From Waste to Income: How a Farmer Group Turned Crop Residue Into a Business

For many farmers, paddy straw becomes a problem within days of harvest. For Navraj Singh of Jaimal Wala village in Punjab’s Ferozepur district, it became a business opportunity. He started collecting straw from nine acres three years ago. Today, his operation covers nearly 1,000 acres.

Navraj collects crop residue from other farmers, converts it into bales and supplies the material to buyers in Gujarat, Rajasthan and Kashmir. The business has also created work for 30 to 35 local youths. His experience shows how residue can become a marketable farm product.

Navraj entered the straw trade three years ago after noticing that farmers considered residue a waste product. He started by collecting straw from his own nine acres and preparing bales. As demand grew, he began entering agreements with other farmers to collect their residue.

The business expanded gradually rather than through a large initial investment. Navraj said he first tested the market, saw demand for straw and then increased the area from which he collected residue. His operation now handles straw from nearly 1,000 acres across farms in the surrounding region.

The straw does not have a single end use. Navraj supplies it to different markets depending on quality and demand. Buyers in Gujarat and Rajasthan mainly use the material for cattle feed, while buyers in Kashmir use it as livestock fodder during the winter.

Spoiled or lower-quality straw can still find another market. Navraj said such material is supplied to cardboard factories and biomass plants. This gives the business several outlets and reduces the amount of residue that would otherwise have limited commercial value.

How much straw does one acre produce?

The amount of straw available depends on the crop and season. Navraj told The Tribune that around 10 to 12 quintals of straw were produced per acre last year. For the current season, he expects around 8 to 10 quintals per acre.

Weather conditions affect residue availability, which directly affects the business. Lower straw production means less material to collect and sell. For a residue-based enterprise, farmers therefore need to account for seasonal variation when estimating supply, transportation requirements and potential revenue.

Navraj said he generally pays farmers around ₹150 per quintal for collected straw. He then spends another ₹250 per quintal on transportation and other expenses before selling the material to buyers.

He said straw generally sells for around ₹500 per quintal, while prices could reach ₹600 this year. These figures reflect his reported business conditions and should not be treated as a standard market price for every location.

Navraj said he invested around ₹80 lakh in the business during the current year. He expects a profit margin of between 25% and 30%, with demand usually increasing around Diwali when straw prices also tend to rise.

The business therefore requires significant working capital once operations expand. Money is needed not only for equipment but also for purchasing straw, transportation, storage and labour. Farmers considering a similar enterprise need enough funds to manage the period between collecting residue and receiving payment from buyers.

Instead of purchasing new machinery, Navraj designed equipment using discarded machines and other available components. He told The Tribune that buying new machines, even after government subsidy, would have cost him more than developing his own equipment.

This approach helped him reduce his initial machinery cost, but it also required technical skills and knowledge of the equipment. His experience shows that machinery is one of the major costs in residue collection and that alternative approaches can reduce the investment required.

How does straw become a business?

The business depends on connecting three points: farmers with residue, workers who collect and process it, and buyers who need the finished material. Navraj coordinates these activities by entering agreements with farmers, arranging collection and supplying straw to markets outside Punjab.

Storage is another part of the operation. Navraj said straw requires proper storage and round-the-clock monitoring because fire can destroy large quantities of material. This becomes especially important during summer, when stored dry residue can create a serious fire risk.

The business has created employment for around 30 to 35 local youths. Their work can include collection, handling, processing, loading, transportation and storage of crop residue.

For rural communities, such enterprises can create jobs beyond crop cultivation itself. The income generated from residue can involve several people across the supply chain rather than remaining limited to the farmer who produced the straw.

Farmers selling residue receive some income from material that might otherwise require management after harvest. The value depends on local demand, collection costs, transportation distance and the quality of straw.

The model can also reduce the pressure to dispose of residue quickly. Instead of viewing straw only as a post-harvest problem, farmers can consider whether nearby buyers, biomass facilities, livestock farms or other users create a viable market.

A similar business would require access to enough crop residue, reliable buyers and suitable transportation. A farmer collecting from only a few fields may struggle to cover machinery and storage costs, while a larger collection network can spread those expenses across more material.

Local market conditions are also important. A residue business may work near cattle-feed buyers or biomass plants but become less viable when transportation distances are long. Farmers should identify buyers and calculate costs before purchasing equipment.

Is crop residue becoming a market?

Government policy is increasingly focused on treating crop residue as a resource rather than simply a disposal problem. For 2026–27, the Centre has allocated ₹544.15 crore for crop-residue management and set a target of developing 141 stubble supply-chain projects.

The government is also supporting machinery and supply chains that can move straw from farms to end users. These efforts create conditions for businesses that collect, transport and process residue, although profitability still depends on local demand and operating costs.

Navraj’s experience starts with a simple shift in how crop residue is viewed. He saw commercial value where others saw waste and began with nine acres before expanding his collection network.

His business also shows that scale matters. Once more farmers participate, the enterprise can collect larger quantities, supply distant markets and create jobs. But expansion also brings higher costs for storage, transport, labour and fire prevention.

What should farmers check before starting?

Farmers interested in a straw business should first identify nearby sources of residue and potential buyers. They should calculate the purchase price per quintal, transport costs, labour, machinery, storage and expected selling price before investing.

They should also consider seasonal demand and fire protection. Navraj’s experience shows that residue trading is not simply about collecting straw. It requires supply agreements, storage, transport, equipment and reliable buyers throughout the season.

Navraj Singh’s business grew from collecting straw on nine acres to managing residue from nearly 1,000 acres. He now supplies buyers across Gujarat, Rajasthan and Kashmir and has created employment for 30 to 35 local youths.

His experience offers one possible model for farmers and rural entrepreneurs looking beyond traditional crop sales. The opportunity depends on local markets, transport costs, residue availability and storage capacity, but the basic idea is clear: crop residue can become a product with a buyer instead of remaining a disposal problem.