
Road to collectivisation of small farmers
The ‘farmer producer organisation’ route is the best way to strengthen aggregation and, thereby, improve farm incomes
In the context of the Indian government’s push to double farm income by 2022, innovative thinking on smallholder farmer empowerment is needed. Collectivisation of small farmers is key to sustained agriculture growth and food security.
Smallholder farmers (SHFs), representing 80 per cent of India’s farming community, are forced to contend with a cycle of low investment, poor productivity, low value addition, weak market orientation and low margins. Decreasing landholdings due to fragmentation coupled with a post-harvest value chain riddled with inefficiencies, causes post-harvest losses (PHL) to stack up throughout the value chain.
As per latest estimates by the Associated Chambers of Commerce of India, India loses around ₹92,600 crore ($14.3 billion) on account of PHL.
The answers to the myriad challenges facing SHFs lie in efficient farmer collectivisation, which confers greater bargaining power, better market and price discovery, access to credit and insurance, and sharing of assets and costs.
It encourages private sector interest and builds the ability of farmers to invest in storage, crop protection and value addition infrastructure. Better access to market linkages and information through partnerships enables farmers to reduce demand/supply imbalances and PHL.
But certain challenges limit the efficacy and sustainability of key collectivisation models. There are two predominant SHF collectivisation models in India: farmer producer organisations (FPOs) and agricultural entrepreneurs (AEs) — each with its own benefits and challenges.
An FPO is a legally registered collective of farmers, often having self-help groups (SHGs) as its building blocks and formed with the objective of enhancing farmer incomes. The FPO model can create value across different post-harvest phases, including harvesting, primary processing, storage, secondary processing, and market linkages.
The model ensures that all benefits from value addition are retained by the SHFs. The FPO model faces challenges with respect to community mobilisation, effective decision-making and governance, efficiency of promoting agency, and access to capital.
The AE model is predominantly buyer and intermediary driven, with a strong profit orientation. AEs are usually from the village and work independently or through contracts with companies that provide farmers inputs, equipment or procure produce from farmers.
AEs link farmers with the market, minimising damage to their produce before delivery to buyers. Constraints associated with the AE model include vastly different individual entrepreneur capabilities and lack of capital.
A multi-pronged approach
According to the Department of Agriculture and Cooperation, the FPO has emerged as the “most appropriate institutional form around which to mobilise farmers and build their capacity to collectively leverage their production and marketing strength.” Practitioners estimate that there are over 3,000 FPOs in India, with more likely to be registered in the coming years.
Strengthening FPOs would enhance the robustness of the AE model since vital complementary roles of AEs can be carved out as FPOs become successful. A multi-pronged approach encompassing a series of interventions can significantly strengthen the SHF collectivisation ecosystem in the long run.
Technical support facility: A dedicated technical support facility can help build transition FPOs from a production-oriented model to a more value-addition and agribusiness focussed model. It will offer farmers access to a range of services, including training, sourcing of inputs, mechanisation, value addition, market information and linkages.
For this, it will need to leverage solutions of private sector companies and NGOs.
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Sharebusiness standard | December, 15, 2018
Leveraging community leaders to build resilience against climate change in urban areas (Comment)
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ShareNext Billion | November, 21, 2018
Inexpensive Impact: The Case for Frugal Innovations
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ShareForbes India | October, 30, 2018
Smart villages: Driving development through entrepreneurship

Leveraging community leaders to build resilience against climate change in urban areas (Comment)
While cities cover only two per cent of the global land area, they contribute around 70 per cent of the global greenhouse emissions, one of the main drivers of climate change.
The UN forecasts that urbanisation and population growth could add another 2.5 billion people to urban populations by 2050, with almost 90 per cent living in Asia and Africa. Consequently, the urban contribution to greenhouse gas emissions and climate change will only increase with time.
As a response, various stakeholders have designed climate change resilience products including cool roofs, home insulations, drip irrigation solutions and solar home systems that have seen heightened interest in India. While such products have seen a market, the uptake is concentrated among the richer sections.
