All a farmer needs is a well-maintained storage facility, fair selling prices, and a diverse network of buyers. Arya.ag, a leading Agri-tech company in India has been providing these facilities to farmers for the past 11 years. With visibility across 11,000 commodity storage points nationwide, this agri-tech company serves a diverse clientele comprising farmers, farmer-producer organizations (FPOs), financial institutions, SME agri-processors, commodity traders, and corporate agribusinesses.
In an interview with Krishi Jagran, the co-founders of Arya.ag, Prasanna Rao and Anand Chandra discussed how their platform safeguards farmers' profits and ensures quality delivery to buyers.
Edited excerpts from the interview:
How did you come up with Arya.ag?
We worked in the banking sector with big corporates which helped us gain experience and credibility. We used to sanction loans to large farmers, however, we always wanted to do something for marginal and small farmers who find it difficult to get loans, and even sell their produce at much lower prices. Hence, Arya.ag came into being to enable farmers to sell their produce at reasonable prices.
What if a farmer fails to repay the loan?
The probability of default is almost negligible in our business model. A farmer gets a loan on the produce which is stored in our warehouses. We give a loan which is equivalent to the 70% of the value of the produce. So invariably, the farmer will never default even if the loan outstanding that one must repay is either more or less than the value of the produce.
Is the price on which farmers sell their produce at par with the minimum support price (MSP)?
We have a system where farmers get the right price for their produce. MSP does not differentiate between different varieties of produce. We have segregated these varieties, according to which the platform ensures complete visibility of the produce and prices, attracting the right buyers.
Why differentiating the varieties is important?
For example, there is a particular variety of rice, which is otherwise sold by farmers at the MSP. If that variety is taken to the right buyers who are willing to pay a higher price, farmers can profit more.
Does opening the agriculture market space in the private domain affect the supply in local mandis?
Private market space gives farmers a variety of customers, who are willing to pay the best price. More number of buyers automatically accelerate demand, helping farmers to have a better command over prices. Anyway, when a farmer sells the produce to a mandi, it does not stop traders from selling it to somebody outside. The market adjusts itself, keeping in mind the local demand and supply. It is a fallacy to say that if you allow competition, supply in the local market will be affected.
How is your platform different from eNAM?
We are not a competition to eNAM. We collaborate with eNAM to facilitate commerce and loans to farmers. So, the idea is that all the initiatives need to be looked at together. eNAM is a government platform that has a different set of challenges. We being a private entity have more flexibility but all of this works together to make it successful.
Do you have any foreign buyers?
We have a few buyers abroad. But we always look forward to connecting the domestic supply to domestic demand and creating transparency around them, which would solve larger issues in the country.
