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Fostering steady growth of an FPO through a 3-Fold model of Technical, Financial and Market linkage

Fostering steady growth of an FPO through a 3-Fold model of Technical, Financial and Market linkage

Pallavi GL, Gayatri Lal, Balakrishnan S, Parthsarathy T

Sep 21, 2021

https://www.smallfarmincomes.in/post/fostering-steady-growth-of-an-fpo-through-a-3-fold-model-of-technical-financial-and-market-linkage

Vrutti’s innovative Business Acceleration Unit (BAU) has played a crucial role in providing Chitravathi FPC with ecosystem-enabling services such as backward linkages, account maintenance and financial linkages. These parameters have helped increase farmers’ incomes almost threefold and provide important insights into the kind of support necessary to sustain FPOs. 

Turning a constraint into an opportunity 

Chikkaballapura district in Karnataka, around 60 kms from Bengaluru, is a drought-prone area with an average and erratic annual rainfall of 677 mm. Groundnut and maize are two important crops grown on these drylands. Fruits and vegetables have huge potential to improve the lives of the farmers in this cluster if any institutional mechanism could ensure better price realisation of the produce for small and marginal farmers. Farmers, though, have limited access to alternative channels to sell their produce, especially when the local market prices are low. The perishable nature of horticultural produce presents an additional challenge, especially without cold-storage facilities. To overcome this problem, farmers were collectivised and mobilised under Chitravathi Farmers’ Producer Company Limited (CFPCL), registered in 2016 at Thimmampalli village, Chikkaballapura district, Karnataka, with the funding support of NABARD and Vrutti Livelihood Impact Partners as the promoting institution. CFPCL has a geographical spread of 44 villages, 9 panchayats and 68 Joint Liability Groups (JLGs), covering 1503 farmers with a share capital of Rs. 11.2 lakhs. The primary goal of CFPCL is to reduce the role of intermediaries in agricultural produce marketing while lowering the risk and cost of cultivation for farmers.

Creating trust through transparent governance 

Focussed Group Discussion with primary stakeholder of CFPCL (from right) – Jagadeep (Assistant BAU Head, Vrutti), Shashikala (Activator, Vrutti), Nagaraj (CEO, CFPCL), Manjunath (member, CFPCL), Narayan Samy (Director, CFPCL), Parthasarathy (Skill Green), Anjana Reddy (member CFPCL), Balakrishnan (CEO, Vrutti)

The FPC is mainly involved in promotion of Good Agricultural Practices (GAP), technical training, capacity building, financial services (facilitating Kisan Credit Cards, enterprise loans), promotion of Agri Allied Enterprises, supply of agricultural inputs and output business – vegetable, Maize marketing (forward and backward integration) and farm gate procurement. The services provided to members by the FPC are part of the 3-Fold model, which is about building wealthy, resilient and responsible farmers.

Inputs are directly procured from input dealers and sold at relatively low prices to the farmer members, thus reducing the transaction cost for them. A significant increase in the revenue (98.2%) of FPC was reported during 2019–20 (from Rs 40,000 to Rs 23 lakhs). The spike in business revenue can be attributed to its access to three retail outlets and CFPCL’s partnership with major players like Big Basket, Way Cool, Big Bazaar, etc., which has also provided opportunities for expanding its business activities. Transparency in the governance of the FPC has built the trust of farmers in the long run. For instance, during board meetings, financial statements—receipts and payments, receivables and payables, profit and loss statements for the period—are discussed along with key updates to the FPO. Besides, the team and BOD are part of a WhatsApp group for regular updates, such as daily sales in each outlet.

Nagaraj (CEO, CFPCL) conducting a monthly board meeting of CFPCL. Ventateshawamy, seated left, is chairman of FPO. BAU staff are seated in an outer circle.

Developing market linkage for perishables

Fresh horticultural produce is highly perishable, with some estimates suggesting a post-harvest loss of 30 to 50% in fruits and vegetables. The loss occurs due to poor pre-production and post-harvest management, as well as a lack of appropriate processing, storage and marketing facilities. But CFPCL has its own strategy for dealing with vegetables throughout the year without any cold storage facilities. CFPCL has made associations with seven corporate companies for its output business, and farmers receive a higher price than the market rate for the quality produce. BAU is established by Vrutti at the district/cluster level to develop a strong ecosystem in the agricultural sector so that farming enterprises in these clusters become sustainable. Mr. Nagaraju, CEO of the FPC, is of the opinion that the producer’s share in consumer rupee has marginally increased through direct marketing and the FPC enjoys better bargaining power. More importantly, the FPC’s intervention saves the farmer time in travelling to the market, as the produce is procured by the FPC at the farmgate and payment is ensured on time.

