Our Food - Decentralising Food Processing
Stage of adaption :
Post Harvest Stage
Technology driven farmer franchising platform that adds value to the farm produce using low cost food processing equipment (pulses, rice, chilli powder, turmeric powder, groundnut, millets, etc.) and market linkages for the produce.
Our Food designed and manufactured new age low cost food processing equipment like Dal, Chilli Powder, Turmeric, Rice, Groundnut, Millets, Masala Powders, etc. Our Food identifies unemployed rural youth farmers, in the age group of 20 to 35 years, with a minimum education of 10th standard, and a minimum land holding of 1 acre. Our Food helps these aspiring rural entrepreneurs build a 1000 sq.ft shed (farmer franchise), assists them in getting the loan, installs low cost food processing machines, trains the farmers on value addition, procures the processed produce like dal, chilli powder, turmeric powder, millets, spices, rice, etc., directly from the farmer franchises and sells to wholesale buyers.
Even though India is a agriculture dominant country, farmers always end up getting low price for their produce. This is owing to the following problems.
• Farmers cannot reach the end consumer directly, there are many intermediaries in the system (middlemen).
• Farmers do not offer the end product that the customer wants, they sell in the raw form.
• Farmes do not have access to the knowledge of food processing
• Farmers cannot market the product on their own.
• There are many transition losses, inefficiencies like multiple transportation, handling in the food value system
• The existing processing mills are located in select pockets, and their size makes it imperative to have large volumes to achieve economies of scale. The high volumes required to keep these mills operating and profitable make middlemen indispensable in the model for aggregation and brokering the trade between farmers and the processor. This additional layer leads to reduction in farmer share in end consumer price.
Deployed in large scale
We have set up more than 200 low cost food processing units till now spread in Telangana, Andhra Pradesh, Madhya Pradesh, and Maharastra states. The primary focus is on processing of pulses, chilli, rice, turmeric, groundnut, millets. Starting from June 2020 onwards we will be setting up 100 units per month. We are adding other processing units like roasted channa dal, cold pressed oils, ginger garlic paste, floors, tomato drying, onion powder making, etc. There are about 15 new machineries ready to be launched.
All the processed material at farmer’s place will be picked up by us and sold to kirana general stores, retail outlets, hotels, restaurants, caterers, and any other bulk buyer. Currently we are covering the market of Hyderabad, Chenna, Indore. We have more than 200 customers for our farmer franchise products.
Unemployed rural youth who own a minimum one acre land and are educated (at least 12th standard). These youth are migrating to nearby cities for merger salary of INR. 8000 to 10000. Many youth in Telangana state are migrating to Middle East countries and working as drivers, construction labor, etc for very less salaries. If we can tap these youth and set up these low cost processing units, they can earn decent income and earn a respectable life.
On the demand side, the Kirana General Stores, retail outlets, super market chains, HORECA segment, and any other company who requires raw materials produced by farmers are our customers.
Each of our processing unit can process up to 100MT per annum. India produces approximately 285 million tonnes of food grains alone. A village with an agriculture output of 1000MT needs at least 10 units. Telangana state alone requires 10Lakh units.
There are approximately 30 crore youth in the age group of 25 to 35. These people are willing to stay back in their villages provided there is decent income earning opportunity. We have around 5000 shortlisted applications from these youth now.
The major limiting factor is getting the loan for our farmer franchise for setting up the low cost processing unit from the local bank at a nominal interest rate. Majority of the public sector banks refused to give loans to our farmer franchises. We have spent the required investment from Our Food books to rove the model.
After all the hard work that we have done and the investment we made on farmer franchises, finally the Grameena Banks have come forward to lend to our farmer franchises. We signed an MoU already with Andhra Pragathi Grameena Bank to lend to 3000 units in the next two years. We are in the final stage of sinning similar deal with Andhra Pradesh Grameena Vikas Bank, Telangana Grameena Bank, Saptagiri Grameena Bank, Chaithanaya Godavari Grameena Bank. We are in advanced level of talks with Grameena Banks in Maharashtra and Madhya Pradesh states.
Maintaining uniform quality across all the farmer franchises is another challenge. We are mitigating this by investing a lot on the training. We deployed one resource per 10 farmer franchises.
The total investment required for setting up one unit is INR. 7Lakhs. This includes the cost of construction of 1000 SqFt (25ftX40ft) shed. Civili construction cost of the shed is INR. 3Lakhs. Any food processing machinery costs INR. 2.5Lakhs. Roofing sheets for the shed INR. 50000. Working capital assistance of INR. 1Lakh will be given. It is the responsibility of the farmer franchise to invest INR. 3Lakhs to construct the shed. The remaining INR. 4Lakhs will be provided in the form of loan.
Farmers can get at least 25% price more than what they get when they sell in the traditional value chain. This income increase can have cascading effect on the well being of the farmer family.
Processing at farm level reduces the transportation cost of the raw material and also post-harvest losses (up to 30%). The costs involved in storing of the raw produce, pilferage costs can be minimized.
Increasing economic activity at village level can create ripple effect by motivating other youth to set up micro industrial units.
Unemployed rural work force get employment in these small units. Each unit can accommodate at least two people. This can curtail migration to cities thereby increasing stress on city infrastructure.