30 x 5 formula for regular income to farmers

Hi All,

I was thinking of an idea to ensure regular income to farmers like salaries. This is a very RAW idea and require your thoughts / critics / suggestions to fine tune it and see if it works.

  1. Need to ensure that the farm produce reaches the end customer directly and hence chosing vegetables.
  2. The idea is to provide 5 variety of vegetables (Grown using organic or Natural methods of farming) 1 Kg each of 5 varieties at Rs 150 per week
  3. The price will NOT vary based on prevailing market rates
  4. Every customer has to purchase minimum 3 varieties.
  5. The Cleaned sorted and weighed vegetables should be door delivered to customers

This is the basic Idea request all you you to put in your thoughts.

There are three main challenges here

  1. Productions
  2. Processing and packaging
  3. Supply chain management

Regards,
Viktree

Idea is good. So you want to rope in a few farmers and offer them to buy their produce. You then clean, sort and pack up everything in neat packages and deliver it to the customers in cities.

First the negatives:

  1. Currently, there are multiple levels from vegetable grower to the consumer. Most of these middle levels work on thin margins and so chances of you making very good profits are low.

  2. Finding a sweet spot where farmers won’t mind selling you in peak season and you not minding buying in low season is important. Salaried farmers reminds me of former Soviet union. You will have to treat carefully

  3. Finding customers in close proximity and retaining them is always a daunting task.

  4. Finding reliable manpower is never easy

Most businesses have only one or two of the above problems and you will have issues on every front.

Positives:

  1. You will never run in deep losses. So your bottomline is protected. And exit is supereasy.

  2. Once you have gained some trust, you will have ready and unexhausting supply of customers and suppliers…so upside is unlimited

  3. You will be able to build up economy of scale quickly and should be able to bring in better practices for farmers

  4. As you would be reaching out a large number of people, you will be able to leverage it for some other value added business (pamphlet deliveries/surveys/local advertising etc)

  5. You will be doing enormous amount of social service. People don’t mind shelling out a few more rupees if they know that money would directly reach farmers and you should be able to really clean and ethical business.

All the best. If you want an mobile app to keep track of customer demands and status of farm produce, do let me know :wink:

This model is already existing in Chennai.  You have to search “The Hindu” for this company (I don’t remember the company but have seen their website sometime back).

Hi,

Quite a few organizations do this in different cities. Some of them produce, some procure from farmers, some merely distribute buying from wholesale markets.

The key is to provide value to customer over the neighborhood shop.

Hi Viktree,

Although the thought process is very good, they will need to have a regular supply to be sold (this will be a initial challenge, but very critical too… only if you take off high in the wind you get the required force to keep flying).

Today’s world, good variety gets better price, so if there is a fixed price then there should be someone who will monitor the quality as end users would gauge you by the quality as a major parameter.

Another thing you have to give thought to is… will your end user pay u higher if same is available for less outside? I think not… so, even if you buy at a fixed price, if stocks are not liquidated, there will be huge losses. :frowning:

But it is not an impossible business, just needs some fine tuning. I have sent you a personal mail, please look into it.

Viktree,
Do read the “Market Gardener” book.  Though it is by a farmer in Canada, the contents utilized for market gardening are relevant.

amazon.in/Market-Gardener-Su … t+gardener

This is much similar to Community Supported Agriculture (CSA) in US and Canada, which is highly successful and community driven wherein people support local farmers by assuring to buy their produce for a period of time. Please visit localharvest.org/ to know how CSA works.
I had earlier posted about the book ‘The Market Gardener’ by Jean here:
farmnest.com/forum/farming-news- … /#msg16965

Thanks,
Nishikanth