On-demand services taking roots in farm sector

The concept of ‘On Demand’, a largely urban phenomenon, seems to have made an entry into the rural milieu, especially in farm-related activities.

A land owner or a farmer does not need to own a pair of bullocks or a tractor, nor the expensive range of implements to plough his field or carry out various farming operations such as sowing or harvesting. One can order the service required by dialling a call centre or through a smartphone app.

The Coimbatore-based Surya Power Magic, a solar pump manufacturer, has started offering on-demand farm services through an online platform Gold Farm in two districts of Karnataka.

Farmers in villages around Kolar and Gadag have begun availing themselves of outsourced services such as ploughing land or sowing seeds over the past couple of months.

That’s what precisely Prakash, a small farmer did recently in Vemgal in Kolar, when he wanted to uproot the existing drumstick plantation to plant maize. “I ordered a service for removing the roots of the chopped drumstick plants and levelling the land by dialling the call centre. The work was done in a couple of hours and it was cheaper by about 30 per cent as I was charged on an hourly basis,” Prakash added.

Similarly, Bhaskar, a large farmer of Yanadahalli village on the Bengaluru-Chennai highway, near Kolar, was happy with the ploughing service that he had ordered. “I had heard about the outsourced services in our village and wanted to try it out. It is cheaper than the prevailing services offered by a local provider,” he adds.

Gold Farm aims to replicate the concept of on-demand – what cab aggregators like Uber and Ola have done in the urban mobility space – to farm mechanisation.

“We branched out into farm services sector through Gold Farm in an attempt to reach out to a significantly large customer base of farmers,” says Abhilash Tirupathy, co-founder, Surya Power Magic, on the rationale for the solar pump maker’s diversification.

Surya Power, which has enabled over 750 irrigation pump owners to harness solar power, is the second such venture for Tirupathy, a dentist and who had earlier floated a start-up Health Care Magic. For Tirupathy’s partner Karthik Ravindranath too, Surya Power is the second start-up venture.

“We think that mechanisation is going to be the next big thing in agriculture,” Thirupathy adds. As the farm sector suffers from shortage of labour and rising wages, start-ups like Gold Farm see a good demand for outsourced services; it competes with the likes Trringo, a subsidiary of Mahindra & Mahindra.

Gold Farm’s business model entails partnering with a local entrepreneur, who can invest in tractors and other implements and set up shop at the village level. “We will help the partner with demand generation through the app, call centre and through booking agents in the villages,” says Ravindranath. The pay back time for the local entrepreneur/investor is around two years. The investor can get a subsidy of up to 75 per cent on the investments made, mainly in Karnataka, where the State government offers subsidy to boost farm mechanisation.

Gold Farm has equipment hiring centres in 11 villages in Kolar and six in Gadag and has enlisted some 500 booking agents in these districts. Using the Gold Farm app or by dialling the call centre, farmers in the vicinity of up to 30 km of these centres can book the tractor service and the equipment.

Gold Farm offers a range of implements such as rotavators, disc harrows, rotary tillers and MB ploughs. The services are charged on an hourly basis, based on the tariff fixed by a local panel that includes a government representative, mainly the District Agriculture Department officials.

The asset light Gold Farm is leveraging IOT and mobile space for demand generation, keeping a tab on the location of the equipment in operation, the fuel consumed and even to issue a receipt to the farmer. Gold Farm gets a percentage of the revenues generated by the local centre. The platform is targeting ₹50 lakh as revenue in the first year of operations.

“The outsourced farm mechanisation services market is highly fragmented and we expect to bring in transparency through the billing and ensure that there is an equipment to service the farmer, whenever required,” Tirupathy says. The company will look at the aggregator model and will attach tractors and farm equipment of individual farmers. “Through this we also aim to provide an option for the owners of these equipment to make some money,” says Tirupathy. Tariffs for the aggregator model are market driven and slightly on the higher side when compared to the subsidised charges.

Labour shortage and rising costs have led to mechanisation even as average farm holdings dwindle. Factors such as drudgery associated with farm labour and waning interest among the younger generation in agriculture due to unremunerative returns are aiding the process of consolidation of land holdings, which makes mechanisation inevitable.

This will benefit start-ups like Gold Farm, where companies such as Infuse Ventures, Kshatriya Ventures and Waaree have invested about $0.5 million. “We recently closed a bridge funding of $1.5 million, which we expect to utilise for our expansion plans,” Thirupathy said.

After stabilising operations in Karnataka, Gold Farm looks to expand to Andhra Pradesh and Madhya Pradesh.

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