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rml agtech

RML Agtech: India’s Farmers Business Network?

July 12, 2017

India’s agriculture sector is beset with a specific set of challenges compared to farmers in other parts of the globe. The Southeast Asian country has 120 million farmers with an average landholding of under two hectares (5 acres), which compares to the US where average land sizes are in the hundreds of acres. Compared to global benchmarks, the industry has very low productivity and high input costs, exacerbated by limited access to technology, services, high-quality inputs, and markets to sell produce, all resulting in poor profitability.

RML Agtech is hoping to alleviate some of these pressures with its multi-function, online agtech platform. The technology started as an information service for farmers using SMS texts; Reuters started this information service in 2007 providing farmers with commodity prices, crop and weather data for roughly $1.50 a month. Rajiv Tevtiya, CEO of RML, later spun out the business and transformed it into the platform it is today.

The platform has expanded a lot since then. It still offers the same information but via an app, and no longer SMS, and it’s free. The main product offers farmers detailed, in-season agronomic advice and decision support. It has also created a marketplace to sell produce nationally, and a fintech product to connect farmers with banks and input retailers.

RML’s target customer base is the 20 million mid-size farmers with an average landholding of 15 hectares who are most likely to own smartphones; about 30 million farmers own smartphones today, with the expectation that will increase three times by 2020, according to Tevtiya.

The company has a range of subscription models starting from Rs1500 ($22), with a mid-range product for about $40 and a top of the line product for about $75 a year.

“With the agronomic service, farmers input details about their field basics [this includes images taken by the farmer] which we monitor alongside various data points such as satellite imagery and weather data. Combining farmers’ inputs with our data analytics, we determine what actions farmers should take such as nutrition management, and disease and pest management,” Tevtiya told AgFunderNews. The platform uses proprietary algorithms for the determination of nutrition schedules, artificial intelligence for image processing, disease identification, and determining solutions.

RML also offers on-demand agronomic services, where farmers can upload an image of their crops where there might be an issue, and the software will respond with the issue identified, and a solution, for about $1 to $2 per transaction. The company has a team of trained agronomists to help with the final identification of issues, which are initially screened with its image recognition software.

Where similarities emerge between RML and Farmers Business Network, a startup in the US that’s raised around $50 million from investors including GV (Google Ventures) and Kleiner Perkins Caufield & Byer, is the creation of a marketplace for farmers to buy and sell products and inputs.

FBN created an input procurement platform in 2016, dealing directly with chemical manufacturers and cutting out the middleman retailer, as a means to drive down the cost of chemicals for farmers. While FBN is yet to announce it is including seed in its procurement platform, it recently started a study on discrepancies in the price of seed, telling AFN earlier this year that farmers in different locations of the US were getting seeds at different costs even though they’re the same variety and brand.

In India, the motivation for RML was slightly different on the input side; Tevtiya created the fintech platform to help farmers access inputs of a higher quality than they would usually get. But with the product marketplace, transparency is a key concern as well as access.

“The cost of produce in one part of the country can be 300 times cheaper than in another,” he said. “With our marketplace, farmers can access markets that will pay more for their product and increase their revenues.”

FBN launched a grain trading tool for farmers earlier this year, to replace what the company described as an outdated and painful crop marketing practice where farmers confront persistent informational, financial, and market-access-related disadvantages.

Where the two startups differ, however, is in their model. FBN has famously kept subscription charges relatively low — $500 a year per farm compared to several thousand dollars that other precision ag software startups charge — but is focusing its revenue generation on a cut from these extra services. RML Agtech is focused on the subscription model by comparison.

“This is to ensure our loyalty and focus remains firmly on farmers and ensure we are answerable to no one else,” said Tevtiya. “And while ticket size of subscription is small, there is a large farmer base [in India] which is not the case for FBN [in the US].”

“While we connect farmers to retailers and banks for free, the fintech product, which results in direct cost benefits for farmers, is for paid customers,” he added. “Also banks and retailers act as our product distribution partners, and they sell our paid services.”

It might not always be the case that the model focuses on subscription revenues, Tevtiya admits, and the company has started to collect additional revenue from banks in exchange for data about commodity prices across the country. “We currently provide commodity price data to banks for mark-to-market usage which is a paid service and banks pay per price point.”

RML’s free app has been downloaded 1.2 million times with around 10,000 farmers paying a subscription so far. Tevtiya expects to reach 10 million free users by 2019 as the use of smartphones in India grows.

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