HomeAcross IndiaThe Apple Project Dhimant Parekh July 24, 2009 Across India, Agriculture, community development, Development, Empowerment, Environment, Government, Livelihood, rural india share this story Background The apple project consists of four decentralised apple collection centres. Farmers are encouraged to join a cooperative, through which they can process and sell their produce jointly at better prices. The goal of the project is to facilitate a process of empowerment among small-scale apple farmers in order to promote sustainable socio-economic development through promotion of a value-addition business chain, owned and led by farmers themselves. In this article, we talk about a successful cooperative initiative called The Apple Project launched by Shri Jagdamba Samiti (SJS), an NGO led by Mr. L.P. Semwal. SJS launched this project in Uttarakhand with the realisation that small farmers in a market-oriented agribusiness get further marginalised mainly due to the dominance of mandis, a chain of well-organised intermediaries who control the entire process from credit supply for farm inputs, transportation and marketing of produce. The apple project hence strives to create a model of business-driven, decentralised independent and small-scale production with coordinated arrangements for processing and marketing by providing technical, managerial and investment support to enable farmers collectively to move up the value chain. The ‘collective’ feature of the business model is promoted to save individual time, distribute risk, maintain price assurance, pursue damage control and save on handling costs such as storage and transportation. Empowerment beyond economic gains The Centre apparently did have an empowering effect among the community beyond mere economic gains. First, market dynamics and the apple business as such became more transparent and easier to understand for everyone. Thereby, people were enabled to participate actively and accumulate broader ownership instead of depending on traders and middlemen. Also, people were encouraged to view and understand power no longer purely along the lines of traditional class boundaries, but become aware of the power and possibilities for participation they have. Also, the Centre has an empowering effect on women. It was for instance repeatedly noted that women were for the first time participating in public meetings, and daring to speak up in public. Breaking the prevalent market cycle A main strategy of the Apple Project is to break the dependency of small and marginal farmers on middlemen through a process of a joint marketing via the Centre. This has both strong economic effects, as it raises the farmers’ direct gains significantly, and empowers them by reducing their risk of being exploited by middlemen. However, breaking entirely away from a highly organised network of middlemen is not an easy task. Middlemen still keep a tight control of crucial stages of growing as well as apples’ post-harvest processing. Sometimes, middlemen also operate transport services and buy apples from farmers at their orchards, but at a very low price. It is hence not easy for small farmers to delink themselves from the system controlled by middlemen. A sustainable, comprehensive alternative system should be in place. The role of SJS as an external agent The commitment, entrepreneurial competence and perseverance of the leadership of the farmers’ association and the Centre staff have been the main contributory factors for the success of business operations. SJS as an external agent has, however, played a distinctive role as a facilitator of the process. SJS’s main contribution has been to come up with an innovative business model for small and marginal apple growers and to build capacities of farmers to own and run such a business operation. SJS’s role in this regard has been building capacities of farmers in general and leadership of the farmers’ association in particular. The other important role that SJS has played as an external agent is to mediate power-play in relation to forming the farmers’ association. Matching economic goals with social goals The uniqueness of the Apple Project is its business model which is based on the functioning of the business operations whilst at the same ensuring social goals. If economic benefits are only used for consumption purposes there is no clear link to social change. Hence, it is important to monitor what the money is spent for (e.g. education, better health care etc.). Story Telling Workshop for the Apple Farmers (Courtesy: CDC) Economic empowerment alongside social interventions is required in order to stimulate long-term social change. SJS is also aware that joint ownership of the business operations alone will not automatically deliver social goals. The new form of collective ownership is an alternative to the form of organisations hitherto established in the village which were dominated by the Sayanas. SJS is cautious that opposing an existent power structure can lead to the unintended creation of another power structure. This is a major concern for the future. Promoting a value-driven business model Organising small and marginal apple growers is not simply an economic activity. The story of apple growers in Bawar area suggests that power structures and politics play a major role in village life and an economic activity cannot circumvent or keep aloof from such realities. The new farmers’ association and the Centre promoted a principle of political neutrality and a leadership model which is based on competence instead of party affiliations. Promoting a new form of economic