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Reaching the next billion – Insights into the Agriculture sector in India

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Krishna Mishra, founder of eKutir, shares his insights into the agriculture sector in India with the Asian Entrepreneur. Krishna is a social entrepreneur running a for profit social business, eKutir, to work for the progress of small and marginal farmers and improve their socio-economic state.

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More than 54 per cent of Indian workforce as per 2011 census is engaged in agriculture. And, it for the last 20 years has been trying to get 4% rate of growth in agriculture and has failed. The rate of agriculture growth since the reforms began has hovered around 3.2-3.3 per cent. The agriculture industry in India is totally fragmented and the supply chain is marred by inefficiency. The alienated environment creates a high risk for farmers and as a result there is no trust in the market, no convergence of service providers at the farmer point, and no collaboration amongst the service providers at the first-mile.

The risks agriculture entrepreneurs are confronted with today; involve the ethical attitude of big companies who are supplying products to the BoP and logistics issues at the last-mile.

Approximately 78 percent of India’s farmers are small and marginal (farmers who own less than five acres of land). A farming cycle is such that a small and marginal farmer, with an income of about $1 a day, is required to undertake various activities apart from laboring on the field including best growth practices to manage the land, access to credit and market information, organize transport, and identify buyers for the produce.

Although there are enterprises, including government agencies, private companies and charitable organizations, which provide farmers with such products and services, a farmer is often not equipped with information to choose the product best suited for him/her or the manner of its application. Even if farmers are equipped with this information, different vendors provide products and services. Consequently, to acquire the potential help, farmer would have to go to each in turn, incurring expenses at each step, to procure what is needed. Because they are economically fragile and situated in remote areas, such farmers are in fact dependent on the ability of local people or institutions to reach out to them. Since many potential services are not easily accessible, farmers are often left with no choice but to use what they can reach locally, irrespective of quality or cost.

Limited by reach and capacity, a farmer’s inability to procure quality products and services multiplies the level of risk. For example, even if a farmer receives access to credit, he/she is adversely affected if they receive contaminated or diluted seeds or is unable to get timely access to the market for selling. Factors that reduce the income also reduce credit-worthiness for the next crop cycle. This cycle creates a systemic risk for the farmer that becomes a vicious loop for poverty.

The complex supply chain for various agricultural inputs (such as seeds and fertilizers) involving a series of actors, amplifies the risk faced by farmers. The agricultural market is controlled and managed by middlemen and cartels, and it is common for distributors and retailers to taint the products received from manufacturers before selling it to the farmers. Multiple brands and products, many of which are not genuine, flood the markets making it hard for farmers to make the right choice and identify quality products. For instance, at one point close to 2,000 brands of hybrid seeds of cotton were being sold in the state of Andhra Pradesh.

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Moreover, most small and marginal farmers are largely ignorant of guarantees provided by the manufacturers. For instance, although the law requires seed companies to provide a guarantee of 80 percent germination, the retailers make few farmers aware of this right. The role of multiple actors in the supply chain also makes it harder to allocate responsibility. As a result of this complex supply chain, on one hand, seed and fertilizer companies find it challenging to reach markets directly and on the other, farmers receive spurious and adulterated products. The existing supply chain also perpetrates and amplifies a huge information gap between the needs of the farmer and the services that are provided.

All of these factors have resulted in farming becoming an unattractive, unviable livelihood opportunity. With these critical gaps to be addressed, eKutir through an enterprise paradigm started creating favorable opportunities for the farmers, to benefit their economic livelihoods.

Would you mind walking us through the process of how eKutir first began?

I recognized the complexity in farming: the criticality of timeliness, weather conditions, and choice of inputs and interconnectedness of each factor with another. Organizing farmers’ bottom-up through a local distribution network of micro-entrepreneurs, I have introduced a sophisticated ICT platform that enables group of farmers to analyze diverse interconnected factors, make critical decisions, and manage agriculture delivery processes to effectively compete in the market.

In order to build a demand-driven system, I identify and support local micro-entrepreneurs who become the ‘go-to’ person within the village for farmers. They build a participatory framework by organizing and partnering with groups of farmers to understand their contexts and needs. Based on farmers’ needs and using cutting-edge software applications (web/mobile), the micro-entrepreneurs create a comprehensive portfolio of farmers, which maps and analyzes the risks faced by each farmer. Leveraging such technology, they assist farmers in crop, resource, and financial planning. The micro-entrepreneurs then enable the farmers to take tangible action based on recommendations and feed their demand for different products and services into a centralized technology platform. Based on aggregated demand from the farmers and again from the micro-entrepreneurs, eKutir builds appropriate partnerships with agro-stakeholders, including university experts, soil scientists, seed, pesticide and fertilizer suppliers and buyers to match the farmer needs.

