By Pallavi Deshpande
An ingenious collaboration between Dutch social investor, Stichting Het GroeneWoudt, and Indian not-for-profit, Shri Jagdamba Samiti, has transformed a 5,000-strong collective of women apple growers in India’s Garhwal region into the largest supplier of Himalayan apples in the country
TThe Apple Project and Mountain Love are sister social enterprises in the food and agriculture sector that exemplify the recent ‘Make in India’ campaign promoted by the current Indian regime. They have created a blueprint of an innovative partnership model between foreign/domestic social investors, Dutch food technology providers, local NGOs, marginal farmers and management professionals. The mission behind this project is to foster marginal apple growers (women) to transform them into owners of their agricultural value chain, while also bridging the gap between consumers and the growers of their food. Business rigour and inclusive growth have been the key driving forces of this model of social change. Here’s a peak into the eight-year journey of a collective of 5,000 apple growers of Uttarakhand becoming the largest suppliers of Himalayan apples and the only supplier of 100% pure apple juice in India (Food Safety and Standards Authority of India-certified).
A drastic rise in the emergence of ‘ghost villages’ in the Himalayan state of Uttarakhand, ie, an unmistakable urge amongst thousands of families to migrate to the cities in search of better livelihood opportunities, points to the acute downfall of financial viability of agriculture as a source of income in these parts. Factors like heavy investment in farming, exclusionary financial products for farmers, lack of infrastructural facilities like cold stores/reefer vans, and widespread exploitation by middlemen, have led to a significant number of farming families being trapped in a vicious cycle of debt. For those who do decide to stay back even in such dire situations, the women shoulder the bulk of the workload, be it as farming labour, house labour or livestock rearer. Despite their industry, however, women’s contribution to the local economy is never given its full due.
Several state-sponsored schemes like the Rashtriya Krishi Vikas Yojna, National Horticulture Mission, Work Plan Organic Farming scheme and various other government subsidy schemes have been propagated for the benefit of small and landless farmers. However, such schemes have not necessarily been able to tackle issues of dependency and poverty. At the same time, several other attempts have been made to strengthen the farmers’ position through self help groups, co-operatives and other organised collectives. These interventions have proven to be useful in terms of breaking the farmers’ dependence on middlemen and making them self sufficient. However, their sustainability is determined by the leadership and/or continued government intervention, which doesn’t necessarily guarantee success.
The Apple Project comprises two sister business concerns—Fresh Food Himalayan (a 1,200-MT capacity controlled atmosphere cold store), and Himalayan Fresh Juice Pvt Ltd. Both enterprises will eventually be owned by the partner farmers who are responsible for collection and first-level grading and sorting. Five pre-cooling collection centres at the decentralised level act as the backbone of the two enterprises. A total of USD 2.594 million was invested in the cold storage and juicing facility
In recent times, the involvement of business-focused social enterprises, corporate entities and private investors has initiated a new approach for the benefit of small and marginal farmers. This approach is an experimental attempt to find an effective rural development strategy by concentrating on setting up healthy agro-businesses in which farmers would gradually develop economic ownership supported by both NGOs and business organisations.
About The Apple Project
It is to counter these burning challenges that The Apple Project was initiated in 2007 by Shri Jagdamba Samiti (SJS), a not-for-profit entity that has pioneered rural development over two decades across the hill communities of Uttarakhand (Garhwal region) and Himachal Pradesh.
Uttarakhand boasts a total of approximately 33,500 apple growers, most of whom have been experiencing the aforementioned life conditions and problems. On the marketside, India is one of the biggest importers of apples, with total import of apples peaking in 2011 at 20,7,600 MT. Hence, if analysed from both the grassroots and market perspectives, development of the apple value chain holds vast opportunities and tremendous potential to give Uttarakhand’s agriculture space a drastic fillip.
This model adds value by building farmer capacity at the grassroots level and organising them into farmer associations or groups, besides injecting efficiency and adding value at several stages within the supply chain. It has also set up a marketing platform that ensures access to distant and more profitable markets for farmers.
The value chain works across 3 levels:
- Farmer Trusts
- Joint Venture Companies
- Marketing Companies
The Apple Project comprises two sister business concerns (marketing companies)—Fresh Food Himalayan (a 1,200-MT capacity controlled atmosphere cold store), and Himalayan Fresh Juice Pvt Ltd (promoter of the Mountain Love brand), which add further value to apples and other fruit produce by producing India’s first 100% pure juices from fresh fruit pulp. Both enterprises will eventually be owned by the partner farmers (2,000 plus women farmers in case of the juice enterprise), who are responsible for collection and first-level grading and sorting. Five pre-cooling collection centres at the decentralised level act as the backbone of the two enterprises. A total of USD 2.594 million was invested in the Cold Storage and juicing facility.
The project has impacted the lives of 5,000+ marginal apple growers across 5 districts of Uttarakhand and Himachal, bringing them together under one unified cooperative-like structure.
Win-Win Partnerships: Make in India at Its Best
The project is the work of a consortium of partners—Dutch Social Investor (Family Foundation) – Stichting Het GroeneWoudt (SHGW); Dutch Food Technology Specialists – Fresh Food Technology (FFT); and SJS (responsible for mobilising and handholding the farmers).
