Agri-Procurement Through the Eyes of an FPO: Why Digitisation is a Game-Changer
Category: Agri
At the Madhuvanti Farmer Producer Organization (FPO) in Junagadh, the procurement season of groundnut is always a test of patience and endurance. As the procurement manager, I stand at the collection center watching trucks, tractors, and carts arrive, each loaded with groundnut bags from our member farmers.
For the farmers, this is the culmination of months of hard work. For us at the FPO, it’s the beginning of a long, complicated process—buying hundreds of small sublots from farmers and consolidating them into a final lot for our buyer.
The Current Procurement Process: Where Challenges Begin
Step 1: Receiving Sublots
Farmers bring their groundnut pods in small sublots—sometimes just a few bags each. We manually weigh and inspect them. Records are entered into registers, but mistakes creep in when the rush is high.
Step 2: Quality Assessment
Our staff does basic checks—looking for shelling percentage, discoloured and broken peanuts, foreign matter and moisture. But the process is manual and subjective. One farmer insists his lot is clean, another disputes a deduction. With no scientific record, the trust gap grows.
Step 3: Pricing
Here lies the biggest flashpoint. As procurement officers, we decide prices based on our assessment of quality and prevailing market rate. Farmers often dispute the deductions, asking: “Why is my price lower than my neighbor’s?” Since there is no digital link between quality and pricing, mistrust brews.
Step 4: Aggregation
Once sublots are collected, we pool them together to create a larger lot for the buyer. The challenge? Quality varies from farmer to farmer. Without accurate digital data, we struggle to create uniform lots.
Step 5: Selling to Buyer
When we send the sample to the buyer, they test for quality parameters and confirm for dispatch. When the truck is loaded and sent to the buyer, again a quality check is carried out. If it doesn’t meet their quality expectations, we face deductions—or outright rejection. That loss affects us, and ultimately, our farmers.
Step 6: Documentation & Reporting
After the chaos of procurement, our team spends days compiling farmer records, preparing payment lists, and generating reports for government compliance. Errors mean delays, and farmers grow anxious waiting for their payments.
Pain Points We Face as an FPO
- Manual quality testing → disputes with both farmers and buyers.
- No quality-price linkage → mistrust in pricing decisions.
- Fragmented data → scattered registers, making reconciliation tedious.
- Lot uniformity issues → difficult to match buyer standards.
- Delayed payments → hurting farmer trust.
- Reporting overheads → consuming staff time with limited insights.
We want to support our farmers and deliver to buyers, but the process feels like navigating a maze with blindfolds.
A Digitised Procurement Journey: What It Could Look Like
Now, imagine if our FPO operated with a digital procurement platform and smart quality analyzers.
Step 1: Sublot Procurement Made Easy
Each farmer’s sublot is tested with a digital grain analyzer. Results—moisture, count, defects—are generated instantly and stored against their farmer ID. No arguments, no subjectivity.
Step 2: Transparent Records
The system creates a digital receipt for every farmer. They see clearly how quality impacted their price. Trust builds, and disputes vanish.
Step 3: Price Linked to Quality
Prices are auto-calculated based on an algorithm of the quality parameters and market rate. A farmer sees exactly how his produce scores and how that impacts the rate. Transparency eliminates suspicion.
Step 4: Smarter Lot Aggregation
With digital quality reports, we can group sublots intelligently—ensuring the final lot meets the buyer’s quality specifications before dispatch. This reduces risk of rejection.
Step 5: Smooth Sale to Buyer
When the buyer tests the lot, our digital records prove its quality. Transparency means better bargaining power for us as an FPO.
Step 5: Faster Payments & Analytics
Since all data is digital, payments can be triggered quickly to farmer bank accounts. At the same time, we get monthly dashboards showing procurement trends, quality variations, and farmer participation—data that helps us grow smarter every season.
Why Digitisation Matters for FPOs
- Farmers gain trust, transparency, and timely payments.
- FPOs gain efficiency, better lot management, and stronger buyer confidence.
- Buyers gain assurance of quality and traceability.
Digitisation turns procurement from a headache into a competitive advantage—for the farmer, the FPO, and the end buyer.
Conclusion
At Madhuvanti FPO, we often joke that procurement season feels like firefighting—handling farmers on one side and buyers on the other. But with digitisation, that balancing act becomes far easier.
The future we want is simple: farmers celebrated for their quality, FPOs respected for their efficiency, and buyers confident in what they purchase. Digitisation is the bridge that makes this future possible.
