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Single window system

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    Single window system Single window system Document Transcript

    • ‘Single Window System for all Agri-Inputs’ P.Gopala Krishna, Sr.Vice President – Retail SBU, M. Sireesha, Deputy Manager-Marketing MIS, Coromandel International Limited, Secunderabad.Abstract‘Single window System’ gained popularity in rural India in the beginning ofthe new millennium. Agri-Input companies, with strong brand name in ruralareas have seen emerging opportunities with the changing aspirations of therural consumers. In addition to making available the agri-Inputs directly tothe farmers without any intermediaries, they also ventured into severalservices which are needed by the farmers. New technology disseminationand improving profitability of agriculture can be well achieved through thismethod of single window system for all agri-Inputs and services.Problems of Agriculture and farmers in IndiaAgriculture is the backbone of the Indian economy. Though the share ofAgriculture in GDP has reduced from 46% in 1950 to 16% in 2009-10,country’s population engaged in agriculture between 1980-81 and 2006-07showed only a reduction from 60.5% to 52%. On the other hand averagesize of farm holdings reduced from 2.58 ha in 1981 to 1.57 ha in 2006-07.Small and marginal farmers have limited resources especially in rain-fedregions resulting in low productivity. About 54% of net cultivated area inIndia is rainfed. Indian agriculture is heavily dependent on seasonalmonsoon and has regional diversities in soil, rainfall distribution,temperature and cropping systems.Food grain production increased from 130 million tonnes in 1980 to 230million tonnes in 2009-10, which is the direct result of ‘Green Revolution’during which period high yielding varieties were introduced which requiredhigh doses of agri inputs and improved management practices in the areasof irrigation, farm mechanization and post harvest technology. In spite of theincreased production as a result of ‘Green revolution’ per hectareproductivity of the crops in India is lower than the world average (Table 1). 1
    • Table 1: Global Ranking of India in Farm Production and ProductivityThis backwardness in productivity is due to the various factors like Unavailability of required authentic seed variety during the peak season and lack of knowledge on the cultivation methods to be adopted as required by the seed variety. Improper knowledge on the right dosage for nutrients (Primary, Secondary and Micronutrients) required for a particular soil type and crop. This results in application of high dosages of primary nutrients leading to imbalance in secondary and micronutrients in the soils Misleading information from myriad sources about the right pesticide to use, quality and application methods . Shift in the mindset of agricultural laborers, resulting in converting to tenant farmers and their children not interested in labor work. This led to shortage in labor during the peak season and increase of labor cost. Non utilization of irrigation techniques to minimize water losses and water conservation which is due to habit or lack of knowledge or resources to acquire the same Farmers to this day use traditional implements for farming due to high investment required in farm machinery. Poor tillage methods lead to low productivity. Heavy post harvest losses due to insufficient transportation and storage facilities. On the economic front lack of latest information on the prices of their produce and less accessibility for right markets resulting in less profits to the farmers.Rural farming initiatives by Indian corporateIn the wake of various problems surrounding the Indian farmer from thetime he starts sowing the seed to markets the produce, Indian corporate 2
    • have done their share to solve the problems to a certain extent. Companieslike ITC and Pepsico ventured into vertical integration.ITCs ‘e-choupal’ leveraged information technology to reduce the company’ssupply chain cost for procuring the raw material for its products. ITCbypassed the intermediaries to come in direct contact with the farmers.Intermediaries blocked market information regarding prevailing prices andthus increased the transaction cost to the farmers resulting in ITC payingmore for the raw material. ‘e-Choupal’ initiative involved farmers(sanchalak) in Information and knowledge dissemination through internetkiosks which display real-time data on market price prevailing in the Mandisacross States, information on weather and knowledge bank of best scientificpractices. ITC aggregated both buyers and sellers by creating a commodityexchange which disassociated intermediaries and made chain morecompetitive. Sanchalaks also retailed agri-inputs as well as other productsand services through e–choupals.Pepsico on the other hand involved the farmer as a partner in its contractfarming model to obtain its desired raw material. Pepsi collaborated withPunjab Agricultural University which provided knowledge of horticulture.Punjab agro Industries Corporation provided the extension support andPepsiCo utilized its international research experience, marketing andcommercial skills. Extension personnel were farmers themselves, whocontact their peers farmers to disseminate knowledge and monitor cropsfrom nursery to