A presentation made to IFAD (International Fund For Agriculture Development) country office on creating market linkages for rural poor farmers as a means to increase their livelihood and sustainability.

1. CREATING MARKET
LINKAGES FOR FARMERS
THE EFARM STORY
VENKATA SUBRAMANIAN
FOUNDER, MD
IFAD CPMT meeting , Dec 6 2009, New Delhi

2. Introduction
 Venkata Subramanian
 Founder & Managing Director, Matchbox Solutions &
eFarm, Chennai
Brief profile :
MS (Computer Science), 2003,University at
Albany, NY ,
B.Arch , IIT Kharagpur ,1995 , India
12 years of experience in IT industry in both
technology & commercial roles (7+ years in US)
Head of key outsourcing & consulting accounts in
Insurance, Capital Markets & Banking

3. Introduction
• Srivalli , Co-Founder, CEO
MBA , B.Com Taxation
8 years experience in Sales, Marketing, &
Operations. Has run two start-ups and
organised fund raising for NGOs as part of
CSR programs.
Responsible for business development, finance

4. Currently Better known as ….
IT enabled
Annachee !!!
Weekend
beachside Hi-tech
Organic Sabjeewallah
Carbazaar ;-)
guy

5. The Farmers’ crisis : A Reality check
From crisis to concept : How we built the business model
The story line
What is eFarm ?
How does eFarm work ?
What are the key Benefit to Farmers ?
Lessons Learnt
IFAD & eFarm : Next steps

6. The Indian Agri Supply Chain
Current State : Too Many Steps , Too Little Value Addition
Harvesting of
Terminal markets to
Vegetables • Unorganized, unregulated, unprofessional & neighborhood wholesalers
unprofitable
• Lack of demand/supply data
1 • No reliable sales, distribution, marketing channels
• Poor logistics and storage
• A Middlemen’ dominated market 5
•No IT/ERP usage – decisions are adhoc and arbitrary
Regional mandi to Wholesalers to Retailers
4 Terminal markets near
A local mandi large cities
auctioning 2
Local to Regional mandis
for Auction
6
Loss in transit
40%
Price hike Retailers to Dining Table
3 End to end
> 400%
7

7. So many solutions , but why still a crisis ?
R&D
ICT
solutions
Increase
yield
Contract
farming Export
market
Cold
chain Modern
Micro
retail &
finance &
logistics
Grants

8. Only a crystal clear question
yields a transparent answer
– Zen saying

9. Development of Model
Study of existing supply chain
Visits to farms
across Tamilnadu
A Roadside farmers
auction in a village
Govt. farmers
direct sales market
,
Theni & Hosur

10. Developing the model
Discussions with
Agri experts ,
Supply chain
managers, existing
models , industry
veterans
(centre)
Forming pilot focus
group with
representative
members across the
chain
Discussions with
NGOs
, Microfinance
, Rural banks & self
help group
members

11. Farming in India : a Social activity or
business ?
Sales &
Marketing
R&D (Agri HR &
research) Training
(Labour)
Production
(Farmer)
IT/MIS Logistics &
(Market Supply
info) chain(Trans
port)
Finance & Processing
Accounting & QA (Post
(Loans and Harvest
Grants) techniques)

12. Marketing : The missing link ?
Other industries have differentiated
production from marketing/sales
Agriculture – Farmer handles both
roles
Brands have value !! Indian
products though superior have not
established a brand

13. What are the main end customer
segments and their needs?
Low Income Middle High Income Hotels & Food & Export
Group Income Group caterers Drink • ~1% of
• > 40% in Group • ~5% in volume • ~25% of processors volume
volume • ~ 20% in • Buy from retail volume • ~5% of • Best quality /
• Buy from volume chains • Buy from volume specific
neighborhood • Quality & wholesale products only
• Buy from • Product
markets street vendors variety mandi specific buyer
(evening) • Price + conscious • Large volume
• Pay more for Quality + fixed price
less quality conscious range

