What barriers might hinder the success of your project and how do you plan to overcome them?
A short-term hurdle is the large increase in working capital needed to build the amounts of ready-reserve stock needed to sustain a rapid expansion in sales. Due to the company’s very young age, we have partnered with more established organizations to overcome the credibility gap and reassure funders about our depth of experience and reach.
A longer-term hurdle is ensuring a sufficiently large and agro-ecologically diversified production base of partner communities to ensure uninterrupted and resilient supplies. Rural Returns has worked towards this from inception, meeting and settting up relationships with many more farming communities and organizations than medium-term needs require. This portfolio of communities represents a prioritized pipeline of communities. Rural Returns works with communities towards their eventual entry into full production. Our next two communities await contract cultivation decisions based on upcoming order flow.
Most important at every step is ensuring adding new sales partnerships with growth potential. Rural Returns is closing a deal with the largest U.S. importer of specialty rice. Our pipeline of orders includes two of the best-known large U.S. high-end grocery stores at intermediate discussion stages, and the largest local supermarket chain. Several distributors with high-profile food-service and retail clients stock our rice, a key hurdle for market presence. Our E.U.-based partner NGO is setting up channels there, apart from our independent relationships with European food-industry players. We are also looking to India as a regional market.
Tell us about your partnerships
Rural Returns’ partnerships can be categorized broadly into the areas of Production, Technical and Sales.
Production partnerships are relationships with strong, long-standing farmer organizations with whom we work to aggregate sufficient production to overcome the volume hurdle that our innovation addresses.
Technical partnerships include organizations with expertise and experience in agricultural aspects, as well as civil sector organizations able to work with, or already working with, our partner communities. The state Department of Agriculture through officials at many levels in the agricultural extension, research and policy areas support our work actively and enthusiastically. The premier semi-governmental research organization, which has already conducted relevant research in post-harvest and alternative products, works closely with Rural Returns, which also sponsors work identified as having strategic value. Non-Governmental Organization (NGO) partners include ICEI, Overseas, World Vision, Sewa Lanka, the Farmer Federation for the Conservation of Traditional Seeds and Agri-Resources. These organizations work in the same communities as Rural Returns, and play an essential role in building communities’ human and organizational capacities as well as complementing technical support provided by Rural Returns and the state.
Sales partnerships include strategic engagements with influential chefs, bloggers and “foodies” impressed by our products and excited by their social value, as well as food importers, distributors, retailers and food-service organizations aligned with our value proposition.
Explain your selections
The 2009-2010 Social Innovation Fellowship awarded by the Stanford Center for Social Innovation provided $120,000 in quarterly disbursements linked to pre-agreed milestones over the Fellowship year. This figure supported the bulk of the expenses during the Fellowship period as well as some months thereafter, thanks to conservative fiscal management. Support from immediate family has helped Rural Returns ride out short-term operating shortfalls. However, financing the rapid expansion needed to achieve sustainable higher volumes requires working with more innovative, risk-tolerant funding sources aligned with the spirit and cognizant of the scope of our potential.
How do you plan to strengthen your project in the next three years?
Rural returns has proven its business and operational model, has attracted sufficient farmer communities for rapid production expansion, and the buyers needed to drive its vision.
The key area of work in the next 3 years is to aggressively reach and exceed the volumes required for the heirloom rice sector to surpass break-even. This is possible within a 1-1.5 year timeframe, but will require sufficient seed working capital to overcome initial financing challenges. Within the rice project, potential beneficiary communities exist throughout the country. We have identified 3 regions around which to base logistical and value-addition planning and investments with the support of equity investors and support programs led by IFAD, the Central Bank of Sri Lanka, and other similar funders.
We routinize and modularize our work and the competencies needed. This will help us expand locally into other complementary or completely new sectors, as well as prepare us to work in other geographies with communities facing challenges similar to our Sri Lankan partner communities.
Rural Returns regularly monitors and is gradually developing other sectors compatible with our mission and competencies. These include other value-added agricultural products; agro-tourism and handicraft projects building on existing community partnerships and leveraging existing logistical and infrastructural arrangements; and working with rural communities along fishery and conservation zones. More urban areas include an e-waste re-purposing concept; child-safety motorcycle helmet exchange etc.