Agri input dealers: crop seasons and credit until harvest

The agri input chain

Seed companies, fertiliser makers and crop protection (pesticide) companies sell through distributors to village and town dealers, who sell to farmers. Many dealers also stock sprayers, small tools, irrigation items and cattle feed. Fertiliser distribution involves government-linked systems for some products, with point-of-sale authentication at the dealer; seeds and pesticides are sold under licences issued by the state agriculture department, and dealers must keep records as their licence requires.

The dealer often acts as an informal adviser: farmers ask which seed variety to sow, which product to spray, and how much to apply. Trust built over years is the dealer's main asset.

Seasons drive everything

Sales cluster around the kharif sowing with the monsoon and the rabi sowing after it, with smaller peaks for zaid crops and for spraying during pest attacks. Within each season, the sowing window is short; a dealer without the right seed variety that week loses the sale for the whole year. Fertiliser demand follows crop stages, and pesticide demand follows weather and pest outbreaks, which are hard to predict.

Timing varies by region and crop; the pattern of selling now and collecting after harvest is common across most areas.

Farmer credit until harvest

Most farmers buy on credit and repay after selling their crop. A dealer can have a large part of the year's sales outstanding for months. When a crop fails or prices fall, repayment is delayed further. Practical steps:

• Keep a separate ledger for every farmer, with village and mobile number, not one combined udhaar book.
• Record every sale with the product and quantity, so the farmer can see what he took.
• Share the statement before harvest, in the farmer's language, so the amount is agreed before he sells his crop.
• Set limits based on land and past repayment, and be cautious with new customers.

Our guide on payment reminder templates includes Hindi wording.

Batches, expiry and returns

Pesticides and many seeds carry batch numbers and expiry or validity dates, and licence rules usually require records of stock and sales by batch. Unsold seeds after a season may be returned to the company under its policy, often within strict time limits. Expired pesticides cannot be sold. Tally can keep batch-wise stock with expiry where enabled; whatever system you use, review stock at the end of each season and return or write off what cannot be sold. See stock audit checklist.

Company schemes and dealer terms

Companies offer early-booking discounts, volume schemes and season-end settlements, and some extend credit to dealers until after the season. Scheme credit notes often arrive months later. Keep a register of expected scheme benefits by company and season, and match each credit note when it comes.

Advising farmers without overselling

Because farmers rely on the dealer's advice, the dealer carries responsibility for it. Recommending a costly product the crop does not need, or more than the label dose, may raise this season's bill but damages trust when the farmer compares notes with neighbours. It also raises the amount that has to be recovered after harvest. Follow the label and the advice of the agriculture department and company agronomists, keep the product leaflets handy, and note on the bill what was recommended for which crop.

Many dealers also see a pattern: farmers who receive a clear statement and fair advice repay first, and those who feel overcharged delay. A good relationship is a credit control tool, not just goodwill.

GST points

Seeds, fertilisers, pesticides, tools and cattle feed are treated differently under GST: some seeds are exempt, fertilisers and pesticides are taxed at different rates, and rates have been revised. Check the current treatment of each item on the GST portal. A dealer selling both exempt and taxable goods should take advice on input tax credit. This is general information, not tax advice.

Cashflow OS and Tally for agri dealers

Cashflow OS syncs your TallyPrime books to the phone. Each farmer's balance and bill-wise dues are visible, and statements can be shared on WhatsApp as a simple Hindi हिसाब page or a PDF in Tally's format. The app and reports work in Hindi and English, chosen per person, so staff can use the language they read best. Distributors can use route plans and the staff app to cover village dealers. Batch and expiry stay in Tally. See Hindi and English.