Drishtee

Innovation Challenge
INTER IIT TECH MEET 9.0
 Reinventing
Agriculture,
Reinventing India
 Agriculture
Why are we talking about agriculture?

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Agriculture’s Present Circumstances

● Agriculture in India is a livelihood for a majority of the population and

can never be underestimated.

● Total foodgrain production in the country is estimated to be a record

of 291.95 million tonnes.

● The government and other organisations are trying to address the

critical challenges of agriculture in India.

● The problem of the farmers not getting the best prices is due to
the glaring inefficiency in India’s agricultural supply chains.

● Logistics play a critical role in any economic sector.

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> 50% of workforce
Employes that much of indian workforce

159.7 million hectares

Acquires a lot of land

17-18% GDP
Contribution in indian economy!
5
 “The farmer is the only man in our

‘’ economy who buys everything at

retail, sells everything at wholesale,
and pays the freight both ways.”

- John F. Kennedy

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 1. Identification of
Identification Problem Statement

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Existing Supply Chain.

● On average, the farm produce has to go through 5-6 layers before it

reaches the consumer.
● Prohibitive transport costs and lack of infrastructure and storage
results in a high risk of post-harvest wastage and deters most farmers
from bypassing intermediaries and selling directly to the market or
consumers.
● Each additional leg of distribution results in increasing transportation,
packaging and operational costs, as well as more pollution.
● This is what we're trying to solve.

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What are we doing - The model:

Our model significantly reduces the layers involved in the existing supply
chain.

We buy the produce from the farmer or a village aggregator and sell it to a
layer before the consumer (the dealer).

We will be having no warehouses of stock. Produce is shipped directly

from the farmer.

The dealer puts up the required amount of product needed, and we

collect it directly from the farmer and deliver it to the dealer.

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 We believe that there are substantial business opportunities in the people at
the bottom of the pyramid with this model, and most of suppliers will be small
farmers or low-end sellers that cooperate with small dealers.

Ultimately, many original tail merchants have the opportunity to become head
farmers on this platform, and the platform’s low-price strategy is bound to tilt
its traffic resources to low-priced goods.

Hence, farmers Active profit-making is the most effective means of

competition in the new environment.

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 SWOT Analysis of our service
STRENGTHS WEAKNESSES
● We are for the farmers ● Stable transaction
and priority is to empower method.
them. ● Many stages of supply
● Initial financial investment chain depends on trust,
is negligible with respect making us vulnerable.
to potential profit.

OPPORTUNITIES
THREATS
● Expanding in the other
sectors like handloom ● Fighting against the
along with different types mentality and tradition
of crops. ● Hostility or lukewarm
● Setting up cold storage response during initial
units for perishable crops. stages.
 2.
Implementation
and
Fitment
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How are we different from
INDIAMART and eNAM?

In mid-evaluation Indiamart and eNAM were mentioned since they deal with
agricultural produce and its supply chain. Here we show how we are different from
them.
IndiaMART InterMESH Ltd. is an Indian e-commerce company that provides B2C,
B2B and customer to customer sales services via its web portal. It doesn’t focus
on connecting the farmer or any other producer with the wholesaler(even indirectly).
National Agriculture Market or eNAM is an online trading platform for agricultural
commodities in India. The market facilitates farmers, traders and buyers with online
trading in commodities. The market is helping in better price discovery and providing
facilities for smooth marketing of their produce. The market transactions stood at
₹36,200 crore (equivalent to ₹390 billion or US$5.5 billion in 2019) by January 2018,
mostly intra-market.

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 Order is sold to us at Order is collected at the
Order accepted if supply Books are
the collection point collection centre by the
is available. updated.
by the farmers. transporter

Order Placed

CHECKING FOR ORDER DETAILS ARE CONTACTING PRODUCE IS DELIVERED

AVAILABILITY SENT VIA SMS TO TRANSPORTERS AND AND PAYMENT IS
REGISTERED FARMERS ORDER OUT FOR COMPLETED TAKING
DELIVERY WASTAGE INTO ACCOUNT

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Step 1: Prerequisites

● The market penetration would start two months before any significant
harvesting season in UP and Bihar’s states . The beginning of this program
would be humble, with only a couple of villages where Drishtee is ubiquitous as
targets.
● Our organisation will Establish ourselves with the development of an online
portal. We would have a tehsil representative in each tehsil, responsible for that
area. These representatives would be the point of contact for the local
producers (farmers).
● Their responsibilities include assisting the local farmers, knowing the number of
crops available with the farmers at any given time, quality control and updating
the portal with the latest information (such as produce remaining in the area,
transporter’s information, quality assurance).

