AUGUST 2010, KRISHNA KUMAR, then 29, left GE India, where he had worked for over four years, to pursue his dream of building a mobile phone app that would collect data from farms. With 250 million acres of fragmented land available for cultivation, India is a huge market for electronic information on crop-sowing patterns and yields. Kumar found that large companies wanted crops for export or food processing, and would pay good money to track them. Professionally-managed farms account for some 10 million acres—an estimated Rs 5,000 crore opportunity for crop data. The idea of a mobile database was Kumar’s entry in an innovation contest at GE India in 2008.
That idea became CropIn Technology Solutions, a startup that is expected to end 2012-13 with Rs 1.8 crore in revenue. “Whatever crop you sow, some things stay true,” Kumar says. Good seeds are needed, and farmers must test the soil and control pests at the right times. “Each crop has its dynamics, but these factors are the same. My principle is to capture these, and let the corporate clients decide what practices they want to apply, depending on whether the yield is for local or global markets.” CropIn is essentially a tool that connects companies with their far-flung, often fragmented, contract farms. The smartphone app helps the companies track even minute changes on farms.
CropIn has nine clients, including FieldFresh Foods, the tie-up between Del Monte and Bharti Group, and PepsiCo, and benefits more than 8,000 farmers in Punjab, Maharashtra, and Karnataka. HDFC Bank’s loan division is also about to begin a project with CropIn in Andhra Pradesh to monitor the workflow and produce of farms to whom the bank has lent money. Such alliances will help the company scale up faster on a lower cost base.
Kumar’s approach has huge implications for Indian agriculture at a time when the government has liberalised retail, allowing multinationals to rebuild the food supply chain. Tesco and Walmart, known to monitor farms for quality and procurement, could find CropIn’s content and data mining abilities useful. In anticipation, global technology providers Thomson Reuters and Intuit have developed a database of 1 million farmers each with their respective ventures, Reuters Market Light (RML) and Fasal, which send crop and price information via SMS. Industry estimates peg RML and Fasal’s combined investments to be between $5 million (Rs 27.61 crore) and $10 million.
RML now spans 13 states. The $4.15 billion Intuit, based in Mountain View, California, entered Indian agriculture in 2009 with a similar approach, but chose to go deep only in Gujarat, Karnataka, and Andhra Pradesh. However, they have not broken even after five years of inception.
In contrast, CropIn’s nine-member team and smartphone technology required an investment of Rs 26.8 lakh. Using information technology in farming took off in 2000, when Kolkata-headquartered conglomerate ITC introduced e-Choupal, where farmers ran village Internet kiosks that provided relevant information in their local languages. This included weather, market prices, scientific farm practices, and risk management. The kiosks also allowed the farmers to directly negotiate with customers.
The second wave, 2007 onwards, was a result of the telecom revolution. With more handsets across rural India, Thomson Reuters and Intuit wanted to distribute live information from the mandis (town markets) via SMS. “We have made the usage simple, so that farmers don’t have to download any application, or send any short code for crop or pricing information,” says RML CEO, Amit Mehra.
ITC, Reuters, and Intuit have created valuable databases of farming activity in the fragmented holdings of some 6 million farmers. CropIn has learnt from their efforts to monetise existing business models and nudged ahead with its smartphone approach.
KUMAR WAS SELECTED AS one of 30 GE employees globally for a leadership programme in information management. After a year he decided to move on. He called childhood chum Kunal Prasad who was in the middle of an MBA course in Chennai. Prasad, an engineer, had taken a study sabbatical after working in Tata Motors’ passenger car business. Kumar explained his plan of action, and Prasad came aboard after graduating, as co-founder and chief operating officer.
Over a few days, Kumar wrote a call for funds and a brief concept note on CropIn, and e-mailed it to several of his well-wishers, adding: If we make money, you’ll make money. If we go down, you’ll go down. He got Rs 6.8 lakh. Any single investment over Rs 1 lakh gave the individual a 1% stake in CropIn. Four people put in Rs 5 lakh between them for such stakes, and the others—over 20 people—contributed the rest. It was enough to keep CropIn’s tech team going until it was ready for clients in 2011.
Kumar connected with prospective clients, including ITC, the National Dairy Development Board, and PepsiCo for pilot projects. Word spread because contract farms did not have such customisable, in-depth data tools. CropIn crossed Rs 10 lakh in revenue by April 2011, and in August, Kolkata-headquartered venture capital firm Seeders invested Rs 20 lakh. The four original investors maintain their stakes. Kumar’s phlegmatic leadership and humility are why clients, mentors, and farm managers want to be part of his venture. “He can positively influence your thinking,” says Sanjaya Mariwala, managing director of Omnikan Earth Sciences, a 5,000-farm food-processing company. “Krishna has demonstrated that he responds quickly to questions, provides good service, and builds a team that is responsive and effective.”
