The ONDC Storyline: Just Posing A Threat To Food Delivery Businesses Or Expanding The Market For The Farm Value Chain.

What is a reasonable price for a farmer’s mushroom in Maharashtra? There is no simple solution. Farmer Producer Organisations (FPOs), for example, aren’t frequently seen on e-commerce merchant sites like Amazon and Flipkart, where they may readily reach consumers outside their immediate vicinity. The Open Network for Digital Commerce (ONDC) aims to alter this. These agricultural groups of small and marginal farmers are joining the government-backed e-commerce marketplace to access a more significant, countrywide market by using the ONDC’s suite of services, such as seller applications and logistics. 

The ONDC recently garnered headlines for the competition it offered to Zomato and Swiggy, as well as the influx of new users that joined the year-old site. 

Now, the network is attempting to pull the fringe to the centre—a modest start has been made by onboarding 597 FPOs with 601 items. The participation of the National Seeds Corporation (NSC) on the platform complements this. Addble, introducing 250 organic FPOs from the northeast to the network, has also joined. DforD (Data for Decision), which deals in agricultural inputs, and vendor app Farmer Mandi, which deals in fruits and vegetables, are also on board. Whether it’s local rice, millet, honey, or mushrooms, ONDC brings local gems to a broader audience. FPOs, on the other hand, provide small and marginal farmers with more negotiating power since they can aggregate their output.

Some real examples where ONDC’s presence has made notable differences.

The capacity to sell directly to a market digitally contrasts with the conventional methods of selling to intermediaries and local marketplaces, according to Maninder Kaur, managing director of the Small Farmers’ Agri-Business Consortium (SFAC) and managing director of NSC. Daringbadi Mahila, a women-led tribal FPO in Odisha’s Kandhamal district, for example, grows organic turmeric without fertiliser and is GI labelled. When they joined ONDC, they sent their items through India Post because the remote tribal area lacked logistical partners. Their first orders were via the buying app Mystore. 

Hence, we can say that ONDC is developing a value chain from farm to fork. A buyer app, such as Mystore, provides ONDC buyers with a shop window that includes a portfolio of items supplied by sellers. Daringbadi Farmers Producer Co. Ltd FPO has received 50 requests for organic turmeric from eight states, although they were previously exclusively available in Odisha.

According to Susanta Nayak, marketing specialist at Odisha’s Basix Krishi Samruddhi Ltd, they’ve marketed organic turmeric in nine cities, including big cities like Mumbai, Nagpur, Delhi, Gurugram, Kolkata, Ahmedabad, and Pune. As they had very narrow margins, they previously exclusively sold at shows in Bhubaneshwar or Cuttack by coordinating with dealers and setting up stands.

Basix Krishi aggregates small and marginal farmers to provide fee-based agri-extension and end-to-end value chain development services. ONDC has made it possible for FPOs to apply their labels to items without the need for local middlemen. FPOs benefit from buyer feedback and increased market access.

There are instances that several types and non-adulterated versions of honey are accessible, for example, dependent on the orchards in which they’re cultivated. Because it is not available in corporate packed containers, the purity of natural honey causes people to give up sugar. Because these plants cannot tolerate excessive nitrogen levels, ethnic rice has a speciality that is free of artificial fertilisers. 

There is a multitude of non-Basmati aromatic rice that may be marketed through ONDC channels. The new outlets have pushed FPOs to look at things sold online by others and maybe mimic them. For example, an FPO in West Bengal sells ten different types of mushrooms and pickles produced from them. They have assisted over 100 different rice merchants in joining ONDC and have set aspirational targets for others to follow.

The claims are that several are GI labelled. Some of these FPO items are specialist crops and kinds that only grow in certain places, necessitating GI or geographical indication marking. The 10K FPO plan encouraged FPOs to join the network in February. They provide both raw materials and completed goods for sale.

Those with an FSSAI licence and a goods and services tax (GST) number have been accepted by ONDC. ONDC compliance was achieved through online training courses. Many are also in talks with the ONDC on B2B (business-to-business) commerce to trade in bulk.