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Step 2: Contacting and Connecting

● At the beginning of our operations, we will contact urban dealers

and rural farmers who are the start and end of our supply chain,
respectively.
● This initial contacting would help us comprehend the supply and
demand in that area. Once we have a vivid picture of the quantity of
produce we are dealing with, we would contact the local
transporters for logistic support.
● The goal will also be to register the maximum number of people on
our portal.

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Step 3:Working and Scalability

● Once we have established our presence in the market, we will start taking
orders from the wholesalers.
● Initially, we will urge them to rely on us for their supply with the reduced prices
as our selling points. Once we receive the order, we will use our portal to check
the order’s availability. We then get the list of taluks that can fulfil that order.
● Priority will be given to the nearest collection point so that wastage during
transportation, transportation costs, and time is taken for delivery is minimised.
Once the pick-up point is decided, we will contact the transporters of that area
registered on the delivery portal.
● The transporters will come to the centres, and the farmers will also be contacted
to supply the food on the day. A day will be allotted for this, and then the truck
will be loaded and will be out for delivery.

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Portal Operations

● The portal acts as a mediator between us and transporters, farmers, wholesalers

and the taluk representatives.
● The portal will contain the information on the current supply available, which
will be updated after every day's operation by the local representative. All
partakers of this operation will have an account made on our portal during
registration time.
● The wholesaler will place an order on our portal, sign the contract and pay us on
that portal. The portal finds the optimal collection point and maintains tabs on
the cash flow of the representatives. The portal will implement a queue system
on the farmers end so that new farmers are prioritised and are encouraged to
work with us.
● It will also find the closest registered transporter for optimal logistics.

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Payments
Payments

Wholesalers
Beneficiaries
(Two methods)

Transporters - At Payments can be Dealers will be paying

Farmers - At the everything at one go.
the time of done using any of
time of collection. For small dealers, we
delivery. the currently can accept 75% before
Transferred to their
Transferred to the existing methods and 25% after delivery.
bank accounts.
contractor’s bank (NEFT, Bank If the amount is big
account. Transfer, UPI). enough, LC can be
implemented.

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● A contract will also double up as an assurance for both the parties involved.
● The wholesaler need to pay a minimum of 75% of the total amount upfront (before
ordering). The leftover should be paid immediately after the produce is delivered. The
amount can be managed using various ways like net banking, UPI, Traditional
Banking(NEFT, RTGS) and cash on delivery.
● The whole system will be farmer-centric, i.e. it will avoid all the ways to cause farmers
to suffer loss. This will be done by not bounding the farmers.
● The farmers registered on the portal will not be bound to sell their produce to us. If
they fear their crops may get damaged before we ask for supply, they may sell their
produce in traditional ways or feel we will not create the demand needed for them to
supply.

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Irrevocable Letter of Credit
● We are considering LC as a mode of transaction between us and the
wholesalers.
● LC acting as a financial instruments from a bank guarantees the payment
from buyer(wholesalers) to sellers(our service) if certain criterias are met.

Requests Issued
LC LC

Buyer Payment Opening Bank Advising Bank Beneficiary

(Applicant) (Issuing Bank)
Documents
Paym Payment Documents
ent
D
(Pay ocume
men n
t de ts
man
d)

Nominated Bank
(Negotiating Bank)
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 3.
Impact of our
service
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How will our farmers benefit?
● Only 6 percent of the farmers take advantage of MSP!
● Through our innovation, every farmer will get at least MSP, which
would lead to their upliftment.

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 Now it’s cheaper and fresher!!

