Scaling Up Rural Returns (Gte) Ltd's Impact Across Sri Lanka - Then The World
Rural Returns has proven a scalable model with strong Product, Market & Social Impact. Now needs access to capital to scale up & serve more
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.
Rural Returns (Gte) Ltd
Established (the solution has passed the previous stages and demonstrated success)
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
Sri Lanka: Vavuniya, Puttalam, Weli Oya, Kakkapalliya, Pannala
Interview by a major Sri Lankan business magazine where the founder explains the basic thinking behind the Rural Returns model. Full article at http://echelon.lk/home/returning-to-our-roots/
Rice is key to the nutrition and poverty challenges facing the poorest billion people in the world. Rural Returns is focused on making rice central to the success story of millions of smallholder farmers in Sri Lanka and beyond, with marginal fields in which only rice paddy is viable.
Smallholders occupy marginal lands that do not fit the template for the intensive, industrial farming that can feed a nation cheaply. Fields such as this terraced paddy field can never be mechanised at an efficient cost. Outside the 5 (of 25) "High-Potential" districts that feed the country with their major irrigation, large flat landholdings for easy mechanization and reliable solar cycle, smallholder farmers must change the game and switch tactics, while preserving heritage and respecting laws
Why Heirloom works. Pre-Green Revolution heirloom varieties are more robust, withstanding pests and disease. They grow 5-7ft tall; the Green Revolution crossed Indica rice with Japonica rice to get the latter's dwarf genes to divert energy from growth to grain production, inadvertently making them vulnerable to taller weeds. Heirloom paddy varieties out-compete weeds by out-growing them, and respond best to organic manure, thus removing all chemical input costs that build up through the season
Community meeting. As the monsoon rain darkens the sky outside, a community meeting at the local temple, presided over by the village priest. Our most experience Field Officer is explaining the plan for the season whose commencement is heralded by the heavy monsoonal rains.
The precious seedlings. These pre-Green Revolution varietals are stable, meaning farmers do not need to keep buying seed from others. This gives the farmers independence and choice in what they grow, and when they choose to grow it. Read more about Sri Lanka's heirloom rice in SriLankan Airlines, the national airline's, special magazine article Rural Returns facilitated at http://serendib.btoptions.lk/article.php?issue=75&id=1787#page
Women play an invaluable role in smallholder agriculture. The Rural Returns model works, and is only recommended, in specific conditions that describe a majority of farmers and field: outside the 5 (of 25) "High-Potential" agricultural districts, unique for their major irrigation, larger, flatter landholdings and ideal weather conditions. Smallholdings, the vast majority, are those of 5 Acres or less. Farm families can handle all the labour, avoiding the biggest of input costs, key to our model.
Meeting farmers in their fields at dawn. Our regional Field Officers and central Field team regularly meet farmers in their fields and at their homes where we are treated like family. Regular contact not only ensures the farmers receive and follow the best technology and techniques, but also bolsters their confidence, the security that Rural Returns will be there for them and ready with money in hand at the end of the season.
Careful record-keeping and tracking is key to building up the histories and information needed for very expensive certifications that will eventually provide another step-change in income for the farmers.
Farmers at harvest time toting traditional hand-scythes. Rural Returns' field team estimates each field's harvest as the season goes on, ensuring there is sufficient cash to relieve farmers' financial burden. We pay farmers an advance at harvest, to cover their most urgent costs, while incentivizing them to correctly dry and store their paddy with a free mind, ready for us to return to collect the paddy and complete the payment. The financial independence we build is key to our mission.
The end of a successful season. Paying the farmers for their paddy, with the traditional clasped hands signifying mutual respect.
Harvests are a joyous time when farmers give thanks to the Gods for blessing them with a successful season. Properly (and patiently) dried paddy can be stored for years, waiting out supply-demand cycles. Everyone pitches in, with the smallest and most agile skipping along the tops of stacked gunny bags, placing Neem leaves as a natural pest deterrent.
The very first farmer group Rural Returns started working with in Kurunegala District, Sri Lanka. Note the gender mix and the average age, which Rural Returns hope to bring down as well as more profitable and attractive options become available to rural youth.
A village entrepreneur employing women to make woven palmyrah boxes. Rural Returns intensifies the cashflows coming in to the villages it works in by sourcing other village products wherever possible, in this case using the boxes for as exclusive Gift Boxes.