Activators as rural entrepreneurs key for servicing orders from corporates

Quantity, timely delivery and quality produce are the needs of corporations. To comply with these needs, CFPCL facilitated the training of ‘Activators’. Activators are field level staff who coordinate the activities of FPC with BAU for smooth conduct of the operations. The demand aggregation of produce is done by the activators, and one activator takes responsibility for five villages. Activators are actively engaged with farmers and provide guidance on crops to be grown, better farming practices, market information and other farming-related information at the village level. These activators predict the yield of any crop before 3 days of the harvest and communicate it to the buyers through FPC. The harvested produce is then supplied to the buyers. The price for the product is fixed based on open market prices in every indent (always higher than the market price).

Harish (member, CFPCL), with his sweet potato crop, for which CFPCL has entered into a contract farming agreement with Heinz Futures for supply of Orange Flesh Sweet potato throughout the year for processing

Communicating quality parameters to farmers 

Maintaining a farmers’ database has helped in the better communication of quality parameters of the produce, market-related issues and extending timely service to the farmers. Regular field visits by the FPC staff are required for monitoring standing crops/produce, and there should be a minimum of 80% match with the quality parameters as prescribed by the buyers. Mr. Jagadeep, personnel from Vrutti mentioned that the proportion of farmers participating in output business is around 30%. Out of the total produce procured, prescribed-quality produce is sent to the buyers, and the remaining produce is sold in the local market. Payment is made to farmers regularly and farmers expect higher prices from the company for their produce as they are providing high-quality produce.

Figure 4: Ramadevi (Agri Business Advisor), Shashikala (earlier ABA, now Activator), at the CFPCL outlet which supplies inputs in a cluster of 16 surrounding villages 

Leveraging greater institutional support

FPC has received good institutional support from Vrutti, NABARD, APEDA, ICAR-IIHR, and KVK. IIHR and KVK Chintamani provided training support to the FPC. Vrutti has supported desilting activities in the villages through its CSR fund. NABARD provided a Business Development Assistance (BDA) fund of Rs. 5 lakhs and training related to market and financial linkages. APEDA and Karnataka State Agricultural Produce Processing and Export Corporation Limited (KAPPEC) extended support for the export of the Rose onion variety, which has a Geographical Indication (GI) tag from the Chikkaballapura district. CFPCL is aiming to supply more than 1,000 to 1,500 tons of rose onions every year, starting with this season.

Future line of business
Procurement and marketing of produce with reduced transaction costs are the major achievements of the FPC as perceived by the farmers, says Mr. Venkateshappa, Chairman of the FPC. Chitravathi has performed well in marketing their produce, contract farming, and adding value to a few commodities. Two acres of land are being purchased by the FPC to expand its business activities, including the establishment of a sheep/goat value chain. The value addition of tomato, tamarind processing, and sauce preparation is perceived as creating employment opportunities and a future line of business for the growth and development of the FPC. Chitravathi is confident about sustaining its business even if Vrutti’s support is withdrawn and it grows organically over the years with the greater contribution of various stakeholders involved in the growth and development of FPC. 

Pallavi GL is an FPRM student at IRMA. She can be reached at [email protected], Gayatri is associated with MYRADA, Balakrishnan S is the CEO of Vrutti and Parthasarathy T is the CEO of SkillGreen. 

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CLIMATE ACTION & AIR QUALITY – ECOSYSTEM & THE ACTORS

CLIMATE ACTION & AIR QUALITY – ECOSYSTEM & THE ACTORS

Authors:  Nikita Deshpande, Nitish Kumar, Sivaramakrishnan Balasubramanian, Vandana Sharma

Introduction  

Despite being the 6th largest emerging economy in the world today, India is increasingly becoming vulnerable to the effects of degrading air quality and extreme air pollution.

The World Air Quality Report 2020 indicated that 21 of the 30 most polluted cities in the world were in India. Additionally, as per a study based on 2016 data, at least 140 million people in India breathe air that is 10X or more, over the WHO safe limit. 13 of the world’s 20 cities with the highest annual levels of air pollution are in India. Delhi was ranked as having the highest annual average concentrations of the pollutant – PM 2.5 of any capital city in the world (WAQ, 2020). As a result of this, all major political parties had to include air pollution as a key factor in their manifestos for the city. Similarly, the Uttar Pradesh (UP) Chief Minister (CM) was also seen promoting measures for mitigating air pollution.