The urban poor, who constitute almost 30 per cent of India’s urban population, do not have the knowledge or the capacity to pay for such products. It has always been a challenge to symbiotically combine all four components (informed customer targeting, low-cost marketing, innovative distribution and sales, and nurturing consumer goodwill) to design a marketing strategy for the urban poor. As a response, some organisations have started leveraging community-level leaders (CLLS) as marketing channels for such products.
The rationale for the CLLs comes from the effectiveness of the model in building long-term products resilient to climate change while simultaneously creating livelihoods. Some best practices that can be used to strengthen the efficacy of the CLL mode are:
* Design a product identification framework tool: Each product should be analysed on the basis of four parameters: a) demand for the product (number of households), b) affordability (price), c) profitability (percentage of price), and d) scalability (potential demand across different urban agglomerations). On the basis of analysis, only those products which score high on all parameters should be offered to the market.
* Conduct on-ground demand assessment: Understanding the customer becomes more important in such cases, particularly since the customers knowledge of the product is limited. Hence awareness levels, willingness to pay and customer demand becomes more critical. Such an on-ground assessment can help further shortlist products for a particular set of homogeneous households.
* Provide easy financing options: It is beneficial to help CLLs establish close networks with MFIs and other financial institutions to provide financing facilities to potential consumers, hence enhancing their ability to pay and increasing uptake.
* Segment CLLs based on skillsets and motivation: Classification of CLLs as per their sales skills and motivation is essential for success. Selling different products require different skillsets and a quick analysis can help in this matchmaking. Some parameters which can be used to assess skills include age, educational qualification, business experience, and technical skillsets.
* Capacity building: CLLs need a certain degree of training and it is observed that CLLs find it easier to sell better when trained rather than through close association with their communities.
* Build ownership in CLLs: Instead of making the product available free-of-cost, CLLs should be asked to invest in the product. If required, finance should be made available by partnering with co-operative banks and MFIs; that way one can build ownership in CLLs.
* Design standardised operational procedures (SOPs): Since the business model includes partnerships both with CLLs and product manufacturers, it is necessary to design SOPs to simplify the entire delivery process.

Inexpensive Impact: The Case for Frugal Innovations
Over 4 billion people around the world face unmet needs in core areas such as food, water, energy, health-care and housing. The market potential for these low-income populations is huge: Approximately 4.5 billion low-income people globally represent an annual purchasing capacity of US$ 5 trillion (PPP), with India, East Africa and South East Asia accounting for a sizable chunk of this market. Yet servicing this market is fraught with challenges, including customers’ limited ability to pay, poor infrastructure and latent demand. Catering to this market requires frugal innovation, which is about transforming adversity into opportunity, enhancing value and ultimately doing more with less, thereby impacting more people.
Many firms – both startups and corporates – have begun to design frugal, market-based solutions that include product and business model innovations to meet the unmet needs of billions of underserved customers. In Kenya, for example, Pad Heaven makes re-usable sanitary towels from banana fibers, and Ecopost uses plastic and agricultural waste as a resource to manufacture sustainable materials for the building, construction and transport industries. India is also a hotbed of frugal innovations, which spread across sectors. For example, Saral Designs markets an automatic machine that allows organizations to produce low-cost sanitary napkins, Bhagwan Mahaveer Viklang Sahayata Smiti provides the Jaipur foot – a low-cost prosthetic leg, and Banka Bioloo sells sanitation systems that eliminate the need for off-site disposal of human waste. Each of these products highlights how such innovations can be game changers.
But frugal innovations are not just about products: Great potential also lies in business model innovation. Frugal innovations in services can include deep specialization in a niche segment of a huge market, tiered pricing systems and efficient use of human capital. These innovations respond not only to a lack of skilled human capital, but to an institutional void. For instance, Unilever’s small, affordable detergent sachets are priced at a more palatable level for the low-income populations in India and Africa. And Aravind Eye Care’s approach to performing cataract surgeries at large scale without compromising on quality highlights how process innovation can ensure inclusivity and service delivery in a sustainable manner.