activity with a social goal based on political neutrality and competence had been possible due to the values of inclusiveness and tolerance of diversity, which the Centre stands for. Drivers of change must hence incorporate the values they aim to promote, and these should be reflected in all areas of operation. Enabling farmers to jointly move up the economic chain With support from private investors, originating from successful business families, a new model for advancement of small and marginal farmers is now being tested in India and other countries. This model is an attempt to find a healthy entry point for rural development by concentrating on setting-up healthy agro-businesses in which farmers themselves gradually gain economic ownership. Similar to the self-help groups and cooperatives, the aim is to set-up healthy business in handling, processing and trading farmer’s commodities on a commercial basis. The main difference of the new approach is that the farmers are equal business partners of the investor: they will only gain full economic ownership if the investment is repaid fully. No paternalistic form of aid, but a sound economic partnership between an investor and a (farmer-owned) company. The investor assists the farmers in setting up commercially-run businesses (private Limiteds), based on a solid feasibility and business plan, and makes available a full (guaranteed) loan to the new company. The companies are to generate sufficient profit to pay back the loan, capitalize the company and invest in new profitable business ventures (allowing the farmer to move further up the value-addition chain). Part of the profit flows back to the farmers in the form of better prices for their commodities and possibly dividend payments.Some of the guiding principles behind the projects where the new model is being tested, are: Invest in profitable agro-business ventures – set up farmer-owned businesses, based on professional feasibility analysis and business plans. Farmers: equal business partners – farmers are not merely ‘beneficiaries’ or ‘the target group’, instead they are an equal business partner of the private business partner/investor Loan, no free money – the investment required is brought in by a private business partner, driven by its social corporate responsibility, rather than by its profit seeking objectives, but is to be repaid to sustain the model. Farmer ownership – as repayments are made on the investments, the economic ownership of the company is automatically transferred to the farmer groups. Continued strategic guidance by professional/business partners – whereas farmers are to gain 100% economic ownership over the business, and they are to be represented in the governing body (Board of Directors), the majority of the BoD will remain professional or business partners, to ensure that the long-term interest of the company and continued strategic guidance is secured. Invest, but also plough back profits – While investing in higher value-addition processing, the model is intended to plough back part of the profits to the farmers and into new economic activities in the region. Collective action to save time, energy & money Improve bargaining position Take out intermediaries – e.g. the middlemen or informal lenders. Overcome difficulties in handling & logistics – e.g. inaccessibility and transportation, especially in undulating terrains, leading to excessive wastage. Collectively, the farmers can more easily organize solutions or obtain external support (e.g. from (local) government or private sector). The above article is excerpted from the original article by CDC with due permission from SJS. All images courtesy CDC and SJS. Pingback: The Better India Pingback: Dhimant Parekh Vivek The best part about this initiative is that it is a hybrid between a cooperative and a firm and is an improvement over the producer company phenomena. Also the produce has a benefit of transactional advantage because of being produced in a unique agroclimatic zone but its benefit is seldom reaching the initial producer unless he is very well established. This initiative helps such small farmers as well in Uttaranchal. Sunder Lal I have visited the area of this project in Yamuna and Tons river velley of Uttrakhand and get inspired to know that the farmers companies are coming up for value additions and storage. Thanks to Mr. L.P. Semwal for taking initiatives for empowerment of small and marginal farmers. http://www.icccministries.com P.K.Gorada Dear sir, we want to Membership with your Organisation. Your sincerly Mr.P.K.Gorada(Director) ICCC,Orissa,India Mayank Sagar Inspired by the initiatives of SJS for starting of this type of much needed value addition and supply chain management project. It would be better if Mr. L.P. Semwal will able to share the model and his teams experience so far. bharat lal saini you fand reuvrant Bharat ram It is most rquired model for delivery of inclusive growth in rural (agriculture) areas. Can you please explain more on the legal model of institutions setting? Mr. Semwal I request you to organise on intrection session to learn more. Peter Das Hi, We are working on the issue of SROI (Social return on Investment). The model of SJS also on working with tools of SROI. It is really nice innovation. All the best for success. http://www.restaurant-namaskar.nl M.Das Hi Dhimant & Arun, Congratulation for good work you have been doing. I am interesting to know about the Netherland counterpart of Apple project in India. Can I request you to send me the details http://nil aryan sanstha baran application Laxmi prakash semwal Please refer to