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Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

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Page 1: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Helping farmers move from subsistence to commercial

agriculture

March 18, 2013

1

Page 2: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Table of contents

I. Overview on role of marginal farmersII. Strategies to move from subsistence to commercial farming

A. Promoting mix farming1. BAIF2. Syngenta Foundation India3. BASIX KRISHI

B. Improving productivity1. TATA Kisan Sansar2. ITC eChoupal3. Bayer Rural Service Centres4. Syngenta Foundation India5. PRADAN

C. Linking farmers to markets1. Rallis More Pulses2. RUDI3. Syngenta Foundation India

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Page 3: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

I. Overview on role of marginal farmers

3

Page 4: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

In India, there are about 92 million marginal farmers with under one hectare, representing over 67% of all agricultural holdings

Number of operational holdings

Marginal Below 0.5 ha to

1.0 ha

Small1.0 ha – 2.0 ha

Semi-medium2.0 ha to 4.0 ha

Medium4.0 ha to 10.0 ha

Large10 ha and above

Farmer group

2000-01 2005-06 2010-11

0 10000 20000 30000 40000 - 20,000 40,000 60,000 80,000 100,000

67%

18%

10%

4%

1%

Percentage of operational holdings / area by farmer group in 2010-11

22%

22%

24%

21%

11%

Source: Agriculture Census, 2010-11

Area by operational holdings

4

Page 5: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

While the number of holdings by small, medium and large farmers has remained relatively constant, the number of holdings by marginal farmers has grown from 35 million to 90 million between 1970 and 2010.

1970-71 1976-77 1980-81 1985-86 1990-91 1995-96 2000-01 2005-06 2010-11 -

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

MarginalSmallSemi_MediumMediumLarge

Source: Agriculture Census 2010 -11, Department of Agriculture and Co-operation Ministry of Agriculture, Government of India

Number of operational holdings in India (in 000)

5

Page 6: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

About 97% of marginal farmers in India are concentrated in 16 states which represent 96% of land under cultivation by marginal farmers

6 - 5,000 10,000 15,000 20,000

Uttar Pradesh

Bihar

Andhra Pradesh

Maharashtra

Kerala

Tamil Nadu

West Bengal

Madhya Pradesh

Karnataka

Odisha

Rajasthan

Chhattisgarh

Jharkhand

Assam

Gujarat

Jammu & Kashmir

Source: Agriculture Census 2010 -11, Department of Agriculture and Co-operation Ministry of Agriculture, Government of India

Number of marginal farmers (‘000) Area (‘000 ha)

- 2,000 4,000 6,000 8,000

Page 7: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Marginal farmers, with under one hectare, normally rely on subsistence agriculture to feed their families, and lack access to inputs, technology, information and finance.

Lack of information

Lack of information on best time and place to sell their produce prevents farmers from effectively bargaining with traders for a better price

Improper application of

key inputs

The rising cost of fertilizer and agro-chemicals have made inputs difficult for small farmers to afford, leading to reduced application and substitution with cheaper inputs, reducing productivity and quality

Low application of modern technology

Very low adoption of irrigation schemes and cold-chain management systems

Low availability of capital and

credit

Inadequate credit for inputs and capital investments and high interests rates

Poor infrastructure

Limited collection, storage and processing facilities, underdeveloped rural road systems and lack of electricity

Small plot of land

Under one hectare

No other sources of

income

Non-farm activities non-existent or insufficient to rely on market purchases for adequate food intake

Source: Small Farmers in India: Challenges and Opportunities, S.Mahendra Dev. IGIDR, June 2012 7

Page 8: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Small and marginal farmers face many constraints in entering commercial agriculture in higher value commodities

Some marginal farmers may feel that their average landholding is too small to enable production of cash crops in addition to what farmers need to feed their families.

Poor access to capital, technology, inputs and information inhibits their participation in the production of high-value commodities

Most high value commodities are perishable, and therefore have greater production and market risks, which risk averse small farmers can be reluctant to bear

Their marketed surplus may be too small to be profitably traded in distant urban markets because of higher transport and other costs

Small and marginal farmers might be excluded from supply chains given their low volumes, the difficulty to comply with food safety standards and the high management costs associated to dealing with large number of small farmers

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Page 9: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

The majority of marginal farmers are women, from scheduled castes and tribes, with low levels of literacy and with dependence on moneylenders for financing

Role of women

In rural areas, about 83% of women are in agriculture vs. 67% of men. Despite their importance, women often are denied property rights and access to resources.

Social groups

The proportion of socially disadvantaged groups such as scheduled castes and scheduled tribes is higher among marginal and small farmers.

Education Literacy among male and female marginal farmers is 62.5% and 31.2%.

Credit and indebtedness

Small and marginal farmers rely on informal sources for 70 to 80% of their loans.