To sum up; in addition to making farming an attractive profession, eKutir is building an independent supply chain platform that is driven by the demand of farmers, assures quality, and increases access to markets for multiple institutions. It also allows farmers to benefit from their collective negotiating power while still making individual choices for products and services.

What were the challenges you faced when eKutir started?

Agriculture and poverty are two complex systems that are so intertwined that a failure of one will beget failure in another. The difficulty while starting out was to identify the most common problem faced by majority of farmers or what is called the low-hanging fruit and address it well. In the agriculture cycle, there are multitudes of gaps that need to be bridged; yet the most feasible for eKutir was to work on soil testing, soil health, and nutrient recommendation, considering a large percentage (~80%) of the farmers shy away from soil testing in Odisha.

These three elements impact crop yield, farmer income, and input costs. Optimal utilization of nutrients and timely results based on soil testing positively impact the aforementioned elements, driving up the agriculture income and yield.

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Once we identified the low hanging fruit, we wanted a cost-effective way to reach out to the farmers. Leveraging technology seemed like a viable option, but the mode of technology had to be defined. Ownership of mobile phones among the farmers had increased but the efficacy of SMS based services and voice-based services were uncertain. We thought of addressing the digital literacy among the farmers, but realized that this is a time-consuming process and the cost-benefit to the farmer was realized after a long period of time. Time was one factor that we could not ignore, as it is indispensable for a farmer. We devised an agent-led model, where a digitally trained resource from the community level will be responsible to interact with the farmers and will be incentivized on the basis of transactions and services provided. When we prototyped this, it had a positive impact both at the farmer and the agent level. Instead of linking the agent to eKutir, we decided to create an independent distribution channel of micro-entrepreneurs (or agents) who would be owned by eKutir or franchised to other field partners that will use the software applications for extending agriculture services for the benefit of the farmer.

This helped eKutir address the twin gap of accessibility through the distribution network and customer relationship with the farmers, a largely overlooked area in dealing with resource poor client or communities.

Can you tell us more about the products and service eKutir offers?

eKutir piloted mrittika, a software application that recommends nutrient application on the basis of soil-testing analysis. The value proposition of this tool was to equip the farmers with the necessary knowledge about their soil, crops to be grown, and the requisite application of nutrients and fertilizers, basis of soil characteristics.

When the first phase of pilot was conducted with 300 farmers, it created excitement among the farmers on seeing the soil testing conducted in front of them at their farm. When the test results were presented, the farmers were astonished with the appropriateness of soil analysis, as majority of these farmers had faced challenges in procuring the soil testing report timely, from the soil health centers established by the Government. The approach of using mobile soil test kits at the farm increased the inquisitiveness of the farmer and helped in disseminating appropriate knowledge on testing and soil health.

Post soil testing, the results were entered in to mrittika, which on the basis of the farmer information captured provided the quantity, quality, and availability of nutrient/fertilizer on the farmland. The software tool had a detailed step-wise algorithm at the back-end with a simplistic user interface to help the micro-entrepreneur enter details and get corresponding recommendations. The software application allowed localization and customization, tailored to a particular region. When compared with the current dosage given by the farmers, it was understood that there was over-application of fertilizers, which were spurious, and were bought at unfair prices.

To test the efficacy of mrittika, a control and treatment group were created. The control group applied the same dosage wherein the treatment group applied the dosage recommended by mrittika with the nutrient procured through eKutir. The results were overwhelming for the treatment group with the best farmer showing 133% reduction in costs, 200% increased crop yield, and 250% increased income on the crop. This established farmer’s trust in eKutir and helped us organically increase our outreach without any additional marketing.

The initial reaction of the farmers helped eKutir build a sense of trust and credibility, which increased farmer’s confidence in the system, and made them understand that this is a non-exploitative way to help them become more productive.

As, we believe in designing appropriate software applications to benefit the needs of the farmers, eKutir came up with additional tools like ankur, FPMT, TIME Tool, and so on to help address the small gaps in the agriculture value chain, with a vision to create a suite of ICT-enabled tools that will help drive our mission to benefit millions of smallholder farmers.

