The Carrot Experiment
The co-founders of Sunshine Vegetables Pvt. Ltd. are Lt. Col. Subhash Deswal (Retd) and Mr Lal Kishan Yadav, both had pursued other vocations before getting together in 1998. Lt. Col. Deswal served in the Indian Army for 22 years and Mr Yadav, a postgraduate in chemistry, ventured in small businesses with limited success. Coming from agricultural families, both had farming in their blood and since neither owned any significant property, they decided to get into lease farming. They began their journey with farming English carrots on 2 acres of land.
SPECIALISATION IN CARROTS
"Quality, Quantity and Commitment"
In the existing farming system, the farmers were trapped in the debt trap and were at the mercy of the commission agents for the sale of their produce in the market. They took credit from the commission agents at the beginning of the season for inputs and were obliged to sell their produce through the creditor during the harvest season. The commission agents also exploited the farmers through unscientific means of price discovery and other malpractices. So he was forced to follow other farmers until he decided to change the status quo.
Col. Deswal realised that farmers are exploited because they are small, disintegrated and unorganised. The farmers find themselves helpless in the wholesale market because they have no other place to sell their produce. The existing system crushed the small and marginal and favoured the big.
The status quo was not acceptable to Col. Deswal who came from the military background. He wanted to break the wheel and bring the farmers outside the hold of the commission agents in the wholesale markets. He understood that it could be done only through “Quality, Quantity and Commitment”. These three golden words set the ground rules for the actions to follow.
In an open market quality always respects better prices. In the existing practices, the focus was only on yield while compromising on the quality. Col Deswal wanted to produce the best quality of carrots in India. The quality was ensured through strict adherence to the best package of practices for cultivation of carrots. The best quality of seed was imported, SOPs for land preparation, sowing, weeding, irrigation, and harvesting were developed, and training of farmers on these SOPs was held. Over time the progressive farmers who understood the benefits of doing so began associating with Col Deswal and Mr Yadav.
Increasing the yield is possible only to a certain extent, beyond which either the land or quality of the product deteriorates. Thus, a balance has to be made between the two. In order to increase the production, more farmers were brought onboard under contract farming. Along with the development of new technologies and adoption of best farm practices, there was a need to develop farmer engagement models to build integrated farmer community based on trust, shared values and shared resources. It was observed that some of the farmers were good at farming while others lacked interest in agriculture and left their land either uncultivated or gave their land to cultivars on lease. The good farmers were financed by Sunshine Vegetables to take more land on lease from unproductive farmers and undertake carrot farming on contract basis. The production was maximized and quality was ensured at the same time.
An important aspect of any trade is commitment. A supplier’s commitment to deliver on promised goods in promised quantity and promised quality goes a long way in establishing brand name and trust in that brand name in the market. Overtime, with commitment Sunshine Vegetables established a brand name for Sikandrabad carrots in all the markets in India.
Farmer Engagement Models
Traditionally farmers are dependent on credit before the season to buy inputs from the market. The commission agents provide this credit along with non-agriculture credit for family functions and weddings to the farmers. This relationship brings the farmer under the eternal debt of the commission agent. Thus, farmers are forced to sell their produce in the market through the commission agent who provided the credit. There is also the established practices that have been followed by their forefathers that they tend to continue without much intention to change them. Col. Deswal wanted to break this chain and bring farmers out of the debt trap. He along with Mr. Yadav pioneered the zero-investment contract farming model that broke this nexus of the commission agents. The contract farming model helped establish long-term relations with the local farmers. These models have evolved overtime with welfare of the farmers as the core principle.
The Birth of Social Entreprise
An enterprise was established and incorporated in the year 2009 as Sunshine Vegetables Private Limited under the Company’s Act 2013 to give a formal structure to the experiment that was started with English carrots in the year 1998. No enterprise can be successful in the long run without innovation. Multiple interventions and innovations by Sunshine Vegetables helped revolutionise agriculture on a large scale and develop Sikandrabad as the ideal cluster of horticulture crop in the Indian context.
In India, cold storages are mostly built for potato and because of the sturdy nature of the crop, not much care is given to the product while it is in storage. Another reason for the neglect of the product in storage is non-captive use of the cold storage. The cold storage operations run on rental model where the rent is charged on number of bags instead of the weight of the product. Thus, even if the product is spoiled or loses weight during storage the cold storage owner is not responsible for it and nor does he face any economic loss. In case of carrots, the product is very sensitive to temperature and humidity. It requires more 0 to 2 degree Celsius of temperature and more than 95% humidity in storage. No cold storage in India was equipped to maintain such atmospheric conditions. Sunshine Vegetables in consultation with experts on cold chain established the first carrot cold storage that was specially designed to maintain the required conditions.
Competition In The South
Sunshine Vegetables was the first to target long distance markets using cold chain in case of fresh products. With the quality of carrots produced in large quantity, Sunshine Vegetables was able to compete with local fresh carrots in south Indian markets like Hyderabad, Chennai and Bengaluru.The second cold storage with a total capacity of 15,000 MT was commissioned and half the capacity has been built till now.