The success of this initiative lies in its adoption of a unique approach aimed at creating a profitable partnership between investors and groups of farmers through establishing joint agro-processing enterprises. It is innovative since it allows farmer organisations to become stakeholders in the joint companies, along with the investors. The aim of creating these agri-businesses is to make them economically independent and free from the dominance of middlemen.
Each partner plays a significant role in facilitating the cause of the other in the entire farm-market-fork value chain. For ex, the collectivised cooperative-like structure of the producers gives unprecedented access to abundant/assured produce to entrepreneurs/food processing industry and vice versa, the companies/entrepreneurs provide a fair and substantial market to producers for stress free sale of their produce. Also, efforts of various stakeholders (government, agriculture universities, private companies, producers) have been fragmented across the stages of pre-production, production, post-production, distribution and marketing. This model has tried to merge all these efforts into one unified institutional solution across all verticals, thus acting as a stimulus to the efficacy of these independent initiatives.
The foreign investment and imported technology have given intense value addition to Indian farm produce, demonstrating true value as a ‘Make in India’ initiative.
Value Addition & Role of Technology
Technology has been heavily employed in making the project sustainable. The collection centres, cold storage and juice facility, along with the state-of-art equipment installed therein form the backbone of the infrastructure required for this project. Despite such involvement of machines, the costs have been kept low. The primary strength of this project is organising farmers for collective action to save time, money and aggregating the produce to improve bargaining power with use of information and communication technology (ICT). ICT tools have connected the most secluded villages where apples are grown for mandis (local markets). The ICT-enabled apple farming project works as a facilitator of information exchange between different stakeholders and maintains the work flow structure in a unique manner.
On the consumer side, lack of information and consequently lack of trust amongst consumers towards the authenticity and purity claims of natural produce has been an epidemic. Through the ‘Track and Trust’ software using the existing ICT system, consumers can now track the journey of their produce from the farm to their doorstep. This is in its pilot stages and is expected to be a milestone initiative to bring consumers and the growers of their food (ie, the two ends of the value chain) closer.
As for the juice facility, this is the first-of-its-kind in India— a fully automated aseptic production and hot-filling packaging line with a capacity of 2,000 litres an hour using leading edge European technology. Furthermore, the popular European packaging concept of ‘Bag-in-a-Box’ has made its way to the Indian retail segment for the first time through Mountain Love. As of now, we are producing 10L, 5L and 1L packs (with tap dispenser) and are marketing the pure apple juice to premium hotels, spas and schools, as well as, the specialty food retail segment. Soon to be introduced is a wide variety of fresh Himalayan fruit juices in flavours such as Apple-Rhododendron, Pear, Peach, Plum and Apricot.
Critical Issues in Implementation of The Apple Project
One of the major challenges the project has had to deal with was to convince farmers to go opt the new business model and make them understand the benefits it offers. In order to circumvent this challenge, attempts were made to establish strong profitable partnerships in which farmers, along with investment partners become equal business partners of the investor. To ensure that farmers benefit most from this model, there is a focus on strengthening the farmers’ collectives or organisations, as well as, provide them with the necessary financial and technical assistance.
A major concern in establishing a social business model deals with the requirement of expertise partners and other stakeholders. One of the advantages that partnerships or collaborative agreements offer is availability of resources for the project and scope of widening the network. While the project has effectively brought together a variety of stakeholders, it is crucial to maintain cooperation among all of them. Initially, the implementation of this model required efforts to convince all the stakeholders in investing their resources in this model but gradually, the new approach enabled setting up of sustainable agro businesses that helped farmers gain economic ownership along with the support of community-based organisations and private business partners.
It is crucial for the success of the model that all stakeholders focus not only on financial profit but also on social profit. It is believed that the success of the business model for apple farmers will pave the way for other farmers also to organise themselves into cooperatives and raise their collective voices.
This Apple Project has exemplified the manner in which a social business model can give back profits to farmers while creating more employment opportunities, income and building capacities for them. The project has been in operation for eight years now and is adapting to the requirements of the small and marginal farmers, as well as, is gaining acceptability among stakeholders, including farmers.
Taking newer commodities, geographies and agricultural value chains into consideration, the joint consortium of SJS and SHGW has planned future activities based on the success of this model. Annamrit Farmers as Owners Foundation has been jointly set up as a social investment fund to further invest in other social enterprises wishing to promote farmers as owners. This would then form a self-perpetuating chain model of change.
Annamrit supports its investees/partners in the form of forging win-win partnerships between producer/growers, organiser NGOs, social investors and entrepreneurs and technical support agencies towards localised economic and social growth; galvanising financial, material and technological resources for these business entities to be truly world class and sustainable; and rigorous tracking of the social and business ethics/practices of these entities (to ensure zero deviation from its original mission of fostering prosperity amongst growers).
They are now on the look out for partners for their next sojourn.
The author is business development head, Mountain Love. For more details, contact email@example.com
This article appeared in the January 2016 issue of Pure & Eco India