23 October 2017

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Solutions for the lone warriors of the soil

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An agri solutions company, Gramco Infratech was started in 2009 by Raman Singh Saluja as a social initiative to help the farmers; an answer to the farmers needs for modern and efficient agriculture.  Gramco is an agriculture infrastructure company that aims at addressing the needs of the farming communities by providing better productivity through technology infusion and introduction of global best practices to ensure better quality and prices for farmers.

 

 


They also aim to provide better remuneration to farmers by allowing them to sell their produce directly to the private players including food processors and the organised retail sector.

About the Founder and the Business Model

The company operates via two 2 facilities, located in Indore and Dewas. Both facilities are equipped with hoppers or elevators and grain cleaning and grading equipment, modern warehousing/ testing equipment etc.  The USPs of the company includes complete integration of Services from Agri-Advisory, Soil Management, Warehousing, Collateral Finance, Value Addition by Cleaning and Grading and Finally Purchase of Produce from Farmers and Procurement operations.

Raman Singh Saluja, the Founder and Managing Director, Gramco Infratech is a serial entrepreneur who has ventured into various business verticals during his long career span. Prior to venturing into Gramco, Raman attempted to invest time and effort into Wind Energy between 1995 and 1998. He then moved on to exporting potatoes and pulses to the Middle East and South Asian Countries. Furthering his entrepreneurial quest, he moved onto metals’ trade which has been his family business for over 40 years now, with present interest in a steel mill in Sri Lanka.  Seeing the potential in the agri business, he found Gramco as a rural solutions company to address the need of farmers. The basic idea is to partner with the farmers in their progress by investing and setting up Gramco in high potential rural areas.

Views on agriculture segment

Agriculture will see a transformation in the years ahead, with focus on productivity and efficiency. The post harvest structure has been getting the required attention and will continue to play a very important role in assisting farmers to preserve and obtain better prices, during off season. “With increasing costs and expensive labour, we will see more mechanization” says Raman.  The present APMC structure was never designed for efficiency, though it has served well over the years. There is a need to alternative and more efficient models. “The government has been talking of FDI or no FDI in back end etc, we as a company and a home grown one at that, and are investing and building the infrastructure with no incentives – there is a huge scope for improving our supply chain and marketing, every region is different and will have to have specific solutions” he continues.

Challenges of farmers

The farmer is a lone warrior of sorts – be it a good season or bad he has to return to the field for his next harvest. Agriculture by and large a a challenge, right from weather to pests to quality and market dynamics all are capable to single handedly nullify all others. “We work with the farmers right through the season. Our agri extension team advises on correct usage of fertilizer by conducting soil testing, regular farm visits to check on pests and then post harvest storage close to producing areas with facilities for cleaning / grading and then procuring from the farmers at fair prices” explains Raman.

The government has tried to make changes and there has been a considerable progress over the situation 15 years back. “There are a lot more areas that can be addressed and I do not feel the government is serious about letting go of APMC’s and permit a fair playing field for private sector. There are a lot of areas that need attention both – market to farm and farm to market side” says Raman.

Fundings and Challenges

They started with our own funds in the first 2 facilities and did a first round of funding last year in August. The projects are funded as a mix of both equity and debt. The current capex is over Rs15 crore and they are looking at increasing their geographic foot print over next 3-5 years.

Challenges are immense for them, right from identification of a location to securing suitable land, finding right people who share and are willing to inculcate the right value system. The process of land conversion itself is a very tedious process. “Every new crop brings its own challenges. Multiple licensing and departments are involved in the entire process, which can be simplified” explains Raman.

Marketing activities and campaigns

They have a team to visit villages and interact with farmers, educate them and explain the benefits and how they can benefit from the services. “It is about building a relationship with the farmer, where he feels and considers the Gramco facility as his own. This takes time. We do not believe in hard selling, as our services and relationship with the farmer is most important. We believe we gain only if the farmers gains” says Raman.

Upcoming products and plans

They have an ongoing capex in the first phase and plans to cover approximately 100-125 additional villages and are targeting over 20000 farmers to join the Gramco family, over next 3 years at these location.  They are commencing our seed production program from this Rabi season which we will extend to other crops. Contract farming is also an area of interest for them and they are keen to build linkages with companies and processors across multiple crops ranging from – oilseeds to wheat to spices like chilies and coriander etc. “Value addition holds a great promise for farmers but they are still hesitant, we are looking at promoting and encouraging farmers to make that a “natural” choice and also in marketing the produce thereafter” signs of Raman.

 
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