Air Quality (AQ) movement in India

In 2020, the Centre came out with a budget (recommended by the 15 Finance Commission – FC) for air pollution. Previously, the Indian government had two significant national legislations – the Air Prevention and Control of Pollution Act 1981[1] and the Environment Protection Act 1986 – with the central and state governments regulating most sources of air pollution for nearly three decades (CPCB, 1986)[2].

However, various challenges, including ineffective monitoring & enforcement capacity, poorly designed regulatory standards, inadequate enforcement mechanisms and a lack of political and executive committees, have restricted the optimal implementation of these legal instruments (Ghosh, 2020). In 2020, based on the recommendations of the 15th FC, the Government of India has set aside about $1.7 billion to fight air pollution over the next five years.

Since the National Clean Air Programme (NCAP) launch in 2019, the Government of India has accelerated the time-bound target for reducing air pollution in cities with an intent to improve air quality. The goals of NCAP are to reduce PM 2.5 pollution by 20%–30% by 2024, compared to 2017, in 122 cities (NCAP, 2019). It is a collaborative and participatory approach that involves all the relevant central & state ministries and local authorities.

As stated by the Ministry of Environment, Forest and Climate Change (MoEFCC), the overall objectives of NCAP are:

  1. Implementing comprehensive mitigation actions for prevention, control and abatement of air pollution
  2. Augmenting the air quality monitoring network across the country
  3. Strengthening public awareness of air pollution and capacity-building activities

Currently, the geographical focus of most philanthropies, foundations and aids working in the climate action sector is in the regions of Delhi-NCR and Uttar Pradesh. Since air quality issues are not geographically contained, moving towards an airshed approach (which looks at the extent and depth of pollution in an area rather than particular regional boundaries) is necessary. It is commendable to note that mature philanthropies and foundations are taking a sector-agnostic approach and working on the nexus of health and pollution rather than focusing on the issue in a silo.

Where is the AQ movement headed?

In its entirety, stakeholders in the air quality sector are slowly but gradually gaining traction on the gravity of the issue and taking mitigative and adaptive action accordingly.

Some organisations are focusing on creating awareness through the power of media, while other organisations are working towards inclusive climate action models. Focusing on the well-being of vulnerable communities requires support for capacity building, management of resources and micro-planning for activities at the national and sub-national levels. Funds are readily available to the government, but the problem lies in effectively utilising them.

Clean energy advocates like the Shakti Sustainable Energy Foundation (SSEF) help create a network of low-cost monitoring stations at the city level (Delhi NCR) that can complement state monitoring systems. International resolution bodies like USAID & others could actively pledge to work on effectively improving air pollution mitigation in India, by linking policies, evidence/science, behavior change, technology and the private sector together in an effort to consolidate the knowledge, means and demand for reducing air pollution, in the strategy 2020-2024.

In September 2021, the India Climate Collaborative (ICC) commissioned a study to map and assess the ecosystem of public, private, non-governmental and civil society organisations working towards tackling air pollution in India with the objective of unlocking all barriers to air quality action at scale. Similar efforts have been undertaken by the Children Investments Fund Foundation (CIFF) to reduce the impacts of air pollution and offer climate co-benefits and strategies to combat challenges for the current and future generations.

At the Catalyst Group, our vision is to build “A thriving world powered by resilient communities and climate-neutral systems”. We intend to address the systemic challenges in the climate ecosystems and work on a people-centred solution approach. Scaling transformative climate actions for us mean prioritising the needs of vulnerable groups.

Green Health Alliance (GHA), anchored by the Catalyst Group, is another instance of an action-oriented alliance. With GHA, the aim is to build disaster preparedness for our health ecosystems. The principle behind the alliance stems from the understanding that the sector has numerous solution providers but needs strong coordination to ensure effective use of the resources.

Conversations around accelerating climate action and its solutions have started gaining momentum over the last two decades. There is no easy way to work towards climate solutions, especially regarding cleaner air. Initiatives across the spectrum need to have the backing of all stakeholders, including communities on the ground. For mobilising a lasting impact on climate action, we need to strengthen our disaster preparedness and health infrastructure as a priority.

