Organic food company goes beyond marketing, sales strategies to support farmers moving away from chemical-free practices
Some businesses have shaped our economies and societies more than others, whether by feeding us cheeseburgers or by controlling commodities. Can they also give an impetus to organic farming, which has been progressing at a tardy pace in India?
Latest data available with the government for 2018-19 showed that only 2 per cent of the country’s net sown area is under organic farming and 1.3 per cent of the farmers follow the practice.
To understand how private players can play their part to encourage farmers as well as influence consumer choices, researchers with Delhi-based Centre for Science and Environment (CSE) analysed the functioning of one of the country’s oldest organic food companies, Sresta Natural Bioproducts Limited.
Based in Hyderabad, Telangana, Sresta forayed into the organic food business in 2004. Organic food was just an exotic idea then, with most farmers relying on chemical inputs for improved crop yield; the government introduced schemes to support and promote organic farming only a decade later.
So, Rajshekhar Reddy Seelam, who had launched Sresta as a farm-to-fork initiative, decided to follow a two-pronged strategy. On the ground, the company offers constant support to farmers to wean them off chemical inputs and shift to organic farming. To create an assured market, it also procures, processes and markets the produce.
At the same time, Sresta invests in massive awareness programmes about organic farming and its benefits for human health and the environment, to create consumer demand for the products.
Today, the company’s brand name “24 Mantra” has the largest market share in organic food products, as per the India: Organic Industry Market Report-2021 released by the United States Department of Agriculture’s Foreign Agricultural Service.
The company has grown from 40 farmers to 40,000 farmers, covering nearly 81,000 hectares (ha) in 15 states. From procuring wheat, mustard, gram and barley initially, Sresta’s list now includes nearly 200 products, from flour, grains, pulses, millets, dry fruits and spices to flours, cold-pressed oil, pickles, cookies, culinary pastes, jams and ready-to-eat products.
Seelam said farmers in the country are hesitant to take up organic farming due to overreliance on chemical inputs and fears of reduced yield. Hence, Sresta tries to eliminate all the steps that make farming a cumbersome venture.
Sresta procures its produce from over 80 project areas established across the country. In each project area, which spans 15-20 km radius and comprises 200-300 farmers, Sresta has deployed ground staff for deciding on the procurement targets for the year.
“Government mandis do not have a separate procurement system for organic produce, while Sresta allots a time and date for procurement,” said Subhas Chander, an organic farmer from Nawalgarh in Jhunjhunu district, Rajasthan, where the company first started operations.
Chander grows wheat, mustard, gram and pearl millet, which the company procures at a rate 8-12 per cent higher than the minimum support price offered by the government. “I receive Rs 200-300 more per 100 kg for my organic wheat,” Chander said.
Karni Ram, another organic farmer from Pillyon ke Daahar village in Rajasthan’s Sikar district also informed CSE researchers that from Sresta, he receives Rs 300 more per 100 kg of wheat; Rs 500 more for mustard and Rs 400 more for fenugreek.
Farmers said they also save on cost of loading, unloading produce and mandi tax with Sresta.
Sresta’s field staff conduct regular training and awareness programmes for the farmers to improve crop yield and reduce farm input costs.
“I used to practise organic farming based on my limited understanding of the concept,” said Manoj Kumar, a young farmer from Nawalgarh. “After joining Sresta in 2015, I received training on selection of seeds and planting materials, preparing organic insecticides for pest management and harvest techniques,” he added.
Sresta also provides support for organic crops it does not procure. For example, it has developed a package of practices to grow potatoes for farmers in Nawalgarh, which has lowered cultivation costs by 30-40 per cent.
In Madhya Pradesh, Om Prakash, an organic farmer from Lasudi village, Mandsaur district, narrated how his association with Sresta has provided him new income opportunities. “Sresta encourages farmers to use their own local seed varieties. So I not only sell my crops as grains but also as seeds, which is more profitable,” added Prakash, who majorly grows wheat, mustard and soybean.
Karni Ram said that the company also sends scientists to the field to advise farmers on specific yield issues.
