KhethiNext helping farmers earn better
The intervention of technology is disrupting many sectors like medicine, finance, education etc.
The intervention of technology is disrupting many sectors like medicine, finance, education etc. This disruption is penetrating agriculture as well, thereby enabling farming into a profitable enterprise.
Hyderabad-based agri-tech startup, KhethiNext aims at address challenges such as higher cultivation cost, increased losses in yields, higher finance cost and lesser price realisation leading to lower average annual income and in turn a poor livelihood of farmers.
Registered under Pals Agri eConnect Private Limited, the Startup India-recognised startup is founded by Phanidhar Palakoti, who comes with an experience of more than 25 years in the field of IT.
A Raghuram Reddy, the co-founder and Director, holds experience of over 30 years in socio-economic empowerment of backward communities in the rural sector through his NGO, Nilagiri Foundation. Founded in 2017, the startup rolled out its services in 2018.
"Agriculture as a sector contributes 17.9 per cent to India's GDP. Though agriculture is supporting India's economy, the farmers are not supported in terms of livelihood.
After having understood the ground challenges faced by farmers on daily basis, we thought -- how can technology bring a difference in agriculture? How can we improve the livelihood of the farmers through better income models?
To address this, we combined Raghuram Reddy's domain experience and my technology knowledge to create this offering," says Phanidhar Palakoti, CEO, KhethiNext.
The platform addresses four challenge areas to increase the income and improve livelihood of the farmers. To reduce the cultivation cost, the startup ensures to bring down the input cost by providing products like seeds, fertilizer, organic and bio products to farmers at an economical rate.
Secondly, to improve the crop productivity, it encourages preventive agriculture among the farmer community. For this, their expert panel of 15 retired scientists provide knowledge and solutions to the farmers.
In addition, it has a partnership with Geocledian for satellite-based field monitoring, which supports the scientists to come out with a solution. "A lot of agriculture is undertaken on reactive basis wherein pesticides are applied only after it has infected the crops.
However, most of these pests can be controlled in preventive mode by ensuring the crop is protected well in advance by using organic and bio products," the founder adds.
The startup also intends to cut down the interference of middlemen, for a transparent pricing and increased profit share to the farmers. For which, the platform facilitates sale of the produce.
Another service provided specifically to the buyers is the 'traceability' feature, implemented on a blockchain platform. Here, the buyer gets to know the origin of the produce and the farmer, available quantity of the produce, along with activities executed while cultivating that specific product.
Also, KhethiNext is working with financial institutions to provide cashless loan to farmers wherein the loan is given in the form of inputs (seeds, bio products etc).
To provide these services, the startup has partnered with farmer produce organisation (FPO), a private association formed by the farmers for the farmers.
Their service is right now utilised by the farmers in AP, under an agreement with SERP (Society for Elimination of Rural Poverty) an autonomous society of the Department of Rural Development, Government of Andhra Pradesh.
In this regard, the startup has signed a memorandum of understanding with 170 FPOs consisting of three lakh farmers.
KhethiNext's revenue model also generates revenue for the self-sustained FPOs. The startup has partnered with seed, bio and organic companies to provide the input supply directly to the FPO – which pre-aggregates the quantity of input needed by a farmer and later for the farmer to collect the supply from these centres.
For this service the startup and FPO together levy a service charge of five to 10 per cent based on the commodity.
The second revenue generation stream for the startup and FPO is based on profit sharing model during sale of the produce, for which again a service charge of five to 10 per cent is collected.
"We do not expect farmers to be using a smartphone, the FPOs on behalf of these farmers aggregates information about a produce on the platform.
Post grading of the produce, we negotiate the price with buyers like exporters, retailers and food processing units. With this, we are eliminating the middleman's fee of 20 to 40 per cent while the farmer is unaware of at what price the produce is sold," says Palakoti.
Besides SERP, the startup also has an understanding with Nabard, an apex financial institution. With this, 250 FPOs and 4.2 lakh farmers from Andhra Pradesh and 40 FPOs and 70,000 farmers from Telangana and Haryana are registered on the platform. In the next six months, these services will be available for farmers in TS.
The agri-tech startup has a team of 15 members placed at their tech office in Hyderabad, regional office at Mangalagiri in AP and field supervisors in some districts of AP.
With expansion plans on cards, they look to add 10 new jobs. Initially the startup was bootstrapped by the founders.
Recently, it raised angel investment. They are looking to raise a pre-series round of fund. In the last six months, the startup generated a revenue of Rs 1 crore.
Incubated at Icrisat, KhethiNext also received support from MABIF, an initiative of Nabard. and Tamil Nadu Agriculture University. Under this, the startup will be entering Tamil Nadu with its services in 2020.
Moreover, they have two new models - a farmer facility and pre-funded farming lined up for launch by the end of this year.
'The picture is not rosy, and we are not expecting every farmer to change overnight. It's a long journey ahead for us. We are moving ahead with a strong vision to reach 2.5 million farmers in the next five years," concludes Palakoti.