Logistics management in the agricultural industry is the process that ensures the optimal and continuous flow of agro-goods from manufacturers/suppliers to producers and, eventually, to consumers. It is crucial that the activities in this process are effectively managed to guarantee the customers’ demands are met on time and the maximum value of the cultivated products is achieved.
Moreover, it is essential to minimize distribution expenses, improve the circulation of agricultural goods, reduce unnecessary losses, and strive for an environment-friendly and compliant logistics. Arya Collateral Warehousing Services Pvt Ltd. is one such agricultural warehousing and logistics platform that offers farmers, FPOs and other participants, a bouquet of post-harvest services like primary aggregation, storage, financing, and market linkage through a network of digitized warehousing solutions.
Until 2013, Arya was part of the JM Baxi Group. That year, Prasanna Rao and Anand Chandra acquired a controlling stake in the company. Prasanna had previously served as the Head of Agri Commodity Finance at ICICI Bank, while Anand was previously ICICI Bank’s National Product Head for Agri Commodity Finance. More recently, they were joined by Chattanathan D, the former Group Product Head of the Rural and Inclusive Banking Group at ICICI Bank.
The team successfully turned around the company and today Arya is already India’s largest player in the agri-warehousing space with the largest NBFC book (Warehouse Receipt Finance) and highest ROE on account of its asset light tech based profitable model. They currently reach about 350,000 farmers in 21 states, directly or through one of 450 FPOs, manage $1 billion worth of commodities in their warehouses and provide or facilitate $350 million worth of financing.
In an interview with Insights Success, Anand Chandra shares about the journey of Arya, various challenges it faced, its achievements, and future plans.
Tell us about your company’s operations, its mission, its vision, and its core values.
We aim to maximise the value of each grain of the Indian farmer. For this, Arya offers an integrated post-harvest service model, called the agChain through its digital platform to address distributed value chains. Arya’s model aims to mitigate the key challenges posed by the currently low density of storage and service providers close to the farmgate. Arya has been able to successfully help smallholder farmers realize better value for their produce through village level commodity storage, integrated financing and market linkage services to create better options for commodity sales.
How is your company catering differently to its clientele, to stand apart from competition in the agriculture solution providers space? What safety, hygiene and quality-assurance standards does your company abide by to inspire the trust of its clients?
Digitization of stored produce is at the crux of Arya’s approach. In this model, produce entering the warehouse is quality checked and each stack of grains is given a unique identification. This translates to a ‘digital balance’ on Arya’s app interface that can be used to track the produce’s movement and status, including fortnightly or monthly commodity health reports.
Once the produce is digitised, Arya addresses the potential cashflow needs of farmers. Arya has developed a digital fin-tech tool that can rapidly assess cashflow needs, conduct credit checks and disburse loans to farmers within 5 minutes. Loans are provided via their wholly owned NBFC subsidiary, Aryadhan, or partner financial institutions. During the currency of the loan, generally ranging from 6 months to a year, farmers or FPOs uses the market linkage platform arya.ag to sell their produce at will, the decision making is further enabled through regular information on prices and other market factors.
 What, according to you, are your company’s most notable contributions in the Agriculture sector?
Arya’s unique farmer-centred approach, providing a full-service digital platform with embedded finance and differentiated efficiencies for small farmholders has made it India’s leading post-harveststartup.
With the goal of catering to farmers and FPOs that are in remote areas, too far from Arya’s warehouses to access their services, Arya has recently introduced flexible, on-demand hermetic storage solutions. These warehousing solutions are IoT-enabled so grain environment parameters such as temperature, oxygen content, humidity and carbon dioxide content can be monitored. They can be used on-farm for as many months as warehousing is required and then easily dismantled and moved to another location.
Another critical innovation Arya has led has been to design mechanisms that cover the risk of price fall post storage for farmers. It has designed and implemented the first-of-its-kind Price Risk mitigation tool, in an exclusive partnership with Rabobank Foundation.
How has the featured person – CEO/Founder/Director helped to enhance the company’s outreach? What notable contributions has the person made in favour of the company?
Anand has close to two decades of experience in Agri-Commodity Based financing and has been a part of ICICI Bank as the National Product Head for the Agri-Commodity Finance Business. He was instrumental in developing the product and the associated processes for the Bank and his experience has been instrumental in driving the entire operations and technology for Arya too. He is a high-performing leader both process and people driven which has helped the organization grow multifold over the last few years.
Under his leadership, Arya has become India’s largest agri-warehousing player, with 85% of their operations in primary and secondary agricultural markets and large market shares in the states of Bihar, Maharashtra, Madhya Pradesh, Karnataka, and Rajasthan.
Over the years, Arya has received various awards. It has been recognised by the Smart CEO – Top 50 Start-up Award 2017 offered in collaboration with IDA Ireland, The All India AgriStart-Up Convention and Agri Start-Up Award 2018 by the Indian Council of Food and Agriculture, The Champions of Rural Markets award by the Economic Times in 2019, Indian Achievers’ Award for Emerging Company 2020, adjudged the winner for CNBC Microsoft SMB Utsav 2021 celebrating Resilience in Indian businesses and most recently recognised as an impact Maker in the Amazon Smbhav Entrepreneurship Challenge.
 What challenges has your team faced in the earlier days of the company? What struggles is the team going through now?
The biggest struggle on the journey was to take the entrepreneurial leap and to face the fear of failure. When we decided to start our journey with Arya, we were leaving behind cushy jobs and the security that came with it. But change does not come easy.
Unlike its competitors, Arya had limited capital and so its execution had to be spot on. The first two years were hard, and we did whatever we could – travel by train, sleep in the offices – to reduce overheads.
The team used technology to track everything, ensure that debtor recovery was being done in time- made sure that Arya was profitable from the start. And slowly they positioned themselves as the guys who were the quickest in execution.
Today the challenges are different. Penetrating increasingly remote areas is a challenge, as warehouse infrastructure may not already exist, but the scale of demand would not justify investments into creating facilities from scratch. Moreover, as Arya switches to a digital format, farmers / depositors still operate on an assisted model, with the help of a physically present representative, presenting a barrier or added costs to scale. But the team is made up of young, dynamic, driven individuals who want to make an impact. We were able to do what they left their jobs for – making a difference in the lives of the smallest, poorest farmer, creating impact and opportunities where access was limited.
 The global coronavirus outbreak has tested people, industries, governments, and supply chains all over the world. How exactly did the pandemic affect your company’s operations and finances?
The disruption of the pandemic had some great learnings. While the pandemic afflicted various industries, it validated our services and our working model. Through technology, we could reach farmers and FPOs right at the farm gate during the pandemic. Our asset-light tech-based model ensures greater profitability with a natural insulation from shocks and allowed for us to push strongly into primary / secondary markets and the electronification of the agricultural commodity markets. However, with the second wave, we have put on hold expansion into newer territories for some time to reduce any burden on employees who are already stretched with health, family’s wellbeing etc.
What are the future prospects for your esteemed company?
For the future, Arya’s focus will be on a larger reach and greater efficiency. We intend to enhance the digital platform, digitising the complete post-harvest value chain and enabling each farmer to have the freedom to decide when, where and who to sell their produce.
