Mahindra & Mahindra plans to aggressively ramp up investments for its Farm Equipment Sector (FES) this fiscal.
“We are putting our money where our mouth is and, starting April 1, are doubling down on our resources in terms of people and money. We want to scale up the whole farm machinery game because we believe that the country can benefit a lot from this transition,” says Hemant Sikka, President, FES.
The R&D Centre for farm mechanisation in Mohali, Punjab is now headed by R Sundararajan, who has spent some years in Finland, working as Chief Operating Officer for Sampo Rosenlew, the company in which M&M has a near 80 percent stake. According to Sikka, this shows “our full commitment” to the global centre of excellence (COE) network that has been created over the years.
“Sundararajan has huge knowledge from his domain expertise there and will now be responsible for doing this whole global COE and R&D development,” he adds. Additionally, M&M’s new global COE centre is coming up in Ankara, Turkey, where hiring has resumed in a big way again under Sundararajan.
“He will be responsible for global R&D for farm machinery. The Turkey operations also report to him. We have already hired people and a few more will come in over the next 3-4 months. Everybody reports to Sundararajan including the heads of all the COEs,” continues Sikka.
M&M also intends to increase its exports of farm machinery products from India. “We will continue to do more and more exports from India but in the spirit of Atmanirbhar Bharat, whatever we make in India will be for India and exported out of India,” he says.
The other piece of “good news” on exports relates to the recent shipment of 18 sprayers from Nashik to Brazil. “This is our first export order from Nashik, executed in Nashik and developed in Nashik. What better example of Atmanirbhar Bharat for the world,” says a delighted Sikka.
The company entrusted with this task is Mitra Agro Equipment in which M&M has a 47 percent stake. The good news is that the sprayer market is buoyant enough to keep the order book busy. “We are giving a very good fight to other players who import parts into India and sell them here. Here, we are making it in India and growing at 35 percent,” he elaborates.
Clearly, farm mechanisation will gain more and more traction going forward with better implements, while using international COEs in Turkey, Finland and Japan (where M&M, over the years, has created footprints through strategic stakes and acquisitions) for the right value chain. The objective is to bring all those products “not as it is into India”, but work on frugality so that farmers can buy them.
“There is no point bringing a Sampo harvester which very few people can afford,” says Sikka. The solution lies in bringing in the elements of that harvester which “we have recently done” that is retailed under the Swaraj brand. “We have brought in a lot of technical expertise from the Sampo COE…we are bringing features and technology, but at Indian prices,” he adds.
Similarly, from Japan (via Mitsubishi Mahindra Agricultural Machinery), the company brought in the rice transplanter — “a very, very good product’ — at Indian prices. “So, we are trying to localise technology brought into India because it is relevant for farmers. It is also available at Indian prices and made in India which is the most important part,” says Sikka.
Likewise, there is a lot of work happening on rotavators (used in tillage) where the company has “gained substantial market share” at a time when the product segment is showing de-growth. The Mahindra FES President is clearly delighted with the way the spirit of Atmanirbhar Bharat is being incorporated in farm mechanisation.
“We have a very nice rice transplanter from Japan while bringing harvesters from Sampo and a few other implements from the Turkey unit (Hisarlar). Plus we have a full R&D setup in Mohali, where we do local development for India.” Clearly, the momentum is in place and the big investments earmarked for this fiscal is intended to take the story to the next level.
Beyond mechanisation, the other key pillar for M&M’s farm equipment sector relates to Krish-e, a subject “which is very close to my heart”. As Sikka puts it, this aligns “so well with our purpose” in transforming farming and enriching lives.
“We have also seen, and genuinely believe, that India is tractorised but not mechanised. There is so much opportunity to bring in farm mechanisation in this field and, thankfully, we are seeing early signs of the breakthrough,” he adds.
Today, M&M sees farmers on the lookout for implements since they want to ease out their work and get better productivity from their farms. There is also better understanding of technology and the pandemic has “kind of accelerated the whole digital play” across the world.
“Sometimes in life, everything comes together and then things happen. Otherwise, an idea before its time is also not an idea. So we believe in the idea of mechanisation — this is the right time — its time has come and many factors are coming together to make it happen,” elaborates Sikka..
It is in this backdrop that he genuinely believes that Krish-e is “a brilliant idea” on which M&M has been working for almost two-and-a-half years now. It is a vertical within FES and headed by Ramesh Ramachandran. Sikka takes a brief detour at this point to drive home an important message.
“At M&M, we always believe that the purpose is what brings you to work everyday. It is not the salary but purpose that is more important and since Krish-e aligns so well with our purpose, we are very very passionate and excited about the whole play of mechanisation and transforming agriculture.”
The first vertical within Krish-e is the advisory part where “we believe that there is a skill set that we have in Mahindra and the kind of resources that we can seek and deploy”. Simply put, it means that the company can play a very good advisory role for farmers.
For instance, its recently launched advisory app with Bollywood star, Manoj Bajpayee, as brand ambassador seeks to spread this message. This is “purely an advisory app” where there are more than half a million downloads happening already. Bajpayee is a well known face on the Hindi screen and has essayed a variety of roles.
“The good thing is that the download-to-active user percentage is more than 40 percent which is “unheard of” in this category. “So 40 percent people are active users and that means they repeatedly come back to this app,” says Sikka. The ad is about a minute long but the play is phygital (physical plus digital) in that “we have an app but we also have very strong on-ground presence”.
As Sikka explains, there are 3,000 demo plots across the country directly managed by M&M translating into thousands of acres of land. Company personnel then reach out to the farmer offering to manage his crop while giving him the right counsel to increase yield. “All these facilities are given free of cost to the farmer and we guarantee yield/quality improvement,” he says.
