Lean farming

An examination of the movements of the farmer and the flow of produce from seed to shipping show that much of the “work” on the farm was actually waste – searching for tools and supplies, walking long distances due to a poor layout, “re-working” crops that had been improperly planted, over-producing due to poor communication with customers about what items they wanted and when. The discussions with customers show that they want more than good produce. The customers want to be directly involved with their supplier in deciding what type of produce should be grown and how it should be delivered at what time in what way.

Indian farm productivity is one fourth of non-farm productivity. Rice yields are one third and wheat yields are three fourth compared to China. Indian farm output is expected to be more than 300 Million Tons in 2022, and traditionally 75 Million Tons get wasted. So, the pressing problem to solve is to reduce this 25% of the food wastage. Of course there is huge potential to increase farm produce as Indian farm yields are much lower than international standards.

Policy of minimum support price, its procurement and stocking to stabilize market price is actually waste. It involves multiple handling, huge working capital, huge capital investment in warehousing, fleet of people to manage the inventory, and pilferages. Every year lots of stock rot due to lack of storage space and poor storage practices. We shall focus on market linkages where these do not exist, ensure quality power supply round the year, build good road and rail network to reduce transport cost and time to take the product to the market. We need to encourage modern crop science and agronomic practices to raise the quality of produce, improve the plants, minimize water usage, fertilizers and pesticides.

Taiichi Ohno, the chief architect of the Toyota Production System, wrote an essay "Agricultural People Have a Penchant for Storage." He had noted in his book "Workplace Management," and said that, “farmers invented inventories.” As per Taiichi Ohno, the hunters, who roamed the earth before farming, practiced pull production. Whenever they were hungry they used to hunt in the forest, plucked fruits and took water from the waterbodies just to quench their hunger and thirst. Farmers, with the long crop cycle started to store food to feed themselves throughout the year and even stored to deal with bad harvests. As a result, inventories and overproduction came to be viewed as good things. Ohno struggled with this ancient farmers habit, that came in industrial management thinking to create excessive, just-in-case inventories in every human activity, no matter how far from the farm.

Let me quote two case studies on Lean Farming.

1. A corporate initiative with the farming community
2. The future of agriculture

ITC Limited, had started an initiative of e-Choupal which is remarkable example of facilitating lean farming in many ways.

It is an initiative of to link directly with rural farmers via internet for procurement of agricultural and aquaculture products. It tackles the challenges posed by Indian agriculture, characterized by fragmented farms and poor infrastructure. The programme installs computers with Internet access in rural areas of India to offer farmers up-to-date marketing and agricultural information. Here the farmers can directly negotiate the sale of their produce with ITC Ltd. Online access enables farmers to obtain information on mandi prices, and good farming practices, and to place orders for agricultural inputs like seeds and fertilizers. This helps farmers improve the quality of their products, and helps in obtaining a better price.

ITC Limited kiosk with internet access is run by a “Sanchalak” — a trained farmer. The computer is housed in the Sanchalak's house and is linked to the internet. Each installation serves an average of 600 farmers in the surrounding 10 villages within a radius of 5 Km. The Sanchalak bears some operating cost but in return earns a service fee for the e-transactions done through his e-Choupal. The warehouse hub is managed by Samyojaks, who make up for the lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and transportation.

Since the introduction of e-Choupal services, farmers have seen a rise in yields, improvement in quality of output, and a fall in transaction costs. Even small farmers have gained from the initiative and their incomes have risen. Farmers can get real-time information despite their physical distance from the mandis. The system saves procurement costs for ITC Limited. The farmers do not pay for the information and knowledge they get from e-Choupal the principle is to inform, empower and compete e-market place for spot transactions and support services to futures exchange.

Abhishek Jain, Soya Farmer, & e-Choupal Sanchalak says,?“before ITC introduced us to e-Choupal, we were restricted to selling our produce in the local mandi. We had to go through middlemen and prices were low. ITC trained me to manage the internet kiosk and I became the e-Choupal Sanchalak in my village. Today we are a community of e-farmers with access to daily prices of a variety of crops in India and abroad - this helps us to get the best price. We can also find out about many other important things - weather forecasts, the latest farming techniques, crop insurance, etc. e-Choupal has not only changed the quality of our lives, but our entire outlook.”

I quote some extracts from the above article.

With clarity about purpose and value, Ben and Rachel have been on a multi-year journey to apply lean principles to every aspect of their production and the way they treat those who work with them on the farm. They have pioneered "market-ready harvesting" to minimize the touches between field and customer, right-sized tools with quick changeovers to minimize the amount and cost of equipment needed, to always have the planting material needed without tying up cash in just-in-case inventories, to know immediately when a plot of land is ready for a new crop and exactly what crop to plant, quick changeovers of plots so the new crop goes in the same day the old crop comes out, and scheduling to spread the work of the farm evenly over a 12-month growing season to eliminate idle assets.

Given their purpose of a good lifestyle with an adequate income, they have continually reduced the size of their farm as their productivity has grown, from seven acres to one half-acre of cropped area, while exceeding their net income target. And they have cut back in the summer – when home gardens and the big produce farmers bring their crops to market and send prices plummeting – to camp (and write books) while going full blast the other nine months in their heated greenhouses.

As they look ahead, one of the big remaining wastes is the waste of transportation. Their customers are concentrated in two small cities some miles from the farm, necessitating long drives. So why not move their half-acre farm to a spot between these adjacent cities that minimizes transport time and cost? Really local food! Perhaps in the future they will be. Certainly, lean thinking has now established a beachhead in agriculture for the first time. And I hope thousands of small farmers will copy (and improve on) Ben and Rachel's methods.

But what about the big, mass-production farming industry? It feels to me like the auto industry in 1965, with high entry barriers, lax safety standards, and minimal environmental demands. A lean leap in big farming that minimizes energy and water requirements (and CO2 and methane emissions) while providing currently unavailable freshness and variety at the same or lower costs to the consumer seems hard to imagine now. But so, did the triumph of Toyota and lean thinking the year before the Corolla was launched.

Learning from the concept of e-Choupal from ITC in India and the farming by Indiana farmers Ben and Rachel from US, we can develop "A Lean Farming System" that can eliminate the poverty and distress of Indian farmers and make them the supplier of food all over the world with good quality produce at affordable price.