Moving away from the pattern of polluted air we are witnessing will mean investing in long-term changes to the extent of rethinking the livelihood patterns of communities. With the right kind of support, we can definitely offer alternatives and a better life to the people who are being affected most by this drastic pollution. We owe a happy, healthy and habitable planet to future generations, and we cannot stop short of that.

[1] https://legislative.gov.in/sites/default/files/A1981-14.pdf

[2] https://cpcb.nic.in/env-protection-act/

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Fuzhio promotes Impact Products directly to customers on behalf of small farmers and vulnerable groups, and allows them to maximise yields and provide customers with safe, responsible products.

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Vrutti is a Livelihood Impact Partner which enhances people’s well-being through knowledge, innovation and transformative actions, and brings about solutions at a scale that eliminate inequities and create wealth for marginalised communities. The social organisation works through result-based planning tools, performance measurement metrics, impact and value for money assessments, and using technology as an augmenter.

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Swasti – The Health Catalyst – is a health resource centre, which achieves public health outcomes for the marginalised through the delivery of end-to-end solutions as well as short and long term support and facilitation, combining research and practice. The organisation has supported governments, donors and development partners to design solutions in public health.

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Why Care for Robust Secondary Data

WHY CARE FOR ROBUST SECONDARY DATA

Choice of research methodology is largely determined by the research questions — what we want to find out, and what will help us do that best. But practical considerations such as the availability of resources (including the type of data available and the knowledge and skills of the persons undertaking the research) also influence the method we choose to employ.

Data in its various types — primary, secondary, quantitative,qualitative — forms the core of a research study. It is ultimately the quality of data generated that determines the reliability of findings, which, in turn, affects programme outcomes. Between primary and secondary data, the latter tends to be less accurate. Also, unlike primary data, it may not be customised for the specific research need.

Despite its shortcomings, secondary data is used extensively, as it saves time, is cost-effective, and provides initial insights into the research problem. But when working with secondary data, its less reliable nature must be kept in mind. It would make good sense always to thoroughly ascertain if it is accurate enough to play the role assigned to it in the study. Where secondary data analysis informs core programme decisions, this becomes extremely crucial. For instance, if identification and selection of beneficiaries for a programme is based on secondary data, we cannot afford inaccuracy or incompleteness of data. Such a lapse may defeat the very purpose of the programme.

In fact, it is good practice to not base decisions on secondary data alone, especially where accuracies are suspected. Combination methodologies and innovative approaches to generate as precise data as possible should be adopted to enhance reliance, and enable the success of development initiatives.

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The Importance Of fit-for-purpose Research Design

THE IMPORTANCE OF FIT-FOR-PURPOSE RESEARCH DESIGN

The principle that policies should be designed using the best available evidence is one that is difficult to contest. Proponents of evidence-based policymaking argue that research evidence should also influence/drive policymaking. However, the notion of a linear relationship between evidence and policy is a far cry from the reality. That is not to say that evidence cannot play a key role in crafting policy. Our experience has identified key strategies that can be employed alongside the research process to facilitate the translation of evidence to policy.

Involving reputable and influential actors in the research process enhances the authority of the evidence produced and encourages buy-in from policymakers. Though Randomised Controlled Trials are considered the gold standard for research, they may result in difficult and time consuming field processes. Usually, they achieve too little, too late.

A variety of methodological tools can be used and should involve a wide range of stakeholders in the production of evidence. Acknowledging that decisions are rarely rational helps to inform the way evidence is presented to policymakers. It should be in simple, clear, uncomplicated language that tells a story and speaks to our emotions. Timing is everything in case of policy influencing. So, when an opportunity appears, one should opt for a methodology that suits the purpose on hand, especially in terms of timelines.

It must be remembered that the standard methodologies do not always yield optimum and timely results. The research methodology employed, hence, need to be fit-for-purpose, rather than trying to be what is considered the best.

Ultimately influencing policy is more an art than a science. The policy process is a complex system that requires political astuteness and an understanding of the complex dynamics of power.

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Task Shifting of HIV Screening in Sex Worker Communities

TASK SHIFTING OF HIV SCREENING IN SEX WORKER COMMUNITIES

In a small office on a busy road in north-western Bangalore, health workers from Swathi Mahila Sangha (SMS) congregate to participate in a monthly training session. SMS is a community organization for women in sex work (WISW) focused on providing community members with improved access to critical resources and services. In order to promote HIV treatment and prevention, SMS is implementing the MITHR programme, a community-led model for providing on-site HIV screening and counselling services to high-risk groups. The MITHR programme technology is minimally invasive and provides results within 20 minutes, which makes it a valuable tool to use in the field where 90% of HIV screenings in the programme take place.

