Summer Spotlight: Listening to the client in Hyderabad

Geetika Agrawal is pursuing her MBA at the Stern School of Business at New York University, specializing in Finance and Social Impact & Innovation. She is currently a Summer Associate at the Acumen Fund India office, where her focus is on building out the Agriculture portfolio and consuming as many mangoes as possible. She holds a BS in Computer Science from Stanford University.

The agriculture industry employs 60 percent of the Indian labor force, according to the CIA World Factbook. The backbone of this sector is the small holder farmer, those living off less than five acres and earning on average about 160 INR per person per day (approx $3 USD). While the Green Revolution increased the productivity of the farming sector and helped alleviate some hunger issues in the country, it did little to increase the livelihoods of the farmers.

In fact, within the fruit and vegetable sector today, there is a post-harvest wastage of 20-40% due to many factors: a lack of storage facilities, poor transportation logistics, a complicated web of middlemen, a dearth of quality controls and other critical supply chain inefficiencies.  This means farmers are often unable to fully realize the value of their crops. These issues in the agriculture sector are further thrown into relief by the fact that while India is the second most productive country in the world when it comes to produce variety, quality, and quantity, its total fruit production represents 8% of the world market share and its vegetable production equals only 15%. Illustrating where the inefficiencies hurt India, the Netherlands imports mangoes from Chile, at half the price, despite the fact that Chile is twice as far away.

On the bright side, supply chain inefficiencies and a demand for innovation regarding sourcing are a cries for help - and for creative business models. With these motivations, the Acumen Fund India team has started to build out a strategy and pipeline for investments in the agriculture industry. As a Summer Associate, my first task is to build a detailed case for Acumen’s involvement in the fruit and vegetable market. After a week of office ramp-up (i.e., numerous hours of quality time with the computer), it was time to get on the ground and understand how the kilos of mangoes I’d be consuming since I arrived in India actually got from the small market to my plate.

I jumped into an autorickshaw and headed to Rythu Bazaar in Hyderabad, a government supported market that allows farmers to sell directly to the customer. These bazaars are still relatively new, created to cut through the complicated set of middle men who would eat away profits through commission and price gouging.

My trip to Rythu was a unique opportunity to converse with the farmers and understand better their daily activities. They were open and eager to share their different methods of getting their produce to market.  I was also incredibly humbled to see how hard each of them works. One farmer, selling a variety of greens, described how he starts his day at 4 AM, first harvesting and then bundling the 500 bunches of greens he brings into market. He then carries the large sacks of greens on the back of his motorcycle two to three hours to bring them from his farm to the mundi.

Other farmers bring their produce by local bus, or they rent autos. On a good day, the “greens” farmer – like many others – will have leftovers which either go to hotels or wholesalers at mass discounts or simply get dumped, due to lack of cold storage.  The fact that this food often just goes to waste is tragic considering the high rate of malnutrition in India - especially in many of the surrounding villages. Storage is limited to cheap tarps and large leaves, leaving a day or less before produce spoils in the heat and humidity of monsoon-season Hyderabad.

When pressed on whether they would prefer cold storage however, many of the farmers shook their heads and simply said “No, madam, who wants to sell old vegetables? That’s not how it’s done.” After reading report after report on how important cold storage was and then hearing their stories, this was a good reminder of the difference between understanding needs and wants.

After a little while in the mundi, I had accumulated a little entourage of young farmers who would take me from one friend’s stand to another.  I was handed samples of mangoes, posed for pictures and they answered my questions before I even asked, since they had memorized them.  Then the tables turned and I was grilled on my life in Hyderabad, what I thought of being here, and most importantly, more details on my iPhone, which I was using to take pictures. I left feeling re-energized and committed to helping these entrepreneurial, energetic people find a way to reap more of the fruits of their labor.

The field trip was also an important reminder of how important it is to reconnect with the client, and how much knowledge can be lost if you just spend time behind the desk. It is also clear to me that we have a long road ahead of us as we seek to make an impact in this space - but it is one that won’t be without its rewards.