Noida-based agtech and post-harvest services firm Arya.ag has launched a blockchain technology that will help its customers monitor goods they store in their warehouses on a real-time basis, the company’s co-founder and managing director Prasanna Rao has said.
“There are three aspects to this. One, we have a digital platform where any entity, be it a farmer or farmer producer organization or any other aggregator or entity at farmgate, can choose any of our warehouses,” said Rao. business line.
AI-enabled technology
The entity or aggregator can see where the warehouses exist and look at their different parameters such as height, capacity or other storage points that can be found on the platform itself.
Second, Arya.ag uses hermetic storage technology that is IoT enabled. “We can set up a warehouse in a place where there is no structure at all in less than 24 hours, and it is IoT-enabled to provide information such as temperature, carbon dioxide content and humidity,” he said.
The company has deployed AI-enabled cameras to detect any unauthorized movement. “We are putting ₹20,000 crore worth of goods stored in balance with the technology. This provides complete certainty, such as which truck arrived or left a particular item; when it arrived and in what condition. All of these are available on the blockchain at this point ,” Rao said.
Seller, buyer insurance
Arya.ag is also digitizing farms, of all its 600 FPO partners it works with now. This will help the company provide information on storage and finances to farmers and their organizations.
“Then we finally connect them to buyers. And when they connect, we make sure there is 100 percent certainty of payment to the farmer. The buyer gets assurance of quality, quantity and delivery,” Rao said.
Arya.ag, which has listed 10 percent of warehouses across the country on its platform, offers similar insurance on other services such as finance and trade as well. – In terms of volume, we have 3-4 per cent of India’s total stock. These warehouses have digital identification,” said the company’s CEO.
Goods handled
Arya.ag can set up warehouses that can store goods for three years without smoking or chemical use, he claimed.
As for setting up steel silos, Rao said they may not be cost-effective as the company is looking at storing goods at locations near the farm gate. “We look at farmers and here the size of the stock is 100 tonnes or 200 tonnes,” Rao said.
Arya.ag handles around 50 goods, basically those with a shelf life of more than three months. The company handles, among other things, grains, pulses, oilseeds, cotton, other fibers and spices, and mostly these are seasonal crops.
Rao said rice, cotton, maize, mustard, oilseeds, pulses and wheat are commodities handled on a large scale.
Weather influence on rabi crops
On the impact of rabi crops this year, he said the above normal temperatures in February could affect the maize crop in Bihar. As for wheat, he said production may not be affected as demand for storage has been less “as of now”.
“We don’t see any panic around. People don’t come to order warehouse space. The wheat crop in most of the significant geographies is already mature and in many places harvesting has already started. So I don’t see too much of a challenge in wheat production,” the Arya.ag boss said.
“Also last year, the heat wave was accompanied by wind. This year it is not. So when the temperatures have gone up, we haven’t seen accompanying winds that actually caused the damage, he said.
The company has been using satellite imagery to assess crops and in some districts like Baran in Rajasthan, it could have an impact on the crop, he said.
Freedom to choose
“I think there may be a little problem in mustard. It is more about timing now when the crop is harvested,” Rao said, adding that around 10 lakh tonnes to 15 lakh tonnes of wheat is coming to the company’s platform.
Argya.ag offers farmers storage facilities so that they do not have to sell the entire crop at once. “Basically, we give them that choice and we offer to finance against that storage. We enable trading that the farmer or the FPO or other entities can actually go out and sell at an appropriate time,” he said.
This also gives the farmers freedom of choice to decide on their buyers.
Currently, there is interest among farmers to store their produce for a longer period of time, said the company’s CEO.
Increasing storage
“A greater amount of storage occurred by traders and farmers as wheat prices increased immediately after harvest last year. They actually got better returns, he said, adding that the trading community bought a large quantity of wheat and stored it.
On the rice outlook, Rao said there is better storage of rice at the farmers’ level for higher value grains like basmati. FPOs in particular store better and higher value paddy.
The current fiscal policy has been good for the company with profitability increasing sevenfold as the storage of goods on the platform has grown by almost 60 percent.
On the financing side, it has had 100 percent growth on its own platform. The company disbursed over Rs 1,000 crore against around Rs 500 crore in the previous fiscal.
Waiting gets extra money
The aggregate funding enabled on Arya.ag’s platform has grown from around ₹ 6,000 crore to ₹ 10,000 crore, and in terms of trading, it has increased from ₹ 700 crore to nearly ₹ 2,200 crore.
Arya.ag gives farmers the choice to decide when to sell their products and also choose the buyer. “If farmers wait 3-5 months, they can easily get 15-40 percent more for their produce than selling immediately after harvest. This is where storage and finance play a crucial role,” said Rao.
Arya.ag does not seek documentation to grant loans against their products or seek collateral. It does not look into previous loans.
“We just see if the item is of a certain quality and when it comes in then a certain amount is given as a loan. It will be equivalent to about 70 percent of the value of the item as of that date,” he said.
Offers risk reduction
For financing, the company has its own built-in non-bank financing company in addition to cooperation with 25 banks. “We connect farmers to borrowers and that book is nearly Rs 9,000 crore that we activate every year for banks,” Rao said.
The company’s founder said for FPOs, which say farmers take advantage of storage, resources and access to finance, specifically offer a price risk mitigation model where they are compensated when prices fall.