A young woman arrives at the office escorting a friend she brought in for screening. The young woman’s name is Lakshmi* and she has been a member of SMS for a year and a half, during which time she became a strong advocate of HIV screening in her community. She describes how she used to have a strong fear of HIV screening because of the implications of testing positive. Lakshmi refused screening the first two times it was offered, and agreed the third time once she had become comfortable with SMS and was encouraged by her friend. She has now successfully convinced six of her friends to join SMS and undergo HIV screening. In the WISW community, community linkages such as these play an important role as many women are convinced to undergo screening because they have been persuaded by fellow community members. In this vein, SMS decided to undergo the process of task shifting HIV screening to members of the WISW community.

Task shifting is defined by the World Health Organization (WHO) as “a process of delegation whereby tasks are moved from highly specialized to less specialized health workers.” In recent years, task shifting has been viewed as a cost-effective solution to the common shortages of qualified medical personnel in many developing countries. The WHO and other thought leaders in public health have officially recommended the process as one that has the potential to catalyse results in the field of community health. A main benefit of this method, in addition to the cost-saving gains, is that community workers are often more in touch with the communities they serve than medical professionals at nearby health facilities, which makes them better positioned to deliver services. At SMS, the HIV screening has traditionally been conducted by professional counsellors. Now, however, the organization is working to task shift that role to members of the WISW community who will carry out the screenings instead.

HIV testing in the WISW community provides a key example of where task shifting has the potential to have major impact. At SMS, there is already one WISW who has been trained to conduct the HIV screenings, and she has been successful in her new role thus far. HIV is a disease associated with significant stigma, and for those who are members of marginalised communities, the implications of this stigma are even more potent. It is unsurprising that many WISWs avoid screening out of fear. Having a fellow community member conducting the screenings increases trust in the screening process, and if there is trust, the women are more likely to encourage their friends to take part as well.

Lakshmi, the community member who persuades her friends to undergo screening, is supportive of this transition. When Lakshmi meets other WISW, she convinces them to get tested by sharing her own experience and by building trust. She is able to tell her fellow community members that she faces the same challenges that they do, understands the same realities and risks of the profession, feels the same fears and hesitations that they have, and yet she has elected to undergo screening. That narrative sends a powerful and convincing message. A message that health workers outside the community do not have the ability to convey.

Lakshmi herself is not trained to conduct screenings, so when she persuades a woman to undergo screening, she must then convince her to come in to the SMS office or to invite the counsellors into her home. Both are challenging propositions. If Lakshmi were able to conduct the screenings without a dependency on the counsellors, she believes she would be more effective. She adds that when WISW conduct screenings, they will be able to have much more frank conversations about methods of HIV prevention and the importance of screening. She says it would facilitate an open dialogue and allow for discussion on issues that someone who is not from the community would not be able to understand, leading to behaviour change.

Even more importantly, these community women have the knowledge and experience to identify high-risk individuals within the WISW community, unlike the counsellors. Within the WISW community, the levels of HIV risk among members varies. A woman who engages in sex work on a daily basis will have a higher risk of contracting HIV than a woman who practices sex work every few months when financial needs are higher. The level of risk varies depending on the frequency of sex work engagements, the types of services offered in sex work, and the presence of other high-risk behaviours such as intravenous drug use. Health workers from outside the community are often not equipped to identify the women who classify as being the most high-risk. The WISW community member that SMS has hired to conduct screenings has already been highly successful at identifying these high-risk women.

While task shifting for HIV screening in the WISW community has a great deal of potential, it is yet to be determined if the change achieves the desired and anticipated results. In an enclave of the SMS office, a 26-year-old sex worker named Divya* prepares to undergo HIV screening for the first time. Despite knowledge of her high-risk status, she never found time to get tested and did not feel urgency to do so. Her work hours as an accountant prevented her from accessing government testing services offering during limited timings. Situations such as Divya’s are not uncommon. Many women do not prioritize HIV screening, many WISW do not realize that they have a higher risk of contracting HIV, and for many the fear and the stigma is too great to overcome. At SMS, task shifting has already shown promising results and may make great strides towards overcoming these barriers, but the work of HIV screening is challenging, emotionally stressful and unrelenting. Provided with support and resources, WISW screeners may thrive and forever change the way community health in this marginalized community operates, but only time will give us a definitive answer.

*All names have been changed.

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