By Tarun Arora, Director, Single Family Office, IG International
Business-to-Business (B2B) is a business model in which the agritech sector obtains goods and/or services from another company. More than any other sector, agribusiness has the most to gain from a B2B business strategy. From the production of agricultural products to their marketing, B2B has revolutionised the industry’s customary internal processes. It has brought technology to the farm, thereby increasing output; it has opened up new markets by going directly to consumers; it has eliminated middlemen, thereby increasing the growers’ profit margin; and it has vastly improved logistics, which was a major concern and a source of loss for the producer.
The B2B model has fit in like a glove, ushering in many advantages into the inner workings of the agritech sector. Using technology, agritech businesses are establishing market connections, including B2B markets and digital agricultural platforms. In recent decades, a substantial portion of the conventional supply chain across several industries has experienced a major setback.
B2B marketplaces have emerged as a solution to this problem by providing excellent items at affordable pricing and dependable delivery schedules, along with regular credit terms. They are immediately capable of addressing India’s agricultural input concerns.
Due to the multitude of connections on these digital platforms, agricultural enterprises are able to locate new prospects, clients, and suppliers, as well as manage the daily challenges encountered by farmers. Farmers may get the necessary data, procedures, and efficiencies from them for both pre-harvest and post-harvest applications. In addition, B2B marketplaces provide a variety of buying and selling channels.
Precision is power
Precision agriculture is one of the most often used B2B services in the agricultural business. It enables you to maximise the productivity of each work shift by maximising your workforce. The data you get is current, making it more actionable and less static. Additionally, superior GPS technology enables your employees to operate in low-visibility conditions. You need not worry about blind areas since you can follow your agricultural equipment in real time using GPS data.
In addition, it lets the producer enhance and improve the soil, reduce the use of natural resources such as land, and water, and improve productivity by implementing a series of focused key interventions, a feat that may be accomplished with the application of sophisticated technology. In fact, it makes agribusiness a profitable and prosperous profession irrespective of climate change and other catastrophic occurrences.
Entering the e-commerce era
The majority of agricultural goods entered the e-commerce platforms via B2B models. This is because B2B helps connect farmers to retailers through the use of technology at each stage of the value chain. Thanks to the proliferation of online retailers, farmers are now able to sell their goods directly to customers rather than merely through mandis or other intermediaries. E-commerce has enormous potential to alleviate a number of issues afflicting the Indian agriculture industry.
The potential for e-commerce disruption in conventional agricultural value chains, where middlemen eat into farmers’ profits, is great. By creating direct connections between farmers and purchasers, agri-e-commerce may help eliminate middlemen. Direct connections with potential customers and good storage facilities can help reduce post-harvest waste, especially for goods that go bad quickly.
Mobile apps boost agri-income
Some B2B platforms have developed mobile programs to make the process of buying and selling goods more straightforward. This is in response to the rising stress on the agricultural sector to fulfill the needs of the growing population. Through these platforms, the buyer receives delivery right to their doorstep, while the seller is able to completely avoid stockpiling their products, which contributes to the generation of better margins for the goods. Besides, by using these platforms, the farmer may discover the correct distributor for a given geographic region. It is also helpful in identifying high-potential areas of development, which ultimately leads to an improvement in profit margins.
Expand logistics possibilities
Logistics is one of the toughest components of the agriculture sector. Due to the product’s frequent transference, grain logistics is particularly difficult. Multiple times, the cargo needs to travel thousands of kilometers via many middlemen before reaching the market. Besides safety, the freshness of the produce has to be maintained throughout the journey. With B2B systems that connect shippers and carriers, warehouses, and other services in the most efficient manner, the farmer can extend his market outside his perimeter, resulting in increased income for the agri business.
Aggregates all advantages
Today, India is home to more than a hundred agritech businesses. These companies have mostly implemented B2B models on farms. In addition to supplying farmers with technology, these B2B companies are bringing capital investment to the industry, which is vital for modernisation. With the influx of venture capital, traditional agricultural business is seeing a new horizon in terms of how well the product can be sold. This means that the returns are higher and more predictable, and most importantly, the producer is protected from the volatility of traditional markets.
Focus on security
Additionally, agricultural firms have significant IT requirements. Since there are so many agricultural businesses in rural locations, it is not always necessary to dispatch an IT professional. Today, B2B information technologies allow agricultural businesses to conduct remote IT work. Even agricultural businesses must now consider cybersecurity concerns. Entire data supply chains have been hacked by malware and man-in-the-middle assaults. Since so much of your infrastructure and operations are dependent on this data, it makes sense to hire top-tier protection via B2B channels. In addition, IT specialists can keep your hotspots operational, enhance encryption, and synchronise your devices.
The world is one farm
In conclusion, B2B facilitates the collaboration of agri producers across geographies. Farms in a faraway area are collaborating with local farmers, exchanging everything from seeds and saplings to technology and growing techniques in order to increase the amount and variety of food to suit the needs of diverse global markets. For instance, an American apple producer produces similar fruits in India for the South Asian market utilising CEA-Controlled Environment Agriculture.
Vantage view
The agriculture sector is also benefiting from the use of big data, AI, and machine learning. Advanced data may aid the farmer in forecasting and estimating crop output. The most spectacular return on investment (RoI) may be accomplished by correctly using this relevant information while also helping the farmer spend money more prudently. With so many advantages, it is certain that B2B will continue to exist as a business model in the present and the future. As a result of these technological improvements, it is anticipated that agricultural businesses will continue to improve. Every day, the agribusiness industry changes as farmers find new ways to grow their businesses and make more money.
