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“Are you guys doing alright?” That’s a question that Venkat Subramanian and his wife Srivalli Krishnan have to deal with on a regular basis. But what invokes such concern for this entrepreneurial couple? They spend their weekends traversing Chennai’s neighborhoods, selling vegetables from a van. An unusual business it may be, but eFarm Solutions is an apt response to India’s agrarian crisis. Launched in January 2008 as a subdivision of Matchbox Solutions, eFarm works on a transparent, economical and farm-to-home model. “Farmers need money for their hard work, not subsidies,” says Subramanian.

In 2007, Subramanian quit his job at Wipro in, the U.S., to return to India and start out on his own. During his 12 years in the IT industry, Subramanian had acquired considerable knowledge about banking, finance and insurance. His initial plan, then, was to get into the online insurance segment, which was still a nascent industry in India. With an investment of Rs. 10-15 lakh from personal savings and help from his friends and family, Subramanian launched Matchbox Solutions in mid 2007.

But the buck didn’t stop there. Interactions with friends who were venturing into the ‘fields’, so to speak, left him smitten with the idea of combining technology with a critical business segment like agriculture. But it also left him deeply concerned at the lack of a viable business model within the agrarian system.

“The real problem lies on the sales and marketing side. Farmers are constantly cheated within the mandi system,” he says. Many branded retailers of agrarian produce spend their energies managing outlets, rather than keeping a tab on their sourcing options. But what creates the most chaos in the system is the fact that India has no set standard for measuring produce.

Thus, eFarm was created as a platform where buyers and sellers can come together—a cross between the dabbawalas of Mumbai and eBay. “We give customer service the utmost importance, providing decent dealings, fl at prices and quality produce,” Subramanian explains.

Eighty percent of eFarm’s customers are wholesale clients, such as hospitals and restaurants, who pay farmers a special rate and help estimate weekly demand. Target customers also include the local kirana stores, pushcart-walas and households. The company prefers to steer clear from big retailers, though, as they tend to give perishable commodities a longer shelf life.

“We are wholesale logistics providers,” says Subramanian. “Our niche is sourcing, not retailing. That’s why eFarm will not consider creating a branded retail chain.” The branded eFarm vans are as close to ‘retailing’ as it gets; on weekends, a van doubles up as an organic mandi. Orders for vegetables are placed over mobile phones and cultivation is planned accordingly.

Microfinance organizations and NGOs also form an important part of eFarm’s network. The company has partered with NGOs that deal with mentally challenged and handicapped people, weaving them into eFarm’s ecosystem of social entrepreneurship. They help with the sorting, cutting and grading of the goods.

“NGOs pay us a basic remuneration for partnering with them, and we do not force our business angle onto this wing of eFarm,” he says. Tamil Nadu has been known for its high density of self-help groups and NGOs run by knowledgeable women. “Moving to Chennai was an eye opener for us in this space. I have learned a lot from these women,” Krishnan adds.

Krishnan deals with the administration within the company and organizes marketing campaigns. But her most important role includes taking care of the tasks handled by women; she treats it as her personal domain. “The biggest challenge here, though, is convincing women that selling vegetables can be lucrative,” she says.

Being both entrepreneurial partners and life partners has its pros and cons. “We did have initial teething problems when it came to decision-making,” says Krishnan.

eFarm’s business model received an ICRISAT grant at the turn of 2009, and the company is being incubated by the organization. The grant money is being used to set up collection centers in rural areas across Tamil Nadu.

eFarm has been growing at 25-35 percent every month, with revenues crossing Rs. 1.5 lakh a month. “By the end of fiscal year 2009- 2010, we expect to touch Rs. 40–50 lakh,” says Subramanian. Five full-time and five part-time employees are keeping this socially conscious company running with the help of 12 advisors. But according to Subramanian, eFarms’ biggest knowledge pool has been the farmers. “Who knew that we have 100 varieties of spinach alone!” he says.

©Entrepreneur September 2009

LIGHTING THE MATCH:
• India’s daily consumption of fruits
& vegetables is to the tune of Rs.
275 crore
• The eFarm model creates opportunities
for new vegetable shops in
areas where none exist
• It taps new areas of sourcing
produce, thereby offering better
market prices for farmers
• Establishes close relationships
with local merchants and traders
who help reach higher volumes by
selling to the lower-end

Tags:
e-farm, Farm, farm-to-home, farmer, Matchbox Solutions, smetv, Srivalli Krishnan, van, Venkat Subramanian