Agri -Tech E- commerce based startups role in enhancing the farmers income in Karnataka (India)

Introduction

As India's ambition to become advanced economy (Viksit Bharat) vision with GDP expanding from $3.4 trillion to $30 trillion by 2047, the centenary of India's independence. The goal encompasses economic growth, innovation and technology, social progress and environmental sustainability in all the sectors. Where agriculture is India's important sector contributing to India's GDP of about 15% in FY23, that has shrunk over time from 35% in 1990-91. Even though it is not a minimal number to neglect for a country like India where 47% of the total population (Economic Survey 2022-23) is dependent on agriculture for livelihood where increasing the farmers per capita income is important for prosperous India. According to FAO, the potential of different emerging technologies (AI, big data, satellite technologies, drone technology, IoT, GIS, GPS, remote sensing, cloud computing etc. needs to be leveraged for solving the existing challenges faced by the agriculture sector. Where startups play an important role in promoting such innovations and technology, they have come to the aid of stressed farmers and answering to the problems of Indian agriculture. The startups have also moved a step forward and now have connected the farmers both backward and forward linkages and solving all the problems existing in the sector with their innovations. E-commerce Agri-tech startups are an agri-marketing platform that connects farmers to business, solving one of the toughest supply chain problems through technology. It connects vegetables and fruits farmers directly with businesses. At one end, helps farmers get better prices and deal with consistent demand and on another end, it helps retailers/customers to source fresh vegetables at competitive prices directly from farmers. Agri-tech startup does this effectively at lower cost, better speed and large scale using integrated supply chain powered by technology, data science, infrastructure, logistics and cold storage facilities. Agri-tech startup's supply chain operation involves the following major stages: Forecasting, Pricing, Farmer Harvesting, Collection Centers, Fulfillment centers, Delivery to Retailer/Customers/Processing unit. Agri-tech startup's supply chain process starts with weekly forecasting; where the sales team publishes the customers growth plans for the week. Analytics combine growth plan with historic demand data and market conditions to prepare the weekly sales and procurement forecast at SKU (Stockkeeping Unit) level. The forecasting is crucial stage for them as it helps them in purchase planning to reduce wastage and it also helps in planning the supply chain in much more efficient way. Once the forecast is done, the next step involves the procurement team which goes on to give weekly indent to the farmers based on the existing farmer harvest calendar. Two days before the actual delivery date based on the existing market condition such as availability and price fluctuations, the procurement forecast gets revised once again. After it's revised, the procurement team again goes on to re-issue indent to the farmers to reconfirm it once again. The next step involves setting prices where product prices are collected from various markets, a www.extensionjournal.com day before the delivery date. This price information is then used to set the purchase and selling price simultaneously to avoid price risks. Based on the indent, the farmer harvests the produce, grades as per startups quality standards and brings it to the nearby collection center. Once the product arrives at collection centers, the items are checked for quality, then weighed and transferred to crates in front of the farmer to ensure transparency. The farmer gets a receipt immediately and the money is transferred to his bank account in 24 hours. The items are then batched and loaded into trucks enabled with real time tracking. Items from multiple collection centers arrive at fulfillment centers and are moved into inventory. Items are batched according to distribution center wise and as per the customer demand using queuing technology and this ensures huge volumes are processed without any error. Items are picked and packed as per customer orders. Mini trucks arrive at distribution centers early morning and items are loaded route wise into the vehicle. Mobile phones are issued to drivers/ gig workers/delivery boy to manage the deliveries. On the way back, the driver collects empty crates and cash from the customers and deposits the same to the distribution centers and thus completing the supply chain. If procurements exceed the demands, then that excess procurement is sent to the 5K (Storage capacity) mega cold storages. Hence, keeping these facts in view, an attempt has been made to assess the Role of Agri-tech (E-Commerce based) Startups in enhancing the Farmers Income in Karnataka. The broad objectives are hereunder: 1. To find out the role of start-ups in uplifting the farmer's income in terms of producer's share in consumer's rupee of the major horticultural crops. 2. To spot out the impediments faced by farmers in using e-commerce in agriculture.

Methodology

Bengaluru district of Karnataka was purposively selected as a study area considering that the concentration of agri-tech startups was highest in this state especially in the metropolitan city of Bengaluru of about 27%. Many agritech startups have its headquarters at Bengaluru though it operates all over the country, hence it is called the hub of agri-tech startups and IT sector. For the purpose of study 60 farmers were selected from those who are using agri-tech startups to sell their produce. Primary data was collected personally by interviewing each respondent through pretested schedules. The schedule was prepared according to the needs of the study and pretesting of the same was done before interviewing. Secondary data were also collected from Ministry of Agriculture and farmers welfare, NASSCOM, Department of Commerce and Industries, Government of Karnataka regarding agri-tech startups. For analysis of collected data following tools were applied to work out the role of startups in uplifting the farmers income in terms of producer's share in consumer's rupee of the major horticultural crops. To estimate the producer's share in consumer's rupee from agri-tech startups through identifying the marketing channels involved, various marketing costs, marketing margins involved from producers to consumers for that. Marketing costs were worked out by using the formula.

C=C f +C m1 +C m2 +……..+C mn Where, C = Total marketing cost of the commodity C f = Cost paid by the producer from the time the producer leaves the farm till he/she sells it. C mn = Cost incurred by middlemen in the process of buying and selling the commodity. Marketing Margins Marketing margins represent the difference between total payments (costs+ purchase price) and receipts (sale price) of the middlemen (nth agency). The marketing margins of the nth middlemen will be worked out by using below mentioned formula.

