Situation/Challenge

Smallholder farmers in Maharashtra face a myriad of challenges across the value chain, owing to the fragmented land holdings, low yields, lack of access to the right inputs, local data-driven advisory, post-harvest infrastructure, financial services, as well as weak market linkages.

Farmer collectives, especially Farmer Producer Companies (FPC) and cooperatives can play a significant role in helping farmers address these challenges through the provision of an array of services including supply of inputs, advisory on production practices and crop management, aggregation of produce, provision of storage and post-harvest infrastructure, conducting capacity building workshops, and market linkages. Maharashtra has among the highest number of registered FPCs in the country, and the number of farmer collectives has seen a sharp increase over the past few years along with a rise in membership.

However, very few FPCs are able to grow their business and achieve scale in their operations sustainably. They face several challenges across their operations which restrict their ability to adequately provide their services to farmers. These include

1. Weak governance and poor data management: FPCs can face challenges related to governance and data management, including poor decision-making and a lack of transparency. Most of the FPCs maintain their records manually and they lack visibility on their farmer members’ operations to provide them with the right inputs and advisory. This also limits their ability to predict the supply of agricultural produce for procurement and developing contracts with buyers
2. Limited access to skilled personnel: Many farmers in FPCs need more knowledge and skills in areas such as marketing and finance, which can limit their ability to effectively run and manage the company. They also face challenges in hiring and retaining full-time skilled resources to manage these operations effectively and sustainably
3. Lack of post-harvest infrastructure to maintain stringent buyer protocols: The major operation of the FPC is to aggregate the agricultural produce and identify its markets but they lack adequate storage options and follow limited checks for cleanliness, sanitation, and readiness during transportation. Buyers have stringent protocols and FPCs lack scientific quality assessment and traceability tools to adhere to these quality parameters
4. Lack of access to alternative markets: FPCs often struggle to access markets, particularly in rural areas, due to limited awareness and infrastructure. The majority of the FPCs supply their produce to the local markets and lack information on the buyer requirements and price discovery mechanisms across other markets
5. Limited access to financial products and services: FPCs often face difficulties in accessing finance due to a lack of collateral and limited credit history. This can limit their ability to invest in new technologies and expand their operations.

Solution

To address these key challenges of FPCs in adoption of DAT solution providers the SMART AgTech Integration Facility (SMART-AIF) was launched by the Government of Maharashtra in partnership with the World Bank Group and the Korea World Bank Partnership Fund (KWPF). Intellecap was assigned with the task of developing a mechanism to identify and create a long list of enterprises that could provide DAT solutions to the CBOs in Maharashtra and operationalize the SMART-AIF.

As part of the first phase of this engagement, Intellecap conducted a needs assessment exercise through an extensive set of primary interviews with Farmer Producer Companies (FPCs) and Primary Agricultural Credit Societies (PACS) in the state of Maharashtra. Intellecap also coordinated closely with the Hon. Balasaheb Thackeray Agribusiness and Rural Transformation Project (SMART) from the Government of Maharashtra for a comprehensive understanding of agriculture value chains and government priorities in the state. Using this information and the primary interviews, Intellecap identified the following key challenges faced by farmers and their collectives.

In the second phase of this engagement, Intellecap identified 6 key themes under which Disruptive Agricultural Technologies (DATs) are providing solutions to overcome the above-mentioned challenges. These included:

1. Digitization Solutions for CBOs
2. Value Chain Actor Aggregation Platforms
3. Precision Agriculture and Automation Solutions
4. Urban Food Systems and Logistics Solutions
5. Market Linkage and Traceability Solutions
6. Access to Financial Services

The SMART Agtech Integration Facility was created as a platform to identify key DAT enterprises across India through a targeted campaign. Interested DAT enterprises applied to work closely with the Government of Maharashtra and World Bank to bring their services to CBOs in the state. Intellecap conducted a rigorous evaluation process on the following factors:

i. The innovativeness and scale of the DAT solution, including the measurable impact of the enterprise since inception
ii. The relevance of the DAT solution to the six themes, how well the product or service aligns with the theme, and how well the enterprise is placed to expand its existing offerings and scope
iii. Past relevant experience of the enterprise in working with farmer organizations or government agencies within and outside Maharashtra.

For more information on the SMART Agtech Integration Facility, please visit https://smartagtech.org/.

61 eligible DAT enterprises were chosen to be a part of the SMART initiative, and the Facility assisted them in contextualizing their solutions to best meet the needs of CBOs in Maharashtra. Intellecap developed a marketplace for FPCs to interact and understand the DAT solutions in the third phase of the engagement through a Bootcamp at the prestigious KISAN Agri Show 2022, Pune. The event featured over 35 Disruptive Agriculture Technology (DAT) companies and was attended by more than 200 farmer collectives (CBOs). As a result of the Bootcamp, over 400 agreements were made to introduce digital and technical solutions to the CBOs throughout Maharashtra.

Key Learnings:

FPC directors understood the value delivered by the adoption of technologies and were optimistic and eager to adopt technologies in their operations, but needed the following support:

1. Financial support to divert their costly capital to the adoption of high-risk innovative technologies
2. Local technical support to identify best-fit solutions for their needs and provide constant technical support and guidance to ensure smooth adoption
3. Customization support of the solutions to provide services in local language and using local data for better uptake and usage
4. Access to a policy platform to build awareness and channel to redress their grievances in technology adoption.