How a social enterprise rooted in Gandhian philosophy is pushing for farmer-to-market linkage
1. Ekgaon – the Background
Ekgaon stands for ‘one village, one world’, a concept evolved for socially embedded businesses to establish linkages with farmers and the markets. The social enterprise, Ekgaon, was established by first generation entrepreneurs Vijay Pratap Singh Aditya and his friend Rohit Mangotra in October 2002. Since they did not have much business experience, they decided to try out a few areas and sustain gradually. With the emergence of rural microcredit systems and institutions, they entered the microcredit market initially. They realized that a gap existed in the rural sector towards enhancing production levels, establishing diversification of farming activities, and connecting farmers to the markets. With the introduction of mobile phones as a popular mode of communication, Ekgaon’s focus shifted to establishing a mobile-driven communication platform for farmers which would provide them information on advanced farming systems, the scope of diversifying to value crops, the establishment of climate resistant farming practices, identification of procurement agencies, and data on prices in advance.
To this effect, the SE established its business through networking farming communities and forging partnerships; to establish farmers’ access to markets, agriculture value chains, financial services, and enterprise services bringing together rural producers, businesses, and artisans. On the one hand the SE would supply the knowledge and other inputs, such as seeds, fertilizers, and pesticides, to farmers and on the other the farmer could sell his produce to the SE at a price comparable to the market. This enabled the SE to emerge as a player in agriculture produce marketing and to establish a brand of its own for value added products. This route would eventually lead the SE towards establishing value creation, value addition, and value appropriation in the value chain that starts from the farmer and ends at the customer.
1.1 Initial work of Ekgaon Technologies
Ekgaon Technologies was registered as a private limited company in Ahmedabad, Gujarat, but started its business of farm and market advisory services at a small centre with about 120 farmers in Madurai district, Tamil Nadu. The business turned out to be unviable for obvious reasons – initially, mobile communication was expensive initially and access to mobile devices limited. The idea however was not dropped as the company had already tied up with the state agriculture universities (SAUs) to receive weather forecasts and the different markets (mandis) for commodity prices. This information was to be placed on notice boards for users.
As access to mobile phones increased, the SE started communicating and updating its small customer base through personal calls and SMS messages. The main objective was to connect the farmers, self-help groups (SHGs) and rural entrepreneurs to microcredit and information services. Nominal fees were charged for the provision of services like weather forecasts, farm/crop advisory, market information, etc. Since its inception, the SE has also conducted over 500 farmer field schools towards helping farmers identify suitable crops and to increase yield levels.
As the farmer base started expanding, the SE started to get requests from farmers to help in marketing the produce. Consequently, it started market linkages with bulk buyers, went on to market directly, and establish its own branded retail network. In 2014 the SE started its online retail shop. With this, focus was made towards value addition and marketing of farm produce. Currently, the online store sells over 160 products from over 60 producer companies. Around 600 cities and towns across the country are covered for its products. The SE has also established eight retail outlets where customers can physically visit and purchase the products. While the major operations involve marketing of products from farmers and farmers’ groups directly to customers, the company has recently started working on value addition of the commodities involving the farmers. As a key feature of the company, a bonus amount is credited to farmers if the products realize a better than usual price.
Each of the farmer members is issued with an identity card with a number that can be used to avail the services over mobile phones. The SE provides a customized advisory service on the requirements of the farmers based on the baseline information. Over the last seven years, the SE has provided services to more than 30,000 farmers across the country. In order to provide farmer-specific advisory, the SE maintains a database about the farmers. One of the challenging tasks for the company is to garner reliable data about the farmers before the farming season.
Currently the geographical coverage of the SE comprises Jharkhand, Madhya Pradesh, and Tamil Nadu. The activities are arranged in clusters of agri-climatic zones. It associates with different input suppliers and service providers locally (as agents) so that farmers may easily avail of its inputs and advisory services.
