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Business News/ News / Business Of Life/  A greenhouse in a box for small farmers
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A greenhouse in a box for small farmers

Farmers in Telangana are early adopters of an innovation that reduces their vulnerability to vagaries of the weather
  • Hyderabad-based startup Kheyti’s focus on small farmers has attracted the interest of US-based impact investment firm Acumen
  • Lush growth inside a low-cost Kheyti greenhouse in Telangana.Premium
    Lush growth inside a low-cost Kheyti greenhouse in Telangana.

    With one-tenth the water and pesticides required and a manifold increase in yield, greenhouses can be transformative. The catch is that their upfront investment cost puts them beyond the reach of those who need them the most—small farmers dependent on rain or borewells. But what if a minimalistic greenhouse is designed from the outset, keeping in mind the needs and limitations of small farmers?

    Hyderabad-based Kheyti has partnered with manufacturing and design companies to introduce such a concept. Its modular greenhouse kit, including a drip irrigation system, occupies just a tenth of an acre and costs less than 1 lakh. That’s much smaller and cheaper than normal greenhouses which only large farmers can afford. Around 500 farmers in Telangana are the early adopters of this “greenhouse in a box", which comes along with inputs like the appropriate seeds and fertilizers.

    It began on a 1.8-acre farm in Narayanpur village, 60km north of Hyderabad, in 2017, recalls Kaushik K., co-founder and CEO of Kheyti. “Venkatesh and his wife Lakshmi were growing rice along with some vegetables on the side. They worked hard, but their annual income of 30,000 barely sufficed for a family of five. The biggest challenge for them was that they could not fully utilize even their 1.8 acres of land because their borewells would run dry in the summer months," says Kaushik.

    Model farm

    Kheyti had set up an R&D farm on the outskirts of Hyderabad to demonstrate its greenhouse to small farmers. Venkatesh was among the first to visit the farm. “We showed him he could grow high-quality vegetables with so much more yields. But he had only one question: How much water would it need? When we explained that for the greenhouse he would run his borewell pump for only five minutes compared to an hour’s running time for his open field, he was ready to sign up," says Kaushik.

    There was a hitch. The 5 lakh cost of the greenhouse was relatively low but still too much to raise for the likes of Venkatesh. So, why not make it even smaller and more affordable? It’s from such interactions that Kheyti’s greenhouse designs evolved.

    “Venkatesh was the first one and after getting his greenhouse, he continued to give us feedback on what we should do for the next version," recounts Kaushik.

    Today, Kheyti offers a 400 sq. m greenhouse for 80,000, with insect netting, shade netting and polyethylene sheets to protect crops from pests, heat and excessive rain. That compares favourably with the 25 lakh that a one-acre (4,047 sq. m) greenhouse of this type would cost.

    Now, even lower-cost versions are out, thanks to the farmer interactions. For example, the height of the greenhouse could be reduced for vegetables like cucumber, brinjal and tomato being grown in the region. “We realized we could maintain the microclimate after reducing the height from the original 12 feet and it would cut the cost by 3%," says Kaushik.

    Another tweak was in irrigation. The greenhouse came with a motor and a tank, but when farmers asked if their existing borewell pump could be used, the Kheyti team again put on their design hats. They were able to bring down the drip irrigation component by almost 80%.

    Kheyti’s focus on small farmers has attracted the interest of US-based impact investment firm Acumen. “We know a lot of startups who say they will improve farmers’ income and all that. For us, it is important to understand how exactly they are able to do that," says Mahesh Yagnaraman, India country director of Acumen. “Most of the agritech funding has been going to platforms connecting buyers and sellers, and we are yet to see how much farmers are actually benefiting from them. Very few investments are going to startups with a smallholder farmer focus. We chose to back Kheyti because they are very committed to small farmer income going up, and that is also our core thesis."

    New frontiers

    Two of Kheyti’s founders, Kaushik and Sathya Raghu, had in fact met during an entrepreneur fellowship programme at Acumen earlier. Kaushik had spurned an investment banking job to focus on social impact ventures after graduating from IIT Kharagpur, and Sathya had already dabbled in an agritech venture. The idea of Kheyti formed after a six-month stint of meeting farmers in Telangana, Karnataka and Maharashtra. The refrain they heard is that at the end of the day, all their efforts came to nought because of the weather. Innovative greenhouses were the answer.

    While the impact on the ground is apparent, Yagnaraman is aware of the challenges in scaling up. The biggest bottleneck is arranging finance to enable larger numbers of small farmers to take it up.

    Kheyti has tied up with agricultural finance startup Samunnati as well the mainstream Bank of Baroda. “Getting them to sign up with us to give loans to farmers without collateral was a breakthrough. But there’s a long waiting list of farmers and the loans are still slow to come. So, the big focus area for us this year is to figure out a scalable model of financing," says Kaushik.

    Although several agri-fintech companies have come up in recent times, they prefer to give loans to aggregators such as farmer producer organizations (FPOs) and not to individual small farmers. The question then arose if Kheyti could itself raise funds and give loans to its farmers. “That’s a very tough model because then you keep putting more and more money just to make Kheyti loan it out," says Yagnaraman.

    “The main thesis for us till now is that we move the ecosystem along. Ideally what should happen is that these finances are as available as tractor loans have become. I do believe that the scale model is for banks and NBFCs to come together to make this a standardized product instead of us becoming a big financier," adds Kaushik.

    The third plank of the Kheyti model, after greenhouse design and loan access, is market linkage. The startup negotiates with retailers such as BigBasket to sell the produce. This gives farmers the facility of having the vegetables they grow picked up from their farms, saving time and costs.

    Kheyti field officers form the fulcrum for all this to come together. One of them is Naga Sai, an NIT Nagaland electrical engineer. He grew up on a farm in Andhra Pradesh, although his family mostly grows red chilli. “Vegetable farming in greenhouses was new to me when I joined Kheyti two years back. From trellising and pruning to keeping a watch on healthy growth, it requires more attention than paddy or red chilli," says Sai.

    He has been interacting closely with farmers and seeing the change Kheyti brings. Just last week, he met a 55-year-old farmer in Trimulgherry on the outskirts of Secunderabad, who had been growing paddy and cotton for decades. He started growing carrot and cabbage and this winter became the first Kheyti farmer to experiment with greenhouse broccoli, which is otherwise mostly grown in cooler climes.

    Malavika Velayanikal is a Consulting Editor with Mint. She tweets @vmalu

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    Published: 22 Feb 2021, 05:21 AM IST
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