● The time taken to reach the customer is

reduced drastically, thereby protecting
freshness
● As we have entirely removed the
intermediaries, the same produce can be
bought by the consumer at a lower price.

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Reduction of waste
● Indian farmers face post-harvest losses amounting to 93000 crores.But
now the farmers can directly sell to buyers and city wholesalers.This
shortens the time it takes for the produce to reach the market and
thereby reduces wastage.

source
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Employment and Empowerment
● Through our innovation, we will provide employment opportunities to
tehsil representatives directly.
● In the long term we are making agriculture and logistics sector a
better employer by reducing exploitation and ensuring a more stable
income. This employment would cause a ripple effect where many
more people would be benefited indirectly too.

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Aiming for empowerment along with
profitability

For any service to be stable,

it has to follow a sustainable
and profitable business
model. We have to do the
same by not forgetting the
fact that we are here to
empower farmers.

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 4. Number speaks
louder than
The Numbers words.

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Let's talk about MSP
● More than 6% market sell agricultural produce way below
MSP.
● Nearly 80% of the land in Punjab is over-exploited and the
number is around 50% in the case of Haryana(by
financialexpress.com).
● The farmers on an average were denied at least Rs 1881 crore
by having to sell their produce below the MSP in October and
November 2020.(Data collected from 3000 mandis by
thewire.in)

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31
But why farmers aren’t able to sell their
produce at MSP?

Wait, but why are we talking about MSP?

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 Procurement
Government procurement was just 7
percent of agri GVA in the year 2019-2020

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90

80

70 65
62
61
60
54
51
50 47 47
40
40

30

20

10 8
0.2 0.1
0 0 0 0 0
0
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Production Procurement

Procurement of wheat in Bihar from year 2012 to 2020

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Due to this shockingly low procurement by the
government, farmers’ are invariably forced to sell
their produce at prices much below the
government declared Minimum Support Prices
(MSP) to private entities.

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Farmers need MSP (ground report)

“I need the “I sold wheat at Rs “We never get the

government’s support 1,800 per quintal, benefit of MSP for
so that a minimum although MSP is Rs paddy because of slow
support for my 1,925. This is not the procurement by
produce is ensured.” first time and I am not government agencies
alone -- farmers hardly and a lot of paperwork
Umesh
Banda, Uttar Pradesh
get the proper rate for and delay of payment
their rabi and kharif by PACS (Primary
produce.” Agricultural Credit
Society). ”
Raghuvendra Singh
Paliganj Block, Faizul Khan
Patna district Raghunathpur,
Aurangabad district
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● The offer price that our service will provide to the farmers
would be MSP or more than MSP, depending on the
profitability and scalability.
● Our priority is to empower farmers by fixing the supply
chain. We will make sure that profitability doesn’t come at
the expense of exploitation.
● Let’s have a look at the bigger picture - the numbers.

37
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 The Numbers
The offer price that our service will provide to the farmers would be
MSP or more than MSP, depending on the profitability and
scalability.

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 Projected income statement for one month from one center for wheat
Mandi Price for 1 quintal(in Patna) Rs 1,700-1,800
Mandi price for 180 quintal(in Patna) Rs 3,06,000-3,24,000
MSP for 1 quintal(in Patna)(Offer Price) Rs 1925
MSP for 180 quintal(in Patna)(Offer Price) Rs 3,46,500

Mandi Price for 1 quintal(in Mumbai)(Modal Price) Rs 3,250-3,300

Mandi Price for 180 quintal(in Mumbai)(Modal Price) Rs 5,85,000-5,94,000

Offer Price for 1 quintal(in Mumbai) Rs 3,100-3,200

Offer Price for 180 quintal(in Mumbai) Rs 5,58,000-5,76,000

Gross Profit for 180 quintal (on offer price) Rs 2,11,500-2,29,500

Gross Profit for 1 kg(on offer price) Rs 11.75-12.75

Considering 5 trades in a month from Patna center to Mumbai Centre targeting 900 quintals,then

Gross Profit for 900 quintals = 90,000 kgs Rs 10,57,500-11,47,500

Expenses:
General Expenses
-Transportation Cost for 900 quintals from Patna to Mumbai Rs 90,000 *5=4,50,000
-Salary of Tehsil representative and rent Rs 12,000
-Miscellaneous(Server Maintenance & Customer Care) Rs 50,000

