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M&M pushes the envelope seeking new farm solutions

Murali Gopalan | Updated on July 11, 2019 Published on July 11, 2019

Rajesh Jejurikar, President (Farm Equipment Sector), Mahindra & Mahindra   -  --

Company invests in global startups to help sharpen its focus on small landholdings

The Gamaya website tells you that this four-year start-up based in Switzerland ‘addresses the need to increase efficiency and sustainability of large industrial farming, as well as the productivity and scalability of small-holder farming’.

This is done by deploying the ‘world’s most advanced solution’ for mapping and diagnostics of farmland. It is in this Swiss company that Mahindra & Mahindra acquired a 11.25 per cent stake a month ago. What was the reasoning behind this move? There is a lot of background to it as Rajesh Jejurikar, President (Farm Equipment Sector) of M&M, reveals.

The Gamaya story is part of the transformational journey that the Indian tractor maker kicked off nearly four years ago. The objective then was to try and make a difference in the way farming was done. Till that point in time, M&M was in a happy space as the market leader in tractors.

Yet, its top management was aware that “the size of the pond outside” was huge in terms of the global machinery place. This is what spurred the move to acquire companies and create big footprints in Japan, Finland and Turkey.

“Now let me add on a couple of layers to that. One, as we look at globalising, there is a sharper understanding of who our customer should be. And that is the small landholding farmer who we want to target in India and globally,” explains Jejurikar.

Holistic farming solutions

M&M, he says, is keen on bringing to this community the technologies that are otherwise deployed on larger farms. “So, when you think about wanting to do this, in a way you are transforming yourself across the spectrum saying I am a specialised tractor player and want to move from here to being a more holistic mechanisation solution,” elaborates Jejurikar.

This is where the tractor-plus-other machinery piece comes into play in checking if the company can move the business to go beyond machines and influencing outcomes. For instance, how it can impact productivity, cost or yields of farmers in a more definitive way at a global level in its priority markets.

These include Turkey, North America, Mexico, Brazil, Africa and South Asia which fit in with what M&M is looking for in terms of small landholding farmers. Essentially, this is also how it strives to be different from other manufacturers. “This is the background with which I am connecting Gamaya and the whole aspect of precision farming as we call it,” says Jejurikar. This involves capturing images of soil and crop on farms using a combination of hyper spectra cameras, satellite images or drones. The data gathered creates algorithms that can start predicting crop infestation and the like.

“Or you could be doing some work on soil and what are the nutrient levels in different parts of your land, what is going to need fertilisation and what is not,” says Jejurikar. Basically, this boils down to creating maps of crop or/and soil data which can help improve output or bring down costs by preventing losses.

Alternatively, the use of crop care or other chemicals in the soil can be optimised by letting it go where it is needed and not overdoing it. “Overdoing is not only cost but it is also bad for the soil. So, when you look at the whole ecosystem, how are you going to create these solutions which are different for different crops? Every crop type that you pick needs a different approach,” says Jejurikar.

Prior to Gamaya, M&M had invested in a Canadian company, Resson Aerospace, for similar objectives. “Think of these as technology innovation centres where you are making small investments with small equity. They allow you to build a technology skill set in the process,” he explains.

In a way, this is akin to the concept of open source innovation where the idea is to use the ecosystem of technological capability to help a company achieve its business objective. This, according to Jejurikar, is a far better option than doing it in-house which is “never going to be easy” in addition to the fact that “you are never going to be able to hire that kind of talent”.

The better way forward is to work with a global start-up ecosystem which is doing cutting edge work and then use that “to adapt to what is the outcome that we want”. In the case of M&M, this essentially means making these technologies relevant to small landholdings by ensuring that they are both affordable and accessible.

“It is a long-term play and will not give you anything tomorrow. It is all part of the process of building capabilities,” says Jejurikar. This vision fits in with M&M’s concept of ‘Farming as a Service’ or FaaS.

Here, the endeavour is to influence outcomes of farmers in India by going beyond selling tractors/mechanisation to helping out with the crop type or soil in a hyperlocal situation. Just to put this in context, sugarcane in Uttar Pradesh is different from Maharashtra as also paddy.

“Hence, it is just not about selling tractors but what else can be done to help farmers maximise (productivity),” says Jejurikar. This is where FaaS comes into play with different options to create specific solutions for India’s vast landscape.

Obviously, it is still too early for a company like M&M to influence “every crop in every part” of the country but at least the journey has begun in right earnest. In a way, says Jejurikar, it is a combination of digitisation and on-ground presence that need to come together to make this work.

By the end of the day, everything is happening on that plot of land accompanied by the inherent risks that go with the story. “It is a very hyperlocal solution that is being offered to the farmer. That map is for his soil/land and the factors that influence it,” he says.

From M&M’s point of view, investing in a company like Gamaya helps because it is already working with a host of global customers. Back home in India, M&M has already got some of its own solutions in place for small landholding farmers.

Beyond India, the company is also looking at Turkey, where it has built a significant presence on ground, as well as Brazil “to think around these solutions”. How about the ASEAN region? Jejurikar says this may not work since it needs to link with the overall strategy.

For instance, it will not be easy doing something like this in Thailand since M&M does not have a presence here. The key is to to connect this strategy with the rest of the overall business strategy. “So, going into a market for this will not give you scale and you need the on-ground presence,” he explains.

Turkey is a different ballgame and a much easier option in contrast, given that M&M has in its kitty the No 3 tractor brand in the country, Erkunt, as well as an agri machinery business through Hisarlar. “We can leverage both and we have the distribution network in place to contemplate a value-addition,’ says Jejurikar.

During the last three years, M&M has made some significant acquisitions in Japan (Mitsubishi Agricultural Machinery), Finland (Sampo Rosenlew) and Turkey (Hisarlar). The three streams of product portfolio that have been created as a result represent individual centres of excellence.

Innovative approach

“We are very happy with our progress on building our technology skills,” says Jejurikar. Work is underway on building “a very large” product portfolio of farm machinery products from Hisarlar, some of which will come to India. Likewise, there is a lot happening on developing a harvester product portfolio.

The strategy is clearly focussed on the word where the different beachheads in Japan, Turkey and Finland will meet the needs of a host of markets. There is also a lot of learning taking place within the Indian teams on cultural sensitivity in dealing with Turkey, Japan, the US and so on.

At one point in time, M&M was exploring the option of re-entering China but that plan has now been put on hold. “We said we would evaluate China but do not have a viable business case to enter the market,” says Jejurikar. For now, the company has its hands full with the Americas, Turkey, Japan, East Europe, Africa, South Asia and so on. The constant push for new ideas in farming stems from the fact that food needs to be available in the decades ahead. Most of the population explosion that happened in the last 20-30 years managed to satiate their requirements by increasing cultivable land. On the other hand, food needs over the next 20-30 years will become more challenging as there is not enough arable land available.

“Many of these things are critical to increase productivity and food availability. If you estimate food requirement, it will have to come out of productivity,” says Jejurikar. Water, of course, is the next big thing and, eventually, conservation will be mankind’s top priority going forward.

Published on July 11, 2019
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