The idea essentially is to teach new technology to farmers backed by the cerebral resources of the M&M workforce which is marinated in this sphere of activity. “Two-and-a-half years back, we started with a few 100 plots and have 3,000 today which means farmers are reaping the benefits,” says Sikka who personally visited farmlands in interior Madhya Pradesh, Karnataka and Maharashtra to see the results for himself.
Beyond advisory, the second part of Krish-e is the digital play where Covid has “accelerated the whole game”. In his view, rural folks are not too far behind their urban counterparts…on the contrary, “their data usage, especially on YouTube and Facebook is very, very high”.
M&M has now created a full IoT platform called DigiSense, a box that goes with the tractor “fitted by us as OEM fitment”. This is “an amazing box” which gives a whole lot of information about the tractor. For instance, a tractor owner who gives his vehicle out on rent can, with DigiSense, monitor through his smartphone the hours of running, acreage covered and so on.
“He does not have to go to the villages and change his tractor or drivers. He can just go and manage all of it. This is all working in the field and all this data is now getting analysed,” says Sikka. The IoT platform is already in play and M&M will scale it up further this fiscal.
“So we have at one place, DigiSense, which is OEM fitting while for the aftermarket, we have the Krish-e Smart Kit,” he adds. With millions of tractors in the market, both Mahindra and non-Mahindra branded,“since our purpose is to transform farming and enrich lives”, a kit has been created even for the aftermarket to help non-Mahindra customers.
“Anybody can buy it and we have already 15,000 Krish-e Smart Kits in the market which are bought by all customers, be it Mahindra or others,” says Sikka. Plans are underway to come up with a “better version” of DigiSense since this is “typically like any electronic platform where you keep improving” on the lines of an iPhone.
The rental pillar is the third vital pillar under Krish-e especially for those who cannot own a tractor or any farm implement like a rotavator for instance. It is a lot easier to pay-and-use pretty much on the lines of what is happening in metros where car ownership is not being perceived as a particularly attractive option by youngsters.
The fourth pillar in the Krish-e fold is precision farming which essentially is futuristic farming. “This is futuristic work that Mahindra is investing money in today to develop technology for the future,” he says. While there are projects that will evolve some years down the line, some are already underway in areas like sugarcane harvesting. The company had invested in Gamaya, a startup in Switzerland, which specialises in analysing satellite imagery.
India is the world's second largest sugarcane producer after Brazil and “we want to transform this entire sector”. Through satellite imagery, the farmer can be told which is the right time to harvest the cane. It is so accurate that we “guarantee yield improvement” otherwise called sugar recovery. In the process, farmers can save considerable sums of money.
M&M kicked off this drive two years ago and now has 15,000 acres under its direct control with people going in for repeat orders. “This is a technological revolution…it will not stay at 15,000 acres but will become 15 lakh acres too. It aligns so well with our purpose of transforming farming and is taking time because you have to convince farmers,” says Sikka.
Yet, once they see the results, it is only a matter of time before they come onboard and it then “becomes a payment model for all of us”. Right now, it is being done by M&M at a “very low cost” as part of the teaching process. “There are many technologies that we are developing which will come after 5-10 years and this is one which is already in play,” he says.
Local area knowledge
All Krish-e centers are manned by competent managers who are primarily agriculture graduates and know their job well. They coordinate with other agri experts in the regions operated by these centres. “For example, if there are experts in Madhya Pradesh, we always engage them with our network of people,” says Sikka.
Leader or ‘hero’ farmers, as they are also called, also play a role here. Also called M Shree, for Mahindra Shree, the employees also constantly coordinate with them. “These entrepreneurs help us generate the knowledge of what works in a local area. Sometimes what works in Haryana does not work in Karnataka. We need to have local expertise of these farmers, local agri experts and get information from them,” he elaborates.
Sikka admits global warming is an area of concern which is borne out by the fact that certain areas are “becoming drought-affected”. M&M, he adds, will play a lead role as a global corporation in the climate change challenge which is a “very, very important” area to work on.
This topic is now gaining importance especially in the context of the Ukrainian war where food supplies are being severely disrupted to countries in Asia and Africa. Hunger is now a real threat and it is in this background that M&M’s focus on mechanization and farm productivity will become even more relevant in the coming years.
Erratic weather plays spoilsport in FY22
In his added responsibility as President of the Tractors Manufacturers Association, Hemant Sikka, says the industry grew by an “unprecedented” 27 percent in FY21 which would be difficult to replicate in the fiscal that just went by. Yet, FY22 would still be seen as “consolidating the gains” of the preceding boom year even while it is slated to de-grow by low single digits.
Beyond the record growth in FY21, unprecedented delayed rainfall has derailed the growth story last fiscal. Farms in MP, for instance, were ravaged and harvesting delayed because it was raining practically every week till end-November. In the process, crops got damaged and that affected the cash flow of farmers. “I would say it was more erratic weather, which has played spoilsport this time,” says the TMA President.
Additionally, terms of trade have become “unfavourable" for farmers since input costs have gone through the roof and have hit cash flow. As for this fiscal, the first indications on the monsoons will start coming in by mid-April which will then pave the way for a forecast. The tractor industry will be hoping for the best especially when 2021 saw the worst of the pandemic which destroyed lives and livelihoods. The Russian onslaught in Ukraine is also expected to bring more pain into the supply chain system and this may end up becoming a bigger issue for the agrarian community.
The feature was first published in Autocar Professional's April 15, 2022 issue.
M&M's Krish-e has redefined the art of bonding with farmers