Sales and Marketing Expense Rs 50,000

Total Expense Rs 5,62,000

Operating Profit Rs 4,95,500-5,85,500

Tax(Considered 40%) Rs 1,98,200-2,34,200

Net Profit for one month from one center for wheat Rs. 2,97,300-3,51,300 39
How did we calculate the Gross Profit
● Mandi Price which we found after research in
How was offer price for Patna mandi was Rs. 1700-1800 per quintal and
01 buying 180 quintals MSP in Bihar was Rs. 1925.
calculated? ● Hence when we calculate on MSP for 180
quintals we get Rs. 3,46,500

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How did we calculate the Gross Profit
● Mandi Price which we found after research in
How was offer price for Patna mandi was Rs. 1700-1800 per quintal
01 buying 180 quintals and MSP in Bihar was Rs. 1925.
calculated? ● Hence when we calculate on MSP for 180
quintals we get Rs. 3,46,500

● Mandi Price which we found after research in

Mumbai mandi was Rs 3250-3300 per quintal.
How was offer price for selling
02 180 quintals calculated?
● So we decided our offer price to be
Rs. 3100-3200 and thus for 180 quintals it
comes up to be Rs. 5,58,000-5,76,000

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How did we calculate the Gross Profit
● Mandi Price which we found after research in
How was offer price for Patna mandi was Rs. 1700-1800 per quintal
01 buying 180 quintals and MSP in Bihar was Rs. 1925.
calculated? ● Hence when we calculate on MSP for 180
quintals we get Rs. 3,46,500

● Mandi Price which we found after research in

Mumbai mandi was Rs 3250-3300 per quintal.
How was offer price for selling
02 180 quintals calculated?
● So we decided our offer price to be
Rs. 3100-3200 and thus for 180 quintals it
comes up to be Rs. 5,58,000-5,76,000

● In 2019, 6 million tonnes(60 million quintals)of wheat

was produced in Bihar, so for the start what we are
Why have we considered targeting is achievable.
03 trade of 900 quintals in a ● Average truck trip can hold 200 quintals so for 900
month from Patna district. quintals we have considered 5 truck trips from Patna
to Mumbai.

Gross Profit (for 900 quintals) - Rs. 10,57,500-11,47,500 42

 Expenses

Rs. 4,50,000 Rs. 62,000 Rs. 50,000

Transportation cost of Salary of tehsil Sales and Marketing
900 quintals from representative and
Patna to Mumbai. expenses
other expenses.

● One trip from Patna to ● For each center we will have a Few methods to market
Mumbai for a truck loaded representative of our service.
our service includes:
with average of 180 quintals ● This representative will
● One Poster at each Mandi.
costs around Rs. 90,000. receive salary of Rs. 10000.
Other expenses include server ● On ads for increasing the
● Hence since we are targeting ●
900 quintals the total trips maintenance and salary for traffic on our portal.
required are 5 hence it will other staff members. ● We may hire sales person
● This also included amount we going door to door to tell
cost around Rs. 4,50,000
will be paying as rent.
farmers about our service.

Total expenses sums up to Rs. 5,62,000 43

44
 Income statement simplified for trade of 900 quintals
from Patna Mandi to Mumbai Mandi
Net Profit
Rs. 2,97,300-3,51,000
Net profit calculated after
deduction of total expenses form
Tax the net profit and taxes from the
Rs. 1,98,200-2,34,200 operating profit..
Considering 40% on the operating
profit, the required tax is mentioned
above.

Total Expenses
Rs. 5,62,000
The total expenses is calculated
Gross Profit after the projected spending on
Rs. 10,57,500-11,47,500 marketing, operations and
Gross profit generated after buying development.
from the farmers and selling it to
the buyers.

