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TUSHAR MANE

24 Good Businesses 2012

Income and bonus
Bhushan Agro’s unique lease-your-land concept is quietly gaining      acceptance among farmers — no mean achievement in a country where land is dearer than lives

Aditi Saxena

We pay a fixed rental to farmers to reduce the usual risks of farming," 

 Chandra Dubey, Founder, Bhushan Agro

Thera-theri, population 1,500, lies 160 km from Bhopal on NH 86. It could be any village in central India though. Thera-theri has fertile land and fresh air but pucca roads and tap water are conspicuous only by their absence. Farming is the primary source of income here. Beedi-making comes a close second. Neither fetches much money and villagers compensate by working at construction sites for₹100 per day. Which is why last winter’s harvest was a marvellous shock for Shivram Sahu, a local farmer who owns three acres of land in Thera-theri. Not only did Sahu’s wheat output double last year, he was also earning a yearly rent of ₹21,000 on the land he had leased to Bhushan Agro, the company that’s turned around his fortunes so unexpectedly. “I could grow only 7-8 quintals of wheat on one acre of land but, last year, I was able to grow 15 quintals per acre,” he says with obvious delight and surprise. “Thanks to the rent I was earning, I did not have to spend the year worrying all the time about my crop. I believe in Bhaiyaji now,” says Sahu.  

Bhaiyaji’ is Chandra Dubey, an IIT-Kharagpur and IIM-Lucknow alumnus who quit his job as marketing manager of an IT firm two years ago, and settled in this non-descript village to do corporate farming. “Pata nahi Bhaiya Bambai se yahaan kya karne aye hain (I don’t know why he has come here from Mumbai),” remarks an elderly woman as she points towards one of the few pucca houses of the village. “He stays there.” Dubey’s three-room house is probably the biggest in the village, but it has more machinery than furniture adorning it — there are soil probes, a device that chisels, and a contraption for furrowing fields.“The distance at which seeds are sown varies according to the crops,” explains the 41-year-old Dubey, CEO, Bhushan Agro Technologies. He is earnest and enthusiastic about his favourite subject — farming. For example: “Farmers here sow soyabean at a distance of 9 inches, but its ideal distance is 15-18 inches.”  

 Virtues of science

Bhushan Agro encourages scientific methods of farming to increase productivity on land it leases from farmers. “We have ample land in India but lack knowledge of agriculture,” says Dubey. 

Machinery in India is expensive and farmers are unaware of its benefits. “This is the biggest tractor in the village,” says a proud Sahu of the Mahindra Arjun, a gleaming 40+ horsepower machine funded by L&T Finance. 

  The company pays farmers a fixed rent of ₹7,000 per acre per year for irrigated land. “The idea of a fixed income is to reduce the usual risks faced by farmers who depend only on good rainfall and crop produce,” says Dubey. Once the harvest is ready and sold in the local mandi, the profit on the increased productivity per acre is shared equally between the company and the farmer. 

Dubey says productivity has gone up, on average, by over 25% as compared to the previous season. Unlike contract farming, where the farmer contracts to sell specified produce he grows to a company, Bhushan Agro’s lease model only divides the profits from increased yield. 

Santosh Shukla, one of the first farmers Dubey convinced, is the village sarpanchs nephew. The 56-year-old Shukla and his family  hold more than 200 acres of land in the village, of which they have leased out ten acres to Bhushan Agro. His clout as one of the largest local landowners is important for Dubey’s plans here and in neighbouring villages. “Our wheat produce never went beyond 8-10 quintals per acre,” Shukla says. “Only last time, it was 13-15 quintals per acre. Now, the lease rent alone [amounting to ₹70,000 in his case] is more than the profit we made back then.” 

Courage and conviction

It took Dubey two IT jobs, four management jobs, and a workshop on the ‘Modern methods of crop management’ by the man he considers his guru, R Madhavan, now also the think tank and CTO at Bhushan Agro, to realise that his interest lay in agriculture. Bhushan Agro kicked off in June 2010 with a ₹20 lakh investment from Dubey’s personal savings, and a pilot run on 10 acres of land that was leased out by Santosh Shukla and one other farmer of the village for one year. Another #8 lakh came within the first year of starting up from Narendra Makwane, an IIM-A alumnus. 

Currently, the company farms on 56 acres of land leased from five farmers. Bhushan pays ₹3000 per month to five farmers and has on its rolls 80 farmers, who work on daily wages of ₹120-150. In the first year (FY12), Bhushan clocked revenues of ₹10 lakh. Although the company is operating in one village currently, Dubey is looking at expanding to other parts of Madhya Pradesh and also Gujarat. By FY14, Bhushan is expecting a turnover of  ₹1.5 crore. 

It will be a slow road to success for Dubey as he will have to counter a lot of marginal farmers who tend to their land more than their lives. Sunder Singh Yadav, a veteran farmer of Thera-theri, has not leased his land yet, but is slowly warming up to the idea of leasing out to Bhushan Agro next year: “Not just us, the entire village will lease out!” That remark will be reassuring enough for Dubey to keep ploughing away  at his business.

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