Sowing Prosperity :
Boosting Agricultural Productivity
Team: Safal Sahyog
Arnab Biswas, Indian Institute of Technology, Kanpur (IITK)
Kevin Jose, IITK
Ritvik Srivastava, IITK
S Gautham Raj, IITK
Shashank Bhandari, IITK
Small Land Holdings :
Almost 85% of holdings in 2010-11 were small and marginal (less than 2ha) and they operated about 44% of gross cropped
Reason: Agriculture has traditionally been a major source of employment and land holding are subdivided for successive
generations between siblings.
Consequences: Small land holdings lead to reduced leverage and bargaining capacity with large players and lack of
financial assistance due to unavailability of collateral.
Productivity is adversely affected by inefficient utilization of human resource in situations where more than the required
number of people are employed.
Reason: Lack of employment opportunities, large families cultivating small pieces of land
Consequences: Leads to non-utilization of human resources and a lower income and production per capita.
Lack of Access to Financial Channels:
Small and marginal farmers face major problems in accessing formal credit which plays a major role in the final produce.
Reason: Banks and other sources of formal credit fail to provide credit easily in terms that are favorable to small farmers.
Consequence: Leads to dependence on informal sources of credit with very high interest on lending.
Challenges in Storage, Transport and Marketing:
At least 40% of all fruit and vegetables is lost in India between the grower and consumer level. Small farmers are not able to
find ready buyers in large retailers because of low volumes that they have to offer.
Reason: Lack of infrastructure as compared to the gross produce of the country.
Consequences: Widespread food scarcity and inflation in food-prices.
Other problems include lack of technological inputs and overdependence on monsoons
The Solution : A Basic Overview
“Our aim is to boost agricultural productivity using a co-
operative based model on the lines of AMUL.”
-> Our solution involves setting up of a nation-wide agricultural
cooperative, „सfal सhyog’ which primarily focuses on
supply, marketing , technology, access to channels of formal
credit and profit for the shareholders.
-> Our cooperative is different from other such prevalent
organizations because it has more than one focus points and
also is majorly concerned with developing a ‘Brand’ that
generates significant profit.
-> The cooperative would also manage post processing, storage
-> By virtue of being a profit making organization, it can
provide formal credit.
-> It will engage professionals from relevant fields full-time to
impart important scientific knowledge relevant to agricultural
production. For example, scientific advice on fertility of soil.
-> By using data on the type of crop, size of plantation, irrigation
technique and expected rainfall, we can evaluate the optimum
number of people required to work on a particular holding.
The remaining people can be advised to work on storage
facilities, processing units and in transport.
-> Give incentive to farmers to pool their resources and in turn
gain leverage for bargaining against large players.
Flow of Technological Impetus and Structure of Manpower
Provides tabulated data on how much
manpower is required based on
technological availability, cropped area
and crop type.
Manure, fertilizers, hybrid seeds, tractors on lease basis, soil testing
facilities to help identify proper fertilizers to help grow a specific
crop. Also provides advice on manhours/field using data received
Additional workforce (identified as
disguised unemployment) routed to
transportation, storage, processing
Farmers directly associated with
Transportation, deep freeze storage,
packaging, processing plant and
marketing for the local market.
Tie up with govt. based organizations like
National Seed Corporation for provision
of high quality hybrid seeds.
Provides transportation, storage for
goods going out of state
Local colleges which provide agriculture
related training provide these members
Flow of Money in the Proposed system
To other state cooperatives
Money from sale in other
states/exports and from other
For expenditure of District Cooperative
and Village Cooperative
Profit from District Cooperative
Salaries, Upkeep of Machines,
Consumables, Transport etc.
From local sales
Payment for raw produce, Transport, etc.
Money for raw goods, credit, dividends, etc.
Interest on Credit
Overheads, Transport, salaries, etc.
Raw produce (in small volumes)
Collected raw produce in large
Large volume of shelf ready products for
other states / export
Processed goods supplied to local
Export / supply to other statesState Cooperatives
Administration and Management of Various Tiers.
Comprises of an elected body of farmers who are responsible for managing crop
procurement, arranging for storage facilities, providing seeds and equipment and also for
An elected body comprises of members elected by the village cooperative. This body will
be responsible for matters related to processing of goods (thus increasing its market value)
packaging , distribution and marketing for local markets. Provision of a soil testing unit to
help identify proper fertilizers to help grow a specific crop.
It comprises of members elected by the district cooperatives as well as agricultural and
management experts who will be responsible for cooperating with other state bodies and
marketing „सfal सhyog’ as a national brand. This body will also be responsible for
distribution of the dividends down to the lower tiers which will be further distributed to the
Solves the problem of microfinance
In modern day scenario of India most of the money that farmers borrow comes
directly from the unorganised sector. Now this has it‟s own fair share of
demerits , the rate of interest is exorbitantly high which results in the
exploitation of small scale farmers. In our model the farmer is the integral part
of the system. To present it more directly our system is “of the farmers, by the
farmers and for the farmers”. The cooperative is a ready source of credit for the
farmers . The village cooperative is in itself a self sustainable unit .
Liquidity of funds
Since all the state cooperatives are connected this will lead to easier flow funds
from area of produce to the area of demand .
Advantages of this system over the existing system
Successfully solves the problem of disguised unemployment
The advisory panel in the State cooperative passes on the recommended man-
hours for a particular field and individuals who are not required at the field can
find employment at the District Cooperative in processing, packaging, etc. Hence
per person productivity can be increased
Solving the problem of lack of technological impetus
The village cooperatives will provide agricultural implements to the farmers on
a lease basis. Thus, they will have access to technological impetus.
Elimination of middlemen
Our proposed cooperative model will do away with the burden of approaching
middlemen who drive down the price that the farmers receive. In our system,
the farmer receives the benefit of the value addition that takes place to his
produce at a later stage
Saving of cost and travel time
On an average a small farmer spends most of his time in selling his produce at
the local mandi . With the introduction of this model , it will save his cost and
travel time and he can focus on farming alone or other resource generation
Implementation : Initial Expenditure and Funding
Initial Expenditure is required for:
-> Setting up warehouses for storage.
-> Setting up transportation facilities.
-> Buying agricultural implements for the cooperatives.
-> Recruiting professionals – Scientific Advisers, Management Experts and Advertising Executives.
-> Since it is initially floated as a government company, the initial funding will be sourced from both
Central and State Governments in pre-decided ratios.
-> Once the entity starts turning profit, government ownership will be phased out in favor of shares for
the farmers. This serves our major purpose of putting the company in the hand of the farmers while
significantly reducing financial risk. The profit made by the company shall reach the farmers in the form of
dividends on their shares.
-> A small entry or registry fee shall be charged on joining to cover registration costs and to get a decent
amount of liquid cash to start the venture.
Challenges and Risks
Large Initial Investment : A nation-wide program of this scale would require a large
amount of seed fund to get started and may be one of the major challenges our model.
Scarcity of Technological and Scientific Professionals: To extend better technology and
inculcate better farming practices at the grassroot level, there is a need for a significant
number of scientific advisers.
Variation in usability with Seasons: Due to the seasonal nature of agriculture, there may
arise a cycle of varying high and low traffic during and after time of harvesting. There
is a challenge to ensure that the infrastructure is fully utilized.
Unwillingness of the farmers: Initially the farmers may be unwilling or hesitant to join
cooperative due to lack of apparent incentive.
Restructuring existing government framework: Slight restructuring of the existing
government framework may be required.
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