Farm to Finger is an agricultural marketing company that aims to connect the rural farmers of Nepal to urban consumers. This direct connection reduces the number of intermediaries in the market, which allows a surplus benefit to consumers as well as the farmers.
In conversation with Deepak Ratna Tuladhar, co-founder of Farm to Finger Pvt. Ltd.
1. Let’s start with your journey of starting this venture. How did Farm to Finger come to exist?
My partner and I were studying in the UK when we thought of starting this venture in Nepal. I come from a background of supply chain management, so we figured that the mismanaged supply chain was a major problem in the agriculture sector of Nepal. We discovered that farmers were getting low prices for their products while the customers were paying very high prices. The only people making money were the intermediaries. So, we decided to seize the opportunity and start this company.
2. Could you tell us more about the company like what stage is it in and how it was funded?
We consider ourselves to be a start-up, since we just started in August 2016. We are registered as a private limited company with my partner and me as the two shareholders of the company.
We started this company with our own investment. Currently, we are operating at break-even and reinvesting our share back into the business to expand the network of the business and farmers. We have not taken any loans or external investment. To build the network of businesses and farmers that we have imagined will require around 50-70 lakhs worth of investment. As of now, we have invested over 20 lakhs.
3. What kind of products do you work with?
We work with only high-value indigenous products that don’t compete with the products in the Indian market. Our products are of high value and from mountainous regions that have unique value and position in the market. For example, we don’t sell Basmati rice but brown rice and black rice since they are exclusive products. Similarly, we sell lentils and apples from Jumla – products with a geographical value proposition. In this way, we connect the story of a place through our products. We supply as per the demand we get through phone calls and demand placements since we don’t have an e-commerce site as of now and that way our inventory isn’t very high.
4. What is the social problem that you’re trying to solve through your company?
In Nepal, the supply chain is not well managed. This means that the farmers are never paid a fair price for their products and are regularly exploited by the supply chain intermediaries. Simultaneously, consumers are paying very high prices for agricultural products. So, we are trying to change this pattern through Farm to Finger.
We connect these farmers directly to their consumers. So, the farmers’ products are sold directly to individual customers, households, bankers, expats, etc through social media marketing, trade fairs and word of mouth.
5. How many staff have you hired and how many farmers are you currently working with? Currently, we have 4 staff members. At one time we had 11 staff members; the optimum level of staff would be 8. We have more than 3500 farmers in around 23 districts including Kalikot, Rukum, Rolpa, Dolpa, Salyan, Surkhet, Sindhupalchowk, Jumla, Manang, and Mustang.
6. Is the business working on self-sufficiency or profit-making model?
We work like any other intermediary platform – we buy, sell and make a profit. However, in a normal supply chain, there are around 4 to 5 intermediaries. Every intermediary takes a 20-25% margin and the mark-up ranges from 100-200%. We, on the other hand, only take a total of 30-35% margin. Hence, we are able to offer customers and farmers with better prices.
7. What challenges did you face while starting the company and are facing now?
In this sector, it is very easy to start and register the company. However, it is really challenging to run the company and build networks. We had to travel to different villages to meet potential farmers which require a lot of time, money, and effort.
Similarly, we also had difficulty in negotiating a lucrative deal as the farmers were more familiar with intermediaries that influenced them. So, despite the added benefit that we had to offer, out of every 10 farmers only 2 to 3 agreed to collaborate.
We’re still facing this problem but it was easier to manage and negotiate since we know how to do it effectively now. Right now, we’re facing a challenge of retaining the farmers since we provide 20-25% more than the market price to establish a deal with farmers but it sometimes becomes difficult to maintain that price.
8. What are the key needs of your company? How many customers or clients do you have?
Mentorship, networking, and visibility are the primary needs of an agricultural marketing company. Any startup, like ours, will have many key needs apart from the innate skills of the founders. However, we lack the opportunities and resources to invest in them adequately. For example, I have a background in human resources, but I look after the marketing department. If we had someone from a marketing background working for us, we could be doing a better job!
We have served about 4000 to 5000 customers till now and around 35 retail shops.
9. What is the scalability and market potential for you?
To put things into context, let us take an example of Bhatbhateni. Big corporations like Bhatbhateni are integrating backward in the agriculture market. They are getting into the supply chain system and investing in farms just like us. So, looking at the industry itself, we believe there is a huge market potential in terms of scalability for us.
10. Do you measure the impact of your product/service?
Given the limited resources we have, we have not been able to measure the impact. But, if we collect the data, I am sure we will see a positive variance in the income and earnings of farmers who are using our services.
11. What is the future plan with your company?
We are expanding –the range of products we are offering as well as in terms of networks with farmers, consumers, and distributors. We want to simplify the supply chain of agricultural products. We also plan to have our own outlets and collection centers. In the future, we want to switch from a demand-based supply model to create our own demand. The supply is high for agricultural products and we want to capture that demand.
12. Do you consider yourself as a Social Entrepreneur?
That’s a tricky question so let me explain what Farm to Finger is doing first. It is based on a profit-making model, but our vision is entirely social and whatever we have achieved so far has had a social impact. So, yes I do consider myself as a social entrepreneur.
If you have any more questions about Farm to Finger then you can comment your queries down below or reach them out directly on their Facebook or email at deepak.tuladhar44@nullgmail.com.
