2. Major Problems hampering Agricultural Productivity
A) Fragmentation of Lands:
• A large section of land is divided into small holdings and this results into a smaller
produce.
• Inference: Smaller produce has to be sold in a smaller market with marginal profit.
B) Dependence on Climate:
• Most of the farmers depend on suitable climatic conditions for a good harvest (be
it harsh winters, heat waves or irregular rainfall).
• Inference: Since India is a tropical country, erratic nature of climate plays a major
influence on the harvest.
C) Loans from Non – Institutionalized sources:
• Local money lenders provide quick financial assistance to the farmers, forcing the
farmers to give a large share of the output to money lenders.
• Inference: High Interest rate has to be paid to the lenders by the farmers along
with the collateral and often forming a vicious cycle of bonded labor.
3. Implemented Solutions
Steps to tackle land fragmentation
• Various initiatives have been set up at panchayat
level to prevent farmers from splitting up their land.
• Government is also incentivizing the farmers if a
greater harvest is obtained from the farms.
• Problem: There is no proper management to keep a
tab on the fragmentations. Fertile land is given to
industries instead of the barren lands.
Steps to tackle climate dependence
• Water harvesting, various innovative drip irrigation methods have been
implemented.
• Green house effects have been implemented in some farms.
• Problem: Most of the farms do not have proper irrigation techniques,
there is irregular water supply, water harvesting is rarely implemented
and green house is not cost effective.
Steps to monitor credit
• Regional rural banks have
been established to promote
institutionalized credit.
• NABARD and SIDBI have been
started.
• Problem: People do not trust
the bankers and refrain from
following the lengthy
procedures required to obtain
credit.
4. Our Model
Non – Government OrganizationsIndian Postal Services
Commercial Banks and
Agricultural Industries.
Agro Retail Industries
Checking Balance and
Monitoring authenticity.
Providing reach and Infrastructure.
Providing funds/loans and
tracking of finances.
Group of farmers having
adjacent farms.
Outcome Success: Credited money
to be given back to the
farmers with minimal
interest.
Failure: Agro Industries
will take the farm on
lease for three years
employing the farmers.
Buy – Sell / Lease
Provide Funds
5. Consider a scenario
where a joint family
owned a large farm.
Now as the family
detached, the land was
fragmented into small
parts.
Now these farmers
started growing different
crops in these small
fragments, which in turn
causes low productivity
of land hence decreasing
the yield.
As most of the harvest
is consumed by the
family itself, he is not
able to sell sufficient
produce. So he is not
able to earn enough to
satisfy the material
needs.
What if we can collaborate the farmers and combine the small fragments into one? If all the farmers having
adjacent lands grow similar crops, the harvest will be large enough to sell in the market leaving ample for the
family to feed. This will in turn increase the productivity of land.
Problem
6. Now we will be giving loans to the farmers who
need money to buy seeds, fertilizers and
necessary materials.
Our Solution
Now, according to the new companies bill it is
compulsory for the companies to donate a part
of their profit to the Corporate Social
Responsibility (CSR) initiatives.
We will be incubating a microfinance institution
in collaboration with all major corporative banks
and major Agriculture industries. As all these
institutions will be giving the money as a part of
their CSR initiatives, it will lead to fund raising.
7. The catch
We will not give loan to any farmer that will come to our
institution.
The following conditions should be satisfied for the
loan to be granted.
• Farmers must come in groups of 4-5, and they
should have adjacent farms.
• Once the loan is given the farmers should grow the
same crop.
• The farmers should agree to let scientists study their
land for the best harvest.
But we need to take some collateral from the farmers
for safekeeping the money given.
Collateral and failure.
• We will be taking some part of land as collateral.
• If the proper output is not obtained and farmer is
not able to return the money for two consecutive
years, then Agro industry will take over the farm
for 3 years.
• The industry will employee the farmer help them
in stabilizing the harvest, and return farm back to
the farmers after 3 years.
8. Improving our reach
Now the problem will come in building the network and
monitoring the transactions.
• With the help of our partner institutions and the government we will spread awareness about our campaign with proper
marketing and publicity.
• We’ll be collaborating with the Indian Postal Services to increase our reach, we will train the officials to manage the
transactions and help maintaining the authenticity.This is like replicating the business correspondent model.
• People from village will be trained to provide financial literacy to the people.
• Further, we will tie up with NGO’s to keep an eye on malpractices and reporting us in such a case.
We can generate employment and skilled labor using this
model.
9. Selling/Marketing
The problem is that we take the crops from farmers at 10 Rs. per Kg and spend 22 Rs. in the storage and give it back to the
farmer at 2 Rs, so instead why don’t we give it to him then and then?
• Now the farmers will be having enough harvest to sell it to the whole sale market.
• So instead of selling to the wholesale market instead of increasing the chances of hoarding, we will be collaborating with the
Agricultural retail stores like Reliance Fresh.
• Such retail stores will in turn take care of the cold storage and selling it to the consumer.
• NGO’s will monitor the amount of harvest that is sold by the farmers and that is reaching to the consumers, they will monitor
the time lapse between the two, and report us directly in case of mal-practice.
• Instead of cutting the middle men and generating unemployment, why don’t we just employ the middle men to work for us?
We will be monitoring their actions instead.
10. Building our Network
(Summary)
Well educated workforce willq be
collaborating with Financial
Institutions and Agro. Industries to
pair up with our conglomerate as a
part of their CSR initiative.
We can tie up with media to
advertise our model, we can
put posters in public places,
local newspapers to encourage
farmers to adopt our model.
India Post has to play a
significant role in increasing our
reach. We will train people basic
skills and employ them in their
respective villages. Financial
literacy will be given to people.
Well established NGO’s will
monitor the implementation of
the scheme. We can also
generate employment for the
same.
Roping in Agricultural Retail
Industries is an important part,
educated people will be doing
the same.
A special dedicated team will
maintain a check on hoarding
and black marketing. Special
teams will be carrying out
random raids.
11. Challenges and Risks
Challenges:
• Government and corporate partnership will
be difficult and consensus among the
parties participating will be challenging.
• Convincing farmers will be a tough task, so
building a reach and creating awareness
should be prioritized.
• Creating an educated workforce and
managing them will take a lot of efforts.
Risks:
• Competition from existing microfinance
ventures, and local landlords.
• NGO’s might manipulate the figures while
reporting to us.
• Retail Industries might themselves try
hoarding.
