Mastercard and LEAF to improve financial access for farmers in India

By Leandra Monteiro

To improve financial access and inclusion for more than one million of farmers in India, Mastercard announced a partnership with Lawrencedale Agro Processing India (LEAF), India’s premier agriculture value chain enabler, to launch LEAF Farmer Network (LFN). This platform will transform the lives of Indian farmers by leveraging technology aided by human intervention, to solve multiple challenges of transparency in India’s rural ecosystem.

LFN will empower farmers across Andhra Pradesh, Karnataka, and Tamil Nadu with digitization of harvest data, enhance access to markets, provide expertise on better crops, and importantly, bring in a high level of transparency by connecting directly with buyers. This will not only build resilience among the farmer community, but also support the Government’s vision of an ‘Atmanirbhar Bharat’.

“The agrarian ecosystem players are hampered by lack of transparent access with actionable information. Digitisation solves this challenge by integrating a virtuous loop between farmers and markets, giving better access to information. We are delighted to partner with Mastercard to take forward our years of work in bringing about a positive change in the livelihood of marginalized farmers,” said Palat Vijayaraghavan, Founder & CEO, LEAF.

LFN will seamlessly bring in access to good quality produce at scale, enable price negotiation with complete transparency and manage end-to-end logistics with quality control. The entire process is managed by farmers, with support from LFN agents.

“The core of LFN is digitizing the produce buying process. It is a high-touch model through a dedicated on-ground farmer advisory and change management team. It is enabled by a rural relevant, secure phone driven and internet agnostic technology provided by Mastercard,” explained LEAF’s Vijayaraghavan.

LFN will digitize marketplaces, payments, workflows, and farmer transaction histories by connecting buyers, farming inputs, suppliers, agtechs, and banks with FPOs/farmers, helping to create a commercially sustainable ecosystem comprising all relevant agriculture value chain players with equitable commercial exchange mechanisms. This initiative will also support the farmers through comprehensive training and capacity building in entire lifecycle of the harvest, including post-harvest management to reduce wastage.

“Mastercard has long been committed to connecting individuals and small businesses to the digital economy, ultimately supporting them to reach their full potential. We do this by applying the full breadth of the company’s resources – people, data insights, technology and philanthropy – to create solutions for sustainable, inclusive growth. The LEAF Farmer Network is another step in this direction. It will leverage the power of digital technologies to bring together key stakeholders across the agri value chain to ensure that farmers get direct access to the knowledge, skills and markets that they currently lack. Together with LEAF, Mastercard is delighted that this initiative will have a tangible positive impact on farmers’ earnings, supporting the Government of India’s goal of doubling farmers’ income in the coming two years,” said Nikhil Sahni, Division President, South Asia, Mastercard.

Banks are struggling to serve the rural ecosystem effectively as incomes are largely paid in cash, which leads to the economy being largely cash-based, low account balances and high servicing costs for banks. Additionally, most farmers do not have a formal credit history, and it is difficult for them to access any formal financial services. Enabling digital payments for farmers through LFN will drive active account usage for farmers. With this platform, farmers will get paid through their bank accounts or cards designed for offline rural usage, providing liquidity of the digital money, instead of going to their bank branches or business agents in nearby towns.

This will eventually enable farmers to save more money and entice them away from unofficial money lenders. Financial inclusion also serves as positive reinforcement for farmers to use formal channels for payments, which builds their credit profile and makes them eligible for loans from financial institutions.

Ricardo Pareja, SVP, Sales and Market Development, H&D, Mastercard said, “Across the globe, Mastercard’s commitment to financial inclusion and inclusive growth has never been stronger. In India, we have made significant strides towards this goal since the farmer network was piloted two years ago, and today we are thrilled to see 110,000 farmers and 180 FPOs being benefitted. Through this partnership with LEAF, we are confident that we’ll be able to further ease the complexity and challenges faced by small and marginal farmers. Mastercard’s vision is to support 10 million farmers by enabling them to adopt digital technologies and helping them be part of the formal economy. The partnership will provide 360-degree intervention and improve transparency in agricultural trade while ensuring that the value is retained within the ecosystem.”

The launch of LFN is an extension of Mastercard Farm Pass, a pilot program that was introduced in 2018 in Andhra Pradesh. Farm Pass is a pivotal component of Community Pass, a shared, interoperable digital infrastructure for the rural population that facilitates access to critical services and minimizes costs. Today Farm Pass supports 600,000 farmers across India and East Africa, helping to raise incomes by 25-50 percent for many farmers.