Demand Aggregation and Services for Smallholders

Examples

KathmanduJan 23, 2013

Aanand Kumar

New Business Models

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

Land Resource Poor Farmers

Aggregation of HouseholdsAggregation 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

Example 1: Smallholder Aggregators

• 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

Service ProviderFarmer

LL Service

Demand

Fees

LL Service

Farmer

Fees Aggregation

Demand Aggregation

Service Provider – Laser Leveller - EUP

LARGE LANDHOLDER FOCUS SMALL LANDHOLDER FOCUS

Village Name

Numbers of audience

Problem in specific area

Demand estimation (acres)

Opinion of Villagers

Conclusion

Nagwa (GDS)

28 Undulating Land and small land holdings and flood

8.21 Acre They want to apply new technology in the field after demonstration

Potential

Belauhi (GDS)

18 5 acre Less Potential

Shivkot (GDS)

17 Undulating Land 13 acre More potential

Ridhiapadi (GDS)

9 8.13 acre More potential

  34 acres

Demand Aggregation: NGO-CSISA

GDS supported Lehra Agro Producer Company Limited board, led by its Chairman Mr. Lalman Yadav

PACS, Noorpur Bet, Ladowal, Punjab

Example 2: Smallholder Aggregators

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

Example 3: Smallholder Aggregators

digitalGREEN

Post HarvestStorage Study

and drying

THANKS

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.

Reach of a Laser Leveller

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 OrganisationsScientists

Business OrganisationsPrivate Sector Entities

Information sharing organisationsMedia

Financing organisationsGrant giving, loan giving

Trustworthy OrganisationsCommunity Engagement