BigBasket is the primary on-line grocery store to have established a correct worth chain for natural vegetables and fruit with direct procurement, chilly storages
A few decade in the past, when farmers of Mahursa village in Uttar Pradesh began transferring away from chemical-based agriculture, their agenda was clear. The village is positioned in Bulandshahr district alongside the Ganga, whose waters guarantee irrigation and fertile soil. With natural farming, they might cut back the rising enter prices. Rising demand for natural produce may additionally open entry to a brand new market.
But, these positives didn’t assist the farmers realise actual revenue for his or her premium natural vegetables and fruit.
“At mandis, native consumers and intermediaries could supply barely greater charges for natural produce, however solely 10-12 per cent of the crops get bought at these costs,” stated Abid Ali, who grows greens in his 5.1 hectares (ha) farm.
“We additionally must account for mandi commissions, weight cuts, labour and transportation prices. Ultimately, we solely have cash to organize for the following season,” added Ali.
However final 12 months, on-line grocery store BigBasket entered the village for natural perishables. By promoting his potato crop to BigBasket at a 15 per cent greater charge than in mandis and by saving on transportation and different prices, Ali’s earnings virtually doubled.
Praveen Kumar, one other farmer from the village who grows a wide range of natural staples and greens in half of his 1.6 ha land, stated he bought virtually 300 kg of various styles of gourd to BigBasket at R15 per kg, virtually double of what he would get from the native mandi.
Like in Mahursa, some 3,300 farmers in 5 states profit from BigBasket’s foray into the natural vegetables and fruit area.
Because the begin of India’s push in direction of natural farming practically 20 years in the past, the main focus has largely been on staple crops comparable to wheat, paddy, pulses and millets.Neither the federal government nor personal gamers are capable of successfully introduce licensed natural vegetables and fruit, as they’re perishable and require costly chilly storage and transport infrastructure.
That is additionally why farmer-producer organisations (FPOs), cooperatives and different teams have been reluctant to obtain vegetables and fruit on a big scale.
However simply three years after being launched by 5 entrepreneurs in 2011, BigBasket recognised the potential in natural perishables.
The corporate, wherein the Tata Group now holds a majority stake, is the primary on-line grocery store to have established a correct worth chain for natural perishables, which kind 5 per cent of the 300 tonnes of the vegetables and fruit it sells.
To grasp how the corporate manages buy and provide of the perishable produce sustainably, researchers from Delhi-based non-profit Centre for Science and Setting (CSE) analysed its provide chain and advertising and marketing methods.
They discovered that within the absence of farmer teams and federations to advertise natural perishables, the corporate has tied up immediately with farmers to obtain natural perishables, offering chilly storage and fast transportation.
Structured provide
First, to construct the availability chain on the village stage, BigBasket surveys areas and villages the place natural vegetables and fruit are already being grown.
It then ropes in 20-30 farmers — this may lengthen as much as 150 — to kind a cluster of 20-29 ha. The journey of the produce from farmers to shoppers is managed by a sequence of centres, every of which is supplied with enough chilly storage amenities.
Every village has a group centre that receives details about produce to be procured, determined by present and previous demand and gross sales developments, and conveys the identical to farmers. Earlier than the harvest, officers from the gathering centres additionally go to farms to verify the standard of crops.
Put up harvesting, farmers provide the natural crops to the centres at charges set every season; these are sometimes 10-15 per cent greater than these for standard produce.
Bharat Singh, nationwide head for potato sourcing at BigBasket, stated the corporate tries to pay farmers inside 72 hours of procurement.
He additionally claimed that the set charges don’t dip if market costs drop, nevertheless, if there is a rise out there charge, farmers are paid extra accordingly.
From the gathering centres, the harvested produce is distributed to a mom distribution centre positioned in main cities, the place it’s sorted, graded, cleaned, packed, branded and saved till additional distribution.
There are presently 40 mom distribution centres throughout the nation, every of which might course of a mean of 100 tonnes of vegetables and fruit daily.
These centres obtain the orders from shoppers and ship the merchandise to a darkish retailer (a facility from which merchandise are delivered) nearest to the supply location. From right here, the produce reaches the shopper. All the course of takes 24 hours, the corporate claims.
Some greens like potatoes have longer shelf-life and are stocked to be delivered throughout the nation. Leafy greens and most fruits have a brief lifespan of 24 hours, and so are sorted and delivered based mostly on market demand. Such rotating stock minimises waste to five per cent and cuts prices by about 3 per cent, says the corporate.
The corporate additionally gives natural staples procured from mills, processors, FPOs and federations that purchase produce from farmers at greater charges and likewise give them a share of the earnings.
Total, natural merchandise kind 13-15 per cent of the BigBasket’s portfolio. Gross sales of natural perishables and staples have grown on a mean of 42 per cent and 62 per cent, respectively, in 2016-22 and have helped BigBasket acquire 300,000 prospects.
Serving to hand
Widespread adoption of natural farming is vital to take care of constant provides. Maintaining this in thoughts, BigBasket helps farmers shift to natural practices. It has launched a “farmer-connect” programme beneath which it appoints an agronomist at assortment centres to offer hand-holding assist and advise on crop administration.
From 2015 to 2021, the corporate has held three main coaching classes. It additionally shares data with farmers on making ready and utilizing inputs along with month-to-month consciousness campaigns. For farmers rising staples, trainings are imparted by FPOs and cooperatives.
The corporate helps cultivators, significantly small farmers with lower than 0.4 ha, receive natural certification. “It permits farmers to promote their produce through the technique of certification so they don’t incur losses,” stated Seshu Kumar, nationwide head, merch-andising at BigBasket.
The corporate mixes licensed natural perishables with these beneath the certification course of and sells it with the emblem “PGS-Inexperienced”. PGS stands for the Participatory Assure System of certification.
Lastly, to advertise buy, the corporate highlights main regional crops. As an example, southern states are main producers of natural turmeric, banana flowers and coconuts, so solely these can be found within the respective areas.
Regardless of its natural push, BigBasket’s excessive pricing, which is a standard development within the natural meals trade, could show a hindrance. With natural vegetables and fruit nonetheless a brand new class, sustaining the availability chain at cheap charges is difficult. The corporate’s costs for natural merchandise don’t exceed standard costs by greater than 20 per cent, stated Kumar.
CSE analysed costs of 9 natural vegetables and fruit accessible on BigBasket’s platform. It discovered that their costs are decrease than these in different platforms, and as compared with standard produce, charges of 5 natural merchandise have been greater by 20 per cent and people of two gadgets have been decrease.
Related evaluation for natural cereals, pulses, oil, spices and dry fruits confirmed that their charges have been decrease than these of two different Indian manufacturers, however greater than these of standard gadgets by 1-58 per cent.
Throughout CSE’s go to to Mahursa, farmers claimed that the corporate procures restricted produce so extra of them are benefited. This impacts farmers with surplus crops. BigBasket ought to make investments extra in capacity-building and improve its engagement with farmers for harvest and procurement, to make sure availability of perishable natural produce across the clock and construct traceability.
(That is the final of a sequence of six articles on how higher market entry to non-chemical produce is essential to success of regenerative agriculture)
This was first printed within the 16-31 October, 2022 version of Down To Earth journal
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