This startup by IIM alumnus is bringing food processing closer to farms
One of the major challenges with centralised processing units in the agri sector is that they require huge quantities of raw material and the cost of procurement is also high as the unit depends on scores of middlemen, smaller vendors, and village aggregators to procure the requisite quantities of raw material. “These challenges go up in the off-season when the unit does not get adequate supply,” says Bala Reddy, Founder and CEO, Our Food.
Started in 2016, the Hyderabad-based startup aims to provide an end-to-end solution to farmer entrepreneurs — right from setting up a micro processing unit, support in availing loan, training on processing and marketing of the processed output at remunerative prices for both the farmer franchises and the farmers. “Our Food came up with its ‘small is beautiful’ concept. It takes Rs 7 lakh to set up a processing unit at the farm. The farmer is expected to invest Rs 3 lakh for the shed construction, and we assist with the rest via NBFCs,” says Bala. Incubated at T-Hub in June 2016, the startup was also selected by Nasscom 10K Startups programme.
Our Food initially reached out to multiple agriculture universities to understand the available food processing technologies and developed low-cost micro-processing units that could easily be deployed at farms in collaboration with food processing equipment manufacturing players. “This is not only expected to decentralise the country’s food processing industry, which requires huge capital infusion, but also result in better income for farmers,” Bala says. The startup identifies educated, unemployed rural farmers in the age group of 20 to 35 years, with a minimum education of 10th standard, and a minimum land holding of one acre. It these aspiring rural entrepreneurs build a shed (farmer franchise), supplies, and installs low-cost food processing machines, trains the farmers on value addition, procures the processed produce directly from the farmer franchises and sells through various channels with a margin of about 10 percent of the price. “Value addition at farm level and market linkages ensures incomes to the tune of Rs 15,000 – Rs 25,000 per month to farmer entrepreneurs and around 10 percent increased price realisation for the end smallholder farmers,” says Bala. So far, over 1,700 rural entrepreneurs have licensed Our Food farmer franchises, each operating a regional crop-specific processing unit that procures and processes raw material from over a hundred farmers from nearby villages. Each farmer franchisee is powered with an end-to-end tech-enabled solution, starting with the establishment of a single mini food processing unit, access to equipment financing, training in processing, and marketing of the processed output.