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From Jacqueline

Novogratz's

Journal

(This is from Jacqueline's most recent journal on India, provided to desideewar by her office. Here she talks about her most recent trip to India where she meets the farmers of India. We'll publish it in three parts.)

INDIA

MAY 1-9, 2012

Part 1

The flight from Karachi to Mumbai via Dubai isn’t for the faint of heart. I leave the office at 8:00 pm, board a 10:45 pm flight, arrive in Dubai around 1:00 am in the morning local time and then wander through the airport cum commercial crossroads of the world until the next flight leaves at 4:00 in the morning, arriving in Mumbai at 8:00 am. I then take a car for an hour to reach my hotel at 9:30 am. I look on a map and see the closeness of the two cities as the bird flies, and think that the night flight is metaphor for a different kind of distance, one so needing to be bridged across these two countries that share so much culture and history.

As the taxi drives through the morning scenes of Bombay, I think about Partition. When India and Pakistan divided, India retained the history and the identity of, well, India. Pakistan, on the other hand, became a newly-created state overnight, founded by men who had made a political compromise to do so. How each country navigates its past, creates renewed meaning, and brings the best to the future will be critical for the region.

India is always an immersion in light and color, vibrancy, noise – life, life, life. It is all around and I love it. I love the bright saris and dupattas fluttering behind women on motorbikes. I love the generosity of strangers willing to walk anywhere with you, even if sometimes their own sense of where you are going isn’t much better than your own. I love the mix of modern and ancient in everything from building design to fashion to food.

I arrive at Le Sutra hotel, a little boutique hotel in Bandra West, near our office. I stay there when I can, not only because it is reasonably-priced and lovely, but because I so enjoy the young team that will go out of their way to help. And I can run straight from the hotel to the sea, along the sea wall, onto a tiny running track where you pay two rupees for the joy of going around and around with a growing number of professionals and elderly neighbors out for a stroll. I become too bored after a few loops, so then take off through the leafy neighborhoods of Bandra, marveling at the beauty of the bougainvillea pouring over white terraces in this sprawling city, thinking about how important these private spaces are in a crowded, growing, youthful city of 14 million.

I barely make it home and into the shower when Molly picks me up for all-day discussions with the team followed by dinner. I get home late, setting my alarm for another early morning flight, this time to Hyderabad.

BASIX KRISHI

EXTENSION SERVICES FOR

SMALLHOLDER FARMERS

Extension services have been part of the agriculture ministries since India became a nation. Helping farmers grow better crops is critical to a country’s food security. Integrating teams of specialists – the equivalent of health workers for

agriculture – thus makes enormous sense. The problem in most developing countries is that the public extension workers are often unskilled and underpaid, and there are few systems for real accountability. It isn’t surprising when you think about the mismatch between what farmers want(access to better seeds, nutrition enhancing products, artificial insemination services for their livestock, and access to market – all in a timely manner) and what extension workers can or will give.

Vijay Mahajan, founder of the esteemed microfinance organization BASIX, has been studying and thinking about this for the past quarter-century. He also has recognized for a long time that micro-credit alone can help most individuals make a little more money, but unless farmers, who are among the poorest people on the planet, can access better agri-inputs, modern agricultural practices, and benefit from proximity to a more functional supply chain, they will not see their lives substantially improve.

Mahajan founded Krishi, a for-profit company, to provide extension services and access to markets to smallholder farmers in India and do just this. Krishi is not, however, trying to replace government. Instead, Krishi is focused on building a service model that sees farmers as customers and requires them to pay, recognizing that the company must therefore be accountable to delivering value. And it is in this trade-off that a better system might emerge.

To succeed, Krishi enables farmers to access free products made available by government that too often don’t make it to the last mile.

We drive a few hours outside the Hyderabad airport on a hot, hot morning to one of the poorest districts in the 85-million person state of Andhra Pradesh in southern India. A group of farmers waits for us at a local village center operated by Krishi. The first thing I notice is how old the farmers are: though some are in their twenties, more are in their thirties and forties. The younger men increasingly leave for the cities if they can.

There is one young man who stands apart. With movie-star good looks, he dresses like a college co-ed – jeans and a plaid shirt – and he seems to be analyzing Vijay’s words as he speaks. I ask how old he is and whether he also is a farmer. Yes, he tells us, he’s 23 years old, working on his father’s farm, but he also has an electrical engineering degree. He wants to both farm and work as an engineer, and hopes to enrich his family this way.

