Indian farmers mostly smallholder farmers need hand holding to adapt to technology and also manage other aspects of agriculture business. With an aim to make the lives of farmers’ easier, a one-stop platform is developed for Indian farmers by Mastercard. It is called MFN.
R B Santosh Kumar, Head, Government Engagement, South Asia at Mastercard talks to Jescilia Karayamparambil and R N Bhaskar about Mastercard Farmer Network (MFN) and plans on expanding its coverage in the country.
What is the role of Mastercard today?
Mastercard operates in around 210 countries. For over three decades, it has been present in India.
Initially, we were perceived to be the card company, but we are a technology company which supports and works with banks, fintechs, merchants, governments and others. Most of the products and solutions — not just technology but services — that we offer are useful to end consumers.
Off late, in India, Mastercard has been focusing on the businesses-driven by governments’ requirements. Mastercard also has a government engagement team which works on various areas — agriculture and SMEs —that are the focus of the government.
For six state governments, we run authentication services for their various schemes/ initiatives as well.
We also do authentication services for six state governments in various government programmes. We are also in urban mobility space.
In a lot of countries, we engage with governments overseas in transit projects and smart cities.
In agriculture, what is Mastercard doing?
Coming to agriculture, it is very important for us.
India is home to around 167 million farmers which is 30 per cent of the world farmer’s population and 140 million are smallholder farmers. Of the 140 million smallholder farmers, only 28 per cent of these farmers are part of the FPOs (Farmer Producer Organisations). This is a very small number. Less than 3 per cent of Indian farmers have access to digital tools in India. This is why agritechs are unable to scale up their business further.
Rural internet access is less than 20 per cent, smartphone penetration is less than 25 per cent. If you look at this against the backdrop of India’s agriculture which is quite a large business. It accounts for USD 270 billion of flows per annum. There has always been a focus by the government and companies to look at the welfare of farmers. The government also hopes to double farmers’ income by 2022. Thus, attempts are made to digitise the whole agricultural ecosystem.
We are here to support the government to digitise the whole agricultural system with solutions that we have.
Tell us more about Mastercard Farmer Network (MFN)
MFN, which was launched in India, is developed by the humanitarian and development business unit. The pilot was launched in Andhra Pradesh (AP) with the support of the horticulture department. We plan to do a full-fledged launch of this by the end of the year.
Due to COVID-19, the launch has been delayed. Earlier, we were suppose to launch it in mid 2020.
We will be launching MFN programme in three states by the end of the year — Andhra Pradesh, Tamil Nadu and Karnataka.
MFN was successful even during the COVID-19 times. During the pandemic, the farmers in our network were able to sell around 51 tonnes of produce to buyers in other states like Tamil Nadu and Karnataka. These farmers were able to make a profit — in the case of mango, profit of 25 per cent and turmeric it was around 50 per cent. Farmers that we worked with are happy about MFNs.
Is education or credit culture or amenability to technology was the reason behind launching MFN in southern states?
The reason we picked the southern farmers was because the credit culture, literacy and the amenability to technology are stronger.
Also, we started the project in AP. So, we will scale up that side. Post that, we will be moving to other states also.
The point is to expand to as many states as possible and do as much good as possible to the farmers in the country.
In addition, one of our implementation partners is based in Andhra Pradesh with presence in Karnataka and Tamil Nadu.
What is MFN offering?
MFN solution caters to all requirement of farmers in one platform. The platform offers farmer profiling, order management, communication management, agri input management, financial service module, value-added services and other solutions, which works offline for farmers.
How MFN works?
Implementation partners will work with FPOs and buyers on the platform. These FPOs will be taking on board farmers. So, farmers will list the produce with the prices through the digital agent. Buyers will put in their requirements.
At this stage, farmers are not literate and are dependent on feature phones. So, we call this a phygital model where a digital agent helps them with all these activities.
In India, there is a lot of focus on digitising every industry and every sector, which will benefit all stakeholders — government, organisations and individuals. MFN will help farmers to sell at better prices and get good buyers. This will be win win situation for all.
How do you see agribusiness evolving?
There is a focus to digitise every sector and it will definitely benefit all stakeholders. This is definitely the right move. This will make life much more easier, quality of life will improve and improve income of farmers.
Have you started evaluating other states as well?
We have already started evaluating other states as well. We usually work with an implementation partner based on the project report they present and we look at the viability of each of the states.
Only after this evaluation, we get into that state. That is the way we look forward. At present, the focus is in these three states. We want to launch and establish ourselves here and ensure that we cater to the requirements of the farmers and then move to other states.
How many FPOs you plan to work with?
For the pilot, we worked with three FPOs. We would like to reach out to 10 per cent of the FPOs in the country as soon as possible and that will be a good base to start with.
What is the difference between MFN in India and MFN-model in other countries?
We currently have MFN in Uganda, Tanzania, India and Kenya. We have around 4.75 lakh farmers on board.
In Uganda and Tanzania, it is MFN 1.0 which is the first version. It has basic modules.
In India, we will have a 360 degree module. So, the African version does not include financial service, agriculture input, value-added services among other services. These additional features are there in the Indian version. In India, it is one platform that will cater to all the agriculture requirements.
There are many others who are working to offer better services to farmers. Do we see you collaborate with them?
Areas where we feel we can work with existing players, we would be looking at them as implementation partners. If we feel some businesses understand things better we will work with them as well.
How are you looking at monetising the model?
The implementation partner will pay us a minimal amount for using the platform. It is a very small percentage. There is no commercial focus in this space.