Source: Small Farmers in India: Challenges and Opportunities, S.Mahendra Dev. IGIDR, June 2012 9

Page 10: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Despite all the constraints, marginal and small holdings are as or more productive than larger farmers

Value of Output per Hectare (Rs. ‘000)

Note: All India includes small states Goa, Delhi, Pondicherry, North Eastern States & UTs. Source: Computed using NSS unit level data 59th Round on Situation Assessment Survey of Farmers 2003.

The contribution to output is higher for marginal and small farmers as compared to their share in area. The share of these farmers was 46.1% in land possessed but they contribute 51.2% to the total output of the country at all India level in 2002-03.

There are significant regional variations in productivity of marginal and small farmers. In ten states, marginal farmers contribute more than their portion of operational holdings. The contribution of small and marginal farmers to output ranges from 19% in Punjab to 86% in West Bengal.

Rajasthan

Orissa

Madhya Pradesh

Chhattisgarh

Karnataka

Gujarat

Himachal Pradesh

Maharashtra

Bihar

Jharkhand

Uttar Pradesh

Andhra Pradesh

Uttaranchal

Tamil Nadu

Haryana

Assam

West Bengal

Kerala

Jammu & Kashmir

Punjab

All India

0 5 10 15 20 25 30

Marginal Small Medium and large

10

Page 11: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Small farmers allocate a higher proportion of their land to high-value crops and make larger contribution to the production of high value crops, especially in vegetables

Percentage share of small and marginal farmers in production of selected commodities, 2003

Source: Chapter 2. Agricultural Diversification in India: Trends, Contributions to Growth, and Small Farmers’ Participation, Birthal, Joshi and Narayanan, 2011

Fruits, vegetables, and spices together occupy 5.7% of the total cropped area of small and marginal farmers, in contrast to 4.6% on medium farms and 3.0% on large farms.

Small and marginal farmers appear to have a comparative advantage in the production of some vegetables (rather than fruits) because vegetables require more labor and care, rather than capital. For small farmers, vegetables are more attractive because they have shorter gestation periods than orchard fruits, and generate more regular and rapid returns.

Veg-etables

Paddy Fruits Coarse Wheat Spices Pulses Milk0%

20%

40%

60%

80%

100%

70% 62% 55% 54% 52% 49% 32% 69%

Small and marginal Medium Large11

Page 12: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

II. Strategies to move from subsistence to commercial farmingA. Promoting mix farmingB. Improving productivityC. Linking farmers to markets

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Page 13: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Strategies to move from subsistence to commercial farming include promoting mixed farming models, improving productivity, linking farmers to markets and tailoring the solutions to specific geographies

Focus on mixed farming models for marginal farmers—rice, hybrid maize, fruits and vegetables, and/or livestock in all project areas—with package of practice and attention maintained on each.

Work with lead farmers, not NGOs, as the vehicles for providing technical services. Back demo plots and provide results oriented payments for increased productivity and sales of other farmers. Mobilize and deploy progressive farmers, agro-input dealers and agro-entrepreneurs—not NGOs—as the vehicles for disseminating good input use and modern farming practices. Focus all efforts on progressive marginal and small farmers, with one to two hectares—those who are likely to move on innovations and influence practice of others.

Promoting mixed

farming

Improving productivity

Linking farmers to markets

Mobilize agro-entrepreneurs to build producer groups and market linkages, in addition to lead farmers.

Adopt a mix of difficult and promising, remote and non-remote areas—and monitor results in each. Pick areas in which farmers have access to water or can get it, to get a second crop, emphasizing partnerships with specialized NGOs or companies which can address water harvesting, storage and irrigation.

Tailoring solutions to

specific geographies

Page 14: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

A. Promoting mix farming1. BAIF2. Syngenta Foundation India3. BASIX KRISHI

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Page 15: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

BAIF is an NGO that supports sustainable livelihood approaches with poor farmers through programs focusing on water management, livestock and agri-horti-forestry as major income generating activities.

Program Gestation period Services provided Benefits Beneficiaries

Dairy develop-ment program

Three to four years, until the newly born calf comes into milk production

Breeding services to cows and buffaloes at the door steps of the farmers, using frozen semen of superior sires. Motivation, awareness about the benefits, regular follow up, technical guidance, timely health care, supply of critical inputs

A crossbred cow is able to contribute a net income of Rs.5000 per year

500,000 families

In land based develop-ment programs

Two to six years, depending on the type of farming systems practiced by the farmers

Community pasture and water resource development: dig trench cum mould for establishing live hedges, contour bunding, gully plugging, sowing of seeds of forage of legumes and grass species to enrich the quality of forage

The investment of Rs.10,000 per ha generates output worth Rs.6000-7000 per yearCropping intensity increased by 31-63% and crop yields by 40-80%

110,000 families

Arable crop production

Short, due to short rotation cropsFruit and tree crops take 5-6 years to generate income

Promotion of agri-horti-forestry through tree planting model. Drought tolerant fruit crops such as mango, cashew, tamarind, custard apple, on marginal or wastelands covering 0.4 to 1.0 ha. The interspace is used for cultivating arable crops.

