In 1988, Tata Chemicals set up the Tata Kisan Kendras (TKKs) as a one-stop shop for fulfilling the Indian farmer's requirements, from seed sowing to post-harvest activities. The TKKs enabled farmers to purchase required products and get expert information. "It was conceived as a long-term strategy to help farmers combat competition and gain a competitive advantage," says Kapil Mehan, chief operating officer of Tata Chemicals' fertiliser division.
Four years later, the company, with the help of McKinsey, conducted a strategic review of the initiative. It was decided to evolve its focus and give it a greater thrust as a distribution tool. By then, Tata Chemicals had also taken over the marketing of products from Rallis. A separate team was created within the fertiliser business to handle the TKK initiative.
Following extensive research with farmers, a branding exercise was conducted, leading to the evolution of the TKK into Tata Kisan Sansar (TKS). It was more than a change of name; it was a shift of focus to services rather than products (urea and fertilisers). The revamped initiative created a strong service brand, with a focus on the delivery of products and services through a reliable channel.
"The farmer will be able to get products, services and knowledge to improve his income," says Mr Mehan. "We are, in effect, telling the farmer to look at farming as a business, not as something that he continues to do because his forefathers did it. An increase in his income will mean a higher standard of living for him and his family."
The change is in keeping with the evolving farming mindset in the country. "The farmer is seeking knowledge and is open to new techniques and ideas," says Mr Mehan. "And that is the challenge for companies in the agricultural business today. You cannot go to the farmer with a pre-designed basket of products and services and expect him to accept it; you have to design them according to his needs."
The TKS model continues to operate in the states where its earlier avatar functioned, namely Punjab, Haryana and Uttar Pradesh, but they have now been extended to incorporate Bihar and West Bengal. All the centres coming under the TKS umbrella have been revamped, but the franchisee model of the original initiative has remained in place so as to keep costs low.
With 21 centres and 421 franchisees, TKS is covering the entire chain from distribution outlets to the village level unit. More than 1 lakh farmers in 25,000 villages are receiving the benefits of the TKS.
The centres use technology in myriad ways. A computerised model for soil-testing analysis helps farmers decide the nutrients they require. Elements such as the crop grown, variety and yield expectation are factored in to help them take the right decisions. Tata Chemicals is in the process of computerising the entire business operations of its TKS franchisees through software designed by Tata Consultancy Services (TCS). Thirty centres have been covered so far and the plan is to complete the network by June 2005. A database of farmers will be developed and will be used to tap farmers who can do contract farming, or be given credit.
Another project that is being implemented is the information kiosk, which will provide information on weather, market pricing, crop production, etc. The kiosk will not only help the agronomist and the franchisee but also the farmer. Tata Chemicals has tapped fellow Tata companies such as Tata Teleservices, Tata Infotech and TCS for this web-enabled initiative. The kiosk will also integrate the GIS project. Currently operational in Ujhani, where 71 villages have already been digitised, it provides a database of the farmer's socio-economic indicators and his land records, crops, yield, soil fertility, nutrients etc.
To avail of the TKS services, a farmer can either become a member of the Tata Kisan Parivar (TKP) or pay selectively for services. TKP is essentially a relationship-building initiative where Tata Chemicals identifies farmers who are open to new techniques, and who can be the company's spokespersons in villages. "Word of mouth is one of the most powerful communication tools in villages," says Mr Mehan.
TKP currently has around 25,000 members. They are given training, offered services at a discount and taken for educational trips to universities, where they can see how new technologies work. In addition, they are provided insurance coverage through Tata AIG.
Tata Chemicals has tied up with Cornell University's College of Agriculture and Life Sciences, a premier American agricultural college, to exchange information and people expertise. Some people from the company have already been sent for training in pre- and post-harvest services, in terms of integrated nutrient and pest management.
Professors from the University have interacted with trainers at TKS centres as well as farmers in the field. Feedback is given on services that can be improved further. Talks are on with five universities to set up development centres, and a student exchange programme with the JB Pant University of Agriculture is also on the anvil. "We keep ourselves updated through these initiatives," says Mr Mehan. "We want to retain our first-mover advantage."
The feedback from the farmers is quite positive. "On their advice, I started to use farming techniques and Tata fertilisers and pesticides. The pests were eliminated and my profits soared," says Surendra Uttam in Prempur, a village near Kanpur in Uttar Pradesh. "Initially we were hesitant about becoming members of the Tata Kisan Sansar. Now we realise what we have gained," say another. The farmers would also like greater interaction with TKS agronomists, more centres, and facilities for crop insurance.
Tata Chemicals is getting into contract farming by tying up with off-takers and banks to provide production credit to farmers. "For the farmers the top priority is their produce," says Mr Mehan. "They want the comfort and confidence that they are getting the right price for their produce, and they want to acquire the knowledge that can help them improve their yield."
The TKS initiative has been fetching Tata Chemicals a significant amount of business. In 2003-04 they did business worth Rs83 crore. This year Mr Mehan expects it to increase to Rs150 crore and is looking at doubling this figure in 2005-06. The growth will also come from products that Tata Chemicals does not manufacture, such as pesticides and seeds. Financial services (credit cards, crop and personal insurance, etc) will be another growth area.
What started out as a support for the company's fertiliser business has grown into an alternate delivery mechanism that provides products and services in a more reliable manner, to the ultimate benefit of the farmer.More articles on Tata Chemicals: