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Agroy has created a service for farmers in India, through which they can order affordable fertilizers via their smartphones. Finnpartnership provided valuable assistance in surveying the new market.
Agroy Oy has developed an electronic purchasing service that gives farmers access to competitive pricing of fertilizers, seeds and agricultural chemicals. The Finland- and USA-based company is now in the process of expanding to India. “India is one of the world’s major farming countries. It is also technologically progressive, so it is a sensible target for our expansion,” explains Agroy’s Project Manager Matti Miikkola.
Agroy started probing the Indian market in the winter of 2017, with Business Partnership Support from Finnpartnership. “The grant from Finnpartnership permitted us to make a much more comprehensive project plan than we would have managed on our own. It also covered the on-site testing and piloting of the app developed specifically for India,” Miikkola says.
He explains that the Finnish embassy in Delhi has also been very helpful in creating the company’s first reliable local contacts. “In India you can fail right from the start by teaming up with the wrong people.”
Agroy registered a subsidiary in India in December 2017, and recruited a local country director who started working in February 2018. They have continued looking for new partners and creating contacts with local suppliers.
The app was completed at the start of the summer, but certain issues related to payment transactions still need to be resolved. Miikkola believes that the solution will be found in mobile payment systems, which are quickly gaining a foothold in India. “Once all the components are ready, we can really start to pitch our services to farmers,” he says.
There are more than 100 million farmers in India, a country where agriculture as a sector employs some 500 million people. The typical farm covers only a few hectares in size. Agroy has decided initially to focus on a limited geographical area, establishing its field office in Chandigarh, in the northern part of the country. The city is located between the farming districts of Punjab and Haryana, which are known as the breadbaskets of India. “We will start in this limited area. Once our business model has proven its worth, we will be able to expand to other parts of India and broaden the scope of the service.”
According to Miikkola, it would be too difficult to contact individual farmers in such extensive farmlands. This is why Agroy is striking up relationships with farming cooperatives and associations. “This allows us to distribute information to many farmers in one go,” Miikkola explains. Agroy intends to offer a similar service in India as it does in Finland: farmers can tell the app how much fertilizer, for example, they want to buy. Agroy collates the orders and obtains competitive tenders from suppliers, choosing the lowest price.
At the moment, Indian farmers buy their fertilizers and seeds from the same local markets where they usually sell their own products. The distance to the market may be long, however, which means that they waste a lot of time travelling and doing business. Many farmers carry out exchanges between their products and fertilizers at the markets, but sometimes they are forced to take high-interest loans for the purchases.
“Our aim is to provide a service that saves the farmers not only money but also time. They can order fertilizers on their smartphones and have the goods delivered directly to their farms.”
Agroy was established in 2011 by a group of Finnish farmers who wanted to join forces in order to improve their cachet in negotiations with large suppliers. Miikkola believes that a similar collaboration model can work to empower Indian farmers. Agroy is aware that it may take time to start up and grow the business in India. It took several months just to establish the subsidiary there. “For now everything has gone according to plan, however. The greatest challenges will probably arise once we start running the actual operations.”