MT=

Where, MT = Total marketing margin S i = Sale value of a product paid by i th firm P i = Purchase value of the product paid by i th firm Q i = Quantity of the product handled by i th firm Price Spread is the difference between price paid by the consumer and the price received by the farmer for an equivalent quantity of farm produce. The formula

Where, P s = price spread C f = price paid by consumer P f = price received by the farmer Similarly, the producer's share in consumer rupee worked out by using

The impediments faced by farmers in using e-commerce in agriculture was worked out by using Friedman test was to spot the impediments faced farmers to adopted agri-tech startups to market their produce and also to spot the impediments faced by the agri-tech farmers to use APMC to market their produce for comparison. For the purpose 60 additional APMC farmers were also interviewed. The Friedmen test was applied for the purpose, in this test a twoway ANOVA by ranks test was applied to identify the most severe constraints faced by the farmers with the following formula,

Where, N= Number of Respondents, n= Number of broad constraints, ƩR 1 2 = Row ranks summed up in each column, squared and then add

Results and Discussions

The role of startups in uplifting the farmers income in terms of producer's share in consumer's rupee of the major www.extensionjournal.com horticultural crops. Many farmers in India face challenges in reaching the right markets and obtaining fair prices for their produce. Agri-tech startups have built platforms that connect farmers directly with buyers and to the business that cuts out the middlemen and ensures a more equitable distribution of profits. They achieve this through mobile and web-based applications. This not only boosts farmer's income but also promotes transparency in the agricultural supply chain unlike in APMC markets. This was calculated by analyzing the marketing channels at both agri-tech and APMC with its marketing costs, marketing margins, and producer's share in consumer's rupee and even price spread involved while marketing of major horticultural crops found in the study area are ridge gourd, beans, brinjal, beetroot.

The main marketing channels involved in agri-tech and APMC are: The table 1 clearly indicates that the Marketing channels of startups in the study area reveals the producer's share in consumer's rupee was 41% for ridge gourd which means every rupee spent by the consumer out of which 41% share goes to the producer and rest to the intermediary i.e., agritech here takes as its margin and in similar lines 45%, 52%, 45% for beans, brinjal, beetroot respectively. APMC's channel I involve only two stakeholders i.e., producer and consumer are one of the shortest marketing channels in the marketing with no intermediaries involved of direct marketing with their marketing costs and margins involved in the process of marketing the produce from farmers to the end customer. In channel II one intermediary retailer is involved. www.extensionjournal.com The table-2 reveals that the producer's share in consumer's rupee was 88% for ridge gourd, beans, brinjal and 87% for beet root which means every rupee spent by consumer out of that 88% share goes to producer and rest was consumed as marketing costs involved by the farmer. The above table reveals that the producer's share in consumer's rupee was 60% for beans and brinjal, whereas 52% and 58% for ridge gourd and beetroot respectively. In other channels the producer's share in the consumer's rupee were 26%, 30%, 29%, 29% for ridge gourd, beans, brinjal, beetroot per quintal respectively which is less compared to other APMC marketing channels due to many middlemen involvement in other channels identified.

Agritech

It was observed that the losses at agri-tech level due to transportation, handling, storage etc., are 5% for all the crops. And the total post-harvest losses account for 13%, 11%, 10%, 10% for ridge gourd, beans, brinjal, beetroot respectively. In APMC total post-harvest losses were worked out as 28%, 26%, 25%, 25% for ridge gourd, beans, brinjal, beetroot respectively.

The details of marketing activities or functions involved in reducing the post -harvest losses in an agri-tech e-commerce startup. At producer level grading or sorting are done at the farm level based on the requirements of the startup. Transportation of produce from farm to startups by using trucks, tempos. For packaging newspapers, gunny bags crates and green leaves are used as coverage. There is no storage at producer level because the quantity is fixed before a day of procurement. At agri-tech startup the produce collected from the farmers are transported to distribution center from the farmer collection center after grading again as per the quality specifications in front of farmer. The distribution centers transport the produce according to the orders of the customers via online with its logistics facilitated trucks, through the gig workers called delivery boy/girl after packing the item according to the order using cardboards, biodegradable seal tape, bubble wrapper etc., with proper labeling. These facilities ensure the quality and efficiency in handling and reducing the post-harvest losses.

The losses are significant in APMC compared to agri-tech. The above tables no 3, 4 and 5 show that both farmer groups were found to face different constraints in which more constraints were faced by Agri-tech farmers in using APMC market. Chi-Square indicates the significant difference between the constraints, more the value indicates the more significance. Between APMC and Agri-tech, the more significance was seen with agri-tech farmers that is 811.12 and APMC farmers with.26. Asymptotic www.extensionjournal.com significance indicates both the groups are statistically significant (p < 0.05).

Constraints

Conclusion and Suggestions

The above discussions indicate that in APMC channel-1 and channel-II were beneficial for the producers share in consumer's rupee but these channels are rarely found in the APMC markets in the sampled areas. The study further reveals that agri-tech channels having producer's share in consumer rupee was high and it varied between 41% ridge gourd to 52% brinjal mainly due to less involvement of middlemen. Thus, the drawback of APMC in the studied area may be tackled with the innovations of e-commerce, agri-tech startup in this present twenty first century era i.e. digital era. It was expected that agri-tech's model will be a win-win situation for the farmers and consumer's in the future. On the basis of various constraints involved in agritech model it is suggested that government should provide support for this type of startup. At present agri-tech startups give emphasis on the procurement of vegetables in study area but there is need to focus on other crops also for the betterment of farmers' socio-economic conditions.

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