"Pragathi Bandhu" Small farmers come together to share and learn.
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Banking on Social Change: Seeking Financial Solutions for All .
Build the confidence and self esteem of small farmers, plan the farm, prepare for the market and access the linkages.
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Ubicación
Project Street Address
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tu idea
Year initiative/program began:
1992
Field of work
Agriculture
If Field of Work is "Other" please define in 1-2 words below (and explain in detail in the entry form):
Service / Activity focus (If "other" please explain in entry form)
Delivery Method
Year organization founded (yyyy)
1982
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Posicionando tu iniciativa en el diagra del Mosaico de Soluciones TM
Which of these barriers is the primary focus of your work?
Non-affluent are not valued customers
Which of the principles is the primary focus of your work?
Turn hidden value into alternative markets
If you believe some other barrier or principle should be included in the mosaic, please describe it and how it would affect the positioning of your initiative in the mosaic
Promotion of soft skills to mangage the smallpiece of land and the accounting skills to manage the family finances by millions of villagers is a significant requirement to improve the village life. In the last 15 years more than 2,50, 000 farmers have commited suicide in India unable to withstnad the fear of failure and percieved ignominy. It is important to bring confidence and hope among the 150 millin small farmer community who eke out a living on smallpieces of land.
Name Your Project
"Pragathi Bandhu" Small farmers come together to share and learn.
Describe Your Idea
Build the confidence and self esteem of small farmers, plan the farm, prepare for the market and access the linkages.
Innovación
What is your signature innovation, your new idea, in one sentence?
Build the confidence and self esteem of small farmers, plan the farm, prepare for the market and access the linkages.
Describe what makes your idea unique—different from all others in the field.
Farming is a high risk enterprise in India with uncertain monsoons, possbilities of adulterated seeds manures and pesticides,risk of pests and crop failures and lack of consistant markets. To prepare an uneducated farmer to face the adversities, convert the threats in to opportunity, weakness into strength will save millions of Indian farmers from despondence.
How do you implement your innovation and apply it to the challenge/problem you are addressing?
We organise the small farmers into small affinity groups of five members called the Pragathibandhus( relatives in progress).Most of these are illiterate men( In 10% cases women folk also join the movement),who come together to first preapare a five year plan to convert thier holding into a mixed farm yielding them return daily, weekly, and in lumpsum. They implement the plan by sharing a days labour together once a week, compulsory savings which is used as margin for borrowing larger investments on the farm land. They learn and practice from one another to reduce external inputs in farming operations and increase free internal inputs to make the farming inexpensive. They plan farm cash flows in such a way that they repay their debts in small sums on a weekly basis so that thier large loans are repaid easily. Over a period of time they learn to plan and execute thier farming and finances, use technology and local resources which ultimately builds thier confidence to face the adversity.
Do you have any existing partnerships, and if so, how did you create them?
The line departments(meaning governament departments created to deal with specialised subjects like agriculture, horticulture etc.) in the governament and the local agricultural research stations are important partners in that they provide technology support by providing the necessary skill training. Many a times the farm subsidies such as high yielding variety of seeds manures and machineries are routed through the pragathibandhu groups. We access the required funds for financing the farmers from the local commercial banks. The credit need assesment of the groups of farmers is made by us and finances provided to them by making bulk borrowing from banks. Support is also provided for the movement from the innovative large farmers of the area who give on the site training to the pragathibandhus.
In which sector do these partners work? (Check all that apply)
Citizen sector (nonprofits, NGOs) , Private sector , Public sector (government).
Impacto
Provide one sentence describing your impact/intended impact.
The innovation sofar has positively impacted 142,000 smallfarmers with holdings of less than 2 hectares apiece.
Please list any other measures of the impact of your innovation.
The farmers have been able to plan thier activities and crops which is measurable. They have been able to significantly increase thier income. They are able to manage thier cashflows and repay thier debts. Farmers have been able to reduce thier dependence on external farm inputs and significantly increase internal inputs to reduce the cost of operations and increase net incomes. The small farmer has become more organised. They paricipate in community development activities and civil society initiatives such as contesting elections for local governaments. They are today a confident lot and can face the world unitedly. A new federation of small farmers have given them a new voice. All these are measurable. Most of the small farmers are also farm laborers in the nieghbouring landlords house. By virtue of the renewed sense of purpose in thier daily lives thier work efficiancy has increased to increase the farm outputs of the large farms too!
Does your innovation address and/or change banking regulations?
The innovation has developed a new methodology of financing the small farms. So far the lending to farms has been activity specific expecting repayment to come from the incomes from that activity. For instance the bank finances sugarcane cultivation and waits for 18months for the sugarcane yield to come before demanding recovery of the loan. If sugarcane crop fails , yields less or there is market crisis the farmer is totally unprepared and faces balancesheet crisis. Where as the pragathi bandhu innovation looks at daily income of the farmer and encourages him to take up mixed farming which increases his income source. For instance a farmer takes up plantation crop, cash crop, vegetable cultivation floriculture fruit crops, dairy farming, a poultry, apiery,etc all of which bring in small revenues to the farmer and reduces the risk on any one crop. The farmer also manages his cash flow daily to pay small amounts from his net surplus to the loans borrowed by him. For instance the farmer pays back the sugarcane loan in weekly instalments from his other incomes without waiting for sugar cane yield. When his sugarcane starts yielding he has already paid back his dues and his dependance on sugarcane has actually come down.He is able to manage the risks on sugarcane production and marketing confidently. We have redefinied the approaches for lending to small farmers.
