User:Kanishkjha/sandbox

In India, most of the warehouses are built up around the port locations, big consuming centres, etc. ERGOS (the Company), on the contrary, is creating a business model by developing a chain of micro-medium warehouses (200 to 2000 MT capacity) at village level on demand side, which can capture the local farmers’ storage business. This is a untaped field with no competition whatsoever. By setting up three to four micro warehouses during 2012-13, the company has demonstrated among the farmers that by storing their grains in the company’s warehouses, they can control damages, better bargain power, realize higher price, even after factoring for warehouse expenses etc. The Company has its footprint at village level and managing farmers’ portfolio for end-to-end solutions for integrated agri supply chain through a grid of warehouses with Bank linkages. The Company has set up its micro warehouses at village level, which helps the company to have efficient procurement services. In order to make the scheme cost effective, one warehousing executive looks after 1-2 warehouses located in vicinity. The company has

developed a software application to sync up with ground level executives, who remain engaged with farmers round the clock to create virtual stock while harvesting which enhance the transaction efficiency during harvesting season. Not only on procurement side, but continuous engagement with farmers create a unique proposition to cross-sell multiple agri input to the farmers through its trusted retailer network. In future, the company plans will maintain jute bag stock at its warehouse and will also provide cleaning, grading, packaging and stitching arrangements to farmers at warehouse location.

The micro warehouses at village level are a low cost format. It has captive clients in the form of farmers connected with the company and so capacity utilisation of the warehouses is higher. At the time of accepting goods in the warehouses, the company checks the quality and weight and issues a warehouse receipt through physical paper or system based SMS or the same gets credited into his account with ERGOS, certifying the weight, grade and quality. Based on this data, the company is able to negotiate with the buyers to discover the highest possible price. In this manner, the micro warehouse network helps the company to accomplish procurement as well as transaction execution. On the other hand, farmers using such micro warehouses have experienced themselves that through scientific warehousing, the quality of food grains can be maintained and moisture, fungus, broken, shriven, etc. can be controlled. This translates into higher price realization and low wastage. Hence, the company has evolved a model, whereby warehousing business provides a major role in supporting procurement as well as transaction execution.

Farmers’ Portfolio Management:

This is a unique concept introduced by ergos, the company has developed software application to capture basic information about each and every farmer connected with ergos, including his land holding, crop pattern, soil health, present assets, etc. All business transacted between farmer and the company also on-going field activity being captured in the portfolio of respective farmer. This includes, warehousing, seed and other agri inputs bought by the farmer through retailers network of the company, grains supplied by the farmer to the company’s end buyers, total amount receivable or payable as on date and the total stock deposited by such farmer in the company’s warehouse. This statement is sent to the farmer every month in hindi language. In other words, Farmers’ Portfolio Report is similar to a bank statement or a report received by a mutual fund investor showing total dealings of such investor during a given period and various analytical representation of the farmer information.

The company has implemented a state of the art model for procurement. Under this model, the company does not need brick and mortar infrastructure for procurement. It does not need to buy Maize/wheat lorry wise and go through the hassles of quality checking, weighing, etc. every time. Under the model implemented by the company, farmers themselves deposit stock in company’s managed warehouse. At the time of depositing stock, the quality and weight is checked. Thereafter, based on procurement order, the company just concludes the deal with the farmer. It unlocks company’s bandwidth from sourcing and it is able to focus on sales and services.

As a result of this model and also due to direct bonding with the farmers, the company is able to achieve higher turnover even with limited capital. The company has identified a huge price efficiency in certain crops grown in Bihar and therefore, it has focussed on creating market linkages in such commodities. At present, the main focus area of the company is Maize, Wheat and Paddy in the State of Bihar. A brief report on few crop and its demand supply information given bellow.

Each farmers, franchise, channel partner have access to their account with us through Mobi-Aps/web based application, sms, calls, walk-in to our farmers office for effective decisions during farming and produce management We also work upon various model which enables the farmer to (1) cut down on the post-harvest losses that they suffer (in essence, doubling their true output); and (2) realize a sales price difference between the harvest season and that lean season that could be 30 to 50 per cent higher. It puts a lot more money into the farmer’s pocket.

The ideas is to remove/reduce procurement inefficiencies by removing the middlemen from supply chain and by minimizing the channel cost, thereby passing the maximum benefit to the farmers and impact their life for better prosperity. The arrangement offers various structured (sale contract, ekisan mandi, move up into value chain, packing, cleaning, sorting etc in future) transaction to farmers, all the time on their convenience to fetch the right value of their produce from across the geographical boundaries through latest technology application by ergos and encourages participations from investors, and consumers across the glob to get right food at right time at right price.