Farm to Fork – Innovating Urban Food Supply Chains in the light of COVID 19
Updated: Jun 12, 2020
The way of life- as we knew it- changed in the year 2020. This change-both good and bad- brought in by the sudden spread of the COVID pandemic, was something that people are having to adapt and live with. The crisis has taken over even the most basic of things- such as the way we purchase essentials. The social distancing norms, followed by strict lockdown measures across the world, have caused immediate distress to the global as well as the local food supply chains. Agriculture- an essential service- has been allowed to continue with strict hygiene measures and limited functionality. This limited functionality— as is the case with other essentials—is fraught with challenges of labour shortage and transport bottlenecks. The direct impact is being felt on the supply of perishable food items such as fruits and vegetables. Uncertainty over hygiene practices adopted by the intermediaries has led to the consumers looking for safer alternatives.
RE-IMAGING THE SUPPLY CHAIN NETWORKS
‘Farm to Fork’-- a concept mostly prevalent in urban areas, has assumed a new meaning and acceptance in these circumstances. Mandi’s are shut down or are functioning at lower capacities, and local vegetable vendors have either run out of items before an order can be placed or are fraught with massive queues due to panic buying. As an alternative, residents are organizing themselves in groups to purchase fresh vegetables and fruits directly from the farmers in the adjoining rural areas. In many cities, this is being done with some help from Residents Welfare Associations (RWAs) and local administration. With the absence of intermediaries such as traders, wholesalers, and retailers, some of the farmers are now able to sell their produce directly to these groups at a better price. For example- Maharashtra, one of the worst COVID 19 affected states in India, is currently facing a critical supply chain bottleneck in the sale of the well-known Alphonso mangoes. As a result, residents of several localities in the cities such as Mumbai and Pune are coming together in groups to bulk purchase directly from the farmers in Ratnagiri and other areas. Sahyadri Farms, a leading Nashik-based Farmer Producer Company(FPC) with 8000+ marginal farmers, is reaching out to consumers directly using technology for tracking and order aggregation. They are delivering fruit and vegetable baskets in Nashik, Pune, and Mumbai, by bunching orders in housing societies.
These models are best described as manifestations of the short food supply chain (SFSC) in varying degrees. Worldwide, SFSCs are becoming more and more popular, especially in European nations where there is consumer consciousness on food safety, quality and traceability. Also, in EU, supporting policy and regulatory framework to promote SFSCs has been developed and tied in with the rural development objectives. By nature, SFSCs have the ability to promote sustainable practices in agriculture one hand and contribute significantly to the local economies via better margin distribution for farmers. There are several agri-based startups in Tier- 1 cities - Pune, Bengaluru, Delhi, that are working on bridging the gap between the farmers and the consumers. Most of these startup models have shorter supply chains and reach the consumers with few intermediaries. Increasing access to smartphones and data connectivity in remote rural areas has helped them in reaching out to the farmers willing to be a part of these contemporary smarter supply chains. COVID – 19 has brought in a paradigm shift in agri-retail in urban centres in India with a greater push towards SFSC. This is an opportunity that has the potential for both farmers and consumers. To understand more on the potential of SFSC models, ClayRoot reached out to three inspiring organizations who have done incredibly well in the pandemic to adapt their business models and bridged the gap between farmers and consumers. It is interesting to note that these organizations while serving similar objectives, differ vastly in their approach to the ‘Farm to Fork’ concept.