Frugal innovation is also not limited to low–tech sectors. It can require, or be combined with, frontier science and technology. Products like Swach a high-tech portable water filter developed by Tata, HealthCubed Inc.’s Health Cube – an integrated, tablet-based, portable point-of-care diagnostic test device, and Agatsa’s pocket-sized 12-lead electrocardiogram have demonstrated how technology can not only be an enabler but an amplifier to both product and process innovations.
Lessons for the Circular Economy
While frugal innovations are commonly associated with developing economies, these innovations are not only for resource-constrained users – and they also address the issue of resource scarcity. The current “take, make and dispose” economy is not sustainable. Economic productivity is already being curbed by the rapid depletion of existing and readily available natural resources. These constraints require a shift in thinking towards a more circular model focusing on resource productivity, and a shift towards a “make, share and remake” model. This will be a key driver towards sustainability for frugal innovations of the future.
Principles from frugal innovations are directly applicable to this circular economy, as generating value from waste is common across African and Indian startups. For example, Kodjo Afate Gnikou built a $100 3D printer from electronic waste. And in Europe, the firm Qarnot has developed QH.1, a high-performance computing server that uses “waste heat” from its microprocessors to heat homes and other buildings.

Smart villages: Driving development through entrepreneurship
Over 68 percent of India’s population lives in rural areas. There has been a gradual increase in migration from villages to cities primarily for livelihood opportunities, better education, and healthcare facilities, among others. The rising burden on urban cities due to migration emphasises the need to transform villages so that they can meet the critical as well as aspirational needs of the villagers. This can be done using innovative technologies and transforming the service delivery models for villages. Transformed villages are called Smart Villages.
While the phrase ‘Smart Village’ has become a buzzword in policy and rural development discussion, there is no universal definition of such villages. Two things that are common to all Smart Villages are the extensive use of technology and integration of several key interventions in infrastructure and service delivery.
It’s an integrated approach of delivering access to skills and quality basic services including education, e-health, 24×7 power, safe food, among others.
There are numerous initiatives supported by the government, and spearheaded and supported by corporate social responsibility (CSR) initiatives and philanthropic institutions.
The Government of India launched the Shyama Prasad Mukherji Rurban Mission (SPMRM) in 2016, with the objective to spur social, economic and infrastructural development in rural areas. The mission aims at making villages smart and growth centers of the nation. In its first phase, it targeted to develop a cluster of 300 Smart Villages over the next three years across the country. Sansad Adarsh Gram Yojana, which envisages integrated development of selected villages was another step taken by government in this direction.
While the government-led initiatives rely on integration and convergence of the existing central and state government schemes to develop these Smart Villages or clusters, the CSR initiatives are generally more innovative in terms of implementation and use of technologies. For example, smartphone-maker Nokia has launched a Smartpur project which aims to create a sustainable ecosystem where community members can leverage digital tools to bring efficiency in daily lives. It aims to bring transparency in governance, economic prosperity for households and ease of access to various government services and information.
Tata Trusts supports agriculture intervention for tribal communities under its Lakhpati Kisan – Smart Villages program. While these CSR or philanthropic institutions do work closely with government institutions, their model of engagement and the partnership with the government vary significantly.
These initiatives have provided key learnings to empower institutions, build engagement models and frameworks for planning, and developing implementation strategies for Smart Villages.
We suggest learning from the Smart Cities mission, but we also caution that these learnings must be contextualised and synthesised, as Smart Villages are very different from Smart Cities. The latter are more focused on increasing the overall efficiency and improvement in civic infrastructure, while Smart Villages envisage the need of building the facilities from scratch.
One of the key challenges in developing Smart Villages is ensuring their sustainability. This can only be addressed if we build our Smart Village strategy with entrepreneurship at its core. Thankfully, India has one of the most vibrant entrepreneurial ecosystem that is working towards addressing rural development challenges using innovative technologies and business models.