Enhance crop yields by 50 to 100%. A family with 0.4 ha land is able to earn a net income of Rs.20,000 per year after 5-6 years

180,000 families

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Page 16: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

BAIF’s dairy development program generates Rs.6,700 per cow per year. The program is currently benefitting 500,000 Indian families

Parameters Local Cow Crossbred Cow  Quantity Amount Quantity Amount

Income: Average milk production of 305 days (l) 200 1,600 2,200 17,600

Dung, farmyard manure (t/year) 3 1,800 5 3,000Total Income (Rs.)   3,400   20,600Expenses:        Feed : Concentrate (Rs. 5/k) 250 1,250 1,100 5,500Dry Fodder (Rs.1.5/kg) 2100 3,150 2,000 3000Green Fodder (Rs.0.8/Kg) 400 320 1,000 800Vaccinations and Veterinary care   10   300Total Expenses (Rs.)   4,730   9,600Net Income (Rs.) (Excluding Labour Costs)   -1,330   11,000National Labour Cost       2,500Breeding and other services       300Cost of growing stock       1,500Net Profit (Rs.)       6,700

Annual cost benefit details of crossbred cows

Gestation period Services provided

Three to four years, until the newly born calf comes into milk production

Breeding services to cows and buffaloes at the door steps of the farmers, using frozen semen of superior sires. Motivation, awareness about the benefits, regular follow up, technical guidance, timely health care, supply of critical inputs

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Page 17: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Implementation of BAIF’s Goat Development Program allows goat keepers to earn between Rs.1,000 to 1,500 per head per annum

• Low capital investment

• Low cost of maintenance

• Short gestation period

• Growing demand for milk and meat

• Important traditional occupation for economically weaker sections of the society

• Goat population is the highest rate compared to any ruminant livestock species increased to 126M in 2008 from 47M in 1952

• Maintained predominantly under extensive range management on community range land

17

BAIF Goat Development Program is being implemented in 13 states, covering nearly 75% of the goat breeds in the country.

• Breed improvement through supply of bucks

• Nutritional improvement through supply of mineral mixture

• Preventive vaccination and deworming

• Increased social awareness

• Guidance for marketing of live animals

Services provided Advantages

• Organization of a group of 7 to 10 women owning 40 to 50 female goats who are encouraged to meet regularly for procurement of inputs, micro-credit, adoption of technologies and collective marketing to improve their income.

• Field officer supports 8 to 10 groups, through mentoring and dissemination of technologies and services.

Strategy

Page 18: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Particulars DetailsPlot size 0.05 haPlant Life 12 YearsPlants in 500 sq meters 200Income commences 6 months after plantationHarvesting interval DailyProduction costs—planting material, fertilizer, secator

Rs.3,500

Marketing costs—packaging, transport

Rs.500

Total costs Rs.4,000Average production per day 700 gramsAverage production per year 189 KgAvg gross income received in one year at Rs.160 / kg

Rs.30,240

Annual net income per farmer Rs.25,240

BAIF’s end to end program for jasmine cultivation generates net revenues of about Rs.25,000 for farmers with plot sizes of 0.05 ha

5,000 producers Maharashtra organized in groups for collective marketing

• Limited seed capital required• Faster income generation compared

to tree based farming• Ease of management, especially in

case of small farmers• Perennial income opportunity• Value added crop

Flower producer

Village level

collection center

Central level

collection center

Mumbai Dadar

wholesale Florist

Customer

Annual cost benefit analysis jasmine model Advantages

• Farmers not willing to work in farms for Rabi season instead of working in nearby town in construction work as laborers earning Rs.300 per day

• Tribals are not worried to form any assets, they grow what they need for consumption

Major issues

18

Page 19: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

SFI promotion of mixed farming models for marginal farmers can yield net returns of US$800 to US$2,450 for a one hectare farm

Paddy, wheat, hybrid maize, legumes, oilseeds—each yield average net incomes of Rs.11,000 to Rs.15,500 per acre vs. Rs. 60,000 in vegetables and Rs. 25,000 for four goats.

Some conclusions from the stylized mixed farming model prepared by SFI team members for one hectare marginal farmers:

Mixed farming models in four project areas yield minimum net returns of Rs.40,000 to Rs.54,000 (about US$800 to US$1,000), or US$160 per person pa just above poverty line.

Models in four project areas, mixed farming models provide maximum net earnings of Rs.83,000 to Rs.144,000, 2 to 3 times minimum levels, creating US$2,450 pa on average for a one hectare farm—an attractive family income.