A Network Model – Vande Bharatam
Vande Bharatam – a Bengaluru based not-for-profit entity is a platform for public grievances redressal having a network of volunteers from varied professional backgrounds. Anticipating the challenge that the lockdown could lead the farmers into, they quickly worked out a collaboration with Horticultural Producers Cooperative Marketing and Processing Society Ltd (HOPCOMS), Bangalore Apartment Federation (BAF) and Force-GW to work out a solution. They reached out to the farmers within a radius of 100-150 km from Bengaluru and provided them with logistics support in transporting their produce to residential areas in Bengaluru. HOPCOMS added 50 more vehicles to its existing fleet, each vehicle of a capacity of 2.5 to 3 tons. At present, this initiative is serving over 3000 apartments and many more, reaching out to them even now. They organized a mobile ‘Fruit Mela’ in 198 wards of the city on April 25 and 26, with 400 tons of pineapple from Uttara Kannada and Shivamogga, grapes from Kolar and Chikkaballapur, and watermelon and musk melon from various districts. The prices were fixed well in advance as per the guidelines of HOPCOMS. A volunteer that we spoke to particularly mentioned about the ‘dilsukh’ variety of grapes- mainly used in making jams, tons of which would have gone waste had it not been for their ‘one fruit a day’ initiative urging the residents to buy at least one kg from the farmers. With the help of volunteers from National Cadet Corps (NCC) and others, the team at Vande Bharatam helped the grapes farmers transport their produce to the apartment complexes that had signed up for the doorstep delivery with them. Within 3-4 days the farmers could sell all their produce and averted potential losses that they could have incurred. A vast network of volunteers and collaboration with relevant stakeholders helped Vande Bharatam bring farmers and consumers together at the same platform in a short time. Buoyed by this positive response, Vande Bharatam is keen to take this model ahead in a post-pandemic world.
A Niche Model - Know your food-grower - Communityfarm
Communityfarm, based in Bengaluru, is a curated online farmers market that brings together farmers and local consumers who are looking to buy organic farm fresh. . Started by Mr. Padmakumar AV and Ms. Revathy Murugesh, it aims to bring community of local farmers and farming enthusiasts closer to nature. While talking to ClayRoot, Ms. Revathy Murugesh, reminisced about the origin of creating an online farmers market- how it all started with her helping out a friend with landscaping. Eventually, other farmers joined in and they have evolved into an online farmer community, with a mix of both urban (a growing breed of weekend farmers) and rural farmers. She finds distinct advantages of the combination - with a knack for technology adoption, financial acumen and a problem-solving approach of urban farmers, and practical knowledge & experience of rural farmers coming together. Communityfarm cater mostly to the demand for organic produce (fresh fruits and vegetables) for their clients and also offer healthy alternatives for groceries and cereals through their product range.
The distinct characteristics of the Communityfarm model are the ‘good farming practices’ followed by their farmers, and the ‘No wastage policy’ which forms the very core of their ethos. During this lockdown period, getting a regular supply of organic fresh has been difficult for them, particularly the inter-state procurements were hampered. The team was approached by nearby farmers (with non-organic produce) for assistance in market outreach. Communityfarm have adapted to the pandemic by facilitating the sale of produce for non-platform farmers and catering to clients’ needs with whatever they could make available through existing and new-forged partnerships. Although in the lockdown Communityfarm faced a lot of challenges - -from getting the passes made for their delivery/transport, to facing staff shortages, to unavailability of organic-only produce, they have seen a 30% increase in their customer base in the last two months. By ensuring a safe workplace and adopting the best hygiene practices, the frequency of sourcing farm-fresh from their farmers has doubled. When asked about the rationale behind pricing, Ms. Murugesh responded, “Making profits is not our agenda, that’s not why we started this”. She added that traditional desi varieties of vegetables have vanished as people have moved to hybrid seeds. But now, many farmers want to bring back the desi seeds as they are realizing that they are effective in fighting pests. She would like to make these different varieties of good quality, chemical-free vegetables available to the consumers. It would be safe to conclude that the team has been successful, as they have a steady stream of the loyal and growing customer base. She is hopeful that this positive spurt in demand would continue in the post-pandemic world as well.
The Tech Edge – Inclusion of the Masses - Farmpal
The other rapidly emerging models are those of agri-tech startups built on scalability and having replication potential. For instance, Farmpal Techlogi Pvt. Ltd, based in Pune, is an Agri marketing and supply chain startup connecting farmers directly to businesses (Hotels, Retailers, Caterers & food processing units). Farmpal uses a mobile app for order aggregation and has five tech-enabled, quality check-equipped collection centres across Maharashtra, which are the mainstay of their model. The lead time between the placing of an order to delivery is 15 hours. Farmpal has a strong farmer connect with 1000 farmers in their network. As per the information from the Farmpal team, the farmers in their network earn 20-50%higher rate for their produce than Mandi prices with their association in the network. As per Puneet Sethi, Director, Farmpal, “Before Farmpal, it would take 8-10 weeks for a farmer to get a payment from Mandi, and that too through a cheque. The biggest encouragement by Farmpal is to open bank accounts for the associated farmers. We make sure that the farmer receives his payment in their bank accounts in 2 business days.”
