Mumbai: Mahindra and Mahindra are investing in farming-as-a-service (FaaS) early on to be a step ahead of its competitors, anticipating the technological transformations that the sector will undergo in the near horizon.

Krish-e is a business vertical in Mahindra’s farm segment that aims to provide technologically driven services to increase the income per acre for the farmer, according to Ramachandran. Launched almost two years ago, so far Mahindra offers FaaS services through Krish-e centres at Mahindra and Swaraj dealerships at around 100 centres.

FaaS is the new innovation in India’s farming business horizon. It aims to offer innovative and professional-grade solutions for farming and allied services. Under the Krish-e banner, Mahindra offers everything from agronomy advisory, access to farm equipment rentals to new age precision farming solutions.

Explaining the strategic intent behind Krish-e, Ramachandran said, “We see Krish-e from a purely business lens. For us, this is a strategic moat around our core business which is in tractors as well as now in the farm equipment space. By adding these value-added services through Krish-e, we intend to make the farmer more prosperous, and that in a way is contiguous to our core business – either through the rental of farm equipment, purchase of our tractors.”

Ramachandran also said that as of now Mahindra is also nurturing the green shoots of potentially profitable revenue streams which can arise from the FaaS business itself, with examples of viable revenue streams being around IoT offerings for rental entrepreneurs to keep in track of their farm equipment, or precision farming, especially in the sugar cane.

For now, Krish-e intends to be a differentiating layer for Mahindra against its competitors, as well as being an endeavour that is innovating for the trends and changes in Mahindra’s horizon. Ramachandran said, “As leaders, we spend time thinking how to retain market leadership in an ever-evolving market. By looking at trends in other countries, visiting our markets, trying to ascertain what trends are relevant here. Krish-e falls into activities very much on the horizon.” Yet, Mahindra anticipates it to be a much-needed endeavour in a crowded competitive field with over 18 players.

So far the evidence that Mahindra has seen for Krish-e’s promise is a ₹5,000-15,000 increase in income per acre for farmers that have implemented Krish-e aided farming practices. In the past two years, Mahindra has also set up over 1,000 taknik (technique) plots over the country to demonstrate the visible returns from employing Krish-e-services.

“The evidence is in the extremely valuable relationship that we have cultivated on the ground. Returns from these services ensure that the farmer has an extremely valuable and loyal relationship with the brand. This kind of stickiness will only be achieved if everyone starts to implement such practices” Ramachandran said.

Returns from Mahindra’s endeavours in the FaaS space are not likely to bear substantial fruit for another 3-5 years, according to Ramachandran. Yet staying in the segment for a long time, allows them to have enough time and experience to iterate and optimize their services.

“For instance our work in smart fertilization, we have been able to offer a certain quality of services since we have been in this space (smart fertilization) for almost four years and therefore we’re able to optimize, frugality costs, etc.,” he said.

For the next five years, Mahindra’s ambitions in the farm equipment space are to grow their farm equipment (non-tractor) business tenfold by 2027, introduce 15 new products and grow market share and industry.

As far as Mahindra’s tractor business, the last three years have been really good for the tractor business according to Ramachandran. Growing 27 percent in FY20 and high single digits in FY21. With three back-to-back good monsoons, the trend is likely to continue for the 2022 fiscal year but Ramachandran anticipates the growth going down to a 7 percent annual growth soon.