A brief about the chain.

ONDC conducted its first business-to-business transaction on May 22, followed by an official launch on June 5. ONDC provides FPOs with various solutions that may be tailored to their specific requirements. According to Ashok Sajjan, farmers earn a decent price on the network. Sajjan works at the Indian Institute of Agricultural Research (ICAR)-Indian Council of Millets Research (IIMR) in Hyderabad as a coordinator for 21 FPOs. Farmers in major cities may preserve a 20% to 30% profit margin, he claims.

On ONDC’s Mystore buying app, he mentioned two FPOs from Karnataka: Aland Bhootai Millets Farmers Producer Co. and Hulsoor Mahila Kisan Millets Producer Co. The FPOs sell millets-based candies, biscuits, chutney powder, rusk, and khakra.

According to Sajjan, the availability of logistics suppliers in the marketplace is a boon for FPOs. However, registering the FPOs is difficult since they lack seed capital and registration costs money. Another issue, he claims, is the packaging. Since joining the ONDC, Rich Returns Krishi Producer Co. of Rajasthan’s Kota has gotten three bulk orders for papads. A bulk order begins at 4 kilogrammes and may be as large as 16 kg. According to Hariom Nagar of Rich Returns, the commission must be on sites like Flipkart and Amazon. 

Why is ONDC winning the game?

ONDC does not levy any fees. While individuals or farm owners earned ’70 per unit offline, they get ‘150 to ‘180 on ONDC, minus shipping expenses. In April, they made ‘40,000,’ and in May, they made ‘10,000. They’ve also recruited five FPOs to join the network.” 

Also, digitisation is not everywhere. So, Amazon, Flipkart, and Myntra aren’t truly options at the village level due to a lack of internet access.

This is the first time FPOs have joined a digital platform like ONDC and are selling their products on Mystore’s buyer app, said  Amal Roy from the cluster-based business organisation (CBBO) of SFAC in West Bengal’s Cooch Behar, adding that 15 FPOs from Cooch Behar, Alipurduar, and Darjeeling had joined the ONDC. Each of these FPOs has 300 farmers as members, for a total of 4,500 farmers. New Agriverse Farmers Producer Co., one of the FPOs, sells solely mushroom-based items, including gift boxes, and has received 45 orders from clients in Delhi, Uttar Pradesh, and Gujarat.

Roy’s CBBO oversees 32 FPOs in nine West Bengal districts. Their goods included tomato squash, betel nut, honey, seeds, and vermicompost, all sold on the open market. They wouldn’t be able to receive a reasonable price, and their market access was limited. They are now accepting orders from many states. Previously, smartphone and laptop users had never purchased from FPOs, he explained. They encourage, guide, and nurture them.

The presence of new alternatives.

Farmers are no longer constrained to the few seed alternatives accessible locally with the NSC on board. Local seed merchants not only restrict seed kinds but also set minimum volumes. While conserved seeds of traditional types are essential for conserving biodiversity and keeping farmer input costs low, access to certified high-yield seeds remains a difficulty. A level playing field for small and marginal farmers includes obtaining certified seeds at reasonable costs.

While seeds are accessible on commercial e-commerce sites, the difference with ONDC is that there are no platform fees. So the farmer or gardener pays the cost of the seed plus the cost of logistics and delivery. According to sources, all charges are for the goods and their logistics, not for the e-commerce platform’s profit. When placing orders online, there is no minimum quantity that a farmer must purchase. Farmers will benefit from home delivery of any amount of seeds.

Selling seeds online involves re-engineering the agricultural input sector’s business operations. Orders from new locations signal which regions to focus on and improve on the ground via the dealer network. The first order received on Mystore was for grain for cow consumption. It showed demand for products even in urban areas, which was unexpected.

Conclusion.

ONDC is not only challenging food ordering applications; it is also attempting to bring the fringe to the centre by providing the agricultural value chain with access to a larger market than ever before.

Proofread & Published by Naveenika Chauhan