Agritech start-up Ergos, which helps small and medium farmers in Bihar to store and market their harvested produce through the grain bank concept, has expanded its operations to Karnataka and Maharashtra recently.
“We are seeing huge response from farmers in Karnataka and Maharashtra, where over 8,000 farmers have been brought on board. Warehouses have been set up in 22 locations,” said Kishor Jha, Founder and CEO of the Bengaluru-based Ergos. The company has brought on board about one lakh farmers in Bihar, where it has set up warehouses in 240 locations since 2012.
Hiring warehouses
Explaining the business model, Jha said Ergos hires warehouses at village levels on long term leases to create grain banks and connects with the farmers in the vicinity explaining the concept of how to store the produce to get better prices. During the harvest season, every farmer, mainly the small and medium, are in a hurry to sell and the buyer has a limited capability to buy.
Leveraging its tech-enabled platform, Ergos converts the produce stored in grain banks into digital inventory and a passbook is issued to the farmer with details of quantity and the type of grains. Presently, Ergos handles six types of grains including maize, wheat, paddy, soyabean, tur and ragi.
“Once the grain is deposited into the warehouse, it becomes fungible. We take care of the storage, preservation and connecting the farmer to the market and also the financial institution. Technology plays a great role in digitising the grains, creating visibility to the buyer and connecting with them” Jha, a banker-turned agri-entrepreneur said.
Grain banks
Farmers can avail of Ergos’ grain bank services at a mere 40 paise per quintal, per day, Jha said adding the model is built to suit even small and marginal farmers, who can store and sell one bag of grain. The stock management charges include warehouse rent, chemical treatment, fumigation and pest control to maintain the stock health. “Also we take insurance cover for the warehouse against fire, burglary, earth quake and theft among others,” he said.
The grain stored at Ergos’ grain bank will remain in farmers account till the time he wants to sell for up to nine months. “If the farmer requires any liquidity, we have multiple banks and financial institutions on the platform including SBI and Sammunati, who lend to farmers against their grains deposited in the banks through one click,” Jha said.
Jha said that farmers, who sell their produce after 3-4 months of harvest, can realise better value. Ergos helps farmers in better price discovery and their incomes have been higher by 30-40 per cent. Using the services, farmers can become price makers rather than price takers, Jha said adding that his company is helping small farmers avoid distress sales. Also, Ergos helps farmers to dispose of the grains that cannot be preserved.
“We are working on a big big plan planning to pan-India in states such like Rajasthan, MP and Odisha in next 3-4 years, which will actually help us to touch base with farmers in 70-80 per cent of the agricultural areas in the country. Our aim is to set up 3,000 warehouse locations managing about ₹10,000 crore worth of produce in the 3-4 years,” Jha said.
Advisory services
Ergos also provide advisory to farmers monitoring the progress and guides them during the harvest period for on-farm processing activities such as drying and segregation of the produce and also logistics. “We have one relationship manager for every 300 farmers, who assist them in using our services. For farmers, who are not savvy using smart phone, there’s an assisted model through kiosks located at the warehouses,” he said.
For traders and buyers sourcing from its platform, Ergos has different types of packages with a base charge of 2 per cent, Jha said. While the focus has been to cater to the local buyers in the region, Ergos has off-late started connecting farmers with large buyers nationally.