In Odisha and West Bengal, vegetables, goats and paddy represent over 80% of min and max net incomes. In Madhya Pradesh, vegetables, paddy, and hybrid corn represent over 90%. In Maharashtra, vegetables dominate earnings followed by paddy and maize.

Vegetables, with two crops on .2 to .3 acres, are the major net earners, 53% in Odisha, 60% in West Bengal, 46% in MP, and 81% in Maharashtra in the maximum scenarios.

Mixed farming models yielded net returns of

US$800 to US$2,450 for a

one hectare farm

A mix of vegetables, grain

and livestock yields the

highest incomes, with vegetables

the major net earners

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Page 20: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Vegetables and goats produce nearly 90% of net earnings in the mixed farming model for Odisha

Project: Kalahandi, Odisha. NGO: KarrtabyaFamily size: Five members – Land holding: 2.5 acre productive land

Agricultural income sources

Area in acres / heads of livestock

Maximum net return

Minimum net return

Mean net return

Paddy 1.5 25,500 6,000 15,750

Vegetables (Kharif) 0.2

79,000 26,500 52,750Vegetables (Late Kharif) 0.3

Goat rearing 4 goats 26,000 13,000 19,500

Subtotal top three net earners 2 130,500 45,500 88,000

Other income sources 1.05 14,000 6,500 10,250

TOTAL 3.05 acres  Rs.144,500 Rs.52,000 Rs.98,250

Top three earners as percentage of total

90% 88% 90%

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Page 21: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Livelihood Triad Strategy

BASIX KRISHI’s business model is aimed at providing agricultural extension and business development services to small and marginal farmers

KRISHI was created in 2010 to develop agricultural and business development services (Ag/BDS beyond the financial inclusion services provided by Basix Financial Services Ltd. BASIX KRISHI provides comprehensive set of livelihood promotion services through their Livelihood Triad Strategy

Action Research Ag/BDS Scaling up of

Ag/BDSLaunch of

KRISHIAction Research through sub-sector study and pilot projects in A.P and Karnataka

2001-2003

Pilot Projects continued rigorously. 39 new pilots launched in 8 states

Ag/BDS created as a Strategic Business Unit (SBU) within BASIX

Creation of Basix Krishi Samruddhi Ltd. (BKSL) as an independent entity in April 2010

2004-2005 2006-2009 2010 onwards

Productivity Enhancement

Increase in yields or

reduction in costs

Risk Management

Local Value Addtion Diversification

Delivering timely

preventive care

Farm gate value addition

for better remuneration

Diversifying activities from farm to allied and non-farm

Input Supply, Output Sales

Source: FIELD VISIT, INTERVIEW WITH Mr. Arijit Dutta and BASIX KRISHI SAMRUDDHI LIMITED OVERVIEW PRESENTATION

Alternate Market

Linkages

BASIX KRISHI services

Institutional development

services

Financial inclusion services

1 2 3

21

Page 22: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

About 30% of KRISHI’s farmers are landless and 40% have less than one hectare. Subsistence farmers are paying fee to receive BASIX KRISHI’s services

2004-05

2010-11

2011-12

22,000

690,000

160,000

Total number of farmers who have received BASIX

services and financing

15,000

600,000

105,000

Farmers for whom BASIX provided or organized input

supply

2004-05 2010-11 2011-12

0.3

126

42

148

41

BASIX expenditures on non-financial services to farmers (Million Rs.)

Fees collected by BASIX from farmers for non-financial services (Million Rs.)

Fees paid by farmers to receive BASIX non-financial services make BASIX Krishi a profitable business

Cotton

Groundnut

Dairy

Soybean

Key commodities for focus

Source: Arijit Dutta, CEO BASIX KRISHI, March 2013

Nancy, can you explain here exactly why decrease in numbers for BASIX

Vegetables

Pulses

Rice

22

Page 23: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Farmers pay a fee to receive BASIX KRISHI services. Backyard poultry and dairy are the products with the highest demand among farmers as results are easily visible by farmers

Product ProductType

Total Fee (Rs)

Input Product

Price(Rs)

Input Products ServicesCustomers

Served (Current)

Poultry, Duckery

Single 750 250 10 chicks, medicines, food Poultry management training,

training on low cost housing, feed preparation, vaccination, market linkages

14,000Double 1300 500 20 chicks, Medicines, Food

Commercial 3000 1200 50 chicks, Medicines, Food

Dairy Single 800 250 Vaccination, Calcium, De-worming (1 cow)

Preventive vaccination, health camps, feed management, better practices, market linkages

13,499

Farm Manage-

ment Services

Single 800 250 16 Plants , Bio-Pesticides Soil testing; training on nutrient management, pest management, crop management, vermi-compost, market linkages

8,700Double 1500 500 30 Plants, Bio-Pesticides

Commercial 3000 1200 100 Plants, Bio-Pesticides

Sheep and Goat Service 750 250 Vaccination, Medicines

Regular health check-up, vaccination, de-worming, training for good practices

300

MushroomM30 1200 500 30 mushroom sponge,

Polythene Training in new technology for mushroom cultivation, regular visit to check progress