(One young man stands aparthe wants to both farm and work as an engineer.)

The other farmers are a mix of very poor and less poor, though it is difficult to discern who owns what in the group. A simple question like "How many cows do you have?" takes many minutes to answer, and I’m not sure we ever get to the truth. Vijay and I smile at each other – nothing is straightforward.

(On average, the farmers think they are seeing at least a Rs. 3000 (USD $60) increase in income.) 

The conversation becomes animated around farm economics and products that Krishi provides. The farmers are paying $15 per year for access to the dairy program and $15 per year for access to the chicken program. The services include a nutrition-enhancer for dairy cow food, access to a free-range chicken program provided by the government and, importantly, access to a private milk aggregator that is fair and transparent, allowing farmers to bypass the old middlemen who too often exploited them.

On average, the farmers think they are seeing at least a Rs. 3000 (USD $60) increase in income for their investments. Their cows are not only producing more milk each day, but the fat content of the milk is also increasing, which means they get a higher price for it. The private milk purchaser has a map of pricing on its door and the farmers stand by the scale and get a daily receipt for their milk. They tell us that this makes them feel part of a more just system of compensation. Krishi also ensures they get access to artificial insemination when their cows are actually in heat and not when the government extension workers decide to visit. Because they can see the connection to rising incomes, many of the farmers have borrowed to buy cows rather than stick with their buffalos given the promise of greater wealth in time.

So the farmers see their income dependent on price x quality x volume. Add in the transparency, which builds trust when farmers see that they are getting a fair price. All human beings want to see a correlation between their hard work and some reward. It isn’t more complicated than this. I wonder if Acumen might be part of a group that begins to define more clearly the best practices for agricultural companies working with the poorest farmers. How do you structure companies that aggregate the production of many small holders? What are the best practices to instill the right checks and balances? How do you ensure transparency? All of this is key to building a new economy in which everyone has a chance to contribute.

Krishi represents the promise of enabling farmers to benefit from the convergence of the private sector, government, and civil society. When Krishi comes to an area, private suppliers know they can count on farmers who have access to real extension services that will result in their enhanced productivity. Government workers can partner with Krishi to bring public products to the last mile, something existing extension services are often unable to do. Microfinance providers have a stronger platform for lending, knowing their loans will turn into enhanced productivity and income.

Of course, nothing is easy. Krishi is confronting two early challenges. The first is that farmers will pay for livestock extension services but are less eager to pay to support their crops. The reason? Livestock extension typically comes with a tangible product: nutrient-rich enhancer for dairy cow food, artificial insemination,

etc. Crop services are often more focused on advice.

This has two implications that make marketing more difficult. First, as with health clinics, people want to be given something to show they’ve received something of value. Think of patients wanting pills to feel they received something valuable from the doctor (even if they don’t need them). Farmers want the equivalent of pills.

Second, farmers are more likely to make an investment when they see revenues rise as opposed to costs decrease. Many farming techniques can significantly reduce fertilizer and weeding costs. Farmers want this knowledge, but they don’t typically want to pay for it. Moreover, once they’ve gained the knowledge, they feel they know it, even if experience points towards needing support for at least two harvests.

The second challenge facing Krishi is the many donors who want to support them but feel it is unethical to ask poor farmers to pay. Consequently, they give Krishi grants so that they can give farmers free services. Krishi has done this in a number of cases, and each time finds it difficult to then convert farmers to paying for services once they’ve received them for free, especially since they are already providing access to free government services.

The question is how to engage well-intended philanthropists in giving grants to build institutions that can then, in turn, use the grants to help support the market-driven services they provide. It is an important nuance, but one that could enable more sustainable and far-reaching programs to be created.

 

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Our Thoughts As We Read Through Jacqueline's Journal

  1. Is there anyone who sees the culture and the history that India and Pakistan share and does not wonder at the differences that keep them apart?
  2. Her take on India always touches us, especially since our visit to India invokes those exact same feelings.
  3. We have heard about Le Sutra hotel, little boutique hotels that are reasonably-priced and lovely. Note to self- check those out.
  4. Forever grateful to get educated by her on organizations like Basix Krishi. their efforts to uplift the life of the poor, the challenges they face and how global organizations like Acumen come in and play a role in helping them achieve their goal.

 Do you agree?

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