RUDI – Small & Marginal Farmers Own Agri Business Company

Competition Finalist

This entry has been selected as a finalist in the
Leveraging Business for Social Change: Building the Field of Social Business competition.

RUDI has built a robust rural distribution network that strengthens the entire commodity supply chain and links the farmer directly to the end consumer. Thereby the small farmer becomes the owner, manager, producer and supplier of the entire distribution network. All this ensures fair returns, food security and employment opportunities.

About You

Organization: Self Employed Women’s Association (SEWA) Visit websitemore ↓↑ hide↑ hide

Section 1: About You

First Name

Reema

Last Name

Nanavaty

Country

India, XX

Section 2: About Your Organization

Is your initiative connected to an established organization?

Yes

Organization Name

Self Employed Women’s Association (SEWA)

Organization Website

Organization Phone

Organization Address

SEWA Reception Centre, Opp. Lokmanya Tilak Baug, Bhadra, Ahmedabad 380 001. Gujarat

Organization Country

India, XX

Is your organization a

Non‐profit/NGO/citizen sector organization

How long has this organization been operating?

More than 5 years

Your idea

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Name Your Project

RUDI – Small & Marginal Farmers Own Agri Business Company

Describe your Social Enterprise

RUDI has built a robust rural distribution network that strengthens the entire commodity supply chain and links the farmer directly to the end consumer. Thereby the small farmer becomes the owner, manager, producer and supplier of the entire distribution network. All this ensures fair returns, food security and employment opportunities.

Country your work focuses on

India, XX

Innovation

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What makes your innovation unique?

RUDI is unique in the sense that the owners and managers of the company are 265,000 small and marginal farmers themselves. RUDI’s core values are based on Gandhian philosophy that scarce rual capital should strengthen the village economy by rotating within the village itself.

RUDI comprises procurement, processing, packaging and marketing of food grains at the local level. The essence of RUDI is to strengthen the rural economy through rural procurement and rural distribution. Thus all the products that are sold under this brand name have been procured from the rural areas and their distribution too is in the rural areas itself. This distribution network would enable to provide multiple employment opportunities, reduced incidental expenses, reach of agricultural products and non agricultural products to customers at affordable prices in required quantity and good quality, elimination of middlemen and socio economic development

So far 36,758 small and marginal farmers have been organized into farmers collectives under RUDI and 1500 women work as rural procurement and sales managers called RUDIbens for the Rural Distribution Network generating an income of Rs. 3500-4500 per month and a total turnover of Rs. 7,62,40,305.

Do you have a patent for this idea?

Impact

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Tell us about the social impact of your innovation. Please include both numbers and stories as evidence of this impact

Brand Rudi was created by Sewa with an objective to provide multiple employment opportunity to the members of SEWA. At the same time it also provide direct market linkage to the small rural producers and make available better quality goods of daily requirement to rural consumer at an affordable price-thus rotating the scarce capital within the village.
RUDI achieves these objectives by branding, marketing, and selling agricultural and daily household products created by the members of SEWA.

The organization has created an impact on the well being of constituents- namely RUDIben by providing following benefits: I

• More than 1500 women from the poorest of the poor families gets direct employment in various stages of procurement, production – value addition, promotion and sales.
• Under procurement of products from farmers for the pilot we are initially able to cover more than 15000 rural farmers and producers.
• The monthly sales potential is Rs. 50,000/- per month in one village and hence an assured income of Rs. 4,000 to 5,000/- per women in the village involved in retail sales
• It also ensures the employment security .Even if the agriculture production failed this is the assured income for them.
• Rural consumers are benefited by getting a wide range of quality product at right price and with proper weights at their doorsteps.
• Quality products of RUDI assure health safety of the rural consumers