14. What are the typical price points ? 42/kg
Eg: Ooty Carrots (As of 29th June 32/kg
28/kg
2009) 24/kg
22/kg
20/kg End
customer
5/kg 12/k price
g
Farmer’s market Regional Metro Terminal Neighbourhoodm Kirana Branded Retailers Premium Grade
(In Ooty/ mandi Market arket stores, Pu (Export)
Kothagiri) (Mettupala (Chennai) (Thiruvanmiyur sh carts
yam) Chennai)
500 % Price hike
Source : Ooty market traders, Chennai traders, indg.in
 Over 500% Price hike on average to customer , but no value addition
 Changes hands several times: 40-50% is wasted – which adds to the costs
 Prices set at each intermediate point arbitrarily by brokers/agents without any
planned demand/supply data
 Farmer typically operates at 25% loss , End retailer less than 5% net margin

15. Current sales/distribution channels ?
The ‘sabjeewallahs’ –
Unsung heroes of the Wholesale
supply chain terminal Farmers
markets
Institutiona
Traders l Buyers
Street Non brand Neighbour
vendors local shops hood
market
99% of the
distribution is through Branded Hotels & Food Exporters
retailers caterers processors
unorganized players

16. How to reduce wastage in distribution ?
 Wastage in transit = 40%
= 40,000 crore in LOST
REVENUE TO FARMERS
 Key reasons :
 Poor demand/supply
prediction
 Poor logistics &
distribution chain
 “Penny saved is penny
earned”

17. An efficient supply chain management
model suited for India ?
•IT Systems usage : NIL
•Management team : Illiterate and average age of 55
•Age of company : Over 150 years
•Customer Segment : From slum dwellers to crorepathis
•Operational efficiency : Six sigma !!!
The Mumbai Dubbawallahs !!!
•Highly decentralized operations – agile, flexible , scalable
•Use of low cost transport medium – trains
•Use of human power for last mile delivery – No Fuel related hikes
•Strong customer relationship – personal , localized
•Simple coding, routing, labelling system – operates even without
electricity !
•Delivery excellence – fixed time , professionalism

18. Why is agri industry in negative growth ?
 Years of neglect & low growth
figures of sector = EDUCATED
YOUTH DO NOT WANT AN AGRI
CAREER
 High uncertainty and risks = VERY
LOW INVESTOR INTEREST
 Large scale conversion of agri land
for industrial expansion = FARMERS
FIND QUICK BUCK IN SELLING
LAND THAN CULTIVATING

19. What technologies are most appropriate for
reaching BOP segment ?
ICT Technology and the BOP
segment : Challenges
• High illiteracy
• Even amongst educated – Mostly local
language skills only Technology Adoption
• Low computer skills , Low internet amongst BOP segment
penetration
• Highest and fastest penetration : The
mobile phone
• Self taught the phone interfaces ,
Interface points usage
• Pay full price for new models , talk
• Voice call centres / BPOs (local time
language )
• Natural language IVRS ( 2 way –
automated messages)
• SMS

20. How do we start small, yet scale BIG?
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 Create 1 fully functional, fully sustainable
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Replicate the successful model into two
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1 -> 2 -> 4 -> 8 -> 16 one step back to prior state and rebuild
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 At a given time, number of units would be
a measure of 2n where n is time taken to
replicate 1 step

21. What is eFarm ?
A PVT LTD company registered in Chennai
One stop Agri business enabler
Sourcing + Marketing + Consulting + IT

22. What is eFarm ? : The Big Picture
Connecting the dots
Value added resellers
Sorting , Grading , Processing, Packing
Storage
Warehouses
Bulk buyers
Exporters
Farmers
Cooperatives
Collection centers
Kiranas
Self Help
Groups
Hawkers
Village ICT kiosks
Phone booths Logistics Fleet Small Independent transporters
Mobile operators operators Intra-city small tempos

23. Benefit to Farmers
Unlock revenue potential across the value chain
Cleaning / Packing
Quality Routing
Inspection/ Grading
Long haul
Transportation
Rural Produce Local vendors
Collection Centres Small retailers
Farmers
Urban area
Local Distribution centre
Distribution
Compost/Manure Food Processing
from waste units
Bulk buyers
(Hotels / Caterers /
Exports
Retailers)
eFarm Common Services
Planning & Call centre / Training &
Research Technology
Coordination Communication Support