N/A (new)M60 2400 1200 60 mushroom sponge,

Polythene

Fishery 750 250 3 medicines, fish-feed Training in fish management N/A

Source: FIELD VISIT, INTERVIEW WITH Mr. Arijit Dutta and BASIX KRISHI SAMRUDDHI LIMITED OVERVIEW PRESENTATION

Page 24: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Basix Krishi faces some challenges

Key challenges

Exact practices not replicable

Timely supply of inputs

Farmers have different needs in different areas. Existing products have to be re-designed

Timely supply of inputs e.g. chicks, niche inputs, since this is dependent on other company

Source: FIELD VISIT, INTERVIEW WITH Mr. Arijit Dutta and BASIX KRISHI SAMRUDDHI LIMITED OVERVIEW PRESENTATION

Timely availability of

creditTimely availability of credit through banking collaboration is a challenge

Lack of marketing

The biggest issue faced by Krishi is marketing of its products and services

Free government schemes

Free government schemes in these areas makes it difficult to sell products and services for money

Recruiting technical people

Lot of effort and resources have to be spent on training but retention is difficult

Difficult to establish quick

improvements in productivity

Farmers generally look for quick and visible results in the short run which is not always possible

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Page 25: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

B. Improving productivity1. TATA Kisan Sansar2. ITC eChoupal3. Bayer Rural Service Centres4. Syngenta Foundation India5. PRADAN

25

Page 26: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Tata Chemicals Limited empowers farmers through their Tata Kisan Sansars

Partnership with Farmers

Increased Profitability and

Relationship AssetsRevenue Growth

Agri SolutionsProducts/ Services

Relationship with Eco system

partners

Brand ImageApproaches

Customer

Business

Tata Kisan Sansars: Customer Centric Business Model

• 10,000 plus Tata Kisan Parivar Members• 8 States in North and East India• 60+ Resource Centres• 4 Soil Testing Laboratories

TKS Presence:26

Page 27: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

The TKS Impact: Franchisee owners report 100% increase in incomes, farmers report 15-35% improvements in yields

CropAdditional Benefit to Farmer due to use

of CF (Rs/acre)

Marginal Benefit-Cost Ratio

Rice 9000 7.5

Wheat 3600 2.0

Potato 21000 >10

Sugarcane 5260 - 9300 3.6 – 3.7

Financial Benefit to Farmer

27

Page 28: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Tata Chemicals plans to focus the next 100 TKS franchises on supporting marginal farmers with technical inputs and selective buy-back

TATA wants to expand by 100 TKS over next 5 years, targeting subsistence farmers.

TATA will do experimental work at the beginning providing inputs and demo plots to understand what models work best to reach subsistence farmers.

TATA may do buyback on selective products. No standard approach at a beginning to test and build protocols than respond to different areas.

TKS strategy to reach marginal farmers

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Page 29: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

2,010

2,100870

1,171

Other350

eChoupals: 6,500Villages: 40,000Farmers: 4MPartners: 100+

E-Choupal Key Benefits to Farmers• Increase market price

transparency• Provide weather information• Share crop best practices • Channel to access other

goods / services

ITC has built a widespread rural distribution network to source its raw materials and channel its goods through its e-Choupal network

ITC’s business model has a farmer support system around the e-Choupal network. ITC e-Choupal has built an expansive reach in rural India , reaching 4

million farmers through the contest provided eChoupal website

E-Choupal Hub

(Processing &

Warehouse)

E-Choupal

Kiosk (info)

E-Choupal

Kiosk (info)

E-Choupal

Kiosk (info)

E-Choupal

Kiosk (info) Financing

(Kisan Credit card)

Retail Channels (grocery store, FMCG

sales)

Contract Farming (potatoes)

Haats

Extension Services(Partner-

ships) E-Choupal

Kiosk (info)

Tech-nico

(Potato Seeds)

29

Page 30: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

ITC eChoupal provides direct and indirect extension services to about 225,000 small, medium and large wheat and soybean farmers

Extension services provided

• Choupal Pradarshan Khet (CPK): field level demonstration program to transfer new inputs and production technologies.

• Pre season meetings to brief farmers about current season program.

• On farm field visits during crop season.• Farmer field days at the end of the season to demonstrate

results. • Website throughout the season to communicate weekly

activities to be carried out on the farm.

Source: Venkata Krishna Velugubanti, Head-Agri Services, ITC Limited. March 2013

Direct contact with 22,000 farmers—those who either participated in demonstration program, training or field days.