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 Summing up the entire calculations, let's find out that who all got
the benefit from this entire supply mechanism:

For the farmers:

Mandi Price was: Rs. 1,700 - 1,800 / quintal
Offer Price is: Rs. 1,925 / quintal
Profit on 900 quintals: Rs. 1,12,500 - 2,02,500

For the wholesalers:

Mandi Price was: Rs. 3,250 - 3,300 / quintal
Offer Price is: Rs. 3,100 - 3,200 / quintal
Profit on 900 quintals: Rs. 90,000-1,35,000

Profit we got: Rs. 2,97,300-3,51,300

So what’s next?
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 Bihar produced 6 million tonnes of wheat in 2019

Even if we acquire 1% of this market (6 lakh quintals)

Taking a net profit of Rs. 1,50,000 (which is half of what we are

making now for 900 quintals, in a month)

Net Profit we earn in a year is Rs. 1,20,00,00,000(Rs. 120 crore)!

Uttar Pradesh produced 32 million tonnes of wheat in the year 2019 alone
(compared to 6 million tonnes in Bihar)! 47
Business Model
Key Partners Key Activities Value Propositions Customer Relationships Customer Segments

1)No such partner is 1)Ensuring the supply 1)Finding buyers for the 1)Through the tehsil 1)Wholesalers who buy
required. for the demand. farmers and at great representative. produce from the
2)Smooth functioning offers prices. 2)Social Media mandis.
of the portal. 2)Providing the produce Marketing. 2)Wholesalers who buys
3)No transaction issue. to the wholesalers at 3)Word of mouth. the produce through
better offers and at their different layers of
doorstep. middlemen.
Key Resources 3)Providing transport Channels 3)Farmers
opportunities to the 4)Transporters
truck drivers.
1)Tehsil representative 1)Website which will be
2)Web developer a three way portal for
farmers, wholesalers
3)Marketing and sales and transporters.
team.

Cost Structure Revenue Streams

Cost Structure has been explained in the previous slides.
If we talk about the most expensive resource then that is 1)Margin generated between each transaction.
transportation.

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 We are not
aiming to just
expand and go
pan-India, we
are aiming to

5.
push an
ecosystem for
the society’s
holistic
Scalability development.

49
 Future and expansion
By now, we would
have gained
significant market We now capitalise on
share, enough for us our most profitable
We initially focus on Bihar and UP for
to start marketing tehsils and expand
establishment and begin operations there. We
and expand to other our ecosystem to go
would try to cover as much as possible in the
nearby states. pan-India.
2 states.
1 3 5

2 4 6

Once we gain Once we are omnipresent in At some point, we would also

traction, we can bring selected states, we can now incorporate cold-storage
local handloom and afford to give back to the rural facilities in our model so that
handicrafts on board. society in upskilling we can reduce crop wastage
programs and educate farmers and further optimise the supply
on optimum crop production. chain 50
 Here we try to
solve some of
the problems
that were
highlighted
during the

6.
mid-report
evaluation and
some of our
own
FAQs apprehensions.

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 ● We are offering them at least MSP or
more than mandi price.(which is more
than mandi price)
Why would the farmers sell ● It is very easy to find buyers for their
01 to us? produce.They have to just register with
us through the tehsil representative or
independently

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 ● The money will be transferred to the
farmer’s account once the produce is
When and how will farmers “out for delivery”.
and wholesalers get their
02 payment?
● The wholesalers will pay us once they
get the delivery.

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 ● We will purchase cash crops from
farmers at a higher price and sell them
How will the supply chain of
04 cash-crops operate?
to the agro-based industries without the
involvement of any middle-men.

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 ● No, the farmers are allowed to sell to any
Do any laws restrict us from private entity as long as MSP is
03 pursuing our idea? respected.

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 ● Proper packaging with seals and locks
will ensure that there is no tampering
during transportation.
How will we ensure quality ● There will be continuous evaluation,
05 check before delivering it to
rating and feedback system.
the wholesalers?
Feedback will help us take the
necessary action and improve the
overall satisfaction.

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 ● We will ensure that no injustice is done
to the farmers at any cost.
● The farmers can immediately contact
What will be the us through our customer service and
06 mechanism to cope with
any disputes occur?
get their issues resolved.
● We will have a helpline number where
farmers and wholesalers can complain
if the tehsil representative is involved in
any malpractice.

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Thank you!

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