Star Agri/
India’s Largest Post-Harvest Service Provider Plans to Go Global

For Amith Agarwal, going global is the next growth strategy for Star Agri, the largest integrated post-harvest service group in India.

“Our long-term plan is to become the number one agri-tech provider in the world,” says Agarwal, co-founder and Executive Director of Star Agri Warehousing and Collateral Management Ltd., the group’s flagship operation.

Early in his career, Agarwal realized that technology was the way to ease the pre- and post-harvest woes of Indian farmers. When he founded Star Agri with his three partners 15 years ago, his idea was to use technology wherever possible.

Over the years, the company grew, and the group now offers warehousing, logistics, finance and “marketplace” services to farmers through three distinct businesses.

Agarwal is now focused on expanding the reach of Star Agri’s online marketplace, Agribazaar, across India. “This will enable farmers from anywhere in the country to use our mobile-based app to sell their products. They don’t need to go to physical mandis (markets),” he explains.

Traditionally, selling agri products has been a major post-harvest problem for farmers. The digital platform not only solves this, but also helps farmers get the best price for their products.

“Our Agripay platform ensures secure payments. The seller doesn’t have to worry about getting his money and buyers their goods,” explains Agarwal, who is also the CEO of Star Agribazaar Technology Ltd, which operates Agribazaar. “Virtual markets will have greater potential once the farm-sector reforms come into force,” he points out. (The Indian government recently enacted laws allowing farmers the freedom to sell their products to anyone they like).

The next growth strategy for Star Agri is to take the digital marketing platform overseas.

“We want to start online services in other countries and our long-term goal is to become the number one agri-tech company in the world.”

Agri- tech, he says, can not only make it easier for farmers to sell their products, but also to access better crop advisories, safe storage facilities and up-to-date market information.

Star Agri has already made an overseas foray by starting a subsidiary in Singapore in 2014, following Temasak Holding’s acquisition of a minority stake in the company.

Agarwal spoke to GPC about his group’s plans for growth, India’s warehousing sector and how the use of technology helps Indian farmers.     

GPC:  You have been in the business of providing post-harvest services to farmers for the past 15 years. What has been your experience in helping farmers cut post-harvest losses?

Amith Agarwal:  We have been able to help farmers cut post-harvest losses by ensuring the safekeeping of their products and providing timely financing and marketing support. We have more than 1,200 modern warehouses across the country with a capacity of over 2 million MT. We also provide value-added services such as weighing, testing, certification and logistics. Our NBFC gives credit facilities and above all our online marketing platform, Agribazaar, helps farmers sell their products. So, farmers are protected from post-harvest distress sales and are assured the best prices.

GPC:  Will the digital market help small farmers?

Agarwal: In fact, it helps small farmers the most. They can choose not to sell their products in traditional mandis (markets). It eliminates intermediaries, reduces trade commissions and empowers farmers with more choices to sell. The idea behind the digital market is that the technology-driven platform reduces overhead costs.

GPC:  How many customers do you have on the Agribazaar platform?

Agarwal: We have more than 200,000 customers including farmers, FPOs, corporate, traders and agricultural credit societies. We deal in over 80 commodities. We expect to add more customers as we expand our reach.  

GPC: Could you give us a sense of the value or volume of transactions?

Agarwal: Agribazaar so far has transacted over 5.5 million MT of agri products worth more than Rs 27,000 crores.

GPC:  What are your growth plans?

Agarwal : We want to make Star Agri the biggest innovation-based agri-tech company in the world. Initially, our plan is to expand our technology-driven platform in India and other countries. Such a network can enable farmers from any part of the world to sell their products to anyone, anywhere and anytime in the world. Technology also helps farmers get better yields, better storage facilities, low-cost credit and current market information. All of these empower farmers and help ensure food security.  Our long-term goal is to become the number one agri-tech provider in the world.

GPC: You started with warehouses. Do you see room for more private players in agri-warehousing?

Agarwal: Yes. There is already a demand-supply gap in agri-warehousing and it will continue as our farm output is expected to grow in the coming years. But what we need is advanced warehouses with value-added services and not the traditional godowns.

GPC: What about public sector companies, which own more than 40% of agri-warehousing?                         

Agarwal:  Yes, traditionally public sector companies like CWC and FCI were major players. But in my view, operators like FCI will gradually exit the warehousing business. Running warehouses is not the business of government companies. They should allow private players to run their warehouses.

GPC:  You mean, FCI warehouses should be privatized?

Agarwal:  Yes. And we should do it with buy-in from all stakeholders. My views should not be misunderstood as a demand for “blatant privatization”. Private players can bring in capital, the latest technology and the best practices. FCI and the government can monetize their assets across the country or partner with the private sector to create better value. We want Indian farmers to benefit from better prices and reduce wastage through scientific warehouses and modern infrastructure.

GPC:  Some observers are disappointed with the 2021/22 Union Budget provisions for the agri sector. What about you?

 Agarwal:  I am happy with the provisions such as an increased allocation for the rural infrastructure fund and a higher credit target for farmers.

GPC:  Do you see an opportunity for dedicated warehouses for pulses?

Agarwal: India is the largest producer and consumer of pulses. Modern temperature-controlled warehouses are important for storing pulses over a long period of time. With production on the rise, there will be more demand for such warehouses.

GPC:  Are agri-warehouses expensive in India?

Agarwal: No. What we offer famers is not just a warehouse. We are providing end-to end post-harvest solutions. These include safekeeping of their products, logistics and supply chain management, credit and marketing support. This integrated service reduces post-harvest expenses.