How many people does your innovation serve or plan to serve? Exactly who will benefit from your innovation?
We want to drastically reach to the entire small farming community which constitutes 70% of farming community in the country and 50% of the population in the country. The potential is quite enormous.The poor farmers will benefit from the innovation.
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Sustenibilidad
Fuente de financiamiento
How is your initiative financed (or how do you expect your initiative will be financed)?
The innovation has basically two types of costs. 1)Initial promotional costs in which the concept has to be explained to the stakeholder who needs to understand the model and agree to join the movement. This cost necessarily needs to be financed as an investment. 2) The management of the innovation involves training and capacity building of the stake holder and ensuring that the system works. This part is self sustaining in nature in the sense that the farmers pay for these services by borrowing from us and the interest income will take care of the programmme as also give sufficiant net surplus to take the innovation to newer areas. All in all the innovation is totally self financing in the long run as proved by us already.
If known, provide information on your finances and organization:
Talking exclusively of the pragathibandhu initiative, for the financial year ending march 31, 2008, the consolidated expenditure was Rs.366.56 million(US $8.15mn)(1US$=Rs.45) including a provision of Rs.5.7 million(US$0.13mn) for microfinance and Rs249.7million (US $ 5.5mn) interest paid on fund borrowings.
The income for the same period was Rs.377.74million(US $ 8.39mn) including earnings from the interest recieved from the stakeholders. For the year 2007-08 the organisation was able to achieve 103% organisational sustainability.
The total fulltime staff as at 31.03.08 was 1945.
What are the main financial barriers and how do you plan to address them?
The initiative is a multipronged solution to the vexed problems faced by the small farmers across the globe. Inview of this the initiative requires many inputs such as social, technical, financial,marketing, commercial to be used in effective implementation of the product. Building the capacities of the field staff organsing the stake holders require investments and therefore upfront investments are substantial. However the product is sustainable in two years. As an organisation we have tried to earn surpluses in our microfinance operations for making upfront investments in new areas. Rapid expansion will therefore be possible if there is outdside assistance from philanthropists. However we are not looking to this in replicating the model but depend on our own operational surpluses.
Aside from financial sustainability, how do you plan to grow the initiative?
We are on a systematic geographical upscaling path. We need to understand the cropping pattern, needs of the area, living environs before we can replicate the model. We therefore have prepared a blue print of doubling the scales on a year to year basis which will lead to rapid expansion. We hope to reach to three million clients over the next four years.
La historia
Please select one
What was the motivation or defining moment that led to the creation of this innovation? Tell us the story.
Millions of poor people became the owners of lands in the land reforms movement launched by the governaments in the 1960'S.This period has also seen a rapid growth of population which has increased the dependancy on fragmented lands for livelihood. This dependancy has been accelarated by closure of village artisan units resulting out of rapid industriallisation of farming. Thus more and more people started depending on meagre income from small pieces of land for livelihood. Thier aspirations were rised when the governament liberalised lending to poor people. These people ventured highly scientific very risky crops expecting huge profits. When many of these crops failed to give expected returns the farmers in despondency started commiting suicides. Starting with 1990'S more than 250,000 farmers have commited suicide in the country which is the single largest cause of deaths in independant Indian farming community.
Saddened by these developments SKDRDP tried to look at the issue as a whole and concluded that the farmer needs to be organised to look at farming from sustainability perspective rather than profit taking. To reduce risks in farming and to spread the risks among different crops and bring in fiscal planning and discipline among the multitude fo the small farmer community. To our surprise we found that the farming of the yore indeed practiced shared labour in accomplishing urgent tasks which facilated a bonding and a sense of brotherhood among the nieghbours which instilled confidence among the farmers. A model therefore was developed to integrate social bonding and systematic planning through pragathibandhu model.
Please provide a personal bio of the social innovator behind this initiative.
Dr. Veerendra Heggade Dharmadhikari of Dharmasthala, and the president of SKDRDP trust must be credited with the innovation of the product. Dr. Heggade a religious philanthropist is a multifaceted personality active in several social spheres such as education, health, rural development, enterprise training, architecture etc. He has promoted and funded SKDRDP since its inception in 1982. He has also guided the policies of the organisation.
a) Please identify the individuals that your innovation benefits (Please check all that apply)
Producers , Consumers , Holders of assets.
b) Do you help the people you serve to buy goods or services using financial innovation? If so, how?
Yes. The innovation has helped the federation of farmers to plan thier needs and purchase them in bulk to assure quality and price. For instance the farmers prepare plans for purchase of certain machinaries such as pumpsets, pipelines, irrigation systems, powertillers to negotiate for the best product in the market. Simillarly each farmer prepares an annual action plan to finallise the requirement. Simillarly they undergo training together visit model farms put up demonstration farms through the pragathibandhu groups.
c) Do you help the people you serve to sell goods or services using financial innovation? If so, how?
Yes. Indeed the innovation has provided a unique strength to the farmer to plan for crops and market them together. The farmers in a particular area come together to grow certain defined products which has market demand and dispose them of together which gives them the strength of volumes. For instance one farmer cultivating 25 jasmine flower plants has a very small volume of flowers. For him to market small quantity at a distant market even though the prices are good is unremunarative.Instead 10 farmers cultivating jasmine have substantial volumes to sell at best rates even in distant markets. At the same time they are also cultivating small quantity of vegetable, milk, which are also sold in the same manner. Thus thier dependancy on each other has increased but the risks are spreadamong different crops.
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