A Rural Returns (Gte) Ltd field officer explains the science and concept behind preparing paddy fields for organic certification. It is a years-long process and one that the Company has to bear a high initial cost for internationally accepted certifications. The Company's plan is to have the farmers themselves own the certifications for their fields unlike the common model, making the farmers independent of any company and able to benefit from the added value of their fields & years of hard work
A cart-full of hope. Rural Returns is working to smooth out farmers' income cycles by seeding opportunities for income diversification. We have trialed Pomegranate seedlings with some farmers, while researching other crops that farmers can grow sustainably while also meeting the needs of discerning consumers.
A traditional preparation of rice boiled in coconut milk, for festive and auspicious occasions. The white Suwandel was reserved for Royalty in ancient times due to its exclusive aroma, taste and therapeutic value. Heirloom grains provide valuable dietary variety and options for people with special dietary needs such as diabetics, people with gluten intolerance, high cholesterol, Fatty Liver condition, etc. They are recommended in Ayurvedic therapies and remedies, with one a known Aphrodisiac
Some heirloom grains grown by our farmers. Sri Lanka has more than 2,200 native rice varieties registered at the International Rice Research Institute (www.IRRI.org). In this incredible biodiversity are varieties with the lowest known Glycemic Index in rice; wonderful aromas, radiant colours and amazing tastes; and valuable nutritive properties such as high Iron, Zinc, Folic Acid, Protein, dietary fibres, and antioxidant properties, and low Sodium. Rice is Cholesterol free and Gluten free.
Problem: What problem is this initiative trying to address?
A poverty trap condemns generations of rural smallholders to subsistence farming. The majority of Sri Lanka’s 80% rural citizens follow an unsustainable smallholder farming model. Politicians exploit their readiness to auction their votes for higher subsidies & government buy-back guarantees. Resulting economic distortions cyclically sabotage market functions, absent price signals create alternating gluts & shortages, & hurt farmers & consumers
Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?
Rural Returns has bootstrapped itself partnering rural communities to sustainably escape poverty. With disciplined execution we use Comparative Advantage to take farmers away from a losing game to a sustainable model.
Most smallholdings are incompatible with the geographically focused national food security imperative. Smallholders lose money even as they drive down profits for farmers in the “high-potential” districts that feed the nation. I identified niche varieties better-suited to smallholders, 2x more profitable outside “high-potential” conditions; and more attractive to consumers gladly playing 3x the price. We thus identify appropriate products; give farmers know-how and the security of a guaranteed buyer at an agreed minimum price; and assume all the financial risk, aggregating quantities to achieve viable, sustainable relationships with large retailers and discerning consumers
Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work
We have worked with around 300 farm families since inception, currently focusing on around 250 families in the post-conflict North and North-Western Provinces, with around 80,100 CHF annually directly paid to farmers. Each farmer tests our model with minimum risk: not allowed to sow more than half an acre in the first season. At season’s end my team compares the test plot’s crop P&L with a standard plot. Farmers usually manage a 2x Net Profit and never look back. What we introduce are pre-Green Revolution heirloom varieties. They do not respond to chemical inputs, resist common pests and diseases, and compete with weeds by simply out-growing them; up to 7 feet, and, in flooding, up to 25 feet, allowing some economic activity even in flood-prone fields. Saline- and drought tolerant, requiring far less water, they give farmers valuable leeway in increasingly uncertain weather conditions
Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?
A non-stock, non-profit, mission driven Company, Rural Returns was set up under the Stanford Social Innovation Fellowship which funded its initial years. The Company budget has doubled or tripled every year, funded by sales, individual loans, primarily from its founder, and bank debt. The Company is also at the end of a USAID business expansion grant where USAID contributed capital assets matched by a doubling of the Company’s operational budget
Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?
Disciplined execution, mission-driven model that farmers trust, breakthrough scale to sustain & grow
Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.
My beloved Great Aunt treated me to heirloom rice just before I left Sri Lanka to study at Stanford Business School. In California I saw the niche, premium, provenance-based marketing of coffee etc.
I thought of farmers’ struggles back home, with alternating supply gluts or famine laying waste to crops – both accompanied by indebted farmers’ suicides. I thought I must find a way to connect discerning consumers with Sri Lanka’s amazing, healthful food diversity, benefiting both farmers and consumers. The announcement of the inaugural Stanford Social Innovation Fellowship focused my thoughts. After some back of the envelope calculations, a lot of research and thinking I pitched for it and won, graduated, flew straight back home & got started
Where did you hear about the Nestlé Creating Shared Value Prize?