Farming was no less than a nightmare for over two decades for Vinod Gautam of Uttar Pradesh’s Salarpur village. A marginal farmer owning less than an acre, access to sophisticated farm equipment was the biggest challenge for him. He not only earned too little to be able to afford the new-age disc harrows, tillers and a tractor, the wealthier upper-caste farmers refused to lend him machinery as he belonged to a lower caste. Gautam and his family were forced to labour relentlessly during the cropping seasons, manually preparing the land, sowing seeds and harvesting the crop.
But now, they have help at last, from the Gurugram-based start-up farMart Agritech, which rents out farm equipment on a pay-per-use basis. Gautam just has to make a call to farMart and a tractor arrives with a trained serviceman to prepare his land — all for ₹1,000. “I no longer have to go begging for machinery. Equipment owners rent out only to large farmers, for more money. farMart sends the machinery within an hour of making a call, no matter how big or small the land is,” he says over phone.
In a country where 67 per cent of farmers own less than a hectare each, few can afford to own modern farm equipment, as even a basic disc harrow costs upwards of ₹23,000. “The drive towards farm mechanisation has focused only on making access to tractors easier, but basic equipment for land preparation and harvesting is still beyond the reach of most farmers,” says Alekh Sanghera, who co-founded farMart Agritech with friends Lokesh Singh and Mehtab Singh Hans in December 2015.
Farmers typically spend 25-30 per cent of their income on hiring machinery from local entrepreneurs, who charge exorbitant rates. The alternative is manual labour, which is hard to find as many agrarian workers have migrated to urban areas for work. “We undertook a study in Punjab, Uttarakhand and Uttar Pradesh and found that 93 per cent of the 1,500 farmers we met hired machinery regularly,” says Sanghera.
The farmers typically lacked information on the kinds of new machines available in the market and their pricing, apart from facing various social and caste barriers. That presented a strong business opportunity to the co-founders of farMart. “We did a pilot in 2016 for two seasons, working with 10 machinery owners, and reached 400 customers at the end of eight months. We realised that a marketplace could be developed,” Sanghera says.
Most villages had just one or two machinery owners willing to rent them out and this led to a shortfall during peak seasons, when demand shot up for the machines. “So farmers were unsure whether a machinery owner would rent to them or not. But we have a huge database and start routing orders to all the owners on our platform. That has brought transparency in the market,” he adds.
Farmer’s Uber
The business model is similar to that of the cab aggregator Uber. “We don’t own any tractor. When we get any request, we find the nearest available machinery owner. The market has current rates and we negotiate the rate with the owner and send it to the farmer’s place. The owner provides the machinery and the service to run it, as the farmer may be unfamiliar with it,” explains Sanghera.
For preparing an acre, a farmer pays ₹1,000-1,200 inclusive of the fuel and driver’s charges. farMart fits every machine with an IOT (Internet of Things) device to track both the equipment and the work done by it. The company charges a 10-12 per cent commission from the machinery owners, most of whom earn between ₹5,000 and ₹7,000 a day.
There’s, however, one difference between the Uber and farMart models. While Uber is for tech-savvy customers, farMart caters mostly to uneducated farmers aged over 40 who use a mobile phone to place their order.
To expand its customer base, farMart ties up with village kirana shops on a commission basis. They spread the word about the company’s services through local networks. “We also use digital media, village-level meetings and send weather updates to farmers to reinforce the brand,” he adds.
In less than two years, the company has roped in 5,000 customers and over 300 machinery owners — all in Uttar Pradesh.
“Our business is growing fourfold every quarter,” says Sanghera, adding that they plan to expand to Madhya Pradesh, Bihar and Uttarakhand. In March last year, the Indian Angel Network (IAN) made an undisclosed investment in farMart. Sanghera says the company is sufficiently funded for now. It might require another round of funding if it keeps up the pace at which it is currently roping in new customers.