Developments in the agri-tech sphere have been fundamental to the improved economic welfare of farmers in India. Founded in 2012 and working primarily in Bihar, Ergos has transformed the lives of 150,000 farmers by reducing their dependence on seasonal income. By freeing farmers from the demands of the physical market, its digital grain bank model has significant potential for reducing poverty in India.

Rural Poverty in India

As of 2022, India’s poverty rate, measured at $3 a day, stood at 5.25%. The country has experienced steadily improved poverty conditions in recent years, particularly in rural areas, which saw a decline in poverty from 32.59% to 19.28% in 2021. NDTV reports suggest that these figures have now declined to just 4.86%. Bihar is one of the regions that has witnessed the most progress in closing the gap between poverty rates in urban and rural areas.

However, despite this progress, the day-to-day experiences of those living in the remote countryside reflect ongoing hardship. For families who rely on agriculture, the goal is simply to earn enough to survive. The unpredictable nature of monsoons and seasonal changes contributes to economic instability. It is within this context that Ergos has helped reduce poverty in India by providing an innovative solution to seasonal dependence.

Ergos the GrainBank Model

Founded by Kishor Jha and Praveen Kumar, Ergos’ grain bank model allows farmers to store harvested crops at local warehouses in order to sell their product later at a more favorable cost. According to Ergos, almost 86% of farmers in India are smallholders without the ability to store their produce. As a result, around 80% to 90% of farmers try to sell the entirety of their grain in under 40 days. This is compounded by widespread debt among workers in the agricultural sector, where high interest rates affect farmers who had initially relied on moneylenders to fund their business, creating a cycle that limits the ability of rural households to raise their incomes.

By providing storage for grain, Ergos enables farmers to access immediate liquidity through a credit system and regain control over commodity prices. Technological innovation underpins the model’s effectiveness, with Ergos collecting and sharing agricultural data to support farmers’ decision-making. This approach benefits both farmers and buyers, returning financial control to rural producers who would otherwise remain vulnerable to seasonal fluctuations.

Looking Ahead

Given that an estimated 60% of rural households rely on agriculture, based on a 2021-22 national survey, innovations in agri-tech have a role to play in reducing poverty in India. Ergos’ digital grain bank model demonstrates how modern technology applied to an age-old livelihood can reduce seasonal income dependence and support rural communities.

– Polly Laws

Polly is based in Cardiff, UK and focuses on Good News and Global Health for The Borgen Project.

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