Imagine you're a farmer in India with a crop of potatoes to sell. Typically, you go to a marketplace called a mandi and get the best price you can from a local middleman, who will then sell them to another middleman.
What will the potatoes ultimately sell for? Is there a better price somewhere else? No way to tell.
A father and son based in New Delhi want to expand farmers' selling options by bringing the mandi to smartphones. The idea came to Sanjay Agarwalla while he was consulting with telecom and consumer goods companies looking to expand into rural India. He noticed that even as his clients eyed these new markets, no one was thinking about how to help farmers increase their incomes.
Little had changed since Sanjay was a student decades ago, learning about Indian farmers' lack of access to buyers. “Thirty years back and into the future, the same problem still persists,” he says.
After talking the problem over with his son Aditya, then a computer science major at Princeton University, the two decided to form an online marketplace they called the Kisan Network in late 2015.
The Agarwallas' project is one of several using technology to transform the plight of farmers in India, where a variety of factors including climate change have contributed to high rates of suicide.
“Anything that deals with agriculture in India is pretty large. So if it’s a problem, the problem can affect millions of people," Sanjay says, noting that the market is worth more than $250 billion. When it comes to solutions, he says, "the impact could be enormous." After all, some 70 percent of rural households in the country depend on agriculture as a primary source of income.
Potatoes sit at a farm on the outskirts of Meerut, Uttar Pradesh, India. Kisan Network is working in Uttar Pradesh and other states to help farmers sell crops online. PHOTOGRAPH BY PRASHANTH VISHWANATHAN, BLOOMBERG, GETTY
Kisan Network's app lets farmers advertise their produce and see potential buyers beyond the local mandi. Once the transaction is completed online, Kisan runs the produce from farmer direct to the buyer, each side staying put.
Kisan's fee ranges from 5 to 15 percent of the sale, and farmers get to keep more than they would under the conventional system, where middleman after middleman bids up the price of the produce before it reaches a final buyer.
"Even with low-margin crops like potatoes, we have been able to offer 10 percent more than prevalent market rates. That’s what our entire goal is," says Aditya. "Venturing into higher-margin crops, the improvement goes up."
An initial pilot phase led to backing from the California-based accelerator Y Combinator. More funding came when Aditya, who dropped out of Princeton in his junior year to pursue Kisan Network full-time, was awarded the $100,000 Thiel Fellowship. Kisan has since grown from 10 to more than 30 staff and has plans to expand from its current five locations to a few hundred within the next two years.
Beyond helping farmers earn more money, Kisan aims to fundamentally change the way they sell.
“Today, the ease of doing business for them has improved drastically," Sanjay says, adding that farmers typically might travel miles to a mandi and end up staying overnight without a place to sleep. "Farmers feel it’s better selling to someone who is at their doorstep.”
Another group using tech to help Indian farmers, Cheruvu, was among four $25,000 prize winners in last year's CHASING GENIUS competition. Cheruvu conducts soil tests on farms and provides a digital platform with soil and climate conditions that can help farmers make changes to improve yields.
"Farmers in India face a lot of problems, and from both sides," says Cheruvu co-founder Adithya Dahagama, referring to the systems for growing and for selling. He says that in three years, the penetration of network connectivity among farmers Cheruvu surveyed has gone from 2 percent to more than 30 percent and climbing.
Building products for this new set of technology consumers brings its own challenges. “All of our engineers are from urban backgrounds," says Aditya Agarwalla. "It’s not like you’re building something you would use on your own.” To be effective, Kisan's platform must work with inexpensive smartphones on slower networks, be able to weather outages and support regional languages.
The Agarwallas plan to continue fine-tuning and expanding Kisan; they envision a future where small farmers can trade at ever greater distances across India.
As for dropping out of university to start a business with his dad, Aditya is matter-of-fact. Family businesses are common in India, he says, but he acknowledges theirs is a little different.
"Normally the younger generation takes up a business that has been running for a long time," Aditya says. "We were starting off together at the same time with something new.”
Lead Image: PHOTOGRAPH COURTESY OF ADITYA AGARWALLA.