my interview with a journalist in Holland here: http://www.centreforcivicdrivenchange.org/stories-of-change/sjs-apple-project-india/ Lalit Kumar I would like to request the better India forum to share the full “Model” of this project as it seems worthworthy for learning of the development practitioners in Rural areas of BHARAT to deliver the fruite of shining India to unprevilaged. Remi Kempers It is very nice to hear from this initiatives about Shri jagdamba samiti after such a long time! Hope everything is well with organisation. And, to be honest, I often think of my visit to Uttarakhand. I have with interest taken knowledge of your successes with regard to the apple project, I think you have a good initiative there. Already at the time that I visited your organisation and the farmers cooperatives I was already impressed by the ideas. It would be very kind of you if you could visit me the next time you are in Holland. You are very welcome at Both ENDS! I understood that you have found some Dutch funders for your project, which is fine. If you need any further information from us, don’t hesitate to contact me. I am looking forward to a visit. Keep up the good work there. Arun Pleased to see comments. Friends who want to interact with project or eager to know more advised to Cpntact: Mr. Laxmi prakash semwal Shri jagdamba samiti 1, vinod market, Dehradun Road Rishikesh e-mail:email@example.com Monika Hi, I have covered the work of apple project during my visit to farmers organisations in Uttrakhand as: Description of Social Enterprise- Strategic Business Unit Level One: – Aggregation – Through Farmer Associations (10-50 groups) / Groups of (10-20 people each) Farmers who are willing to join, pay membership fees and with the approval of the quorum (2/3) have right of voting during election. These groups engage in Primary collection/aggregation through farm collectives in the form of SHGs or Farmer Associations who do collection of the produce and sell it either to the SBU level two or in the market. Ownership is divided amongst the farmers (30%) as well as the second level SBU (60%) based on supply of working capital for purchase and sale of the produce. The facilitating organization also has a (10%) stake till the farmer need backstopping support. First Payment is made at the time of purchase from the collectors. Premium is paid after trading and deduction of capitalization and service fees. Strategic Business Unit Level Two: – Primary Value addition (Like grading/pre-cooling or quality improvement or packaging) Through Farmer’s LTD company that is made up of (Federation/ Clusters of groups) as a community based organization. The SBU level two has a company structure with management and business decision making in the hands of professionals. Initially divided amongst the investment firm (90%) and the facilitating organisation also have a (10%) stake. The ownership is transferable to the farmers either on the basis of the patronage. i.e. they can buy shares of this limited firm and become shareholders. Investments are made in Transportation, Storage, Grading Equipment, Packaging and Labor through this company. Premium is paid after primary processing. Strategic Business Unit Level Three: – Secondary Value addition by Limited companies-They can do additional value addition of the produce from the producer companies (like long term storage of apples for off-season sales). Ownership is initially divided amongst the investment firm i.e. FFT Limited (90%) and the facilitating organisation also have a (10%) stake. This ownership is transferable on repayment of investments (from government subsidies and profits) to the supplying farmer http://www.b-cat.nl Edwin Willemsen Happy to see the article on web. Thanks to Better India team. It would be better to feature the approach with all pertners experiementing this model for betterment of small & marginal farmers of India. Dr Shyama N Sharma Apple is a highly remunerative temperate fruit crop, help in improving economy and living standards of those engage in any way with this business and generting empoyment for the rural population. Commercial cultivation of apple needed the use of modern technologies with scientific base.Follow proper harvesting, handling, storage, packaging amd trasportation to fetch good price in the market. Judith Inspiring work by SJS. Keep it up. Hopefully, we’ll have a learning sharing visit soon Judith from Konstaz, Germany http://www.applehouse.co.in Raje Singh This project has a real positive approach for empowering farmers socially as well as economically. The Ultra Low oxizen technology based storage is coming up in nogaon, uttarkashi, Uttrakhand will help the famers to save time, money and provide them to fetch more realistic prices for their produces. All the best. http://www.dnfrd.org Sudhir Great initiative by Mr. Semwal. We request SJS to explore the possibilities for working together in BHILANGANA area of Tehri Garhwal, Uttrakhand with our organisation. vird application http://www.afsg.wur.nl Matthijs We heared about this project when the representatives of FFT and SJS visited us. Sound very innovative and realistic for small growers in developing world. All the best for success. http://www.totalproduce.com Sudhir Suri Congratulations for initiations to bring the much required development intervention in rural India. http://www.dnfrd.org S.K. Nautiyal I have participated in workshop organised by whole cast & crew of Apple project on 4th February 2010 at Rishikesh on the following themes: Triangulation (of social development organizations, corporations and Investors) workshop