Emertech Innovations

Sahyadri Farms Case Study

1. Introduction

Income earned by a small and marginal landholding farmer in India depends on multiple extraneous factors thereby making farming a financially perilous profession. Lack of infrastructure, less bargaining power, lack of storage facilities and marketing resources have been the prime challenges for the small landholding Indian farmer. Thus, economies of scale are becoming important for basic sustainability which can be enabled with collectivisation, more so for those intending to grow traditional specialty crops/cultivars. At the same time, modern consumers are also becoming health conscious and socially aware regarding farming practices and ensuring farmer equity. But lack of transparency leads to food fraud which costs the global food industry an estimated $30-40 billion annually. Consumers want to know more about the journey (harvest-to-shelf), freshness, authenticity, integrity and ingredients of the food they consume. On the other hand, the small-landholding Indian farmer has always been operating in a domain where lack of transparency dictates nearly every facet of life, right from isolation from market trends till exploitation by middlemen. The initiative by Farmer Producer Companies to form integrated value chains to ensure that fair equity is ensured among the value chain partners is critical for betterment of the entire rural economy. We will explore a case study of how Blockchain technology is being leveraged to bring transparency throughout the value chain from farmer till the consumer. The research questions to be answered in the paper are: (1) How can collectivization of farmers ensure better equity to the small landholding Indian farmer? (2) How can Blockchain technology be leveraged by farmer groups to bring transparency in the value chain?

2. Industry Landscape

Lack of accessibility to the benefits of mechanisation, modern irrigation, and other investment-based technological improvements leading to suboptimal productivity. A perpetual debt cycle, post-harvest losses, exploitation by middlemen, increasing input costs, fluctuating supply resulting in price volatility, are some of the major problems faced by the Indian farmer. As explained by Ministry of Agriculture, Government of India, in the ‘Policy and Process Guidelines for Farmer Producer Organizations’, ‘Collectivization of producers, especially small and marginal farmers, into producer organizations has emerged as one of the most effective pathways to address the many challenges of agriculture but most importantly, improved access to investments, technology and inputs and markets. A Farmer Producer Organization (FPO) or a Farmer Producer Company (FPC) enables every farmer to have equal voting rights regardless of their shareholding, thereby bringing democratization. Only farmers can become shareholders within an FPO or FPC, although an FPO or FPC can invest and hold equity in other organizations (Ministry of Corporate Affairs, Government of India, 2013). As per the latest information, there are more than 8,000 registered Farmer Producer Companies in India, and the government is making policies and plans to boost their number.

3. Supply Chain Dynamics

For implementing this solution for fruits and vegetables for SFPCL, four attributes of every unit of produce needed to be transparently recorded at stock keeping unit (SKU) level across multiple operational locations: origin, pricing, provenance, quality & safety through certificates. Each location captured this information during operational processes and stored it onto the blockchain. Real life movement of produce necessitated a four-location design. The value chain began at cultivated plots called origins where the produce was harvested. Information about origins was recorded onto a blockchain verified registry of farmers and their fields. Harvested produce was purchased by Sahyadri Farms and transported to a production and packaging location that performed quality assessment. Critical information about the price given to the farmers and transport timestamp was recorded onto the blockchain. Accepted produce quantities were then moved to assembly lines for production into freshly packaged SKUs (stock keeping unit). At this stage, information about the production costs and timestamp were calculated as per the weight of each SKU and recorded onto the blockchain. Finished SKUs were then dispatched to multiple distribution centers that serviced either physical retail stores or direct delivery to consumers in designated geographical zones. Transport timestamps and storage costs incurred by distribution centers and retail stores were calculated as per the weight of each SKU and recorded onto the blockchain. Due to the perishable nature of the products being tracked, it was extremely important that data was captured in real time or near real time, validated as per predefined business rules and committed to blockchain

4. 5.2 million QR codes for 110 varieties of Fruits and Vegetables, and 50,000+ QR codes for Cotton-to-Tshirts Traceability

Upon scanning the QR code of the item, customer can see - Know Your Farmer, Know Your Money, Know Your Journey and Know Your Food, along with Sahyadri Farms brand logo and ‘Why Blockchain?’ content for making consumers aware about the technology. A cropped sample of a real QR code scan of an SKU is provided in the image of the trace screen. in which one can see the amount received by the farmer with respect to how much the end consumer is paying for the final product and other information. Owing to the nature of the data availability and data capture, the QR codes could show varying degrees of information. Transparency regarding how much money goes to the farmer defined per SKU is a first of its kind initiative in India. Consumer awareness and consciousness is now being channelized by offering them visibility of what happens in the journey of the food that they consume. The rising awareness, along with maintenance of food quality and safety standards, leads to more consumers for the farmer collective which in turn enables the collective to offer better prices to the farmers. As of 28th June, 2022, more than 5.2 million QR codes have been printed for fruits and vegetables. For cotton-to-tshirts, over 50,000+ T-shirts are equipped with a Blockchain-backed QR code. The successful implementation has been covered by the mainstream media for Blockchain-based traceability and transparency.

Our work acknowledged by Mainstream Media

Our Blockchain case study with Sahyadri Farms is published in the Special Issue of 'Indian Journal of Plant Genetic Resources’ Special Issue Vol 35 (3), 2022