Mahindra & Mahindra is looking at multifold jump in revenue to USD 1 billion (about Rs 6,700 crore) from agriculture business within 5-6 years and expects e-commerce to play a major role in the growth.
M&M’s agriculture business, excluding tractors and mechanicals currently stands at around Rs 1,000 crore.
“Sky is the limit. It depends how well we do. We are right now targeting USD 1 billion in the next 5-6 years and I am not counting tractors and mechanicals,” M&M Executive Director Pawan Goenka told PTI on the sidelines of India Economic Summit here.
On the importance of e-commerce in the agriculture sector, he said it will remove the intermediates thereby enhancing the earnings of a farmer.
He added: “I personally believe we are sitting at inflection point in agriculture because there are several things which have started to happen. We are underestimating what e-commerce will do to Indian agriculture.
“It will remove the intermediates and will be almost from farm to the dinner table and therefore revenue won’t be distributed in different baskets.”
When asked if this is the reason why Mahindra got into e-commerce for rural markets, Goenka said: “Yes, certainly.”
Mahindra currently is having three e-commerce businesses to cater to agriculture sector.
It has forayed into the agricultural equipment rental services with the launch of Trringo which uses a proprietary digital platform as an enabler to process orders and pass them on to the nearest franchisee through location based mapping.
Franchisee also tie-up with tractor owners in the vicinity enabling them to rent out equipment to farmers on a commission basis.
Large farmers who own expensive, high-end equipment can rent out their assets thereby optimising utilisation based on seasonality, cutting across geographies.
“The fact that India has 139 million farmers and out of that 85 per cent, which is about 100 million, have less than 2 hectares, means they cannot afford a tractor. So if these 100 million start renting tractors, that means 20 million tractors are deployed in custom hiring.
That is 10 times the tractor park right now, that’s the kind of potential it has,” Goenka said.
The company runs e-commerce based start-up, MeraKisan, which buys from farmers on order from the customer and supplies directly to the customer. It also has ‘My Agri Guru’, portal on disseminating knowledge to farmers.