He went on to add that helping the farmers earn the right price for their produce is at the very core of Farmpal’s vision. Karan Hon and Ganesh Hon, Co-founders at Farmpal, both come from farming families and understand the struggles and uncertainties that farmers’ endure. Addressing this disparate distribution of risks, became the driving force for the creation of Farmpal. In 2016, with the delisting of fruits and vegetables from the scope of the Agricultural Produce Market Committees (APMC) through a government resolution, paving the way for private players to directly procure from farmers. This gave the co-founders the impetus to start Farmpal Techlogi. The goal is to bring as many small and marginal farmers under its ambit as possible as long as they meet two key criteria- the quality of the produce and frequency of the produce/supply. On diversification to other segments such as organics, Puneet Sethi shared, “We decided to stay with big volumes as our mission is to reach the maximum number of farmers, as quickly as possible. We differentiate our produce on quality. We try to tie up with farmers to reduce the use of pesticides and follow good practices so that we get good quality produce” he added. During COVID 19 lockdown, Farmpal has focused on small scale retailer segment exclusively. In this period, the demand has increased 5 times, potential customer acquisition opportunities have opened up and more farmers on the supply side have reached out to them. Farmpal has been able to make up for the smaller scale of operation in the lockdown by optimizing logistics and catering to high population density areas.
THE NEW NORMAL
Supply chains in urban areas tend to be long, complicated, and, vulnerable. In contrast, for rural and agricultural economies, they are shorter and simpler. These startups, in their own capacity, have used tech-innovation, fin-connect, skilling manpower to address some of these vulnerabilities. COVID has exposed the vulnerabilities further- while also presenting an opportunity for further innovation. Agri-tech/supply chain startups should take it as a customer acquisition opportunity as is implied in the above discussion. For example, Farmpal with its quick digital payments and an agile business model, continue to add farmers and businesses in its network when most of the other enterprises seem to be incurring losses. The need of the hour is for food supply chains to demonstrate resourcefulness and adaptability when faced with a crisis. For instance, the ingenuity of the model adopted by Vande Bharatam is particularly striking. It recognized the problem- in this case, the vulnerability of the farmers- and used its strong network of professionals/volunteers to help them minimize their losses due to crop wastage. It is to be seen if this model can be replicated and adapted on a larger scale as things go back to normal. Communityfarm, while catering to a niche segment of organic farmers and consumers before COVID 19, has adapted to include ‘non-organic’ in its supply chain for now. Farmpal, based on a B2B model, could have seen a significant dip in demand due to closed restaurants/hotels, but instead adapted to serve more retailers in high-density areas. The key takeaway is the importance of connecting farmers to decentralized markets and consumers more directly and the ability of SFSCs to achieve this.
The impacts of COVID 19 on the food supply chains are to extend beyond the lockdown. There is a change in the psyche of the consumers, and the lockdown has significantly changed the way we look at food. As living with COVID 19 becomes more and more a plausibility ahead, dimensions of safety, traceability, lesser handling, hygiene are all going to be important considerations for consumers. There is an immense opportunity for peri-urban agriculture to adapt and innovate on small food supply chain models (SFSC). The organisations that ClayRoot spoke with, already have elements of SFSC in some combinations: fewer intermediaries, better margins for farmers, and sustainable or better land management practices. Promotion and facilitating SFSCs have the potential to realise ambitious developmental targets such as ‘Doubling of farmers income’, particularly in certain pockets close to urban centres. With regulation and timely policy support, this could be the critical solution linking healthy eating, healthy local economy and a healthy environment. After all smart cities are about adopting smarter models, isn’t it!