Problem: Many farmers, while having large fields with quite a bit of produce and grown goods or livestock, do not and cannot afford to purchase and operate agricultural machinery. This is especially true as they can cost upwards of $1M or more per machine.
Solution: Most farmers do not live in isolation: they live around others farms. Thus, even though they cannot individually own expensive machinery, a collective of farmers can run the machines that allow them to produce goods for the masses. This business would take advantage of this fact to create hubs of “Farm Machinery as a Service” to farmers who need machines but cannot afford to purchase them directly.
In India, many businesses have seen this opportunity. As Yourstory writes, Five farming-as-a-service startups are empowering farmers, and making the sector more profitable. In particular these 5 operate in different industries while providing services:
The Rental Solution: “Founded in 2012, Oxen Farm Solutions aims to boost India's agricultural productivity by ensuring farming equipment is made affordable and accessible…. To address this issue, he created Oxen, aiming to help farmers rent out equipment at affordable prices.”
The Marketplace Solution: “Agribolo is a farmer engagement startup, which adopts farm-to-mill, farm-to-fork, and farm-to-warehouse models, aims to link farmers to the marketplace. Founded by Balaji Balaram in 2015, Agribolo has engaged over 2.5 lakh farmers across India… We plan to achieve it through creating the decentralised ecosystem and looking at the farmer as an opportunity instead of a customer or a consumer, as this will enable us to create a host of business opportunities to make the franchise model and the rural distribution model sustainable."
Farming Equipment through Mobile Apps: Founded in 2016, FaaS-based Gold Farm enables farmers to access any farm equipment via a mobile app, or by contacting the firm's call centre. Founders Abhilash Thirupathy and Karthic Ravindranath aim to help both farmers and tractor owners profit by connecting them via the mobile app. So far, Gold Farm's platform connects around 250 booking agents, and over 500 tractor owners to farmers in its mobile app.
Of course there are many other solutions, but the bulk of them hinge on the above three conditions and areas. As described by GrandViewResearch,
The global agriculture equipment market size was valued at USD 139.0 billion in 2018 and is expected to grow at a compound annual growth rate (CAGR) of 8.9% from 2019 to 2025. Adoption of modern technologies by farmers to increase farm yield and meet the soaring demand for food is expected to be a key factor driving the market. Traditional farming techniques such as plows, tillage, and seeders are now being replaced with various modern agricultural machinery. Advanced farming machinery such as spraying equipment, hay and forage equipment, harvesters, and irrigation and crop processing equipment is being used in various processes to enhance overall crop output and quality.
Given such an unsurprisingly large market this business would thrive by ideating on innovative ways to provide farming or farm machinery as a service.
Monetization: Subscription to this farming service or platform.
Contributed by: Michael Bervell (Billion Dollar Startup Ideas)
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