on 4th February 2010 A new approach for the development of India’s small & marginal farmers Although India is rapidly transforming itself into an open, more efficient and rapidly developing market-driven economy, in rural areas such transition has been lacking or progressing painfully slow for most farmers. Marginalized and small farmers in particular are unable to escape the powerful grip and dependence on middlemen, informal lenders and other intermediaries. Although there have been several attempts to assist farmers in escaping from their poverty trap, the results have been disappointing. Loan and grant schemes, if at all they reach the individual farmers, do not have the desired effect as these schemes do not tackle the core problems of dependence of the farmers, which brought them in poverty in the first place. As a result, most loan and grant schemes are in effect only patching solutions rather than a structural solution. Tripartite partnership to move farmers up the economic chain With support from private investors, originating from successful business families, a new approach for advancement of small and marginal farmers is now being tested in India and other countries. This approach is an attempt to find a critical entry point for rural development by concentrating on setting-up healthy agro-businesses in which farmers themselves gradually gain economic ownership, supported by both NGOs and experienced private entrepreneurs. Similar to the self-help groups and cooperatives, the aim is to set-up healthy business in handling, processing and trading farmer’s commodities on a commercial basis. The main difference of the new approach is that the farmers, along with social-conscious corporate partners, become equal business partners of the investor. The farmers will only gain full economic ownership, once the investment is repaid fully. No paternalistic form of aid, but a sound economic partnership between an investor and a (farmer-owned) company, supported by experience entrepreneurs. Along with a corporate business partner, the farmers are to set up a commercially-run business (a joint venture in the form of a private limited), based on a solid feasibility and business plan. This farmer-run joint venture enters into a loan agreement with (social) investors and becomes responsible for setting-up and running the business in a commercially responsible manner. The joint venture is to generate sufficient profit to: i) meet its loan obligations, ii) capitalize the company, iii) pay premium prices to the farmers who supplied produce and/or iv) invest in new profitable business ventures (allowing the farmer to move further up the value-addition chain). As a result, the farmers benefit in the form of good and assured prices for their commodities and possibly additional premium or dividend payments if sufficient profit is realized. In such partnership, the (social) investor, the social conscious entrepreneurs and the farmers become mutual depend business partners. Whereas the financial risk is to remain largely by the (social) investor, the farmers have most interest in making the business a success for their own future and village/region. workshop expected to enrich the approach from different perspectives as: 1-Non Govt. Development organizations: How the small producers can organize? (with business rigour) to contribute as co-creators of civil society to initiate civic driven changes (speakers of the season requested from various experienced organizations Dr. Anil Joshi from HESCO confirmed) 2-Corporate houses or business professionals: What would be the good CSR policy to contribute for Inclusive growth of the Nation? 3-Investors (Banks, International donors, Govt. development projects etc.): How to find the way of sustainable investment in participatory (producers& consumers) feasible business plans based on fair business principles? 4-Development professional: How to integrate of socio-economic complexities I felt it was an experience of new learnings. Best wishes for the success of approach. http://www.icsafrica.org peter We shared this story of civic driven change in joint learning workshop held at Kaapdorn The Netherlands organised by Context International. Found this an innovative idea of local socio-economic change. All the best. Vipin Hi, I have visited the area and have an opportunity to see the farmer associations. I suggest to upscale the project with other (more) farmers for agriculture/rural development in remote hill areas. D.P. Khimta The practical aspects of the project now coming in picture in our (Jubbal, himachal pradesh)area. A great initiative to make small growers self reliant. Anita Bhatt This great initiative by SJS & Mr. Semwal also started with tribal women’s group in Jaunsar Babar area of Uttrakhand this year for fruit processing. I have visited the group ion Chausal and find this project realy interesting for empowerment of marginalised. All the best for success. http://www.territoriosvivos.org Antonio Great initiatives by Shri jagdamba samiti. We are also looking for a collaboration with Mr. Semwal for promotion of eco-tourism based enterises development in bhilangana valley of uttrakhand India. Roberto I have heared about the project where an innovative theme of ” doing business with social concern” implemented by Shri jagdamba samiti. We are exploring posibilities of collaboration from teritorious vivos to work with Semwal on the basis of same concept for natural resources management in uttrakhand himalayas. Ashish I have visited the project area and found this initiative by Mr. Semwal & his team very much inspiring and a