Farmers reached through farm

extension interventions Indirect contact 200,000 farmers—those exposed to

demonstrations plots through direct farmers

30

Page 31: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Some key lessons in building effective and cost effective services for small farmers

Lessons learned in building effective services that result in substantial

increases in productivity for farmers

Lessons learned on cost-effective solutions to make eChoupal model

profitable

Multi tiered system by leveraging ICT, Haats, farmer training, field level demonstrations results in higher scale at a lower cost.

ICT and Haats can be used to disseminate simple information like weather, availability of inputs, simple practices etc., while farmer trainings are better for method and skill based activities demonstrations.

Field level demonstrations to demonstrate the result of one or more than one intervention resulting in yield increase or reduction in cost or both.

Channel rural communities as both suppliers and consumers, increasing their income raises purchasing power

Following eco system approach by involving multiple partners like research institutes and input suppliers is key to the success of extension efforts.

Conducting Choupal Pradarshan Khets and handholding throughout the crop cycle results in better adoption and improvements in yield.

High potential seeds as an intervention results in higher levels of adoption and yield improvement.

The longer the period a company works with farmer, the higher the level of adoption

Inputs suggested as a part of interventions should be made available to farmers to result in higher adoption level.

Source: Venkata Krishna Velugubanti Head-Agri Services, ITC Limited. March 201331

Page 32: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Bayer Rural Service Centres (BRSCs) use the post office distribution system to reach small and marginal farmers

MCXMarket price

Information

BayerSeed to Harvest

SolutionsOther partners

Farmers

Bayer Rural Service Centres (BRSCs) are a collaboration among Bayer, the Multi Commodities Exchange of India (MCX) and the India Post network to provide easy access to inputs, services and advice to farmers in remote villages.

BRSC housed in Village Post office

• Post office premises act as a hub for disseminating products, services and advise

• Currently in 91 branch post offices, reaching 262 villages in the districts of Koppal, Gadag and Bagalkot (Karnataka)

• Potential: Post office has 155,000 branches, which is twice as large as the outreach of all commercial banks in India put together

• Sales of Bayer products expected to increase by 30% in FY2012-13

• Bayer employee• Link between the

various stakeholders assisted by the India Post officials

BRSC coordinator

Post office official

• Receives a commission for sales to farmers

• Trust agent in community

Managed by:

• Farmers reached FY2012: 10,000

• Farmer pays a Rs.30 fee to become a member 32

Page 33: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Main products and services offered by Bayer

• Commodity price information• Soil testing• Agri-inputs, micro nutrients• Post harvest and quality assessment

trainings with National Bulk Handling Corporation

• Weather insurance service• Field visits and demonstrations• Awareness generation on Bayer animal

health products• Non agricultural products: LED torches,

solar battery, smokeless stoves

Main products and services offered

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Page 34: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Working with 200 lead farmers, SFI will back demos, provide results-oriented payments for productivity, marketing improvements of participating farmers

Lead farmer

Farmer

SFI

Year 2Year 1

Rs. 50,000

Demos and training Lead farmer

Farmer

SFI

• Create model mixed farming by backing lead farmers in 200 villages

• Lead farmers make their farms available to all farmers in the village, and provide training and demonstrations every two weeks involving about 30 progressive farmers, with SFI staff participating monthly

• Financing of Rs. 40,000 to set up demo farm at plot of lead farmer

• Farmer to lead farmer ratio = 30:1

• Lead farmers who have performed well could be paid as extension officers Rs. 5,000 (US$100) a month in the eight active months of the year, adding Rs. 40,000 (US$800) to their income.

• About half of this amount can be calibrated to actual productivity and income increases by participating farmers, creating the incentive for lead farmers to pick the most progressive farmers and to devote the time to providing assistance

Rs. 5,000

a month

Farmer to lead farmer ratio: 30:1

Farmer to lead farmer ratio: 60:1

Extension services, Demos and training

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To support the extension model, SFI staff would need to:

• Train lead farmers as a group, in each state

• Support the lead farmer in achieving maximum results from the full mixed farming model

• Provide lead farmers with training materials and videos

• Participate in training of farmers once a month.

• One SFI officer would be required for every 40 villages covered, with SFI officer expected to visit ten villages each week or about two per day.

• SFI needs to monitor training, demos and results very carefully, to learn lessons and reflect these in the POPs for the following year, and in SFI’s positioning as the experts in POPs for mixed farming models for marginal farmers.

 

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The lead farmer model can be adapted to different areas, with systematic experimentation and lessons learned

SFI can experiment in a highly systematic way with modifications on the basic lead farmer market led extension model and the agro-entrepreneur model, capturing impact and lessons from each modified approach.

• One vs. two lead farmers in the village in year one, going with the one that has been most successful in impacting the productivity and earnings of 30 farmers in year one.

• SFI staff working solo to identify lead farmers in project areas in which SFI has experience, training the lead farmers in the area, and paying monthly visit to each lead farmer group of 30 vs. using specialized NGOs to provide all or part of these services to lead farmers on behalf of SFI.

