Making Farmer Producer Companies (FPCs) work for struggling small and marginal farms
S3IDF helps FPCs to strengthen the livelihoods of marginal farmer members by linking FPCs to critical missing business incubation services
I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.
Growth (the pilot has already launched and is starting to expand)
Annual budget in 2017 (USD)
Number of beneficiaries impacted so far
Nonprofit, NGO, or citizen sector
Headquarters location: Country
Headquarters location: City
Location(s) of impact
Landless laborers like these women gain access to a safe and comfortable area to work within when they join a farmer produce company.
At meetings like these, members of the farmer producer company can come together to discuss shared challenges and determine the management of their collective, enabling previously under-served small and marginal farmers a voice in their own development.
To harvest areca nuts, laborers jump from tree to tree, cutting down the bunches of hasi and chali nuts to be collected by others below.
Small and marginal farmers lack the capital, networks and business acumen to purchase processing technology like this de-husker on their own, but when they collect into a farmer producer company and receive support from organizations like S3IDF, they are able to invest in machinery that will help them increase their incomes and address their labor shortage challenges.
To help mitigate challenges with irrigation and water usage, local NGOs, like one of our partners - Manuvikasa, will assist farmer producer companies in creating farm ponds and water storage areas.
Often farmers and laborers dry crops in the sun to process them before sale, unfortunately un-seasonal weather and monsoons can destroy these dry crops and hurt farmer livelihoods. One method of addressing this risk is to help farmers, and farmer producer companies to purchase a mechanical dryer.
Areca nuts are harvested at two stages called hasi and chali. Has nuts are green (unripe) and chali nuts are orange (ripe). Areca is one of the many crops grown and consumed throughout India, and a large majority of the country's areca comes from the regions in which we work.
Farmer producer companies need extensive supporting during their initial creation and early development stages. S3IDF and our local partners provide this support, assisting the FPC with training, financial access and technology access as they require it.
Problem: What problem is this initiative trying to address?
Small and marginal farmers lack the capacity to increase their incomes and capture enough value for their crops due to their limited bargaining power with middlemen and inability to access business, financial and technical services. FPCs can help improve their livelihoods; however, government schemes aimed at fostering FPC growth target a development stage above what FPCs typically achieve with existing support. This disconnect affects the broader agricultural sector, limiting the yield potential and social impacts.
Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?
S3IDF will address the existing gaps by collaborating with local NGOs to strengthen FPCs, whose members include farmers and laborers of all ages, so that they can leverage government schemes. We will build FPC business acumen through targeted trainings, and facilitate acquisition of productivity-enabling technology, as well as critical operational capital. These interventions will create shared value for various stakeholders, including the financial institutions who will gain familiarity with agriculture lending, and technology providers who will gain access to new markets. Further, existing government programs, such as the Small Farmers’ Agri-Business Consortium (SFAC), which provides a credit guarantee to banks lending to these FPCs, will be able to overcome their disbursal challenges. Finally, S3IDF will create a knowledge-sharing hub for FPCs to discuss best practices with each other, fostering an enabling environment.
Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work
S3IDF is piloting our initiative in conjunction with Manuvikasa (local promoting NGO) to strengthen Pragatimitra (areca nut farmer FPC). In the 8 months of our initiative Pragatimitra’s membership has increased by over 30%, 83 agricultural laborers have been employed as a direct result of our engagement, 97 farmers’ incomes have increased by 22% and S3IDF has facilitated two capital infusions for the FPC, one from a local credit cooperative and one from a major financial institution, Vijaya Bank, using a combination of partial loan guarantees and demonstrated credit-worthiness.
Further, we assisted the FPC in acquiring a mobile de-husking machine that now allows it to re-purpose discarded areca nut husks, securing a sustainable water supply for FPC processing needs, and purchasing a biomass boiler that is more efficient than the traditional practice of burning wood. For more details on our impact and growth plans, please see attached PDF: S3IDF - Strengthening Farm Livelihoods.
Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?
Corporate contributions: 5%
Earned income: 5%*
Estimates are for the program’s first year, and draw on S3IDF’s existing pool of philanthropic capital. S3IDF will pursue additional grant funding for future project implementation. The initiative’s sustainability will further be reinforced by our effort to become empaneled consultants to the SFAC, which would significantly build our brand and allow S3IDF to scale through replication and disseminate our innovative approach to many more FPCs, potentially nationwide.
*The program is designed to recapture some of the economic value created for the FPCs through fees or returns on guarantees at later development stages. These revenue streams are expected to grow overtime and contribute to programmatic sustainability.
Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?
S3IDF’s system-level approach leverages an existing government scheme to improve market outcomes for small and marginal farmers by identifying and bridging an implementation gap that would otherwise critically inhibit policy efficacy, social impacts and agriculture yields. S3IDF’s bridge integrates stakeholders across the value chain and fosters more inclusive practices, enabling catalytic strengthening for farmers and FPCs, scheme success, and regional replication potential.
Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.
Government strengthening schemes and policies can be effective but implementation realities often require additional inputs to realize full program potential. S3IDF recognized that the existing strengthening scheme did not intervene at the appropriate development stage to address FPC needs, and that the limited capacity of FPCs and local supporting NGOs critically inhibited the FPCs’ ability to strengthen from the ground up. S3IDF’s ‘Aha!’ moment was our recognition that this strengthening gap exactly aligned with the expertise that we have built over 15 years of hands-on, pro-poor entrepreneur incubation. Today we are working with several strong local NGO partners to address these fundamental strengthening gaps and evaluating opportunities for broader programmatic replication and scale.
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