Food Producer Organizations: Farmers Reap Windfall Gains
Farmers in Adilabad district of Telangana have written a success story that can serve as a ready-to-adopt model for the country. Four Food Producer Organizations (FPOs) promoted by the Dhan Foundation have leveraged new-era digital technologies to overcome their constraints, dramatically increasing their collective incomes.
Farmers in Asifabad, Untoor, Indervelly and Gudihathnoor in Adilabad faced several post-harvest challenges, with lack of access to financial resources, storage issues and confusion over when and to whom to sell, forcing them to opt for distress sales. With a shortage of cash affecting their operations, agricultural productivity in the region was threatened.
However, not to be discouraged, women-led farmers in this area of Telangana as well as those from ST, SC and OBC communities have embraced the technology to break the pattern of distress selling of agricultural produce. First, thanks to the digital warehouses offered by the integrated services of the agritech startup Arya.ag, farmers were able to store their agricultural products in a smart ecosystem that offered real-time monitoring, including on the absorption of cotton. and legumes. These agricultural products could then be used as collateral for loan considerations, allowing farmers to access financial services, probably for the first time in many cases.
For example, members of UNR Farmers Producer Company trained in scientific storage and accessed financing solutions to increase their income from 90 lakh to 1.2 crore. Similarly, the BBWS Farmers Producer Company has made additional income of Rs 90 lakh through access to storage solutions and loans against commodities. Equipped with the latest digital technologies such as AI, ML and IoT, farmers have been able to reap multiple benefits ranging from storage facilities to access to financial and business services.
Grouped under the umbrella of the DNT Farmers Producer Company, smallholder farmers in the region have managed to increase their collective income from Rs 1.4 crore in 2019-20 to Rs 2 crore in 2020-21 and Rs 7 crore in 2021 -22. As for FPC Indervelly, it used the Arya.ag platform to sell cotton bales, its turnover this year reaching Rs 14 crore thanks to the sale of more than 4,100 bales.
On her selling experience on the platform, Ms. Tanubai, President of Indervelly FPO, said, “Last year, we sold 300 bales of cotton independently. We received prepayment for 100 bales, but for the remaining 200 bales there were GST deductions that we were not aware of before. When working with Arya’s platform, we receive full prepayments without any deductions. There is transparency in the exchanges and complete documentation with the buyers.
Chitru Patel, President of UNR Farmers Producer Company, added, “Arya.ag’s platform’s instant loan disbursements and payments have enabled us to deliver immediate payments to farmers associated with us. This has helped us build strong relationships with them because they know the organization is working for their well-being and they are not struggling to find money to meet their needs. »
The commodity-based digital lending model has also contributed to financial inclusion. In addition, farmers, who previously largely depended on traditional channels of trade and finance, were able to benefit from the services seamlessly. Thanks to Arya.ag’s digital lending model, their loan applications are processed in no time. Whether it is facing a threat to their livelihoods or witnessing an almost fourfold increase in their collective income, this is how the application of digital technologies in the field of the chain agriculture had an impact on their lives. As Arya.ag co-founder Chattanathan Devarajan puts it: “Technology eliminates all biases and prejudices with the ultimate goal of benefiting the end user. The story of the turnaround of the farming community in Adilabad highlights the difference new-age agritech companies led by digital technology can make to the sector. In fact, the relevance of these actors is more than a simple intermediary or facilitator, because they are driven by a goal of empowerment.