The Obstacle

Agribusiness in India, as in many emerging markets, faces many challenges, including lengthy supply chains and limited market access. There is also a lack of transparency into pricing, with price realizations being approximately 10%–15% lower than they should be. This is exacerbated by a shortage of supporting infrastructure such as storage facilities and refrigerated transport vehicles.

A prime example of this crisis is Himachal Pradesh, a hilly state with challenging terrain. While crops command a significant price premium due to their off-season cultivation and quality of produce, farmers struggle to maximize their earnings, as most profits are captured by dominant middlemen in the value chain. AgriTech players that were providing digital solutions elsewhere to connect farmers to buyers were inactive in Himachal Pradesh owing to the geographical constraints, although there was potential for procuring premium produce.

JICA sought to bridge the gap between farmers and AgriTech players by leveraging digital technology to deploy a market linkage platform that would provide solutions at each stage of the value chain. This was in addition to an ongoing official development assistance (ODA) loan project JICA had in Himachal Pradesh that was aimed at increasing farmer incomes through crop diversification, which allowed for synergies with the market linkage solution.

As a part of BCG’s partnership with JICA to deliver impact across multiple sectors, including agriculture using digital technology, they worked together to design, deliver, and deploy this market linkage platform.
In partnership with JICA’s DXLab, BCG helped develop scalable digital tools that empower smallholder farmers in India to increase productivity and access better markets.

Our Approach

To begin with, BCG and JICA developed a comprehensive strategy tailored to implementing digital solutions and improving market access for farmers. 
 
We conducted a detailed baselining on key farmer challenges and outcomes expected and assessed the digital maturity and readiness of the state to implement them. 
 
While market linkage was identified as the prioritized use case, our work revealed the need to ensure strong farmer traction and meaningful adoption. Within the market linkage framework, we uncovered multiple critical points that required nuanced understanding, ranging from local cropping patterns and farmer transaction behaviors to infrastructure bottlenecks and market price volatility. We tailored the solution design to both reflect these local realities and ensure alignment with farmer needs, operational feasibility, and stakeholder priorities. Building on this understanding, BCG and JICA onboarded DeHaat, a leading Indian AgriTech player, to implement a contextualized solution co-developed to address the specific needs and conditions of farmers in Himachal Pradesh.

BCG and JICA supported DeHaat in providing a digital marketplace connecting farmers in Himachal Pradesh with collection centers for enabling transactions, with end-to-end transparency and digital tracking. The Department of Agriculture, Himachal Pradesh played a crucial role in kick-starting and monitoring the proof-of-concept (PoC). The parties also reduced post-harvest losses, which was made possible through timely procurement and logistics support.

To ensure that the solution was implemented in line with key requirements, BCG worked with DeHaat to ensure the following:

  • Payments to farmers’ bank accounts made directly within one to two working days
  • The procurement of all qualities of produce as opposed to just high-quality produce
  • Uniform pricing throughout the day, with prices offered by DeHaat and market prices transparently displayed on the digital app
  • Regular project check-ins for on-the-ground implementation and the removal of bottlenecks
  • Regular meeting cadences and appropriate governance mechanisms for alignment of goals and objectives across multiple stakeholder groups

The Result

We have benefitted a lot from this system because the collection center is also near our village. This saves our time as well as our money. More farmers should join in—we would like to continue engaging with this solution. — Prakash Kumar, a farmer involved in the PoC in Himachal Pradesh

This was a unique project for BCG, as teams needed to spend time on the ground in order to understand the conditions in which farmers in Himachal Pradesh were having to work. This required multiple field trips, with comprehensive strategizing rounds following up with government and digital partners. This was a “farmer-centric” initiative to ensure that these communities were able to acquire a solution that ultimately worked for them.

>1000
farmers were onboarded on DeHaat’s digital platform through the PoC
10-11%
average price increase in produce traded through digital means

Other benefits included techniques for improving crop resilience to weather, pests, and diseases, with the promise of more gains to come.

Through this PoC, we were able to demonstrate that, with sufficient care and effort in the design of the solution, farmers and businesses can benefit profitably.

Looking ahead, there is a willingness in Himachal Pradesh to onboard many more AgriTech start-ups like DeHaat to improve farmer incomes, with reciprocal enthusiasm on the part of AgriTech companies to partner with the state.