We have enterprises that are addressing healthcare needs (Glocal Healthcare Systems, mHealth, iKure), delivering quality education (Gyanshala, Hippocampus, Avanti), providing decentralised energy solutions (Sun Moksha, Mera Gao Power, Mlinda), transforming agriculture productivity (Ekgaon, Jain Irrigation, Milk Mantra), providing drinking water and sanitation services (Sarvajal, Svadha, Banka Bioloo), creating livelihood opportunities for women (Dharma Life, Frontier Markets, Sudiksha Knowledge Solutions), and so on. The need is to integrate this approach for the Smart Village vision.
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Giving Women Farmers Access to Technology | Charu Thukral & Shreejit Borthakur write for India Development Review (IDR)
January, 13, 2021Share
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Climate risk strategies needed for investors in India – India Climate Dialogue speaks to Santosh Kumar Singh, Director, Intellecap
December, 24, 2020Share
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FaaS Startups Make Farming Profitable but what has stunted their growth
December, 10, 2020Share

Giving Women Farmers Access to Technology | Charu Thukral & Shreejit Borthakur write for India Development Review (IDR)
“If women in rural areas have access to land, technology, and financial services farm yield could increase by 20-30 percent.”
Charu Thukral and Shreejit Borthakur from the Intellecap team, recently contributed to an an article for India Development Review (IDR) that highlighted the current technology gap that exists for women farmers in India, and shared five principles that #technology service providers could integrate in design, development, and deployment phases to make their solutions more inclusive for women.
According to the Food and Agriculture Organisation (FAO) of the United Nations, women produce approximately 60-70 percent of the food in most developing countries and are responsible for almost 50 percent of all global food production. In India, 48 percent of all self-employed farmers are women. In Sri Lanka and Bhutan respectively, 41.5 percent and 62 percent of women work in agriculture. And in Sub-Saharan Africa, 50 percent of the total agricultural workforce is made up of women farmers.
Despite these figures, the work of women in agriculture is often unaccounted for, rendered marginal, or invisibilised. In addition, women farmers are paid significantly lower than their male counterparts—estimates suggest that, as of 2016–2017, there was close to a 22 percent wage difference. Furthermore, the role of women farmers is often limited to less skilled work such as sowing, weeding, and harvesting. They are seldom included in decision-making processes and are not often seen participating in work that is mechanised.
Many of these gender disparities in smallholder agriculture are an outcome of systemic challenges. For instance, land ownership and other entitlements have been a major cause of concern for women farmers— in India, women own only 10 percent of agricultural land, while in Africa the figure is 20 percent…

Climate risk strategies needed for investors in India – India Climate Dialogue speaks to Santosh Kumar Singh, Director, Intellecap
Mumbai, Dec 23 –A few weeks ago India Climate Dialogue, one of the few reputed media that converges and covers conversations specifically around Climate Change spoke to Santosh Kumar Singh , Director , Energy, Agriculture and Climate Change, Intellecap for a story titled, “Climate risk strategies needed for investors in India” which talks about the imperative need of Financial institutions in India to integrate climate risk considerations in their investment decisions and portfolio management to mitigate impacts
India have lost over USD 80 billion in the 20 years to 2019 due to climate change and the losses could only multiply in the coming years, a recent report has said.
Businesses and investors need to be more proactive in incorporating climate risk considerations in their operations , along with the government, which needs to include climate change resilience initiatives in its policies, said the Climate Risk Mainstreaming; Approaches for Indian Financial Institutions report by the Shakti Sustainable Energy Foundation .
“The country has faced intense and increased events of floods, drought, cyclones, erratic rainfall, heat (and) water stress, which has impacted livelihoods, businesses, and thus the portfolio of financial institutions,” the report said. “Hence, it is important for financial institutions to rethink their financing strategies and deploy capital with careful consideration of climate risk mainstreaming strategies.”
The study carried out by Intellecap, a financial advisory, mapped the understanding of financial institutions in India on climate risk mainstreaming requirements as well as implementation strategies.
