This post aims to address the question of how the Farmer Data Network benefits farmers by thinking about a specific use case that we hope to execute in India starting early next year with a few partners.
Today
Purnima is a woman farmer in Bagalkot district of Karnataka who used to grow sugarcane for many years but switched to pulses two years ago after a series of droughts and on the recommendation of members in a local SHG (reference). Purnima’s husband is a laborer in Mumbai and she manages all aspects of the farm and bringing up their two young children.
Purnmia grows pigeon pea (tur) during the kharif season; she sows in June and harvests in late November / December. It is a rainfed farm of one acre and Purnima does not have access to irrigation. Her first year was challenging as due to a delay in rain and uncertainty about planting, her yield was only 2 quintals or 200 kg (reference) but last year she grew 4.5 quintals through a combination of more timely rain and a better sense of seed spacing and depth.
While her yield last year was OK, Purnima only received 4500 rupees per kg from a local trader. This trader extended credit to Purnima so she could purchase seeds and fertilizers and while she has heard that there is technically a minimum government support price (MSP) of 60 per kg (reference), the trader didn’t offer this price and claimed that her product quality was poor because the pods were broken and small in size. Purnima doesn’t know any other local traders or how quality is assessed by buyers and was not able to push back. Also, she doesn’t have easy access to transportation to head to a local mandi herself or storage to keep the pigeon pea for some time so she could look for alternatives.
A few members of Purnima’s SHG recently launched a Producer Group that is linked up with a Farmer Producer Company that focuses on trading pulses. They have ambitious plans including setting up their own pulse milling and packaging operation and selling directly to retailers whose customers pay over 110 rupees per kilo in fancy city shops and online.
Purnima will also be able to buy inputs at a discounted rate from the FPO but they are not yet in a position to give her credit; she will need to look for other sources of money bc if she works with the FPO, she won’t be able to work with the local trader she has known for years. While his money is not cheap and he’s tight on price, he has reliably been buying from her family for years.
In Two Years
Purnima has a smartphone where she records entries about her own farm and also four neighboring farmers. She has been trained on how to use an app where she can simply record voice notes about critical information like what crop is bring grown, over what area and dates for some critical activities like sowing dates and irrigation dates and amount of fertilizer applied.
The FPO hosts a meeting just before kharif sowing to share the total acreage of tur that will be planted across all the member farmers. The FPO also shares what quantity it expects to procure and an indicative price which may move by 5% in either direction. This is made possible by Waycool, an agribusiness that supplies retail shops and HORECA clients in Bangalore, Chennai, and Mumbai. Waycool has a data driven demand forecasting model which enables it to predict how much supply it needs a few months out and make a high conviction estimate of its purchase volume (though not a formal commitment) well in advance of harvest time. Right now Waycool is purchasing about 60% of the total capacity of the FPO and the remaining offtake happens through local traders. Waycool also hosts learning sessions through the season to explain how quality is assessed and what price they are willing to pay for different quality grades.
A different app uses the data that Purnima records to provide her with a target yield and recommended actions she should take to achieve that potential. The advisories are in the form of short videos which Purnima watches alone and sometimes with the four neighboring farmers. This year, Purnima implemented early sowing, a practice she recently learned about and her expected yield for this season has gone up to 8 quintals.
She is also signed up to a Whatsapp message group that sends out a fortnightly message that include a weather forecast and photos with signs of pest infestations and other things of concern to look out for the upcoming two weeks. If something concerning comes through on the Whatsapp group, Purnima can send a message and someone will respond within a day.
Purnima spent 10% less on her seeds and fertilizer this season as opposed to last year as the FPO was able to negotiate a discount by placing a bulk order. Also, this season’s inputs all seem to be of high quality and came in official looking bags and packages with phone numbers to contact in case of questions as opposed to the unmarked bags she used to receive previously. Purnima did need to borrow from the local SHG as the FPO could not provide inputs on credit but the terms of the loan were OK.
In Five Years
Purnima purchases inputs on credit from the FPO at rates that are about 40% lower than the local traders. The credit is made available by Samunnati who has observed the stability of the FPOs business with Waycool for the past few years and gained confidence in the FPOs ability to meet reliably meet buyer demand.
FPO processing and packaging facility is setup which means the FPO is selling a a portion of its offtake as a finished product for 75 rupees per kg rather than the 55 rupees it used to get for selling raw, unprocessed pulses. Before the facility was setup, all the FPO members joined a presentation by the FPO leadership which described the business case for making this investment and all members had an opportunity to vote on the proposal Also, all the members agreed to top-up their share capital in the FPO by 500 rupees each which unlocked an a loan from an agro-infrastructure fund administered by a local bank.
Rain is becoming increasingly erratic (long delays early in the season and unexpected rain towards year end) but the farmers are able to manage as some irrigation facilities have been put in place and they have moved away from water intensive crops. The FPO is evaluating a parametric weather insurance product which will pay its members in cases of extreme weather events which sounds promising.
20% of total acreage managed by FPO members no longer uses chemical pesticides and the farmers keep detailed records about their production practices which enables them to realize an extra 5 rupees per kg by selling to Safe Harvest. They plan to ramp this up to all farmers and look for additional premium buyers.
What role will Digital Green play in making this happen?
Capacity building and digital literacy for the FPO leadership and farmer members like Purnima on how use smartphones to record information and access / utilize third party digital services. Another core part of this training relates to informed consent so Purnima is aware of what data assets she has and can grant permissions for that data to be shared with a clear understanding of how that information will be used (eg, to signup with an advisory service).
Enable data sharing via the Farmstack protocol between Cropin (which does remote sensing based yield estimates) and Waycool (which buys in bulk and wants to streamline its procurement).
Enable data sharing between the FPO and Samunnati to unlock access to capital. Samuannti is able to verify that FPO sales record which show Waycool as a buyer are legitimate in an automated way which reduces loan processing times.