In an attempt to make hydroponic farming attractive to those interested in farming, Barton Breeze, a Gurugram-based agritech firm, has come up with an assured return plan with a bank guarantee.
“A prospective investor will be able to get an assured annual return of 30 per cent on his capital expenditure. We would operate the farm for them and sell the produce for them. If there is a shortfall in this return, the deficit would be paid by banks with whom we have entered into an agreement,” said Shivendra Singh, Founder and CEO of the commercial hydroponic farming venture, which set up shop in India in 2017 after a successful run in West Asia.
Singh said the firm has already tied up with the State Bank of India and HDFC Bank for the bank guarantee scheme. Explaining the model further, Singh said not only progressive farmers, but HNIs and corporates would be able to reap benefit from this scheme.
“Hydroponic has several benefits for commercial farms. However, many customers are not completely aware of the environmental and financial contribution of it that makes them skeptical of investing in a hydroponic set-up. Our approach of providing a bank guarantee to B2B customers ensures a risk-free transaction. With this strategic step, we look forward to strengthening our relationship with customers,” said Singh.
“This a bit similar to contract farming, except that in this case we take care of everything, including running of the farm. Unlike in a contract farming where the farmer is having the liability and responsibility of growing the crop, we ensure that the crop is grown properly by being present at the farm on a continuous basis,” Singh told BusinessLine.
According to him, the capital expenditure involved in setting a one-acre hydroponic farm is around ₹1.1 crore, and with the government subsidies this comes further down to around ₹85 lakh.
To make this attractive for urban dwellers interested in investing in farming, Barton Breeze plans to make it possible to invest as little as ₹5 lakh. He said a bunch of people can together and start a hydroponic farm, which his firm can help set up. There is no need to purchase the land as it can be taken on long lease, say, of 10 to 12 years. “We will ensure that they would get 30 per cent or more returns on the investment annually,” said Singh. The bank guarantee will be available to the investors for three years initially, but this can be further renewed.
He said already a few farms are being planned in Delhi-NCR, Kolkata and Indore in Madhya Pradesh under the bank guarantee scheme.
Singh said his young company has been growing exponentially in the last few years. Starting from a low base, the firm grew by eight times in 2017, six times each in two subsequent years. “Even in 2020, which was hit by Covid-19, we grew by 300 per cent,” he claimed.
Barton Breeze, which introduced hydroponic kits that can be used by city dwellers to grow vegetables in their terraces and balconies in the country a couple of years ago, normally grows off-season vegetables and greens to fetch better price for their farmer customers.