• Different incentive structures provided to lead farmers, always linked to results of farmers he selects for his group of 30. Incentives can include SFI paying for the demo plot in year 1 vs. making direct payments to the lead farmer for inputs vs. outcomes in year 1 and 2.

• Having the lead farmer focus only on POP advice, adding the responsibility of having the lead farmer organize procurement of improved inputs on behalf of the farmers, adding the function of organizing production and marketing produce in local markets on behalf of the 30 participating farmers.

With the lead farmer model, SFI can experiment with:

Lead farmer model

ExtensionDemosTraining

Payment

Farmer

Lead farmer

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Page 37: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

In determining which of the specialized NGOs to work with, it is important for SFI to understand the focus and geographical footprint of each NGO

37

NGOStates in which activities

concentratedTypes of geographies and farmers of focus

Gender focus Commodity focus

Pradan Jharkhard, Orissa, Madhya Pradesh, Rajasthan, Bihar, West Bengal, ChharttisgarhAssam

Exclusive focus on remote areas and on very poor communities, mainly tribal and scheduled castes

Exclusively female SHG members

Combination of staple and cash crops e.g. vegetables, pulses, paddy.

BAIFPunjab, HP, Uttarakhand, UP, AP, Jharkhard, Orissa, MP, Rajasthan, Bihar, West Bengal, Maharashtra, Chharttisgarh, Assam, Karnataka, Gujarat, Haryana, Tripura

Low income rural communities

Male and female Fruits and vegetables, dairy animals and meat livestock,

Basix Krishi

Karnataka, Andhra Pradesh, Maharashtra

Focus on networks of farms and/or firms that supply raw materials, transform them, and distribute finished goods

Male and female

Dairy animal and livestock, poultry, staple crops, paddy, seed production, vermi-compost, organic farming

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The average land holdings of PRADAN’s farmers is less than 2 acres (0.8 ha).The initial intervention of PRADAN with subsistence farmers is on agriculture, with a focus on stabilization of the main food crop. In most locations, the food crops cultivated are paddy, wheat, maize and minor millets. The main intervention in food crops is around paddy cultivation. As families become food secure, PRADAN helps them diversify into cash crops. Usually, most families take up vegetable cultivation on the homestead in addition to food crops and some pulses as field crops.Since 2011, PRADAN has been encouraging the community to pay for its on‐field expertise

Food Crop Stabilization Interventions

Interventions SHGs Involved in 2011‐12

FamiliesCovered in

2011–12Paddy crop    

Improved practices 7,190 54,435System for rice intensification (SRI)

5,821 33,195

Wheat (improved practice) 2,650 16,530Maize (as food crop) 3,205 25,960Millets (improved practice) 685 6,952Net food crops 9,257 76,503

PRADAN, NGO committed to grassroots empowerment and promoting producer organizations in rural areas worked with about 140,000 marginal farmers in FY2012 helping them improve their agricultural practices

 

Crop Diversification Interventions in 2011‐12

InterventionsSHGs

Involved in 2011‐12

FamiliesCovered in

2011–12Pulses 3,478 27,041Oilseeds 2,135 17,173Vegetables    

Kharif (Monsoon) 7,464 53,967Rabi (Winter) 5,441 41,054Summer 2,304 15,252

Other crops 1,216 7,546

Services:• Support farmers plan household livelihood• Provision of inputs and technologies for vegetable production, which included new seed

varieties, package of practices, scientific nurseries, constructing low cost net houses to control diseases

• Marketing services. The fruits and vegetables were marketed through an informal farmer collective, in which selected youth entrepreneurs in the village aggregated all the produce at the village level and sold them in the cities nearby

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PRADAN also supports subsistence famers with land, water resources and livestock improvement programs

PRADAN also helps farmers access funds under MGNREGA.In terms of actual activities, there werethree major strands:

• Plantation (fruit trees, different types of host plants—tasar, lac, mulberry, etc.—and trees for timber)

• Land treatment to improve soil moisture regime and rejuvenation of soil

• Systems for water storage and irrigation

Plantation Families(% of ST SC group)

Fruit trees: Mango 9,012 (85%)

Other fruit trees 1,604 (85%)

Other plantations 3,317 (92%)

Land treatment(different locallysuited models)

10,177 (81%)

Irrigation 10,159 (80%)

Net covered without overlaps

25,200 (85%)

Improvement of land and water resources

Livestock

Focus on training the community in improved rearing practices. Key areas of intervention are:

• Reducing the inter‐calving period of the animal• Increasing milk yield• Reducing calf mortality• Enhancing animal health service support (both

preventive and curative) through the para‐vet system• Enhancing choices for milk marketing• Access to credit to create animal assets

Activity Families

Dairy 4,579

Goat rearing 4,015

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Based upon this experience over the past few years, Pradan has made major changes in its strategy for agriculture and rural development

Pradan’s successful experience with this model indicates that, depending upon the geographical areas, one to two service provider can serve 200 farm families, or about six SHGs, earning a viable livelihood from fees for technical and marketing services to these farm families. Some of these agro-service providers also help SHGs with bank linkages.

