Removing Middlemen & Connecting Farmers Directly to Businesses: Farmpal

Startups like Farmpal, Pune have opened new collection centres to help farmers deliver fresh produce easily by connecting farmers to their markets and cutting off the middlemen.  

India grew more foodgrain in 2017 than ever before and the government’s agriculture budget rose 111per cent over four years to 2017-18. Yet, prices crashed, unpaid agricultural loans grew 20 per cent and 600 million Indians, who depend on farming, struggled to get by. Nearly 70 per cent of India’s 90 million agricultural households spend more than they earn on average each month, pushing them towards debt. Farmers get a fraction of the money for their produce; about 80 per cent is pocketed by middlemen who control agri-trade in India.  

Farmpal has established a connection with more than 1000 farmers, of which 400 farmers actively supply their crops to them. They provide a sale price that is at a 15-30 per cent premium over what the farmers receive in mandis, where they sell to middlemen according to the prevailing market price.  

It pays the farmers through online bank transfers, or in a few special cases, in cash on delivery. Besides, the farmers have a choice of selling their produce at their doorsteps and not facing exploitation at the hands of mandi traders. Eventually, the farmers will receive weekly pricing for their produce on their mobile phones, as well as price comparison between what Farmpal pays them and the prevailing market rate, in their bid to infuse more transparency in the Agri ecosystem. 

Farmpal collection centres, which are within a 3-5km radius of the farmers they work with, ensure they are informed about the quality and quantity of the products we are looking at procuring. The information helps farmers to plan their sowing, harvest and delivery cycles. Our team helps farmers with marginal landholdings to diversify their products and reduce their dependence on high-risk crops. 

The impact Farmpal creates is by increasing a farmer’s earnings and helps to mitigate rural farm distress like: 

• The farmers they collaborate with for the cabbage and cauliflower crops have upped their crop rotations from 2 to 4 a year due to assured daily purchase order from Farmpal, which is at a 20-30 per cent premium over market price.

• Traders and buyers dominate the mandi ecosystem, forcing farmers to accept the price set by them, given the high transport cost and the perishable nature of the crops. Farmpalinforms farmers about the price they will pay via a mobile app interface or through collection centres, helping them make an informed decision.  

With the COVID-19 lockdown bringing new challenges for farmers, Agritech startups are taking initiatives to mitigate the impact of the lockdown on farmer incomes and the agricultural sector. In many cases, farmers are finding it difficult to sell their harvested produce.  To empower farmers and eliminate intermediaries, they have set up the collection centres within a distance of not more than four kilometres from where most of the farms are located. This helps farmers to save resources and delivers fresh produce. Then the products are sent to Farmpal's distribution centres across various cities of Maharashtra.