Future Beneficiaries

• In future RUDI will cover 14 districts and reach to 1750 villages of Gujarat including non rudi districts and also cater to surrounding states of Rajasthan ,Madhya Pradesh, Maharastra.
• Nearly 7000 women will get direct employment opportunities on expansion of RUDI in other fourteen districts of Gujarat.
• The expected monthly sales potential is more than Rs. 100000/- per month in one village and hence an assured income of Rs,8000 to 10000/- per women in the village.
• It will provide an assured market to more than three lakh rural producer members.
• The procurement / distribution hubs will also act as Integrated Information Exchange Centers for the rural members

Problem: Describe the primary problem(s) that your innovation is addressing

Challenge RUDI’s Benefit
Lack of access to high quality agricultural products (Spices mixed with sawdust, etc.) By providing access to high quality agricultural goods and basic household goods, RUDI improves the health and quality of life of the rural consumer and his/her family
Lack of access to basic household goods (Light bulbs, etc.)
Lack of fair treatment by shopkeepers (Inaccurate scales and weights, etc.) By providing access to accurately measured, weighed, and packaged goods, RUDI improves the financial situation of the rural consumer
Lack of competition between retail outlets (Only one store in town, etc) By providing access to retail alternatives for agricultural and household products, RUDI forces other retail outlets to improve their products, pricing, and their customer service, which benefits the village as a whole
Lack of income-producing opportunities for women (In some villages women aren’t allowed to leave their homes, aren’t allowed to leave their homes alone, and/or aren’t allowed to own land, etc.) By providing rural women with work in the District Association Processing Centers or as RUDIbens, RUDI creates several income producing options that rural women can take advantage of in their village or in their own homes

By helping farmers get fair prices, by helping rural women find employment, and by helping rural consumers get access to high quality goods, RUDI is helping rural villages keep their scarce resources within the village while helping the Indian economy take a significant step in the direction of truly “inclusive growth”.

Actions: Describe the steps that you are taking to make your innovation a success. Include a description of the business model. What might prevent that success?

KEY FEATURE OF THE RURAL DISTRIBUTION NETWORK

1. Infrastructure at Rural Distribution network:

 Storage center at village hubs
 Processing center at village hubs
 Distribution centers at village level and district level
 Business development/marketing / market research/Training cells at SEWAt
 District hubs for coordination at village level (accounting- coordination-training- procurement- storage coordination centers)

2. Procurement of Raw Material:

 After analyzing the production data of the nine districts that SEWA farmer members works with the commodities growing in bulk were selected.
 After deduction of spoilage amount from the production figures, we have targeted 80% of the total production will arrive at the village hubs to be set up, one between 3 village, where it will be sorted, cleaned and packed. From the village hubs the production will arrive at the District hubs and from there it will be supplied to the other members as a part of the ration kits as per the demand.

3. Target audience of the Rural Distribution network

 The major buyers will be our own rural members.
 The margins for the target customers will be nominal just enough to cover the basic expenses.
 Tie ups with major retail chains like Reliance, Star bazaar

4. Scope for new opportunities due to the Rural Distribution Network.

 The rural distribution network will lead to increase in sales to the rural members itself which at present is much low due to lack of proper infrastructural facilities and improper quality management both at the farm level and at the post harvest level.
 Also with the establishment of post harvest management operation, cold chain and packaging in the rural distribution network will induce the Sales of processed products. And also help in creation of multitude of employment opportunities.

Results: Describe the expected results of these actions over the next three years. Please address each year separately, if possible

2009-10 2010-11 2011-12
year 1 year 2 year 3
Sales Rs. 3 crores 4 crores 6 crores

new rudiben 200 300 500

district associations 8 10 12

rural sales 59% 64% 68%
urban sales 41% 36% 32%

How many people will your project serve annually?

1001‐10,000

What is the average monthly household income in your target community, in US Dollars?

$50 - 100

Does your innovation seek to have an impact on public policy?

No

If your innovation seeks to impact public policy, how?

Approximately 150 words left (1200 characters).

Sustainability

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What stage is your Social Enterprise in?

Operating for 1‐5 years

Does your organization have a board of directors or an advisory board?

Yes

Does your organization have a non monetary partnerships with NGOs?

No

Does your organization have a non monetary partnerships with businesses?