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How would these micro-entrepreneurs compete with the big players in the industry?

We as social entrepreneurs must thrive to build a shared and collaborative eco-system rather than a competitive one, in order to benefit the farmers. There are social enterprises (for-profit and not-for-profit) that are addressing to the challenges of farmers in their unique way and have made considerable positive impact. Yet, there is a long way to go and collaboration will help in binding best methodologies and approaches together for the farmer’s benefit.

The entrepreneurs working at the BoP have the knowledge of the need, the gaps, and have designed the solution to address the need. The big players have capital and resources but need an ethical partner to reach to the BoP. Combining these two will mutually benefit both stakeholders and create an all-inclusive, market-driven approach to solving the bigger challenges and ramping up outreach and impact.

It is this competition that has created such a dysfunction in the agriculture value chain today. If we are to make advances in agriculture and farmer growth, a collaborative framework to converge at the BoP will be indispensable.

What are your personal goals and what is the future for eKutir Agriculture?

My personal goal is to mentor hundreds of social entrepreneurs to address to the problems of the BoP farmers and farming communities. The future for eKutir Agriculture is to reach out to all the resource poor farmers in India and globally with its products through a partnership model and create maximum impact for the society at large.

I believe that to find catalytic, scalable solutions to global farming challenges, agriculture should be seen from an enterprise paradigm, not a charity. eKutir’s transformative solution offers a variety of new approaches. Many other attempts to spread agricultural best-practice knowledge have run into challenges of literacy, which our model can help mitigate.

Real-time information delivery systems are important in agriculture, and technology-enabled solutions like ours can create a live platform to farmers and all other players in the eco-system. A system where information is gathered at the grassroots farmer-level will provide important data to inform policymakers and decision-makers along the value chain. Farmers need to be empowered and enabled by knowledge.

This proven system has the potential to dramatically increase the incomes, well being, and quality of life for millions of farmers around the world.

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Honesty, dedication, empathy, and a spirit of leadership will be the key values to successful entrepreneurship. eKutir strongly believes that a person should have all these traits and values in him/her for success in the BoP market. Agriculture; as it has the power of changing the profile of the poor, which will be visible to the beneficiaries. Farmers as changemakers; as they constitute the majority of the population, are the custodian of the earth, stewards of natural resources, and feed 7 billion people around the globe. 

LinkedIn: https://www.linkedin.com/company/ekutir
Facebook: https://www.facebook.com/eKutirSB
Twitter: https://twitter.com/ekutirsb
YouTube: How eKutir works
Vimeohttp://vimeo.com/71197753

Entrepreneurship

Science is the Next Big Thing in Startups

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From pharmaceuticals to petrochemical processes: Newcomer companies and investors and investors alike are setting their sights on science. How the start-up scene moves beyond the mobile apps bubble…

For the last two years Silicon Valley analysts and venture capitalists are anticipating the burst of yet another bubble. This time, under the risk are the mobile start-ups which constitute the biggest share of the market. Out of 50 companies listed in Forbes’ “the hottest startup of 2015” (by valuation) only six companies are based on innovations in other-than-mobile area, one company provide cleaning services, while the rest are diverse mobile apps.

Meanwhile many products listed can be barely called innovative. A significant proportion of the listed start-ups are texting apps, apps for people search (starting from business partners to life partners) or delivery services. While those services can definitely facilitate one’s life, in general they differ from their predecessors by only a narrower audience.

Many venture investors expect stagnation if not decrease on the markets, which is why they start to transfer their capitals from start-ups offering customers software to start-ups offering specific solutions for existing businesses. Such companies are expected to demonstrate more stability in the near future.

The Market for Mobile Apps Might be Saturated

Back in 2012 a talented entrepreneur could walk into a venture capitalist’s office, say his startup was a mobile-first solution for pretty much any problem (payments! photos! blogging!), and walk out with a good-size seed investment. “That pitch was enough to get going,” says Roelof Botha, a partner with VC firm Sequoia Capital. “It’s not enough anymore.”

“I think investors are bored with investing in another messaging app. And our idea is crazy enough that it might just work. ”, has declared in 2014 Nadir Bagaveyev a founder of a start-up using 3-D printers to make rocket engines. By 2016 the company attracted investors funding sufficient to launch its first rocket.