Pradan remains committed to the use of self help groups (SHGs) comprised of 15 to 20 women farmers as the base of all its operations

To provide technical and marketing services to these agriculturally focused SHGs, Pradan now identifies strong potential agro-service providers from within the rural community, trains them, establishes protocols for service payments by women in the self help groups, with these agro-service providers e.g. 50 paise per kg of vegetables marketed to local mandis and to agents.

1

2

3

4040

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C. Linking farmers to markets1. Rallis More Pulses2. RUDI3. Syngenta Foundation India

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Rallis’ More Pulses campaign aims to increase India’s pulses production and productivity

Rallis has developed an end-to-end support network for pulses farmers

To meet growing protein demand, India will need to double pulses yields

Grow More

Pulses

Package of Practices

Access to Financing

Harvest & Storage

Farmer Knowledge Exchange

Crop RotationQuality Seeds

Crop Advisory

Transparent Pricing for

Procurement

Market and Distribute under Tata’s i-Shakti

brand

Pulses (MT)

GAP

Rallis is currently piloting MoPu in three states (2011-12)

Maharashtra: 744 MT

Karnataka: 465 MT Tamil Nadu:

211 MT

Total Amount of Pulses Procured = 1420 MT

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MoPu’s pilots cover 20,000 farmers and aim to expand to 200,000 farmers in five years

MoPu spans over 500 villages and 20,000 farmers

Rallis’ package of practices leads to higher yields and better quality crops

# Villages by State

MoPu cuts out the middlemen and provides more value to the farmer

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# Farmers by State Details Mandi Rallis

Rate (Rs. 40 for 100 kg) 4000 4000

Unloading Charges – Rs.10/ 50 Kg Bag -20

Weighing Charges - 1 Kg/ Qtl -40

Commission - 2% - 4% -80

Net Rate 3860 4000

Kg / Acre

Page 44: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

Four key drivers position the company for future growth and profitability

Key Drivers Implications

Yield Increase

• Target yield increase from 20-30% to 50% in the 2012 to 2013 production season

• Provide greater supply for i-Shakti dal products• Increase visits of crop advisors, package of practices

Access to Inputs

Processing Centers

Geographic Expansion

• Aggregate and organize farmers into groups to get inputs at better price and share of machinery

• Establish tie-ups with banks to provide farmers with working capital loans to purchase inputs

• Establish more processing centers in areas with high concentration of farmers

• Increase support provided to farmers to transport, quality check, and price pulses

• Aim to connect with 7.5 million farmers by providing 2.5 million with TCL inputs, consult 1 million farmers, and procure from 200,000 farmers in the next 5 years

• Develop micronutrients tailored to region and soil quality44

Page 45: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

RUDI. Creating short value chains

Direct market access for more than15,000 small and

marginal farmers

Employment opportunities for over 5000 rural women

Providing quality, affordable products with an annual turnover of nearly

Rs. 70 million

Consumption

Rural and Urban

Consumers

Sale

RUDI bens, retail

shops, institutional customers,.

Processing

RUDI Processing

Centres

Purchase

RUDI purchasers and District

Associations

Production

Farmers

Distribution

Urban and Rural

Distribution Hubs 45

Page 46: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

RUDI helps small and marginal farmers by providing them end-to-end support at all stages of the value chain

2008 2009 2010 2011 2012

10

20

30

40

50

2008

2009

2010

2011

2012

0 10 20 30 40 50 60 70 80

FarmersRUDI bens

Reduced transaction costs with a ready market for sale of products

Access to updated information regarding daily crop prices and latest technologies

Provision of farmer education and training at all stages of the crop, creating awareness about Govt. benefits

Access to high quality inputs and finance at affordable rates

Production

Sale

RUDI’s reaching out to more than 15,000 small farmers and 5,000 rural women

Annual turnover

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Page 47: Helping farmers move from subsistence to commercial agriculture March 18, 2013 1

SFI has launched a successful project to promote hybrid tomato seeds with marginal farmers for sale to Syngenta

In the past three years, SFI has supported local farmers in West Bengal to build seed-ling nurseries with low cost poly-houses to grow hybrid tomato seeds sold to Syngenta.

Participating farmers gain net earnings of Rs.80,000 (US$1,600) pa for each tomato seedproduction unit, based upon successful trials of seed quality with Syngenta Company.

In 2011-2012, Syngenta approved quality of the tomato seeds for Syngenta seed purchases from two units, which encouraged five more farmers to join the program. Currently the program has grown to 11 units producing 85 kg of tomato seeds, with 20 units proposed.

Number of units grown

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