September 20, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

India is a top global producer of many agricultural products, ranking second in fruit and vegetable production only to China, producing 102.48 metric tons of fruit and 200.45  metric tons of vegetables according to the Ministry of Commerce & Industry, Government of India. It also is a young, high-energy country with 74 percent of its population being younger than 45 years. 

However, due to inefficiencies throughout the country’s supply chain, India sees food waste of up to 67 million tons each year – more than the total food production of Great Britain, according to Zee News. Likewise, additional challenges associated with inequalities in gender, education, family wealth, outdated technologies, and access to capital present hurdles as the country shifts increasingly toward entrepreneurship.

This shift is being strongly represented in Sahyadri Farms Post Harvest Care Limited (Sahyadri Farms) that was initially founded in 2010 by 10 farmers who joined forces to collectively produce and export fresh grapes to Europe.

Today, Sahyadri Farms has grown into one of the leading fruit and vegetable processing and exporting companies in the country, servicing more than 18,000 farmers cultivating nine crops across 31,000 acres.

From the beginning, the company is a partner to its farmers, from their choice of crop to the production practices and inputs used, to how those crops are harvested and then sold. Helping in the process is the company’s digital platform that provides background information to farmers on high-yielding crop varieties, farm inputs, real-time climate information, and market access.

“The idea of Sahyadri Farms is to unite farmers and make them think like professional entrepreneurs.  We are building a sustainable, scalable, and profitable organization for all our stakeholders by  making farming profitable and viable activity for each small and marginal farmer,” said Vilas Shinde, founding farmer and managing director, Sahyadri Farms.

Just as Sahyadri Farms supports farmers, Incofin has come forward together with a collective of European impact investors including Korys, FMO, and Proparco in support of Sahyadri, investing Rs310Crs (nearly US$40 million) in growth capital in the company.

Rahul Rai, partner, Incofin India, said, “Incofin feels privileged to lead this investor consortium and for its partnership with Sahyadri Farms to support its spread as a global role model of a partnership based approach to farming that results in sustainable financial impact, climate change adaptation and inclusive growth in rural communities while creating a technology-driven, globally competitive  business.”

The capital gained from this round will be used to further grow the farmer-owned company by expanding its processing capacity for fruit and vegetable-based products, the establishment of a biomass plant to generate electricity from processing waste, and to strengthen its infrastructure such as its packhouses.

“This investment in a leading Indian agricultural company committed to a responsible approach will  generate many positive social and environmental impacts,” commented Françoise Lombard, CEO, Proparco. 

“First, nearly 15,000 farmers will be able to enter a modern supply chain, with access to regenerative farming practices and quality equipment, enabling them to increase yields and quality of their production, while reducing farm losses and the use of pesticides and fertilizers. Thanks to this investment, Sahyadri Farms will be able to implement concrete measures to adapt to climate change, but also to mitigate it by increasing its share of  renewable energy production to more than 50 percent, and finally, to implement its zero waste policy.”

This significant economic and social impact for farmers is already evident.

“In 2012, I was on the verge of selling my land,” said farmer Namdeo Pawar. “Sahyadri supported me, helped me get back up, and I pushed myself to return to work. Through Sahyadri, my income increased. In 2014, I even repaid  my bank loan.”

Another farmer, Anil Dawre, explained the benefits of this collective farming model. “I farm on less than one acre, because a part of my land is taken up by my home and an animal shed,” explained Dawre. “Group farming turned out to be a success. My parents never imagined their son’s produce would  travel abroad. Their joy knows no bounds.”

However, the positive impacts stemming from Sahyadri Farms’ business model reach beyond the smallholder, explained Katti Van Oosterwijck, senior investment manager, Korys.

“We strongly believe in the  importance of making the food value chain more sustainable and ethical,” said Van Oosterwijck. “As such, we are very proud  that we have invested in Sahyadri Farms: they stimulate their network of more than 18,000 small landholding farms to build an entrepreneurial mindset and ensure that a fair compensation for their  produce and labor is received. In doing so, they adhere to the most stringent global standards of  agricultural practices and provide the highest value to the end consumer.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.