An app that helps farmers cut the middleman out

For many years, farmers in India have had little freedom in choosing markets and buyers for their produce.

All states in the country, except three, mandate that marketing and selling of farm produce must be routed through state-owned mandis, retail markets where middlemen squeeze farmers to increase margins.

In such a situation, can technology-enabled solutions help out Indian farmers to sell their produce directly to customers?

It’s a question that led Edvin Varghese, who was working to develop computing components at IBM India, to take a break from his corporate world and develop, along with others, an app called Mandi Trades.

When a farmer registers on Mandi Trades, it takes information of his produce, along with location details, and stores it on a scalable cloud-based database. For a buyer, it gives a map-based view of available produce with the produce info, sorted by his geographical proximity to the farmer. It’s as easy as a breeze to contact farmers, as his phone number is available on the app.

There are also options to help farmers plan better, such as viewing the current prices of commodities in trade, demand for listed products, weather and seasonal changes and prices of rare items.

Launched two years ago by Farmmobi Technologies, with an investment ofRs.20 lakh each by Edvin and his friend Murthy Gurunathan, the app has about 10,000 registered users.

About a year after the launch, the makers realised it cannot put out the content only in English if it means business. So in version 2.0, they made the app the available in five other languages: Hindi, Tamil, Telugu, Kannada and Malayalam.

Mandi Trades, says the company, has enabled about Rs.50 crore worth of trade until now. It has been short-listed for the m-Billionth award. “The solution we have developed is a convergence of four disruptive technologies—social, mobile, analytics and cloud. Anybody in the supply chain can use it. The only thing that we didn’t enable is payment, as the laws do not allow that,” said Varghese.

He was referring to the agricultural produce marketing committee (APMC) rules, which mandate that the sale or purchase of agricultural commodities notified under it are to be carried out in specified areas.

According to experts, such innovations can go a long way in levelling the playing field in fragmented, monopolised agricultural markets if the dated regulations are scrapped.

The trade restrictions in fruits and vegetables are such that it is sometimes easier for traders to import goods from abroad than purchase the same from a neighbouring state.

The central government seems to have taken note of the constraints. The centre has already issued an advisory to states to allow free movement of fruits and vegetables by delisting them from the APMC. The Digital India campaign has been rolled out, alongside a scheme for setting up a Rs.200 crore national e-market to bring 585 regulated wholesale markets across the country on an electronic platform in the next three years.

However, the returns from Mandi Trades for the company are nil. “Farmmobi’s parent company Appface Technologies, which offers service products to private tech clients, is making money, so it’s all fine. We are looking at it from a problem-solving angle rather than a profit making angle,” said Edvin. “We have developed a workable solution based on disruptive technology and on an average 50 people are registering on to the platform each day. So we’re positive.”

Harvinder Singh, a user of the app from Samana in Punjab, is a new type of Indian farmer who uses apps such as Mandi Trades plan to monetise. He is 26, a postgraduate in commerce, proud owner of an iPhone and a full-time farmer by choice. Earlier, his family used to sell the produce, mainly rice, from their traditional 44-acre farm at the local mandi for Rs.1,460 per quintal.

By the time it reaches the hands of the customer, it would be priced between Rs.3,500 to Rs.4,000 per quintal. “My father used to say that there is no way to get more money for my produce than the local mandi price. So I went online, pricing my item at Rs.2,000,” he said. “Now I’m getting two calls per day and expects to close the deal with one soon, and my father is surprised.”