DIGITAL FOOD SYSTEMS EVIDENCE CLEARING HOUSE
Food system component(s):
Food system activity/ies:
Type(s) of digital intervention:
Ergos has disrupted the conventional warehousing model by providing doorstep access to warehousing services to farmers . The company leverages a strong technology platform to ensure seamless services to farmers almost akin to a “grainbank”.
Conventionally, food grain warehousing has been undertaken by large companies. These players tend to have large scale warehouses (20,000 MT to 50,000 MT) which are generally located close to consumption centers. Their customers are generally large whole-sellers, traders, food mills, etc. The average farmer, who would have around five to ten MT of produce, however, is not able to access these warehouses given their distant location coupled with the fact that the warehousing service providers are typically not equipped to deal with small quantities.
Ergos has disrupted the conventional warehousing model by providing doorstep access to warehousing services to farmers . The company leverages a strong technology platform to ensure seamless services to farmers almost akin to a “grainbank”. The company’s operations are currently based in the state of Bihar. Most farmers in India all rush to sell their produce immediately at the time of harvest as they either do not have access to warehousing services or because they are financially stretched and have debts to repay. This results in farmers realizing an extremely low price during the harvest season where they sell their produce to traders, who then typically aggregate small lots and warehouse them at commodity consumption centers and gradually sell them over a period of time to realise 20-30% higher prices. Ergos’ model tends to address all these need gaps for the farmers –
- By having digital warehouses at the village level, we enable farmers to warehouse their produce and thus avoid distress sales during harvest season at low prices.
- Help farmers reduce wastage by quality warehousing.
- Help farmers tide over their immediate liquidity/ financing needs by working with NBFCs/ Banks to extend loans to farmers against the security of their warehoused produce on one click.
- One Tap-Connect farmers to market enabling them sell their produce in the off-season, at prices which are nearly 25-30% higher.
ERGOS began with four warehouses (aggregating to 800 MT of storage capacity) in 2015 and has grown to include over 42 digital warehouses (aggregating to over 20,000 MT). ERGOS has dealt with over 5,000 farmers to date.
Estimated number of active users:
- At inception: 300
- At time of last report: 20000
Evidence of impact
Desired social impacts are happening can be gauged from the satisfaction levels of the farmers as well as the growing demand for micro digital warehousing services of the company. In the absence of any impact studies the only way to assess social impacts would be to see the extent of participation of different categories of farmers. Since the entire intervention is geared towards participation of Small & Marginal (S&M) farmers, an attempt was made to examine the pattern of participation vis-à-vis medium and large farmers and changes in the same over time.
Since Samastipur (Bihar, India) is the district is the oldest one the trends are more visible in that district as compared to the other two where the work was initiated only in 2016. In 2015-16 we see that the pattern is that of a pyramid with the maximum registered and participating farmers in the BoP category (S & M). However, there is a significant shift in both registration and participation by 2017-18 when the total registered S & M farmers at 3593 are outnumbered by the total medium and large (M & L) farmers at 4388. However, the company seems to have made a conscious effort to give to preference to S & M farmers as reflected in the actual usage figures where S & M stands at 787 (57.8%) as compared to 576 (42.3%) for M & L in the year 2017-18. A similar ratio is to be seen in the other two districts where the S & M farmer accounts for 69.5% in Begusrai (Bihar, India) and 72.2% in Muzaffarpur (Bihar, India) of actual usage.