Farmer Ownership in Food Processing

To set up small farmer ownership of approximately USD250,000 in annual revenue capacity to achieve sustainability (breakeven) and increase farmer-ownership within our supply chain.

By

Krishi Star

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Social causes

Beneficiaries

SDGs covered

Endorsed by

Rianta Capital, Artha Impact

The Artha Initiative is an online community dedicated to building relationships between impact investors and capacity building support organizations in India.

Market of Implementation

  • India

Problem

Small farmers in India suffer from poor socioeconomic conditions due to a multitude of challenge such as lack of market power, weather risk, and supply/demand fluctuations. While many of these can be addressed on a micro level, achieving scale impact for nearly 200M small farmers is difficult because of two major reasons. Firstly, small farmers, as small commodity producers with inefficient cost structures and limited market linkages, have inherently poor economics that prohibit them from long-term success. Secondly, there is insufficient economic value available to be divided amongst such a large population. Over 70% of India’s population depends on agriculture for livelihood yet the sector accounts for less than 20% of GDP.

Solution

Krishi Star is a Food Brand that develops and supplies quality natural, food ingredients sourced from farmer-owned food processing units. India’s food processing industry is projected to grow at 20% over 5 years to USD 4300B. If even 1% of this growth is captured by small farmers, it could lift 1M out of poverty. In addition, food processing is a natural hedge to agricultural risk factors such as unstable prices. However, existing farmer-owned food processing capacity is often underutilized due to challenges in market linkages and product quality. To fill this gap, Krishi Star’s focus is (1) marketing and selling products through our brand and (2) building farmer-owned capacity such as through food processing technology transfer and quality controls through our integrated supply chain. We currently have 80+ institutional customers across Mumbai, Goa, Pune, and Delhi and operations across Maharashtra and Gujarat with USD 30k to-date in revenue to our farmer-owned supply chain.

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