Digital value chain for smallholders | Spotlight, Ergos

“India is a marginal farmer country – more than 70% of farmers are marginals. Currently we have a 1.4 billion population, and we need to feed everyone, everyday – and for that, we need to produce and we need to preserve every grain,” says Kishor Jha, CEO and co-founder of Ergos, an agri-tech company that Abler Nordic invested equity in in 2023.

 Smallholder farmers produce around 60% of India’s food grains, but over 20% of the country’s total grain harvest is lost each year, in part due to improper storage methods.  “We used to store the harvest here, in our homes. Pests attacked the harvests – it used to be ruined,” Bhaglu Pandit, Ergos customer in Bihar.

 Commercial grain warehouses are usually far from small-scale farmers and are not a viable option for the small quantities these farmers typically produce. Smallholders in India are often forced to sell their grain within a month of harvest due to lack of safe storage options and don’t benefit from price increases post-harvest. This leaves them with little to no buffer to cover expenses, particularly during increasing periods of climate unpredictability.

Commercial grain warehouses are usually far from small-scale farmers and are not a viable option for the small quantities these farmers typically produce. Smallholders in India are often forced to sell their grain within a month of harvest due to lack of safe storage options and don’t benefit from price increases post-harvest. This leaves them with little to no buffer to cover expenses, particularly during increasing periods of climate unpredictability.

 Ergos digitises grain storage, enabling smallholder farmers to store their grain safely in micro-warehouses and convert their grains into tradable digital assets. Farmers earn 30-40 % more by selling produce at optimal prices post-harvest through a buyer's platform linking farmers to markets. “The farmers are no longer the price-taker, but the price-maker,” explains Kishor.

 “Before, we didn’t know the market rates. Whatever rates traders told us, we sold to them on it. Now, through the mobile app, we know daily rates,” says Jitendra Kumar Das, Ergos customer in Bihar.

Once the grain is digitized, farmers can also access credit for up to 70 percent of their stored grain with affordable interest rates from banking partners, helping them purchase seeds and equipment for the replanting season.

“Normally in a village area, it’s not easy for a bank to work. The tendency is different, and farmers are mostly poor. Now, they don’t need to go anywhere – they click the button, and they get the loan in 48 hours,” explains Praveen Kumar, COO and co-founder.

Ergos currently supports over 160,000 farmers on its platform and has a physical network of micro-warehouses, or “GrainBanks” in over 200 locations at farm gates across the states of Bihar, Karnataka and Maharashtra.