M&M chalks out strategy to grow beyond tractors

Mahindra & Mahindra Limited (M&M) aims to push farm mechanisation in India through its new Farming-as-a-Service (FaaS) business, Krish-e, as part of a strategy to expand its Farm Equipment Sector (FES) division beyond tractors.

Krish-e commenced operations in 2020 and had so far established more than 100 Krish-e centres across 16 States. Operating through Mahindra and Swaraj dealers, these centres provide services across a crop cycle.

‘Cost of farming’

Mahindra said it is focused on bringing down the overall cost of farming, improving crop output and consequently, bolstering the farmer’s income.

In its first year of operations, Krish-e had set up 60 rental banks where advanced farm equipment was available for rent through physical touchpoints or a farmer’s smartphone.

Rice transplanters

“We have machines such as rice transplanters and laser levelers, tractor-mounted combine harvesters… and potato planters,” said Ramesh Ramachandran, senior VP, FaaS and head of Farm Sector Strategy. “This is not the kind of equipment that farmers will necessarily buy themselves, nor are they very familiar with.

“Krish-e will help popularise this equipment by showing them tangible benefits,” he added.

So far, 20 lakh rental hours had been managed on the rental platform, with more than 35,000 precision farming acres managed.

Thus, ₹40 crore of extra income had been facilitated for rental entrepreneurs. And for Krish-e and M&M, ₹150 crore worth of farm equipment and crop inputs had been retailed through this initiative.

Ramdas Dhandage (37), a rental entrepreneur from Baramati, Maharashtra, with three Mahindra tractors, said he had seen rapid growth in his farm implements and tractor-rental business.

“My gross income has increased from ₹1.5 lakh to ₹4.5 lakh per month. After deducting EMI, maintenance and additional costs, my net income stands at ₹1 lakh per month,” he said.

Earlier, he was driving tractor on the farmlands but now has appointed a supervisor and 2 drivers to support his business. Recently, he bought a super seeder for maize harvesting which helps in time and cost savings for his customers.

Mahindra has laid out an elaborate plan to grow its farm equipment business.

‘Not mechanised’

“India is tractorised, but not mechanised,” said Mr. Ramachandran.

“The total global agri-equipment market is roughly about $160 billion, of which farm machinery makes up $100 billion and tractors $60 billion. But from an Indian context, the tractor market is roughly about $7 billion, and farm machinery is at $1 billion. There is a huge potential for growth in farm machinery segment,” he added.

By allowing customers to sample new farm machinery at a fraction of the cost, and with Krish-e’s potential to scale up from the current 100 to 1,600 Mahindra and Swaraj dealerships, Krish-e going forward could further provide a fillip to the sale of Mahindra’s and Swaraj’s crop -pecific farm machinery.

Recently, the company announced to aggressively grow its farm equipment businesses in the next six years. It is looking at a 10 times growth of its farm machinery business (other than tractors) by 2027.

The company plans to introduce 15 new farm mechanisation products and wants to expand its farm mechanisation dealer network three times by 2025.

It is also setting up farm machinery manufacturing facility in Pithampur, Madhya Pradesh by 2023.

To enable this, Mahindra has made strategic investments across the globe in agri tech Tech companies like Sampo Rosenlew of Finland, Erkunt of Turkey and Mitsubishi of Japan.

Krish-e is supported by newly-introduced apps called Krish-e & Krish-e Nidaan.

These apps provide scientific, field validated and personalised crop advisory that is presented in an easy-to-follow understandable format for farmers, across different crops and regions in multiple languages using audio and video content.

Mr. Ramachandran said, “Our new farming as a service business is a phygital [physical + digital] business. So far Krish-e has already impacted over 200,000 farmers by way of better practices that improves income.”

“Through demo plots or Takneek plots, Krish-e is working alongside over 6,000 farmers, imbibing new farming practices and modern farm machinery to showcase visible impact of technology and new-age practices to drive behavioural changes in the farmer,” he added.

Through Takneek plots, Krish-e has been able to deliver an increased income of up to ₹15,000 per acre. This has translated into an income increase of around ₹25 crore for Takneek plot farmers, he further said.

Such operations are already helping potato, grape and sugarcane farmers reduce their costs of cultivation and improve their yields.

Vikas Kashinath Kate (45), a farmer from Baramati owning 40 acres of sugarcane crop, said earlier he faced new challenges on the field every day, but now with advanced technology the profits are expected to increase.

“Earlier I used to sell about 50 tonnes of sugarcane, now expecting it to be over 70 tonnes. The sugar factory that we normally sell our produce gave us ₹2,750 per ton will now pay approximately ₹3,100 per ton due to improvement in quality,” he said.

The company’s Farming as a Service (FaaS) converts high fixed costs related to expensive farm equipment ownership, agronomy services as well as data and precision farming solutions, into variable costs for farmers.

In other words, FaaS targets to make modern farming practices, otherwise popular globally, affordable for a majority of Indian farmers, who often struggle with low productivity issues.

Through Krish-e the company said it would like to create an impact to the lives of 20 million farmers in the next 10 years.

While the government is working towards doubling farmers’ income, Mahindra is focused on growing their income per acre. Either way its a positive for the farmer.