The Statistics

As we all know small farmers represent 86% of all the farmers in India ((IJAEM). Due to their lack of knowledge and resources these farmers end up using a middleman in order for them to expand 

their businesses to desired outcomes. Small farmers represent the population that has less than 2 ha, medium ones are the ones that have between 2ha and 10 ha and big farmers are the ones that have more than 10 ha. To be extremely exact with our measurements we can say that out of the population of farmers in India (which is 58% of the entire population, approximatively 828 820 000 people) marginal farmers that use 1 ha or less make up to 67% of the population, small farmers 17.9%, semi-medium 10.04% and medium 4.25%. Big farmers in India make up to 0.7% on the scal therefore there is an extreme demand to help those in needs. The more land and education those farmers aquire the more they will be able to expand their businesses and no longer rely on the middleman. 

Because of the middleman, most farmers end up taking 40% of the final price (the pricesc an vary between 15% and 40% but their income is usually very low) which means that in the worst case scenario the middleman ends up taking more than 60% of their income!

More than half of small and marginal farmers live in areas like Uttar Pradesh, Bihar, Madhya Pradesh, Maharashtra and Andhra Pradesh (Agriculture Census 2015-16) and most of them cultivate the classic combination of cereals i.e., paddy in kharif (and even in rabi in some cases) and wheat in rabi as well as cotton (which according to NSO 2018-19 represents the third preferred crop).

Our app, Branch will offer courses and it will eliminate the middlemen ( we will connect marginal up to medium farmers to supermarkets using a matching algoritm) in the equation to make sure the farmers will be able to obtain their profits. Through our matching algorithm we will evaluate distance, order preferences and payment choices which will be extremely useful in creating a successful business plan. 

We will generate our revenues by charging a commision between 10% to 3% that progressively decreases based on the farm size as well as creating a premium feature (that will contain courses and access to the data about him, Bulk Purchase Discounts, Priority Listing & Visibility). Furthermore, our revenue will also come from partnerships with government and NGO’s and selling anonymus data in a further stage.

From our calculations one hectare of land will be able to give a farmer €1,050 - €1,650€per year( median : 1325) and by approximating that to our groups of farmers we can calculate their income per year. A marginal farmer has maximum 1325€ per year, a small farmer (more than one ha of land) has between 1325€ and 2650€, a semi-medium farmer (2-4 ha) will generate between 2650€ and 5300€, a medium farmer between 5300€and 10600€ and a big farmer +10600€. Taking into consideration their expenses like land preparation cost (33-55 EUR per hectar), rent for land (110 EUR - 165 EUR per hectare), seeds (27 EUR - 38 EUR per ha), labour and equipment (11 EUR - 16.50 EUR per ha), fertilizers (44 EUR - 66 EUR per ha), watering and electricity (which goes between 77 EUR to 110 EUR per ha per year), pesticides and labour (33-56.50 EUR) and other costs like harvesting, transportation and storage that would bring a marginal farmer to the total of less than 1053€  per year, a small farmer between 1053€ and 2106€, small medium 2106€  and 4212€, medium betwen 4212€ and 10530€ and large farmer over 10530. Considering the effort these farmers put in the income is extremely low.

Is this plan for revenue feasable for the farmers with a low income? 

For Marginal Farmers (≤1 ha, 67.1% of farmers) annual profit can be €1,053 and Branch Commission would be 3%. The estimated yearly commission paid would be €31.59. 

For small farmers (1-2 ha, 17.91% of farmers) the annual profit would be €2,106 and Branch commission would be 5%.  The estimated yearly commission paid: €105.30. For Semi-Medium Farmers (2-4 ha, 10.04% of farmers) the annual profit would be €4,212 and Branch commission would be 7%.  The estimated yearly commission paid would be €294.84. 

For medium farmers (4-10 ha, 4.25% of farmers) the annual profit would be €10,530 and Branch commission: 9%.  The estimated yearly commission paid would be €947.70. 

For large farmers (10+ ha, 0.7% of farmers) the annual Profit: €15,000+ and Branch commission would be 10%. The estimated yearly commission paid: €1,500+

In the best case: marginal farmer (67.1% of indian): max 1053€-  per year, small farmer  between 1053€ and 2106€, semi medium farmer between 2106€  and 4212€, medium farmer: between 4212€ and 10530€, large farmer: +10530€.

In the worst case the marginal farmer (67.1% of indian) would have max 885.€-  per year, the small farmer : between 885€ and 1770€, the semi medium farmer : between 1770€  and3540€, the medium farmer: between 3540€ and 7080€ and the large farmer: +7080€.