“As of now, Indian financial institutions do not have a specific strategy to manage risks induced by extreme weather events in their operations and portfolios,” said Santosh Kumar Singh, director, energy, agriculture and climate change, Intellecap. “A majority of financial institutions suggested that it will take another 3-4 years for them to develop and consider climate risk mainstreaming models for their investments.”
For instance, in its annual survey of energy transition in developing countries in Climatescope 2020, BloombergNEF found a 12% decline in clean energy investments in 2018-19 to USD 8.5 billion. The fall was as much as 32% since the peak of USD 12.6 billion in 2017.
Policy action
Realising the gravity of the situation, India’s environment ministry in December announced forming a high-level inter-ministerial Apex Committee for Implementation of Paris Agreement (AIPA).
“The purpose of the AIPA is to generate a coordinated response on climate change matters, which ensures that India is on track to meet its obligations under the Paris Agreement, including its Nationally Determined Contributions (NDCs),” the ministry said in a statement.
“Climate change must be fought not in silos but in an integrated, comprehensive and holistic way,” Prime Minister Narendra Modi said at the summit of G20 nations on November 22. “The entire world can progress faster if there is greater support of technology and finance to developing nations”.
Policy can play in coming up with climate solutions when calamities strike, Singh said. “One of the most critical aspects of managing climate risk is to understand the portfolio exposure to different sectors that are vulnerable to climate hazards and have both physical and transition risks. The next step is to disclose the exposures to these risks to larger stakeholders,” he said.
“Once you start understanding and disclosing climate risk, then managing them and mainstreaming them follow.”
In the absence of any government mandate or push from the central bank, financial institutions have not been proactive in reporting exposure to climate risks or their exposure to different sectors that are vulnerable to climate hazards and risks, Singh said.
Mainstreaming climate risks
Government guidelines and regulations can push financial institutions to report their exposure to climate risks and make them act to mainstream climate risks in their portfolios and
operations.
Government institutions such as the National Disaster Management Authority (NDMA) need to set up appropriate and dedicated climate collection data mechanisms in the country and make them available to relevant stakeholders. “These will act as inputs to scenario analysis,” Singh said. “Legitimate inputs are essential for accurate predictions and will greatly aid investors to initiate climate action.”
Climate change could cost businesses and investors across the world over USD 1.2 trillion over the next 15 years, the Intellicap report said. The private sector has a role in mitigating this, Singh said.
There has to be efforts to create climate risk indicators and modes of collecting relevant data required for climate risk modelling, which could be provided for consideration of everyone, he said. Insurance companies and credit rating agencies, for instance, could share knowledge and experience in managing climate risk owing to the nature of the business they are involved in, where it is essential to factor all important risks.
In 2015, a private sector led initiative called Climate-related Financial Disclosures (TCFD) was set-up in India to help develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.
TCFD recommendations are intended to help build considerations of the effects of climate change into routine business and financial decisions.
Responsibility and foresight
“Their adoption can help companies demonstrate responsibility and foresight. Also, better disclosure will lead to more informed and more efficient allocation of capital,” Singh said. “Overall, 1,500 organisations globally, including over 1,340 companies with a market capitalisation of USD 12.6 trillion and financial institutions responsible for assets of USD 150 trillion have expressed support for TCFD recommendations.”
Akin to the growth in the number of organisations supporting TCFD, investor demand for companies to report information in line with the TCFD recommendations has also grown dramatically, he said.
As part of Climate Action 100+, more than 500 investors with over USD 47 trillion in assets under management are engaging the world’s largest corporate greenhouse gas emitters to strengthen their climate-related disclosures by implementing the TCFD recommendations.
In addition, many large asset managers and asset owners have asked or encouraged investee companies to report in line with the TCFD recommendations and reflected this in their investment practices or policies.
Along with recommendations, the task force has issued guidance on two topics — conducting climate-related scenario analysis and integrating climate-related risks — into existing risk management processes and disclosing those processes.
Such metrics would help financial institutions understand the process of integrating climate risks along with understanding from other organizations that are part of TCFD recommendations, Singh said.
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