MAHINDRA SHUBHLABH SERVICES LTD.

- JOURNEY AS A TOTAL FARM SOLUTION PROVIDER

Abstract Mahindra and Mahindra Ltd, Indias largest farm equipment company with a group turnover of Rs 6200 crores created Mahindra Shubhlabh Services Ltd. (MSSL) as a subsidiary company. The mission of Mahindra Shubhlabh Services is to tackle the deficiencies in the farm sector including low consumption of the quality inputs, lack of mechanization, scarcity of farm finances and low awareness of scientific farm practices and coping with the vagaries of nature. The main focus of MSSL scheme involved setting up of One Stop farm solutions centers known as Mahindra Krishi Vihar (MKV) to provide farmers with a wide range of services. MSSL aimed at providing various farm solutions through its MKV initiative and help them make more profits and enhance the farming business in India. The support The World Banks International Finance Corporation purchased a 27.22% stake in the paid-up equity capital of MSSL for its commitment to sustainable development of MSSL. The distribution model MSSL adopted the Hub and Spoke distribution model. The distribution model involved each MKV serving a hub linked to sub-centers called spokes. MSSL-Steering the Indian Agriculture The model aimed at overall growth of Indian agriculture, making agriculture a way of life rather than a profitable proposition for farmers. MSSls main objective was to improve the profitability of the Indian agricultural sector by plugging all the loopholes. India being one of the largest producers of both food and cash crops in the world. The Stumbling Block One factor that has acted as a stumbling block for agricultural development since the mid eighties is poor Investment in rural economy. Both public and private investment in agriculture has shown a steady decline.

Even the prices in India are directed by the state government which restricts the growth of farmers. Thus there is a need to liberalise agriculture from the clutches of the state. Contract Farming-The Catalyst Earlier even corporate were not allowed contract farming with farmers. But with the changing time the Indian agricultural scenario has seen an historic change, number of corporate are into contract farming like PepsiCo, HLL, Cargill, ITC and a host of others. Government has also paved way for Private-public partnership model of extension. The Business Model The model was broken into 3 broad categories and they are1) It wanted all possible agri-inputs and marketing support available to farmers at the right time and at a reasonable cost. 2) Secondly being already into rural markets as tractor major, MSSL knew that the poor and illiterate farmer is unaware of the judicious use of input to maximize benefits in terms of crop yield. 3) Last but not the least, in order to improve farm profits, Mahindra Krishi Vihar wanted farmers to grow crops such as cotton, rice, vegetables etc. specifically required by the institutional buyers, retailers and commodity traders. Later on, when the Franchisee system was started many problems were faced by MSSL because of certain underlying rules and regulations like Rs 5 lakh as a non-refundable deposit Royalties on every product category Yearly service charges from the 2nd year of commencement of the Franchisee Summarizing the Effort Though Mahindra and Mahindra started MSSL for the growth of Indian agricultural sector, it turned out to be unsuccessful. The aim of improving the profitability of farm industry and farmers remained as a Dream Unachieved.