procurement. Farmers find help in terms of landpreparation, crop monitoring during growing period, harvesting,transportation and logistics.ITC and Pepsico focused on the providing information and disseminatingknowledge of various farm practices to a selected section of farmers. Thissuccessful initiative opened doors of opportunities to corporates who want toenter the rural market which was emerging as a hub for rural retailing.Rural retail as a tool for single window systemRural market underwent a rapid change in the back drop of the enhancedpurchasing power of rural consumers, the changing consumption pattern andincreasing overall value of consumption of goods and services. Informationdissemination in rural areas was instantaneous due to spread of cell phones,internet kiosks and satellite TVs. Young generation is well educated and is 3
    • aspiring for urban amenities and looking at business as means of earning.Rural women are educated, outgoing and demanding.Rural markets showed tremendous growth over the years in life styleproducts like FMCG, small appliances, home furnishing, apparels, footwear,and telecom. Organized retail industry had Clothing, Textiles & fashionaccessories as the highest contributor (39%), Food and Grocery contributedto 18% whereas Pharma had a contribution of 2%. Organized retailers likeMore, Heritage Foods, Reliance Fresh, Spencer’s Daily Format, Wah Magna,and Subhiksha were already present in rural areas. However, they weretrying to build a connect with the rural population, which the traditional Agri-Inputs companies already have to their credit. Moreover the Agri-inputmarket size in rural India was huge which can’t be ignored. Thus emergedthe concept of providing Agri-inputs under a single roof – which was initiatedby Mahindra and Tata.Pioneers for single window systemTata Kisan Kendras, a venture by Tata Chemicals Limited offered end-to-endsolutions to the farmers. Service offerings included Agro Input supplies,Farm equipment leasing, Agronomy services, Training and information,farmers club, crop insurance and credit facilities.Mahindra Shubhlabh, a Mahindra subsidiary provided total farm solution tothe Indian farmers. There were two aspects to the business, one was thecommodity trading and second one was to provide one stop shop to thefarmers for all his needs. Viswas and Mrighshira are other ventures whichprovided complete Agri-solutions to the farmers.Corporates like ITCs-Choupal sagar, Godrej Aadhar and Haryali Kisan Bazaar(HKB) went a step further and added the needs of the rural household intotheir rural retailing format in addition to the providing Agri-Inputs andservices in order to make the agri-ventures a viable business model.Coromandel experience – Mana Gromor Centers in A.P.Rural retailing was started by Coromandel International Limited (formerlyCoromandel Fertilizers Limited) in Andhra Pradesh in the brand name of‘Mana Gromor’ with the idea of establishing direct relationship with ruralcustomers. Two Mana Gromor centers (MGC) were started in the year 2006- 4
    • 07, increased to 20 in 2007-08. Presently more than 425 MGCs are spreadacross Andhra Pradesh.Mana Gromor centers are located at Mandal HQ (Mandal is a revenue unit inAndhra Pradesh, which is 1/50th of a district). Each MGC has an averagearea of 2500 sq.ft. Catchment area of each MGC is 30-40 villages havingabout 5,000 farm families.Two Field Sales Associates (FSAs) cover the catchment villages daily,thereby maintaining continuous interaction and relation. Product range inMGCs include agri-inputs like Fertilisers, Pesticides, Secondary andMicronutrients, Seed, Sprayers, Veterinary feed, Farm mechanizationservices. The Tie ups have been made with companies like RCF, MCF,KHRIBHCO, Zuari, Bayer, Syngenta, DuPont, Monsanto, Nuziveedu, Pioneer,Raasi etc for the supply of entire range of agri-inputs.Each of these Mana Gromor centers provides services in addition to theproducts. Services offered at MGCs include1. Soil testing for 5 nutrients (NPKS&Zn) - Soil testing is the foremostimportant tool for the farmer to know about the fertility status anddeficiency of nutrients of their field. Coromandel operates 22 stationary soiltest labs in Andhra Pradesh. All the labs are located at 22 different locationsspread throughout the state for easy access to the farmers.Major Nutrients like Nitrogen, Phosphorus, Potassium and secondary nutrientSulphur is analyzed in all the 21 labs located in Managromor retail centers.All major and micronutrients are analyzed in Vishakapatnam Factory lab.Leaf analysis is also done in Vizag lab. All soil testing services are done freeof cost for the farmers starting from collection of samples, analysis,generating recommendations using customized software and handing overthe soil test result report to the farmer at his doorstep.All equipments, chemicals and procedures adopted/practiced in the soil testlabs are as per the recommended technical guidelines. Spectrophotometerfor Phosphorus, Flame Photometer for Potassium, Nephlometer for Sulphurand Atomic Absorption Spectrophotometer (AAS) for all micronutrients isbeing used to give the best service to farmers. 5
