Building an agricultural supply chain on bandwidth


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During the early days of the lockdown in 2020, farmers and wholesalers across the country faced adverse conditions to deliver their produce to major city markets. As a result, farmers suffered from strain in their income streams while consumers suffered inflated prices due to lack of supply.

This situation was caused by the rather archaic supply chain through which farmers have to sell their products. They usually sell their products to a wholesaler who transports them from the countryside to big cities and supplies them to retailers or other wholesalers.

By its very nature, this chain is uncoordinated; a cut link can damage every part of the chain, which is exactly what happened during locking.

As a result, market gardeners received the short end of the proverbial stick. As they had to pick at least some of the produce each day and then sell it to earn income, their livelihoods were quickly in jeopardy.

Atik Mondol, a wholesaler from Madhupur, Tangail found himself, along with the 100 farmers who supplied him with products, in such a dilemma.

Fortunately, these farmers are members of the Madhupur Krishok Club, a collective of farmers managed by the Sasya Foundation. When Sasya was briefed on the situation by Atik, they came up with an idea: to set up a new supply chain based mainly on the use of technology.

This assimilation of technology was not a gimmick but an absolute necessity. Sasya founders were unable to travel to Madhupur to talk to farmers, select products and prices in person due to the nationwide lockdown. They first partnered with one of the country’s leading e-commerce retailers to provide them with fresh fruits and vegetables.

The founders coordinated with Atik while the farmers came up with a list of products and prices and submitted them to the retail company. At the end of the day, Madhupur farmers collectively received an order for their produce, which was equivalent to around Tk 60,000.

The farmers gathered at Atik the next day with their produce.

The first challenge was to sort the products that were up to the retailer’s standards. As the farmers were inexperienced, they found it difficult to choose the best products.

Sasya’s founders called a local studio photographer and told him to live stream the sorting process, which allowed the founders to select the perfect products for the business. After this process, a loaded van delivered fresh produce to the retailer the same day.

But these farmers carried on their daily activities and were in urgent need of money. The founders of Sasya used every available method of digital financial services to pay farmers on the same day.

Over the next few days, the process became more efficient and streamlined. Instead of discussing prices with farmers for hours on end, Sasya members received product lists and prices via Whatsapp. Farmers have also become much more efficient at sorting out the wrong products.

Hours of work were done in just a few minutes.

Although it has been the most devastating for the economy, the pandemic has also revealed better, efficient and more productive ways of doing business. The agricultural supply chain is no exception.

Effective coordination between farmers and major retailers can be of tremendous benefit to all parties involved.

Mahmud Hasan, one of the founders of Sasya and CEO of Agromars, a grocery retailer, said: “As the pandemic has shifted consumer behavior in favor of online retailers, demand for basic necessities and of fresh produce has increased considerably. directly to retailers will benefit both farmers and customers, as both parties will derive value from their transactions. ”

This process still has the potential to be more efficient. Retail businesses can provide farmers with transportation, which will allow them to reduce the cost of produce while transporting it more efficiently.

But this step still has potential hurdles. As these farmers’ collectives are decentralized and dispersed, providing them with transport remains a considerable challenge.

In addition, the replication of this process on a larger scale may be hampered by traditional financing mechanisms in the agricultural sector.

As Mahmud Hasan explains, “Farmers usually have to take out high interest loans from ‘mohajons’ to finance their cultivation process. In return, they have to resell all or most of their crops to the “mohajons” at a lower price. than the market price. As a result, buying directly from farmers becomes extremely difficult ”.

The methods established for financing farmers have not had a great impact on this front. Since most farmers are unfamiliar with the bureaucratic processes of obtaining a loan from a bank, they effectively cannot take advantage of these facilities.

Finding alternative ways to reach grassroots farmers will be the key to replicating such a process across the country.

“Farmers are more comfortable using digital financial services, which can be the key to funding such businesses,” said Mahmud.

Despite all these difficulties, farmers in the neighboring regions of Jalchatra, Dhanbari and Sherpur decided to join the initiative. It looks like this innovative adoption of technology in the agricultural supply chain is about to catch on.

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