Pharma and Biotech Start-Ups in High Demand

Currently the most successful science-based start-ups are the companies offering innovative solutions in the field of pharmaceuticals and biotechnologies. It’s noteworthy that despite the previous revelations and even judicial proceedings the list of the most expensive start-ups still includes Theranos, blood analyzing laboratory, whose story did not descend from the main pages of the global leading media from 2014.

It first amazed the audience with its fantastic take-off and then with its collapse. One of the crucial parts of the success story of this start-up is its fundamental difference from the majority of the services produced in the Silicon Valley. Unlike the others, it was not a story of yet another beautiful gadget for communication or mobile app, but the story of the scientific idea which intended to conquer the world.

The great success stories in other scientific areas are now happening on occasional basis. However certain facts allow to predict that the situation is to change soon. One of such factors is growing interest among the big corporations to attract innovative solutions from outside to develop their businesses.

Given the accelerating pace of scientific and technological development of the world, the activities of internal R & D departments are often turn to be insufficient to ensure stable development of innovative business. Outsourcing of the R&D may become the efficient mechanism to stimulate the growth of the company. And high-tech start-up can certainly benefit from it.

Start-Up Technology for the Petro-Business

In December, 2016 world leading companies in the field of gas processing, petrochemicals and chemicals announced their intentions to enforce their R&D capacities by attracting start-ups. 3M, AkzoNobel, BASF, The Dow Chemical Company, DuPont, Henkel, Honeywell UOP, LG Chem, Linde, Sibur, Solvay and Technip together created a global stage for startups and investors.

“The petrochemicals industry can and must rely on the potential of open innovations to facilitate further inventions and implementation of new solutions in all major application areas, from construction and medicine to packaging and 3D printing. Thanks to the participation of international partners, IQ-CHem is now the largest global project within the industry which attracts innovative solutions and provides for their implementation into practice,” said Vasily Nomokonov, Executive Director of Sibur, a company which coordinates the project.

Positive Experience in Chemicals and Beyond

Some of the listed companies have already gained positive experience in working with start-ups which may have driven them to elaborate a systemic approach to attract innovative companies.

At the beginning of 2016, SIBUR and RRT Global start-up reached an agreement to build a pilot plant for isomerization based on RRT Global technologies in Sibur’s Industrial Park SIBUR “Tolyattisintez”. According to Oleg Giyazov, co-founder and CEO of RRT Global cooperation with a large corporation bring significant advantages to his company.

“By cooperation with Sibur we get a huge industrial experience that enables us to develop technologies and solutions better fitted to the market demand. This advantage is often not given due attention, but we, on the contrary, see significant opportunities in it. Currently, RRT Global cooperates with several companies around the world” he said.

Another petrochemical leader BASF enjoys successful cooperation with Genomatica start-up. In 2013 BASF started the production of 1,4-butanediol based on renewable feedstock (renewable BDO) using Genomatica’s patented process and in 2015 the license was expanded to the Asian market.

Unlike traditional forms of cooperation between a start-up and a venture capitalist, a cooperation between start-up and a relevant corporation allows to minimize the risks associated with investing in a potentially promising idea where the key word is “potential” (but not “guaranteed”). While delivering services in the same field as the start-up the corporation gets an opportunity to more effectively and accurately estimate the market value of an innovative idea and to support its implementation.

Structural Changes Ahead: Outlines of A Coming Market

In the short term prospective, possibly in 2017, the global start-up market will face structural changes – both in terms of start-ups professional orientation and of funding mechanism. In the future science-based start-ups will dominate the market and will change our lives at a deeper level than the way of sending a text message or searching the restaurant for an evening meal. To be more concise this is already happening in the pharmaceutical industry, and the other scientific areas are to follow.

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About the Author

This article was written by Dominik Stephan of Process Worldwide. See more.

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Callum Connects

Norman Tien, Founder of Neuromath and Early Math Matters

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From a young age, Norman Tien, found his passion helping students as a math tutor and went on to translate that into a successful business.

What’s your story?
From the age of 14, I knew I would be in business for myself and started designing my company logo.

Growing up in a poor family, I worked part time while I was in school. That’s when I started tutoring and realised I had a gift to help students “see” mathematics. I delivered good results, and my students started to love math as well.

A turning point was when I was down with dengue fever and I realised I had to grow my business to the next level. I started a learning centre and that was the beginning of Neuromath. The initial years were tough as costs went up while my personal income took a dive. I almost gave up, but I pushed through.

Today, we have 3 specialty math enrichment centres managed and delivered by my dedicated team of teachers.