    • Soil Testing in Progress at Coromandel MGC labsApart from testing soils in the labs coromandel extension team is involved infield testing (qualitative) of soil for Organic Carbon and Sulphur. Trainedpersonnel with field kits do the testing in the farmers field and results areinstantly given to the farmers.Coromandel operates three soil test labs apart from the above 22 labs using‘Alternate Analytical Technology’ for soil testing. This technology isdeveloped after three year intensive research by Shri AMM MurugappaChettiar Research Centre (MCRC) and IIT, Chennai. The project is promotedby Department of Science and Technology, Govt of India and by MurugappaGroup. The technology works on chromatogram technique and is costeffective. Using this technology all soil macro and micro nutrients can betested in the lab at low cost and results can be given the next day tofarmers. But this testing method is yet to be fully established.2. Crop diagnosis visits - FSAs visit 2-3 villages everyday and make fieldvisits to diagnose any symptoms of pests and diseases and recommendrequired control measures. FSAs are thoroughly trained through a dedicatedtraining team and Hello Gromor personnel. Field Visits and technical advice to the farmers 6
    • 3. Technical help and training at the MGCs – Every Mana Gromor Centerhas a farmer training room of about 100-200 sft. Regular trainingprogrammes are held in the MGC as well as in villages to keep the farmersupdate about the latest trends in agriculture. A bi-monthly technicalNewsletter which gives details about seasonal agricultural practices andrecommendations, specific nutrient schedules and pest managementsolutions is circulated among the farmers. MGCs are also equipped with aminiature agricultural library as well as ‘interactive Kiosks’ which giveproblem specific solutions to the farmers. In-store Farmer Training Programmes4. Resolution of farmer’s queries through Hello Gromor – It is a TollFree information services center with 365 days of operation which resolvesqueries with the help of technically sound graduates. Hello Gromordisseminates Agriculture related information to the farmers in order toreduce technology gaps between Lab to field. It also resolves the queriesand complaints of farmers with respect to farming. Special calls are alsomade to MGC farmers to provide Technical advice during season, andprovide online information to farmers on weather, commodity prices tocustomers pertaining to specific market and crop. 7
    • Hello Gromor – Farmer Interaction center7. Veterinary Care -Cattle need to be reared in a more professional way toincrease the income to the farmers by increasing the milk productivity.Recognizing this, MGCs have conducted dedicated Veterinary camps incollaboration with local Veterinary doctors. Camps enabled the farmers tounderstand the need for balanced nutrition and quality feed to their cattle. Veterinary Camp in progress6. Farm Mechanization Services- Recognizing the difficulties faced by thefarmers to hire labor during the peak crop season like – Paddytransplantation and harvesting, Coromandel introduced ‘Farm MechanizationServices’ on pilot basis. Coromandel operates its own tractors, rotovatorsand Transplanters to do ploughing, puddling toi raise the nursery andtransplant in the farmer’s fields. This has given good response as it tacklesthe existing problem. 8
    • Paddy seeder used in nursery and Transplanter used in the main fieldServices provided by the MGCs are coordinated with the products offered tothe farmers. This gives the farmers advantage to understand the right usageof the product at the right time in right dosage.Advantages of ‘Single window system’Single window system has its own advantages to the farmer as well thecorporate involved in it. Assurance of quality of Agri-inputs to the farmers as they are supplied directly from the manufacturer. Encourage direct dealings with farmers and remove intermediaries in the supply chain, which ensures authenticity of the product. Farm level field trials based recommendations gives credibility at farm level. Understanding of the farmers expectations gives corporate ideas to develop methods to improve yield and crop selection. With investments in upgrading technology and agricultural practices in the entire value chain, including production, storage and logistics, will give higher productivity to the soils and profits to the farmers.Obstacles faced in ‘Single window system’In addition to the advantages ‘Single Window System’ has its own share ofproblems. Some of them are listed below Lack of supply chain integration as various Agri-Inputs like fertilizers, Pesticides, Seeds etc which have different logistic requirements are handled simultaneously. Resistance from intermediaries of Agri-inputs as they feel that their margins may shrink. 9
    • The initial investment involved in set up of the system is very high and profitability takes longer period. Managing huge manpower which is spread in remote villages is mammoth task. Connectivity of network of stores is huge task as they are located in remote areas.ConclusionIn spite of the problems involved in maintaining a single window system, themodel appears to have gained the credibility of the farmers as it tries tofulfill the three basic needs of the new age farmers – new technology,education on new technology at the farm level and availability of all inputsand services at one place. Fulfilling these three basic needs of the farmerswill encourage them to engage in productive and profitable agriculture andin the long run the private investment levels in agriculture will increase. 10