The pursuit of a bottom-up supply chain for Indian agriculture

Agriculture is the most important sector in India employing ~42% of people. However, a ton of issues still continues to ail the farmer. Perhaps the most important is the disconnect between producers and consumers. In most cases, they’re either ill-informed or not properly equipped to operate their farms, in a profitable way.

Digital Green is one organisation that has been working to educate farmers and hence uplifting them from the shackles of poverty. Since its spin-off from a Microsoft Research Project in 2008, Digital Green has gone on to empower millions of farmers around the world.

We caught up with Rikin in his San Francisco office. Here’s a selected transcript of the 2-hour conversation that ensued.

Rikin, tell us about how you started out? Was agriculture always a part of your plan?

Growing up, I wanted to be an astronaut. I studied Aerospace Engineering and was on my path to becoming an astronaut. Around this time some of my friends were starting a biodiesel venture in rural Maharashtra. Visiting these places and interacting with people in rural communities made me understand the ground realities, which is when I realised this wasn’t going to work out. So I joined Microsoft Research.

Tell us about your work with the Microsoft Research Team. How did technology play a part?

Sure. We just started as an academic research project, with a hypothesis that there is a role for technology in small-scale agriculture systems.

In 1998, MIT had done some work with sugarcane cooperatives, which was one of the first tech programs by MIT in rural India. They had deployed computers connected to the internet that was meant to make a difference in terms of marketing exposure, weather reports and other avenues.

When Microsoft stepped in in 2005, MIT had left, and the cost of maintaining the computers was being borne by the cooperatives. They couldn’t afford it any longer. Also, the computers weren’t being used for any of these “aspirational purposes,” but instead for back office stuff — payment processing, maintaining records and credits, etc.

We asked ourselves, how differently could tech play a role in small-scale farms?  

We were inspired by a Princeton professor’s work in rural India called Digital Study Hall. In this model, after private schools were done with lessons for the day, they had private school teachers teach the rural kids science, math and English. Videos of the lessons were recorded and distributed to surrounding rural government school teachers. What they found, was that these videos helped build the capacity of the teachers who would otherwise just be teaching rote-based material.

We decided to apply this model to develop the capacity of farmers. This was trickier, because the audience was adults, not kids, and there wasn’t a defined curriculum, unlike the school syllabus.

Around the same time, there was an NGO called Green Foundation, which was promoting sustainable and green agricultural practices. We decided to add a digital layer to their process to make it more efficient.

We tried different types of message delivery methods: posters with pictures and facts (Explainers); MP3 players with speakers to play audio messages; and also videos. Our goal was to see if the productivity of the farmers would increase. We then analysed the different types of videos for their effectiveness.

Through trial and error, and cost vs benefit, we tested what drives adoption of these sustainable agricultural practices among the communities.

We complemented what the Green Foundation did with a layer of technology.

What came out of these experiments?

What we found, was that videos produced by and for the community, in which people were able to recognize the names, people and villages made a huge impact. And in terms of distribution more than broadcast, a self-help group setting, with somebody from the local village facilitating a conversation within the group and available for follow-up support, is what worked best.

We then collected feedback on who watched which video, what were their questions, etc. We used this data and feedback to inform the creation of the next set of videos.

We wanted to see if this model was applicable to other communities and organisations, so we spun off from Microsoft as an independent organization, with other NGOs like Pradhan, BAIF etc and across different states like MP, Jharkhand, Orissa etc.

How did Digital Green scale up after that?

We had 60,000 farmers by 2011-12 on our platform. Post this we were approached by Govt. of India and partnered in around 9 states.

We expanded into new countries Africa – Ethiopia, Ghana, Afghanistan. We also expanded beyond pure agricultural practices to nutrition and crop diversity to cooking practices.

About 2 years ago, in 2016, we hit 1.5M farmers, 80% of who are women and produced 5,000 videos in 50 different languages. We saw this made a difference in productivity for some farmers.

That sounds like a great growth curve. How did you get to Loop from here?

With our previous work, we realized that information only gets you so far. It still doesn’t solve most of the problems these guys encounter on a daily basis.

We decided to use marketplace linkages to solve problems in that area.

The result was Loop –  which is basically like a shared transportation service that helps farmers take their perishable fruit and vegetable produce to nearby Mandis — like UberPool for farmers.

We aggregate the pickup requests and assign it to nearby transporters who already exist – like rickshaw drivers who help them transport produce to the nearby Mandis. Payments are made via PayTM. We also provide market and transport price data to inform decisions about which market to sell.

We’re trying to connect these dots between the video — farm and farming practices — and market transportation services. So farmers can both increase their production and save time and money on the sales side. Instead, they can share the load and pay a fractional amount.

What is Loop’s differentiator? Who does it impact?

We asked ourselves, can we work with the 85% of farmers who aren’t connected to the regular supply chains, take them to the existing Mandi system as efficiently as possible?

Currently, commission agents go to the farms to collect and sell farmers’ produce. That’s bad because the agents set the terms and the prices — the farmers have no visibility into what’s happening.

How do we integrate this 85% of farmers who have no access to formal supply chains into the existing Mandi system, as efficiently as possible? If I can get the volumes sufficiently high, then I can get them to grow more, depending on demand.

Say if XYZ grocery delivery company wants broccoli, we could get some farmers to grow that, efficiently through the existing network. It’s much faster and easier than having to go all the way to the farmers.

This is a problem in America as well. If you go to Safeway, and you’re looking for exotic mangoes, and you compare their prices with the Asian store right outside, the Asian store is probably selling it for 1/5th the price if they acquired it from the Indian or Chinese farmers directly. But because Safeway doesn’t have access to these mangoes directly from the farm, they have to overcharge their customers.

If you create a bottom-up supply chain then you might reduce the price variation. This is what we’re trying to work toward with Loop.

What is one important “edible issue” that more people should talk about?

A bottom-up supply chain is something everyone should care about. From the point of view of consumers, here’s how they think: There’s a lot of farmers in the country. But most of the farmers don’t necessarily know the happenings, they’re excluded from the supply chain.

Online grocery stores are in the media a lot, so let’s take that as a case study. They (online grocery stores) help rich people to buy a lot, but they don’t really help the small guys.

Is there an opportunity to create a bottom-up supply chain so that farmers can supply quality produce to you, directly?

Supermarkets today source mostly from the Mandi, wrap it in plastic and put it up on the shelves. That’s probably what Amazon or any other big company entering would do. It’s easier and frictionless for them to start, but if all these guys plan to take over as they claim, you can’t just do that.

I think there’s a lot of opportunity with programs like the ZBNF.

(ZBNF stands for Zero-Budget Natural Farming which is an alternative to chemicals based agriculture. More about ZBNF here).

If you could make the purchase of ZBNF produce by a retailer like Big Bazaar efficient, that would be a great use of agri-technology.

Consumers should care more about their food and how it reaches them.

More about Digital Green and Loop here.