To assure the consumers about the quality of the produce, Sresta helps farmers obtain organic certification under the National Programme for Organic Production, which allows for exports and bears the cost of the process. Scientists at Sresta constantly research on improving packaging and quality of the products. They have, for instance, found a way to enhance the shelf life of jaggery-based products by reducing the crystallisation of the raw produce.
To increase its consumer base, Sresta has tied up with over 7,500 retail outlets across the globe, which includes modern trade stores, general stores and ethnic stores such as Aditya Birla Retail Limited, Food Bazaar, Hyper City, Walmart Best Price, Spencer’s and Godrej Nature’s Basket. The company also makes its products available over e-commerce platforms, advertises its products through campaigns and through social media, shares recipes that use its products and spreads awareness on the benefits of organic food.
In the past three years, the company has made on average a profit of Rs 7.56 crore, with Rs 10.39 crore in 2020-21 despite COVID-19. Some 55 per cent of its sales are from India and 45 per cent from other 34 countries. Some 75 per cent of international sales are from the US, through a wholly owned subsidiary called Fyve Elements.
However, there have been some problems. “A few years ago, payment was delayed and I could not meet expenses. I had to discontinue work with Sresta,” said Bapu Lal, a farmer from Jhakeda village in Mandsaur. To overcome this hurdle, Sresta has appointed in certain areas an aggregator-farmer, to procure on its behalf. In such cases, farmers are paid right away, but the rates are slightly lower and the aggregator gets a commission of 1 per cent on the total amount.
If the company plans to roll this out on a large-scale, it must ensure farmers’ share is not affected. Some farmers also say that Sresta stops procurement of a particular crop if its target is met, which leaves them with unsold produce. The company can look into raising procurement levels based on the crop grown and the stocks available.
Finally, as with most organic players, Sresta’s high prices dissuade consumers. Negotiating pricing policies on e-commerce platforms, and government support for mark-eting will help ease costs, which can lower the final sale prices. Generating demand through awareness on the benefits of organic products will also help both the company and the sector grow.
End-to-end support
Sresta Natural Bioproducts Limited has expanded the “farm-to-fork” philosophy to boost consumption of organic produce as well as to promote chemical-free practices among farmers
| Pre-sowing | Training on organic practices for each crop and season, which include composting techniques, preparation of organic inputs and support in transition from conventional agriculture |
| Sowing and harvest | Sresta’s ground staff, who aid in training and procurement, inform farmers on the annual targets and maintain records of the types of crops sown. They monitor fields, record practices followed for weeding, pest and disease treatment and address farmers’ concerns. Before harvest, they inspects the growth of crops and trains farmers on suitable practices to safeguard the produce |
| Post-harvest | Random samples of crops are picked, mixed and sent to Hyderabad for quality tests |
| Procurement | Farmers whose samples have passed the quality tests gather for procurement. In some areas, procurement is coordinated by aggregator-farmers. The procurement happens in collection centres 10-15 km from villages. The crops are loaded and unloaded for free, inspected for uniformity, infestation, colour, contamination and moisture. Once the produce is weighed, farmers get a receipt. Crops are stored at local warehouses and transported to processing centres within a week |
| Payment | Payment is transferred into the bank accounts of the farmers within 14-21 days. In case the produce has been collected by an aggregator, payment is done right at the time of procurement |
| Processing | Produce goes through two rounds of processing wherein it is cleaned, checked and packaged under the brand name “24 Mantra” |
| Marketing | The company advertises products through campaigns and through social media, shares recipes that use its products and spreads awareness on the benefits of organic food |
| Sales | The products are sold in over 7,500 retail outlets, modern trade stores, general stores, ethnic stores and e-commerce platforms, at prices 40-60 per cent higher than those for conventional products. Some 55 per cent of sales are from India and 45 per cent from 34 other countries |
(This is fifth in a series of six articles on how better market access to non-chemical produce is key to success of regenerative agriculture)
This was first published in the 1-15 October,2022 edition of Down To Earth magazine
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