However, Kumar and his clients have talked about stake sales. Omnikan was first approached as an investor, until Mariwala chose to be a customer. The CropIn management is in talks with a Fortune India 500 company’s venture arm for a stake sale, but no single client has wanted to buy it outright yet.
Vasudev Avadhani, mentor at IIM Bangalore’s N.S. Raghavan Centre for Entrepreneurial Learning, who advises CropIn on strategy, points to its co-founders’ astuteness. “They didn’t go for better pricing to global clients through custom platforms, but focussed on crop traceability on a cloud platform from seeding to harvesting. ”
To investors, CropIn’s business model is smart. And this is how it works. First, Kumar has shown common sense by not depending on farmers to provide data. The application has a menu that asks for a string of details related to crops, and high-resolution images. Apart from the poor quality of mobile networks in the hinterland, smartphones haven’t caught on in rural India yet. Besides, it is too much to expect farmers to come back after a hard day’s work and fill in the details based on what they noted at different times of the day, says Kumar. Instead, the client’s team members provide data, after subscribing to the smartphone application for a 40% down payment.
Clients have field executives monitoring their contract farms. These are a mix of people from agriculture sciences and secondary-education backgrounds in small cities. The executives carry the smartphone bought by the client, and CropIn trains them in the device modules. On request, CropIn employees even accompany the executives on field visits. One executive monitors the progress of 100 to 150 farmers. The device guides them in scheduling farm visits, and helps farmers carry out best practices at the right time. They record information through the mobiles with photographs from the farm location, which is available to corporates’ agronomists and planners in real time. “The application is essentially smart forms, which the managers can update without a network and send when they access the network,” Prasad says. “We are operating from remote villages but there haven’t been network issues as 2G is available everywhere.”
FieldFresh Foods and Omnikan have teams of agronomists, who recommend ideal water quantity, pesticides, which crops to focus on, which land holdings to ignore because of anticipated loss, or how to treat deficient crops. Previously they had to travel to each farm, and help sometimes came too late. Now, problems are reported early enough that negative results can be averted.
Timely measures let clients plan procurement and monitor harvest estimates. If one farm’s crop is damaged by 5%, the client can re-estimate the productivity and find another farm’s yield to make up for the first farm’s shortfall. In cases of excessive yield, the company can plan logistics and distribution better, so that the bonus crop is not wasted.
“You know the quality of the standing crop, can forecast production, and have real-time control over pest and farm issues across geographies,” Kumar adds. It bears out his dream of enterprise resource planning on a mobile phone.
CropIn recently hired Chittaranjan Jena from GE as chief technology officer, primarily to build functions such as radio frequency identification for crop warehouses, and expand capability for larger scale. For now, while the client bears the cost of smartphones and pays for the application per season, CropIn develops and manages live data. It has assimilated content on seven crops, spanning 12,000 acres.
In terms of security and protecting its intellectual property, CropIn signs MoUs and non-disclosure agreements with each client before rolling out the solution. This has given it legal protection, lest a client develops proprietary apps or commercialises such an app. Kumar says that geo-tagging and accurately mapping the farms is difficult to build, and clients may lack the experience or the confidence to execute it themselves. So, even after rollout, CropIn sometimes manages the regular flow and analysis of data at the back end; it also customises the data-flow based on what the clients or their field representatives want, which is a full-time exercise.
WHEN THE RURAL penetration of smartphones improves, we will provide a much richer interface and capabilities,” says Deepa Bachu, Intuit India’s director of products and innovation, pointing to early experiments with Android apps to deliver market prices more efficiently. For CropIn, its own content is limited to the number of its clients. It has a user base of less than 10,000 farmers. But thanks to trained managers and smartphone usage, Kumar and Prasad have taken mobile technology to rural areas beyond SMS platforms.
“Why can’t we make every farm traceable with technology, so we can assist farming remotely?” Kumar asks. The question is driving the next wave of the spread of technology in rural areas. Today, more than five of 10 rural households in India have a handset, according to the National Sample Survey Organisation.
It is why agriculture is the next sector for Mehra, Bachu, and Kumar. In 2007, Mehra’s office in London oversaw the Thames; Bachu was with Intuit in Mountain View; Kumar at GE in Hyderabad. Now, all three till the land from their tablets.
