One of the biggest consequences of climate change in India has been farmer suicides. India has been plagued by one drought after the other. Last year, too, turned out to be a disappointment after monsoons, which were expected to be good, ended deficient in 2016. This year, India is staring at another drought with a number of states already suffering.
According to data from the National Crime Records Bureau, farmer suicides in India touched nearly 8000 in 2015. And among the root causes of farmer suicides are bankruptcy and indebtedness, caused due to crop-failure.
A sustainable farming method and being able to reach the right markets can really go a long way in helping farmers have sustainable incomes. While there are a number of companies helping farmers with go-to-market solutions, is there a way to first prevent dependency on rains and crop failure?
For farmers, especially small ones, incomes are unpredictable and unviable. When Sathya Raghu V Mokkapati and his friends were working on open cultivation of organic vegetables and go-to market opportunities to maximize farmer incomes, they realized something similar.
“While working with nearly 250 farmers, we noticed that farmers suffered despite decent market due to multiple reasons, like excess heat resulting in crops dying, increase in pest problems, decrease in water resources etc. I discussed this with my friend from Acumen fellowship, Kaushik. After a careful analysis, we could find the roots for all these problems is climate change,” says Mokkapati.
One of the main issues according to Mokkapati and his team was open cultivation. After speaking with over 150 farmers, and understanding every problem they were facing through open cultivation, they came to the conclusion that a protective solution was required to not let heat or insects hit crops directly.
After six months of comprehensive research, Kheyti was founded in December 2016. Kheyti’s solution for a sustainable income for small farmers is its ‘Greenhouse-in-a-Box’ (GIB), a low-cost modular greenhouse integrated with end-to-end support.
A lot of research and discussion with farmers went into building a greenhouse unit of the right size. Mokkapati and his team first came up with a 500-square-metre unit that could give farmers income of Rs. 10,000 a month. But when they started pitching it to farmer, the idea was rejected.
“They said it was too big and too risky for them. We went back to the drawing board and designed a 100 sq meter unit but were rejected again. When we asked for feedback, a group of 100 farmers told us for to create a 250-square-meter unit, which can get them about Rs 5000 monthly profit. It struck us later that, as the World Bank reports, a household of five needs Rs 4,800 per month to stay above poverty line,” says Mokkapati
He adds that the fact that farmers can intuitively arrive at an academic number blew their minds. “It taught us that listening to the voices of the customer goes beyond conducting focus groups - it requires us to treat them as equals and trust that they know their lives and the math better than us,” he says.
Taking this into account, the team designed their product, a GIB that fits in 2% of a farmer’s land, crops from climate risk and grows seven times more food using 90% less water.
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And how does it do that?
Firstly, Mokkapati says that the high-quality seeds are used. And any form of greenhouse farming yields 4-5 times more than open farming. With close monitoring and better production practices given by Kheyti, production increases even more. “We have a lot of control over the farming practices. We have one person who visits the field every day. We do micromanaging to ensure the farmer gets the most amount of yield,” he says.
Speaking of water, Kheyti uses drip irrigation method and a mulching sheet near the roots which reduces evaporation of water, making more available to the crops. The net cover of the greenhouse also reduces water usage. In fact, crops growing in a GIB require water only for 15-20 minutes a day. “Reduced water usage is one of our strongest selling factors. Every farmer at some point faces water problems and if we can save that for them, they’re more than happy to adopt our methods,” Mokkapati says.
Kheyti’s business model is not restricted to just greenhouses. The idea is to take a full-stack approach and provide complete end-to-end solutions to make technology work for small farmers.
And what is the full stack?
Apart from GIBs and financing, Kheyti also provides input linkages to help farmers get timely access to qualitative seeds and fertilisers. It provides training and ongoing advisory to help farmers grow the right way and helps them with market linkages with organised retailers to create a reliable marketing channel. The idea is to create a path out of poverty.
After four iterations, Kheyti has completed prototyping. It is currently working on the proof of concept with farmers. So far, 15 farmers have bought units from Kheyti in the first phase. Of this, 14 farmers have come forward to buy a second unit. Additionally, Kheyti has received nearly 2500 inquiries from different parts of the country. By the end of this year, the company will finish prototyping with at least 150 farmers.
Each GIB costs Rs 1,60,000. A farmer is required to pay a down payment of Rs 30,000. The balance is given as a loan by Kheyti’s financing partners with a repayment term of three years.
Kheyti will earn through the sale of the GIBs to farmers and commission charged on annuity from input companies on input linkages and market linkages.
However, only after it finishes the proof of concept will business actually begin for the company.
Right now, Kheyti is working in Shamirpet mandal of Telangana with research units in Shadnagar in Mahboobnagar Mandal of Telangana. In June or July this year, Kheyti will being operations in another district of Telangana. And in early next year, it is looking at expanding operations to either Andhra Pradesh, Karnataka or Maharashtra.
While Rs 1,60,000 sounds expensive for a small-scale farmer, conventional greenhouses are extremely expensive costing around Rs 30 lakh-40 lakh. Moreover, they are available only in commercial sizes suitable for large-scale farmers.
“We designed the Kheyti GIB to be modular at 1/16th the size, making it an asset small farmers can invest in. Design changes make our greenhouse 40% cheaper than these solutions, giving us an advantage,” Mokkapati says.
Innovation has not stopped here for Kheyti. It is working on further reducing the cost of GIBs and make it more economical and efficient. Kheyti is working with Stanford on this front.
So far, the eight-member team has invested around $150,000 into Kheyti. This was funded by promoter capital partially, but predominantly by winning competitions and through grant challenges. Kheyti has won several awards already like the Acumen Global Award 2017 in Kenya and the Global Social Venture Competition that it won on Saturday.
Once Kheyti completes proof of concept with 150 farmers by end of this year, it says it will be able to figure out a recipe for scale. The plan is to reach 2000 by end of 2018 and 20,000 by the end of 2019. And once it manages to sell 900 units, Kheyti says it will break even, which it expects to happen in 2018.
“There are 100 million small farmers in India and ½ a billion across the world who lack access to climate risk mitigation technologies. Our vision is to serve a million farmers by 2025,” Mokkapati says.
This article has been produced with inputs from T Hub as a part of a partner program.