1.2 Mobile technology-based advisory services
The social enterprise’s mobile technology-based advisory services platform provide member farmers all the farm-related information across various crops, viz., input availability, best crop management practices, extension systems, support services, weather forecasts, and the prices at various markets for such produce. It also links up with government agencies which support the farmers with subsidized inputs and other services as a facilitator. Further the SE acts as an informal guarantor to banks and financial institutions so that farmers may avail credit, given the strength of its network and the peer pressure that comes with it. Since the SE acts as a procurement agent of the farmer produce, the model works. Figure 1 illustrates the value delivery channel of the SE.
2. Organizational Vision and its Pathways
Ekgaon Technologies was established with the initial mission of establishing village self sufficiency (Gram Swaraj) in keeping with the Gandhian pursuit of self-reliance. Hence it sought to support sustainable economic activities of the farming communities it worked with and thereby establish their self-reliance.
Towards its goals, the SE seeks to help its stakeholder community in nurturing the traditional knowledge and spiritual principles that guide food habits across its diverse regions. The SE network therefore works across agricultural value chains; from production, processing to distribution, in order to bring unique products from community-based enterprises. The company markets a vast range of biodiverse community-based organic/natural food products processed through traditional techniques that are sustainable, equitable, and ethical. These products are curated by exploring the traditional food habits of various regions across the country to restore forgotten food-diversity and healthy dietary systems. These products include organic produce, indigenous pulses, rare herbs, spices, and staples.
The SE, in its vision, strives to build up the local community with capacity to manage the value chain and create premium quality food products. It works with small farmers, mostly women from tribal communities and food producers; to conserve, revive, and sustain biodiversity and food heritage. Locally sourced food ingredients and local processing encourages strengthening of the local economy and also serves the consumers with ‘authentic products’. The company strives to share with the byers farmers’ lives, their stories, and encourages them to produce quality crops. Each product marketed by the SE has a tag ‘Know Your Product’ which informs the consumer of the origin of the product and the name of the farmer through a geo-tagging system provided by the company. This system helps the company to build trust by taking the farmer’s story to the customer. Mobile applications are used to track compliance across their supply chains.
Driven by the emergence of microcredit and rural financial markets, initially the SE thought it a better business to enter into to realize its vision. However it was observed later that adequate money and credit facilities were not enough to establish sustainable rural activities; rather the knowledge of operations and suitable linkages of farms to the market were the enablers. The route to achieve the vision got transformed. In the second phase, the SE customized and personalized the information being sent out over the mobile phone using local languages. The target audience, the farmers, were provided information on the scope and options for climate resilient farming systems and the market potential for high value crops. For instance, the information and demonstration of efficient water use options like drip irrigation systems, soil enrichment programmes through organic manure, and demonstration of best farming practices gave farmers the confidence to go in for crop diversification. Thus newer crops could be added to the cultivation schedule of farmers. As these new crops were in high demand at the marketplace, the farmers were able to realize higher prices. For example the farmers who used to cultivate paddy or wheat alone earlier (by virtue of the MSP – minimum support price – guarantee to avert the potential market risk) shifted to growing pulses, vegetables, and sugarcane to gain a comparatively better income than was the case earlier.
With the expansion in adoption of this mobile technology-driven farm advisory and information service, as well as the increased diversification of farming practices on the ground, the SE realized the need to establish sustainable forward linkages to its fold to ensure a market for the farmers. Consequently the SE visualized achieving its organizational goals through establishing the market linkage services to the farmers. Hence, the same mobile-based advisory service incorporated the market information module to the farmers. Further it visualized the scope of value addition to raw farm produce for enhanced value realization from the market and accordingly established marketing services in bulk commodities as well as value-added branded products in its own portfolio. Hence the SE evolved the pathways to its vision realization through three broad phases.
[Excerpted from the chapter ‘Socially Embedding Businesses: Ekgaon Technologies Private Limited’]
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