New Business ModelsDemand Aggregation and Services for Smallholders Examples Aanand Kumar Kathmandu Jan 23, 2013
10 Minute Agenda• Why Smallholders• Why Aggregation• Examples of Work Done
Why Smallholders?• Comprise “90% plus” of rural households in EUP, Bihar and Odisha• Main focus of donors – small farmers• Cannot negotiate – give the maximum margins• Most value conscious• Generally left out by all agencies• Maximum market available here
Rural Households Vs Land Operated Resource Poor Farmers Aggregation of Households Land Aggregation of Land
Why Smallholders?• Comprise “90% plus” of households in EUP, Bihar and Odisha• Main focus of donors – small farmers• Cannot negotiate – give the maximum margins• Most value conscious• Generally left out by all agencies• Maximum market available here
Why Smallholders and Aggregation?• Comprise “90% plus” of households in EUP, Bihar and Odisha• Main focus of donors – small farmers• Cannot negotiate – give the maximum margins• Most value conscious• Generally left out by agencies• Maximum market/ scale up opportunities here• Aggregation leads to “profitable businesses”
Examples• Service Provider – Laser Leveller - EUP• PACS – Noorpur Bet, Ladowal, Punjab• Digital Green – Aggregation and Servicing
Service Provider – Laser Leveller - EUP• Clients spread over 100 km range loss of income in season;• Recovering fees difficult. 8% held by large/ small recalcitrant farmers. Subsidy?• Initial hub support put off salary and alone. Limited influence. Intimidated to independently hold meetings in new villages for publicity.• Flatly interested in servicing large farmers - can work on large areas, get paid in bulk, fewer hassles, primarily cash crops.• Finds demand aggregation and fee collection weak areas in his business model.• Willing to share 10-20% margin with any intermediary that helps him in aggregation of demand, fee collection and growth.
Service Provider – Laser Leveller - EUP Demand Demand Aggregation LL Service LL Service Farmer Farmer Service Provider Fees Fees AggregationLARGE LANDHOLDER FOCUS SMALL LANDHOLDER FOCUS
Demand Aggregation: NGO-CSISAVillage Numbers Problem in specific Demand Opinion of ConclusioName of area estimation Villagers n audience (acres)Nagwa 28 Undulating Land 8.21 Acre They want to apply Potential(GDS) and small land new technology in holdings and flood the field after demonstrationBelauhi 18 5 acre Less(GDS) PotentialShivkot 17 Undulating Land 13 acre More(GDS) potentialRidhiapadi 9 8.13 acre More(GDS) potential 34 acres
GDS supported Lehra Agro Producer Company Limited board, led by its Chairman Mr. Lalman Yadav
Example 2: Smallholder Aggregators PACS, Noorpur Bet, Ladowal, Punjab
PACS – Noorpur Bet, Ladowal, Punjab• Primary Agriculture Cooperative Society• Currently at a profit of Rs.35,00,000• 6 villages – reaches out to approximate 1000 households• 725 members - 500 agri households (50 HH>10acres,450HH<10 acres) - 225 non agri households• 100 of these members don’t have tractors and use PACS tractors•Suite of services – - Implements on hire (4 tractors, 2 Laser Levellers, Happy Seeder, Cultivators, harrows, levellers, etc) - Seeds and fertilizers - Agrochemicals, - Loans, - Fixed Deposits, - Household grocery items
Reach of a Laser Leveller Taking the maximum possible scenario: •A Laser Leveller can work for 12 hours/ day for 90 days = 1080 hours •If it takes approx 3 hours/ acre, maximum possible is about 360 acres •If the laser leveller is repeated in the same farm/ 4 years, we are looking at an impact of 1080 acres per laser leveller •Assuming that 50% of households agree to get their lands levelled, a laser leveller can have a maximum impact zone of 2160 acres in its entire lifespan •An average sized village has land approximately of 250-500 acres, a laser leveller can ideally work maximum in 4-5 or maximum 10 villages in its entire life.
What does this mean for CSISA• Enormous task• Small team• Too few sCannot reach to all population even within the same district
Channels to Communicate Scientific Organisations Scientists Business Organisations Private Sector Entities Information sharing organisations Media Financing organisations Grant giving, loan giving Trustworthy Organisations Community Engagement