milestone in development of Garhwal himalaya. Abhik Kumar Bose I have visited Yamunotari & share the project with participating farmers. Inspired by the work of SJS & Mr. Semwal. The initiative selected for e-agriculture award 2010. Interested supporter can visit: http://www.eindia.net.in/2010/awards/ Bjhishnu Bhatt Our company DHARI_KAFNOL FARM COLLECTIVES PVT LTD promoted by this project. We are delighted to see the nomination of project for award Jagmohan singh This project completed three years now. We (The Purola Naitwar farmer company) benefited by the initiative each time by helping us in trainings, input supply and better marketing oppotunities. Amar Singh Kafola Thanks for this initiative. our farmer trust keen to get share in the joint venture company out of profit earned. We welcome the project head during his upcoming visit. Arvind Greetings to apple project. We learned more about the “SOCIAL RETURNS ON INVESTMENTS” from context team visited our center. We are committed to make this “Social venture” a big success. Bisar dutt Happy to learn about the “Social Venture” and its possibilities to transform Rural India in a vibrant economy. My thanks to Honorably Meindert sir of SHGW and Shri L.P. Semwal of Shri jagdamba samiti Vijay Badhani Hi, friends we have started apple procurement at our center. Thanks to SHGW and SJS for encouraging us last week. We will make a success out of opportunity given to us by our mentors i.e. Mr. Laxmi Prakash Semwal, Mr. Edwin Willemsen and Mr. Meindert. Kishan singh I realised this project will able to set a new rural development milestone through Value addition and supply chain infrastructure creation. Sunita The model “Fostering Farmer organisation with business rigour” also organised womens in 46 villages of Jaunsar-bavar area under a social venture project of SHGW. thanks to Apple project & Mr. L.P. Semwal Mahavir Singh We would like to share our experiences in Apple project: 1-Farmers are getting fair and immidiate prices for crop. 2-We are getting technical know how. 3-We are happy to see that first time our company is supplying fresh and tested apples to our customers. Thanks to our mentors in social venturing. Jagendra rana This apple harvesting time more farmers are joining our collection point at pissao. Thanks to Mr. Edwin & Mr. Semwal for guiding us. Sunder Lal I am glad to see apple project in e-India conference 2010. Pl. see links: http://www.eindia.net.in/2010/album/eAgriculture/eagriculture-photo-gallery.asp Uttapal Chandra I am working on the ICT part of this project. Glad to see presentation by Mr. Semwal in e-India: http://axisbank.com R.S. Tomar happy to know about the project from mr. Semwal. looking farward to join the initiative for rural services. http://www.axisbank.com Akshay Discussed to introduce the smart card scheme for small farmers associated with apple project in Uttrakhand. Inspired by the initiative. Vivek kappor Inspired by this initiative when visited the farmers collection centers. The model described here is really working at ground. All the best to Mr. Semwal &team. S.K. Sharma I knew about the initiative from women group of Tyuni area when they visited us for fruit processing training. Feedback from community about the project is highly appriciated. All the best. http://www.e-geo.org Dr. N. Sai Bhaskar Reddy Great initiative Semwalji. Best wishes to you and the team. http://www.axisbank.com Akshay Visited the project and discussed with joint venture companies of farmers formed by SJS. An inspiring innovation in farming and agriculture value addition chain business. Pankaj Tribal women of Jaunsar-Bavar area Uttrakhand also joinig the initiative through thier cooperatives in 36 villages. Thanks to SHGW, SJS, FFT. Vipin The initiatives of SJS/FFT/SHGW is benefiting the farmers of remote hilly area. Thjis is most relavent in the situation of disaster prone Uttrakhand. Keep it up, All the best. M.S. Ojha Our branch at rishikesh supporting the farmers joint venture formed under the apple project. It would be an opportunity for bank to finance these type of initiatives. http://www.sjsindia.org Utpal The project recently discussed in KRISHI DARSHAN program of Doordarshan national Pl. See: http://www.youtube.com/watch?v=gBHHiIm8ZHE Sureshuniyal11 I have visited the area of this project in Yamuna and Tons river velley of Uttrakhand and himanchal and get inspired to know that the farmers companies are coming up for value additions and storage. Thanks to Mr. L.P. Semwal for taking initiatives for empowerment of small and marginal farmers. Lalit Gumta I have visited the farmer joint venture companies and inspired by the work of SJS and FFT would like to share the conversation with Director SHGW and SJS on youtube: Request for application in himachal. Dilip Singh Congratulations to SJS team for good work in remote hilly areas. Hope, it will set an example for local employement creation. Arun Recently participating farmers of all four joint venture company got ownership shares in apple project initiatives. http://www.facebook.com/topic.php?uid=195367337149499&topic=328 Suresh Please read the concept paper on this model: http://www.groundreportindia.com/2010/12/fostering-farmers-organisations-with.html We are interested to collaborate for other agriculture produces in other areas. Shrijas More videos about this project now available at you tube pl. see: Shri Ram Please see the full concept paper on this model: http://www.groundreportindia.com/2010/12/fostering-farmers-organisations-with.html I strongly recommend to visit this initiative in yamuna valley of uttarkashi district Uttrakhand.