Do More with Less

Gustavo Grobocopatel is a fourth generation Argentinian farmer of Russian-Jewish extraction. For three generations his family pursued a small scale, subsistence model of farming in Argentina. Grobocopatel’s dream was to break out of this mold and do something more ambitious. But doing business in Argentina was not very easy and he faced problems right from the very beginning.

First problem faced by Grobocopatel was in getting access to large lands for agriculture. Although Argentina is a vast country, endowed with rich soil and a favourable climate, farmland is actually hard to come by. Only 10% of the land is arable and that is controlled by few owners who are reluctant to part with it.

Second problem Grobocopatel faced was the shortage of skilled labour that was needed to scale up his business. Farming is a labour intensive business and without skilled and adequate man power Grobocopatel could not achieve his goals. Labour was required at all levels of farming, fertilize, sow, tend and harvest.

Third problem for Grobocopatel was the finance required to buy the farm equipments that were needed to scale up. Funding opportunities to bootstrap new business are very limited for entrepreneurs in Argentina.

Instead of giving in to these problems, Grobocopatel conceived and implemented an ingenious business model. He overcame the land problem by leasing it rather than buying it. He dealt with scarcity of labour by subcontracting every aspect of farm work to a network of specialized service providers, giving him access to freelancer laborers that he can hire only when they are required. Instead of buying the farm equipments he rented them from a network of small local companies.

By cleaverly leveraging a grassroots network of 3,800 small and medium agricultural suppliers, Grobocopatel’s company Los Grobo operates as an asset-light company, and in this way he is able to do more with less. In 2010 Los Grobo became the second largest grain producer in Latin America. Farmed over 3 lakh hectares traded 30 lakh tones of grain per year and generated Rs. 3750 crore in revenue. He did all this without owning land or a single tractor or harvester.

Having succeceeded in Argentina, Los Grobo is now exporting its frugal farming model to Brazil, Uruguay and Paraguay, helping farmers produce more with less in their local contexts.