The Hindu Business Line : Nafed sets up franchises to sell fertiliser, seeds

UNTIL a few months ago, Lachman Singh, a farmer in remote UP village, had to take a day's time out from his farming activities to purchase fertiliser or seeds. That's because either he has to make it to his nearest cooperative society within its working hours or travel over 10-15 km to the nearest dealer.

No more has he to spend an entire day to buy fertiliser or seeds. Thanks to the initiative of the National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) to set up a franchise in his village, he can get the fertiliser or certified seeds even delivered at his doorsteps.

In fact, Nafed has set up such franchises in six States— Uttar Pradesh, Bihar, Jharkhand, Uttaranchal, Punjab and Assam, says Mr Kailash Jyani, Executive Director, Nafed.

Under the initiative to set up franchises, Nafed has roped in cooperative fertiliser giant IFFCO and State Agricultural Production Corporations. Nafed will sell fertilisers produced by IFFCO through its franchises, while making available to farmers seeds certified by the corporations.

According to Mr Jyani, at least 6.5 lakh tonnes of IFFCO fertilisers had been sold by Nafed this season through such franchises.

According to Mr Rama Mohana Rao, Regional Manger, Nafed, such franchises will be launched in Andhra Pradesh shortly, while plans are afoot to open a few in Tamil Nadu.

The initiative to set up franchises was also an unique one in that only unemployed graduates, ex-servicemen are selected to run them.

"Our effort is to have as many franchises as possible in the country. But there will be only one franchise per village," Mr Jyani says.

Nafed will charge a "nominal service" fee from the franchisees for providing fertiliser and seeds. "Whatever margin the franchisees get on the maximum retail price is for them to keep," Mr Jyani says, adding that already around 2,000 franchises are in operation. " We have 1,400 functioning in Uttar Pradesh."

Mr Rao says the IFFCO structure was shaped in a way that sales can be done only through cooperatives. Nafed, on the other hand, is looking for avenues to help farmers. Therefore, the two had come together.

"The plan is to make these franchises a sort of agro-centres," he says.

Nafed does not incur any expenditure in setting up these franchises, according to Mr Jyani. "Those selected up to run these franchises will have to make a minimum investment and we only provide our name to it," he says.

Mr Rao says it would be enough even if those selected to run the franchises have a room in their houses to stock fertilisers and seeds. "These people will be running the franchises in their own villages," he says, adding that, those selected will, however, have to invest in buying stocks.

"That will depend on the need and their capability. But it can be lower than even Rs 10,000," Mr Rao says.

Nafed would like the franchisees to invest at least this bare minimum since they should be seen as being serious in the venture they are undertaking.

"Nafed's investment is in training those selected to run the franchises. It is very minimal," Mr Jyani says.

According to sources, Nafed has plans to turn these franchises as one to sell the consumer products it plans to market in a big way shortly and even procure commodities from growers for its commercial operations.

"The idea is to eliminate distributors in the long run and convert these franchises as a sort of retail shops," the sources say.

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