What excites you most about your industry?
“How to win” has always influenced how I position myself in the industry. I researched the psychology of learning, why some students are so naturally good at math, while others struggled. I managed to find the connection, and have always sought out niches to position myself so I can win.

In the beginning, I fused academic delivery with psychology to differentiate my services. Now I have a good team of teachers fully equipped with a psychological skillset.

In the next evolution of our business, we will incorporate technology into education in order to customise each student’s learning experience based on his or her needs.

What’s your connection to Asia?
I was born and educated in Singapore. One key driver why I started a business was, as a youth, I witnessed how my dad struggled daily as a taxi driver trying to make ends meet.

That said, I am very blessed to be in Singapore and to be given the right education. I see this as a very important factor to my success today.

Favourite city in Asia for business and why?
Singapore – well, for one, most of my businesses are here. Singapore is convenient for business and is very well governed. There are rules and systems that make the entire entrepreneurial journey more secure here. One big plus is the location: Singapore is a hub that allows us to connect to the world.

What’s the best piece of advice you ever received?
船到桥头自然直 –
There is a Chinese saying that when a boat goes near the pier, it will automatically align itself (with the current). It means we don’t have to worry too much, that things will take care of themselves.

A mentor once challenged me: “But who can guarantee you can even reach the pier?”

It is such a highly competitive world we are in, who can guarantee success? This is the ONE question that has been etched in my mind for decades. The Chinese saying always comes to mind when I am positioning, designing and strategizing for my business.

Who inspires you?
Mr. Lee Kuan Yew – The fact that he started ruling the country just like a startup. With limited resources, he was able to find a strong positioning to differentiate his country from the rest of the of Asia. With hardwork and proper planning, he transformed Singapore from a fishing village to a prominent financial hub in Asia.

Because Mr. Lee Kuan Yew positioned Singapore so well, government owned companies, such as Singapore Airlines, have emerged as the best in the world.

His story inspires me, spurs me to understand that success is not by chance but by design – every little step, all the strategies are all planned out. Not at all by chance.

What have you just learnt recently that blew you away?
My business coach, Marshall Thurber, shared with me the power of the “Trim Tab” – a small part of the rudder system in a ship. This Trim Tab, despite its small size, is able to influence the entire ship’s direction by turning it.

This metaphor helped me see that a man can influence the entire world if the right effort is applied. We are now living in an entirely new world, the way we commute with an app on the phone – that’s the power of the Trim Tab at work.

If you had your time again, what would you do differently?
I would embark on the same journey but I would seek a mentor at a very early age.

I have been through many hard knocks along the way, and I definitely could have shortened the learning curve if I had a mentor to advise me on the many aspects of entrepreneurship.

How do you unwind?
Driving down long highways helps me unwind, that’s when I let my mind relax and wander.

I love long distance driving and riding. My wife gave me a Harley Davidson Tourer for my 50th birthday and we intend to embark on riding holidays together in Asia.

Favourite Asian destination for relaxation? Why?
Hong Kong – I love the fast pace and the vibrance of the city. I love the cars there and it’s a very unique and exciting experience for me. And of course, I love the food there too!

Everyone in business should read this book:
One Minute Millionaire – this book highlights the mindset of an individual that is the key determinant for success in whatever we embark on. As long as we know we have a very strong reason why we need to do it, we can do it!

Shameless plug for your business:
I am the CEO and Founder of 2 Math enrichment brands:
Neuromath is a Specialist Math Learning Centre that helps students from Primary 1 to Junior College, empowering them with strategies, skills and a strong desire to learn and problem solve. We use technology to train students to avoid careless mistakes reclaiming 30 marks or more in Math exams and achieve their full potential in math.
www.neuromath.com.sg

Early Math Matters is a premier Mathematics and Cognitive Development enrichment centre for preschool children aged 3-6 years old. Through purposeful play and our renowned EMM approach, we help learners build a strong foundation for problem solving at an early age, and instil in them a passion & love for math that will stay with them for life.
www.earlymathmatters.com

We are actively seeking passionate teachers, entrepreneurs and investors who are keen to grow the education business with us.

How can people connect with you?
I speak regularly at workshops for schools, parents and platforms demonstrating the use of technology for peak performance in education.

Do contact me at
www.NormanTien.com

Alternatively, you can connect with me:
www.NormanTien.com/facebook
www.NormanTien.com/linkedin

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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