24. The eFarm Solution
Create a network of farmers, intermediaries, logistics providers, distributors and
retailers
‘Organize’ the ‘un-organized’ rural to urban supply chain to create sustainable prices
for the rural members of the chain
Create a shared sourcing/marketing/distribution/retailing platform which is a
combination of offline delivery mechanism with online IT systems :
IT based B2B order matching/fulfillment system (e.g. Amazon, eBay)
+
Low cost-efficient, ‘Indianised’ logistics & delivery mechanism (e.g. AMUL, Dubbawallahs)
+
People driven Direct To Consumer Marketing / Retailing channel (e.g. HLL’s Shakti, Amway)
+
Bottom Up Entrepreneur driven model to reach all customer segments
(Self help groups, Micro finance)
Our goal
• Build a nationwide agri-supply chain network platform - Enable fair, efficient & reliable
business across the community
• Make agriculture self sustaining and curtail erratic fluctuations in price/quality
• Generate job opportunities in BOP socio-economic strata in rural and urban areas

25. Setting up the pilot
eFarm office
and godown
at Mylapore
, Chennai
Upgraded
vending carts
, standardised
weights and
measures
Distribution
centre at
Chennai
(godown)

26. Organizing the Unorganised .. To create
a low cost, scalable distribution chain
Fix the process
first
And THEN
Implement
technology
Otherwise will be
a failure …..

27. Social Impact : BOP segment Murugesan, c
oconut
farmer, with
graded
coconuts
Small
tempos for
local
deliveries –
powered by
eFarm
Panjali picking up vegetables from our Mylapore centre
Only a eFarm
phone call mobile store
away … a at an old
vegetable age home
vendor
enquiring
prices

28. DisABILITY : Working with their strengths
Cut
vegetables
Peeled
onions
and garlic
Sorting
Grading
Over 60% of our staff have some physical or mental disability &
Natural
Agri waste Ripening
collection and Of fruits
composting

29. How does eFarm work ?
Advanced Planning
Hub & Spoke Distributed network
Technology backend

30. Demand / Supply Forecasting and
aggregation
Strategic
Forecast Stocking Sales &
Plan marketing
<Sample spreadsheet>
COLLABORATION FOR
PLANNING
COLLABORATION FOR
Farmer OPERATIONS
Purchase Order Sourcing
Confirmations Purchase manager
Orders

31. eFarm : Operations Overview
Cooperatives Hub and Spoke Model For Catering/Hotels
Producer Scalability and Organic Growth
Corporations
Exporters
Rural Urban
SHGs
Collection Forward Logistics ( Fresh Produce) Distribution
Centres Centers
Food Processors
Reverse Logistics ( Manure , Farmer supplies)
Bulk buyers
Small & mid sized farmers
Retailers /
Mom & Pop stores
… organic growth and
expansion

32. Technology Overview
Behind the scenes
Open source
Tools &
technologies
AgriXML
As a dataXchange
format

33. Benefit to farmers
World Class Technology tools backing the network
Collaboration and B2B trading
platform
•Content : Daily
pricelists, Schedules, Trends
, Buyers guides
•Order management
•Search / Track items
•Delivery tracking
•Agri specific social networking
Backoffice Systems
•Customer relationship
management
•Supply chain management
•Mobile/SMS gateway interface
•Voice based interface
•MIS & Data mart

34. ICT in Agri marketing :
Data collection from farmers
Production data
• Produce name, variety
• Grade
• Typical yield at harvest
• Harvest cycles
• Cost price at farm gate
Farmer information
• Name
• Address
• Contact number
• Preferred mode of payment
• Bank / Post office details
• Photo
• Attestation

35. ICT in Agri marketing :
Price determination through cost price
analysis - worksheets
Tools and calculators to
assist farmers in
determining their
Sale price
Click to open ->

36. AgriBusiness Consulting
Market Analysis and Decision Support
(data courtesy : TNAU-INDG market Koyambedu
information portal) nadu tomato
What to grow ?
How much to grow ?
When to harvest ?
Where to sell ?
At what price ?
Ottanchatram
•Head to head comparisons across nadu tomato
•Markets
•Insight - Support level prices and
inflection points
•High / Low variations
•Identifying ‘hoarding’ and ‘cartelisation’

37. Example – Nendran banana
NENDRUM IN COIMBATORE MARKET NENDRUM IN CHENNAI MARKET
60 60
50
50 40
40 30
20
30 10
20 0
10
0
08/06/2009 08/07/2009
Nendram in Bangalore market
60
Customer : A major chips manufacturer In 50
40
chennai 30
Problem : Nendran variety availability & quality 20
10
was poor and price was very high 0
Identified alternate markets for viable bulk
sourcing from alternate markets

