Helping farmers cultivate digital ways

The Centre for Digital Financial Inclusion brings farmers on board the tech wagon

The Centre for Digital Financial Inclusion (CDFI), a not-for-profit organisation, works towards reducing inequities in financial access and services, with the help of technology.

The Centre has developed many technology platforms, including KANCHI (Kisan Advancement through cashless innovations), an integrated digital platform for farmers, BETS (Benefits Entitlement Tracking Solution), a platform that facilitates benefit transfers — both cash and kind, and SAMWAD, a learning platform for continuous literacy. The Centre has also implemented many projects to help the under-served, such as Pradhan Mantri Matru Vandana Yojana, e-Nikshay program for TB patients and financial literacy programmes through mobile phones, to name a few.

In an exclusive interview with BusinessLine, Krishnan Dharmarajan, Executive Director, CDFI, talks of how CDFI innovations help farmers.

Could you tell us about the projects targeted at farmers that CDFI has implemented?

For farmers in Tamil Nadu, CDFI, in collaboration with the National Agro Foundation, has developed KANCHI.

It is a pilot program currently running in Kanchipuram, Tamil Nadu, hence the name KANCHI. This platform is currently used by 14 Farmer Producer Organisations (FPOs) in Tamil Nadu and more than 8,500 farmers have been registered on it.

KANCHI is a digital platform that caters to various activities related to FPOs, such as demand aggregation, cashless payments for inputs and outputs, loan management (application, disbursement and repayment), leasing of farm equipment, produce aggregation and grading at doorstep, and connecting farmers and buyers.

How exactly does KANCHI help farmers?

We started with dairy farming, as it is an important source of subsidiary income for many farmers. Dairy farming is a year-round activity whereas other activities are seasonal.

Where dairy farming is an organised activity, the KANCHI platform enables the milk aggregator or FPO to digitally record the milk collected from each individual farmer using a mobile phone.

The KANCHI application captures the volume of milk sold by the farmer to the aggregator, quality of the milk, price at which the milk is taken by the aggregator, payment made by the aggregator to the farmer, the date of payment, and so on.

These payments from the aggregator to the individual farmers are directly credited to the bank accounts of the farmers at the end of every billing cycle, which is typically a 10-day period. Prior to the implementation of KANCHI, all these transactions were being done in cash.

Cashless payments to the bank account will help the farmers. For instance, if a farmer wants to avail a loan from a bank, banks can look at these business payments or credit history in their bank account and determine the farmer’s credit-worthiness.

This is not possible in a cash-oriented business. What is interesting is that we have enabled this at a low cost by means of a phone in the hands of milk aggregators (at the pilot sites, aggregators happen to be farmers themselves).

Using KANCHI, over ₹30 lakh has been transferred into the bank accounts of 219 marginal farmers as payments against the milk sold at the aggregation centres in Tamil Nadu. Loans worth ₹73 lakh have been disbursed to 173 farmers by the FPOs and their repayments are being tracked through the platform. FPOs have used KANCHI to repay their loans to the banks — ₹3 lakh has been paid so far.

How does SAMWAD benefit farmers?

SAMWAD is a digital platform for continuous literacy programmes. It uses the mobile phone as the interface for engagement. An SMS/IVR (interactive voice response) can be used to engage with users on a literacy programme. All the farmer needs is a basic mobile phone. Users with smart phone can use a chat-like feature to access content. These messages and chats are interactive – the users can respond and based on their response, the system chats back with relevant content. The users can choose the language in which they want to receive the content. We have rolled out multiple pilot projects in Tamil and English to help farmers acquire a working knowledge of the modes of digital payments, such as cards, wallets and BHIM.

What is in store for agriculture from CDFI?

We are exploring opportunities with like-minded organisations to scale up the KANCHI platform, get more FPOs and farmers on board.

Recognising that a major expenditure for farmers are input items such as seeds, fertilisers, pesticides and cattle feed, we have already started digitising inventory and sale at the input centres and consolidating demand for bulk purchases.

We are in the process of introducing cashless payments at the input centres for which a partner bank is needed.

We are also developing a component for leasing farm equipment, which will enable small farmers and FPOs who cannot afford to buy farm equipment to lease such equipment from the service providers.

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