 acres. Another 18% farm between 2.5 and 5 acres. Only 1% of India’s farmers work more than 25 hectares.
With some 120 million growers and a predominantly generic agrichemical market, a strong and efficient distribution network is essential for crop protection.
Yet, the country’s industry has been plagued by problems arising out of supply chain inefficiencies, a lack of transparency, counterfeit products, and inadequate infrastructure, which result in post-harvest losses estimated at INR 45,000 ($7 billion) crore every year, according to a Tata Strategic Management Group/FICCI report.
This also makes it difficult for agrichemical companies to reach the farmers to promote their products and educate them about their usage and benefits. Indian farmers deal with layers upon layers of agents, dealers, and distributors to get to the farm inputs they want to buy.
Enter a Rising Start-Up Called AgroStar
The Pune-headquartered firm, founded in 2012, skips all the layers and goes straight to the farmer via their cellphone.
As the motto splashed on its homepage goes: “Our mission is to simplify the agribusiness experience for farmers in rural India.”
The Accel-backed start-up raised $10 million in Series B funding earlier in 2017 and currently operates in the three states of Maharashtra, Gujarat, and Rajasthan with a staff of over 200 people.
Commenting on the investment, Prashanth Prakash, Partner, Accel India, said: “There is a huge scope to implement technology to solve the inherent problems faced by farmers in India. In a mobile first country like India, AgroStar has clearly demonstrated that farmers in India are ready to adapt the latest in technology that can make their lives simpler and improve their productivity.”
It has around one million farmers connected on its “direct-to-farmer” technology platform and aims to spread throughout India within the next two years. Partners include more than 150 brands, including multinationals such as DuPont Pioneer, Dow, and BASF to provide raw materials, seeds, fertilizers, and other inputs.
Indian Manufacturers’ Perspective
Several major Indian manufacturers recently spoke with CropLife®’s sister publication, AgriBusiness Global, at its annual Trade Summit — Americas, in Las Vegas, NV, on August 10, to shed some light on distribution.
Bimal Shah, Director of Sulphur Mills Limited, says that despite India’s distribution woes, he considers the intricacies of U.S. distribution perhaps even trickier, in part due to rebate systems with the multinationals. For Sulphur Mills — the largest sulphur-based fungicide producer in India — the product goes from its plant to 40 warehouses. Each warehouse has 10 or 12 people associated with sales or marketing around each particular location.
“We have a 10,000-dealer network, but the sizes (of regions) the dealers cover are small. There is a product development team that goes to the farm- and dealer-level explaining what the product is. At the farm level, there are small demonstration trials showing side-by-side comparisons of product performance,” Shah says.
Meghmani Organics Chief Executive Ankit Patel says that recently, many companies are focusing directly on the farmer level by engaging in various educational programs. They reach out by involving the technology transfer to farmers in terms of evaluating soil quality tests, predicting weather conditions, and many other factors directly affecting crop enhancement and yield.
Meghmani has a robust domestic team covering various parts of the Indian market through a network of more than 3,000 distributors.
“We are also engaged in technology transfer to the farmer’s level in key states including Karnataka, Punjab, Andhra Pradesh, Maharashtra, Madhya Pradesh, Rajasthan and Gujarat,” Patel adds.