Creating inclusive and sustainable growth in the local communities
Turmeric Sourcing for Terravana Nutraceuticals
Khethinext, Vana India’s JV partner works towards transformation of agriculture for small and marginal farmers, to reduce their cultivation costs, improve their crop productivity, and obtain higher remunerative prices. Terravana Nutra Private Limited is a manufacturer of nutraceutical products and extracts from crops like turmeric, ginger, coleus, tulsi, ashwagandha, etc. The manufactured products are exported to various clients in USA, Europe, and East Asian countries. Khethinext has entered into an MOU with Terravana Nutra in March 2018, to supplement each other’s strengths in forward and backward linkages. As a first step towards honouring this MoU, Khethinext has provided Terravana Nutra with access to its wide network of farmers to procure Turmeric at farm-gate prices.
Terravana Nutra has a strong client base in countries like USA, UK, UAE, Japan and Malaysia, for its nutraceutical products and extracts. Procurement of raw material has always been a challenge for Terravana Nutra due to volatile market prices, dispersed farmer network, and a mere lack of aggregator of farmers.Khethinext has a strong farmer network in the state of Andhra Pradesh, but lacks strength in marketing of the produce in bulk. No matter how much the cultivation costs are reduced to, sale of the harvested crop is what matters the most to the farmers. In a niche industry like nutraceuticals which does not have much of a relevance in India yet, marketing the nutraceutical crops is not easy at all.
The complementing nature of Khethinext’s and Terravana Nutra’s lines of business gave rise to an alliance between the two. Following the MOU, Khethinext has supported Terravana Nutra to procure turmeric directly from the farmers to extract curcumin. The elimination of multiple layers of middlemen, reduces the raw material cost for Terravana Nutra, and increases the income of farmers. Moreover, the supply-demand equation is in near balance state in this arrangement due to planned cultivation, processing and marketing of the products.
Vana India has facilitated the MOU between Khethinext and Terravana Nutra for their mutual benefit. Through this MOU, Vana has provided a guaranteed buyer for Khethinext’s farmers and guaranteed suppliers for Terravana Nutra at the best possible price. To supplement the efforts of these two companies, Vana will provide logistical and mechanization services through its other partners, to complete the supply chain requirements, thereby building the much-needed ecosystem for the nutraceutical industry.
The association between Khethinext and Terravana Nutra has provided beneficiaries of both the parties with tangibly better results in comparison to the market outside the ecosystem. When the farmers of Khethinext were earlier selling the turmeric to traders at Rs.63 per kg, they were able to secure a price of Rs.68 per kg from Terravana Nutra, fetching them an 8% increase in their income. Similarly, Terravana Nutra was paying a price of Rs.75 per kg to purchase turmeric from traders, and now the cost of raw material reduced by 9.3%. Due to reduction in cost of inputs, Terravana Nutra can offer a stiff competition in the market, thereby gaining a larger client base and higher demand for raw material. This cumulates the benefits for both Khethinext and Terravana Nutra over time, strengthening the ecosystem created by Vana.
Similar arrangements will be made between farmers/FPOs of other nutraceutical crops – which help in building the portfolio of both the companies. The pricing and supply chain will be made more transparent to attract more farmers and clients into the ecosystem. If implemented perfectly this will give a huge leverage to Terravana Nutra in pricing and a possibility of building a retail brand in the coming years. Ultimately this will result in much better incomes to the partner-farmers cultivating the nutraceutical crops, while encouraging more price-sensitive consumers to try nutraceutical and wellness products.
First Vana Centre Site Inauguration
Vana Centre is a one stop destination for all the smallholder farmers’ needs. The key purpose of the Vana Centre is to assist the farmers at every step of the supply-chain through scientific help, targeted training, and innovative tools and implements. Vana Centres are structurally and functionally well-equipped than the other extension-services providers in the market. In a Vana Centre, services are designed and executed to empower the farmers and improve their bargaining power as major stakeholders in the agriculture value-chain. It offers end-to-end services and products such as, financing for capital and operational expenditures, inputs and infrastructure, technical advisory, market access and logistics.
Key Activities at the Vana Centre
- Recruitment of farmers based on Vana’s selection criteria
- Enrolment of farmers on Vana’s portal
- Verification of land documents and cultivation history of farmers
- Testing soil and water samples of registered farmers
- Logistics management of farmers’ inputs & equipment
- Addressing real-time and long-term farming issues
- Purchase and post-harvest handling of farmers’ produce
- Accounting and disbursal of farmers’ loans and payouts
Vana Global’s first Centre site inauguration was done in Chintalgera Village in Bidar District. Located in the Southern Indian state Karnataka, Bidar district has a net sown area of over 450,000 hectares. Bidar is predominantly a sugar cane growing region, although farmers here grow millets pulses, ginger and soy bean. More than 90% of the arable land in Bidar is rainfed, with the remaining 9% being irrigated by tube wells, borewells, open wells and tanks. Bidar is connected with three seaports, Mumbai, Kakinada, and Krishnapatnam, in its 600-kilometer radius. And two airports, Hyderabad and Latur, in its 150-kilometer radius.
Bidar Centre’s site was inaugurated on the 15th of October 2018. The team met the local farmers who attended the inauguration ceremony. The farmers explained the problems they are facing, and also their expectations from Vana. Registrations and data collection were done by the team during the event, to understand the crop and landholding patterns of local farmers. Extensive discussions made Vana’s team know the farmers in person, and reaffirmed the conviction in Vana’s solution to the smallholder farmers’ problems.