38. AgriBusiness Consulting
MIS / Data Analysis
Insights into customer’s procurement patterns
and identifying cost saving opportunities
Drill down to
details
Highlight
Dashboard summary potential
For senior management problems
and issues for
immediate
action

39. ICT in Agri marketing :
Farmer’s Social Network/Portal
Agri India – LinkedIn Group ( > Link )
•Operational since Jan 2009
•connecting farmers, buyers , social agencies, agri professionals
, academicians , press reporters & students
•Leads on key demands , info about agri expos/conferences , trade news , job
announcements , new ideas , discussions …
•Articles on key topics :
•Agri business & entrepreneurship
•Organic farming
•Video clippings on key technologies & processes
•Buyer’s guide to various fresh produce (for e.g. detecting carbide
mangoes, health benefits of keerai , selecting brinjal without insects etc)

40. Benefit to Farmers
Joining a growing, large network of Clients / Suppliers/ Partners
Customers Major Suppliers / Farmers Consultants / Collaborators
• VGP resorts • Green earth, Nilgiris • MOP Vaishnava Women’s
• Savera hotel • Earth trust , Ooty college – Dept. of Food Science
• Raj varadarajan farms , padalam & technology
• Veggibazaar.com
• Ecoville – organic produce • Tamilnadu Agri University –
• NH47 / OVG caterers Agri Business Incubation
• Banana farmers association, TN
• Pizzaguy • ICRISAT, Hyderabad
• Satguna Agro , Thanjavur
• J’s Organo store, neelangarai • Dept. of Horticulture & Agri • PSG College of Tech – Business
• Voluntary Health Services marketing, TN government school
Hospital, taramani • SMILE , Nellore • Hospiexchange
• Kalyani hospital, Mylapore • Nalamagal Trust, Dharapuram • RASA – School for Special
• Venkateshwara hospital • Future agro, calicut Children
, Nandanam • Major Collection regions • Nandini – Voice for Deprived
• Bharani hotel, Thiruvanmiyur • Around Chennai /kancheepuram • Indian Bank – Microsate II
• Picnic plaza, Mylapore • Karur, Namakkal • IFMR
• Rayar mess , Mylapore • Thanjavur • Yes Bank / Wagenegan
• SS Annamalai staff canteen • Ooty/Mettupalayam University
• Hamilton bridge area vegetable • Krishnagiri, Hosur • Microsoft
& fruit vendors association • Nellore, AP • SMS integra mobile gateway
• Thiruvanmiyur market traders • Theni/Cumbum • Silicon house hosting
association
• Samanvaya
• VAREWA
• Ichiban consulting
• ….etc
Tap a wideExnora of expertise and support
• range
Access to wide range of customer base structure to promote agribusiness
From the domestic to export houses across
economic pyramid!
As of August 2009

41. Spreading the message
Workshops, Training, Agri business entrepreneurship development
Innovations in Tie ups with Agri
agriculture retailing research and Agri eFarm office and
business incubation godown at
Talk at MOP centres Mylapore , Chennai
Vaishnava womens’s (ICRISAT)
college, Chennai
Talks in
management (centre)
schools and Setting shop - Our
institutions home became the
(IFMR , IBS) godown & store.
Field trips to villages and address Conferences and
Farmers gathering trade shows
Upgraded vending
carts , standardised
weights and
measures

42. eFarmstartup 2009 nominee
•TATA NEN Hottest
in the news
•IIM Kozhikode Whiteknight 2009 Business
Plan contest winner
•IIM Ahmedabad Leverage 2009 Showcase
shortlisted startup
•In the press
•Entrepreneur , Sep 09
•The Hindu magazine’s Ergo tabloid (Mar
2009)
•Times of India , May 2009
•NDTV News , June 2009
•Featured in leading e-zines –
yourstory.in, startups.in
•Featured in Tamil press- Kumudham
, Dinakaran
•Outlook Money , June 2009
•JADE , June 2009
•Academic
•Faculty for Food SCM course, MOP
Vaishnava college
•Key note speaker – TNAU conferences

43. IFAD & eFarm
 Training and Consulting for farmers and NGOs
 Marketing of produce
 Scale up eFarm model and replicate in other
regions
 Agri IT implementation partner (Agri
SRM/CRM/ERP/SCM/MIS)