Yes

Does your organization have a non monetary partnerships with government?

No

Please tell us more about how partnerships could be critical to the success of your Social Enterprise

Approximately 250 words left (1200 characters).

We would like to learn more about how your initiative is financially supported. Please explain your business plan/revenue model

2008-09 2008-09 2010-11 2011-12 2012-13
Target sales Rs. crores 1.50 3.00 4.00 6.00 8.50
Rural sales 96% 82% 59% 64% 68%
Urban sale 4% 18% 41% 36% 32%
RUDI product 90% 90% 60% 60% 60%
Non RUDI prod 10% 10% 40% 40% 40%

Earlier projections were more focused on rural market. With the experience for past 1 year it seems it would be difficult to achieve the targets if the sales is focused mainly in rural area and hence more focus given to the urban market where the volumes as well as price realisation is more compared to rural market. For this, we have planned for appointing super-stockist-Distributors/dealer network as this is the only way to reach the urban market apart from retail chains tie-up. The retail chain segment has also become a risky preposition due to exist of established players like Subhiksha, Vishal, Godrej-Adhar(sold to Biyanis),AdityaBirla More withdrawing slowly from Gujarat( supposed to concentrate on hyper market only).Also players like Reliance curtailing their operations and now concentrating on private labeling as done by Big Bazaar. . Appointing of super stockiest would also reduce the working capital requirement to certain extent as we can take advance for the orders/some deposits.

The second major change done in the plan is introducing non- rudi products along with the RUDI products. The issue was highlighted by the renowned Yale university professor Prof. Barry Nalebuff. On a general survey conducted amongst the members of RUDI for the spending and consumption pattern the figures for a family of 4-5 persons, it was found that certain products like tea, sugar, oil,soap are the major spending items as compared to the spices-cereal-pulsee in RUDI brand, so focus on non rudi products is increased.

The Story

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What was the defining moment that led you to this innovation?

Why farmers are remaining hungry

The Farmers’s remain hungry because they do not have the holding capacity and also their produce is limited and therefore they do not have access to direct markets. They are then forced to sell their produce to the middlemen at very low price due lack of knowledge. SEWA found that there was a need for them to have ready access to the market and a supply chain whereby they can have food security and at the same time the money from the village remains within the village. To bridge the gap between the farmers and market SEWA took initiative to set up the Rural Distribution Network along with brand name of RUDI which is farmer’s own Brand in 2004.

The SEWA’s RUDI initiative followed the Gandhian philosophy of Gram Swaraj, meaning village self reliance. The company inculcated by SEWA for the same philosophy through which it started the RUDI initiative of making the rural areas centre of economic activities, facilitating the rotation of scarce rural capital within the rural areas, and thereby strengthening the rural economy. To ensure the overall socio-economic development of the rural population, SEWA has been promoted RUDI to operate in integration with farmers’ Self Help Groups (SHGs) of SEWA members, .To achieve economic self sustenance in rural areas, it was very important for the rural areas to have existence of economic activities.

Tell us about the person—the social innovator—behind this idea.

Reema Nanavaty- I myself behind this idea to set up a rural distribution net work by setting up processing centers at district level. The function of the centre is to procure agriculture commodities directly from the small and marginal farmers. Farmers will get the market price at their door step. Rural communities will get regular employment and consumers will get the good quality products at affordable price through ‘RUDI’ brand. The main objective of the RUDI is to ensure the multiple employment opportunities for rural communities, to strengthen the rural economy by rotating their working capital within the village.

How did you first hear about Changemakers?

Email from Changemakers

If through another source, please provide the information

220 weeks ago Violeta Bendersky said: Dear Reema Nanavaty, According to your experience what are the main barriers or challenges so that social business model can ... about this Competition Entry. - read more >
223 weeks ago Rachna Pandey Donthi said: Dear Reema, SEWA as an organization has developed some great programs for the empowerment of women, and this is another example of ... about this Competition Entry. - read more >
223 weeks ago Reema Nanavaty submitted this idea.