Posts Tagged ‘Agriculture’

Innovations in the Field: Wheat ATM

May 14, 2009

The next series of blog posts will cover innovations from the field. Recently, I conducted some in-depth farmer interviews around Hyderbad and learned about some pretty interesting innovations that are happening on the ground. Keep in mind that these are not college-educated individuals; most have not even finished high school. What I saw was human ingenuity in its purest sense. At the end of the day, I found myself leaving inspired by their innovativeness and creativity.

Zulfiqar Ali, a four-acre farmer in the small village of Dabri, Pakistan, doesn’t travel to his nearest bank branch when he needs some cash. All he has to do is open the door to a room where he stores his wheat crop and travel to the market. Unlike most farmers in Pakistan, Zulfiqar does not sell his wheat crop upon harvest. He realized that harvest season was the worst time to sell his crops due to a glut in supply. Zulfiqar stores his wheat crop and sells it one bag at a time, based upon when he needs cash. With each passing week, the value of his remaining wheat increases. A wheat ATM… that is innovation.

Joel Montgomery

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Innovations from the Field: Natural Insurance Policy

May 13, 2009

The next series of blog posts will cover innovations from the field. Recently, I conducted some in-depth farmer interviews around Hyderbad and learned about some pretty interesting innovations that are happening on the ground. Keep in mind that these are not college-educated individuals; most have not even finished high school. What I saw was human ingenuity in its purest sense. At the end of the day, I found myself leaving inspired by their innovativeness and creativity.

Agriculture is extremely risky. There are so many things that can go wrong: bad seed, no water, pest attack, fake fertilizer, bad weather, no transportation to market, etc. Price fluctuations are also quite common. This means that a farmer may spend Rs. 25,000 (USD $315) or more on inputs (seed, fertilizer, pesticide, etc.) and land preparation (tractor rental, laborer wages, etc.) just to find out at the end of the season that the price of his crop is so low that he will make a loss. He borrowed money at the beginning of the season from an arti (money lender) at a rate of 120% annual interest and now is even farther in debt.

In Pakistan, most farmers grow two crops: cotton (summer) and wheat (winter). We always wondered why both crops were so prevalent and finally realized upon completing our interviews. Firstly, most farmers grow cotton and wheat because the prices are stable. It takes a lot of the guess work (and risk) from other types of crops that have more volatile prices. Secondly, farmers grow cotton and wheat because they don’t spoil. If you grow vegetables, then you must transport them to the market quickly before they rot. Cotton and wheat, on the other hand, can be stored for a long time and won’t go bad. Probably the most interesting reason for the traditional cotton-wheat rotation is that wheat is a natural life insurance policy. Farmers grow wheat and keep 50-100 munds (1 mund = 40kg) back to ensure that their families have food to eat during the coming year. Usually an average family needs around 50 munds per year, but they keep extra for festivals, weddings, and unforeseen circumstances. No matter what happens in

Social Enterprise is HARD to do

December 23, 2008

Starting a business is hard enough, but starting a business that has a social focus is even harder.  For Micro Drip, we are still very much working to refine our business model so that we can successfully sell to the Base of the Pyramid (BOP) here in Pakistan, those who live on less than $4/day.  For Micro Drip, one of the most difficult challenges is that we can have the greatest low cost, high quality drip irrigation system in the world, but ultimately success for a farmer depends on much more than our system: microfinancing, stable water source, good seed, fertilizer, storage, know-how, distribution to markets, etc.  As a result, we cannot simply sell our system off the shelf; we have to think about ways to directly and indirectly (through partnerships) address the problems that come before and after our product. 

A second difficulty that we face is the seasonality of our product.  There are two growing seasons in Pakistan each year with most farmers growing cotton during the summer season and wheat during the fall season.  Unfortunately, drip irrigation cannot be used with wheat given the density of the plants/acre.  Vegetables can be grown during both seasons and offer much higher prices, but the lack of storage and access to markets forces many farmers into cotton and wheat, which are more stable with much less risk of going bad. 

A third difficulty that we are tackling is how to motivate local sales reps in the communities that we serve.  CEMEX, a Mexican cement company, has successfully mobilized a large network of local promoters in its program Patrimonio Hoy, which helps clients who make between $5-$15/day to save money for do-it-yourself home improvements.  While there are some successful models out there, many social businesses are struggling with this issue, as it is often difficult for local sales people to make sufficient income selling a single product.  Where sales channels to the BOP already exist, it is much easier for existing sales people to add additional products to their offerings.  Unfortunately, we are not aware of any other sales channels that reach our target market that would be willing to add our systems to their existing portfolio.

In spite of the challenges, we are committed to bringing irrigation solutions to the poor farmers of Pakistan.  Drip irrigation increases crop yields by 30-100% all the while decreasing water usage by 50-70%.  This translates into more money for poor farmers and ultimately has the potential to free farmers who are imprisoned in debt and a subsistence life. 

Food or Money?

June 5, 2008

I was on my way home the other day and just as we stopped at the traffic lights,it is very common in Pakistan that some young boys looking for money will clean your windscreen in exchange for some few coins.Most of them are homeless and others just trying to earn a living to support their big families by toiling hard.

This young man approached our car and the driver gave him a nod that he could go ahead and clean the windscreen.After he was done and was waiting for his payment and I being very curious to see how much he would get for this job turned out interesting or funny I thought at the time.The driver spoke some words in Urdu and handed the guy some peanuts that he had been eating.The man gladly nodded and went away looking for more cars to clean.The driver later told me that the man had indicated that he is doing that coz he was hungry and since the driver did not have any coins the man accepted the peanuts as payment.

This made me think of the current food crisis and about giving aid to the developing world.What does the poor man at the village need?food or money?Not a very easy answer to give. I read an article of a relief organisation in Kenya which was targeting the school going children and giving them free lunch in school and most of the children would save this food and take it home to share it with the other children.Same case as giving an adult money to buy food;at that instance there are so many competing needs and the money may be channeled into other uses.

Giving money to the suppliers of food in the villages only enhances the hoarding of food and hence the food prices shoot up and what was to be a noble venture becomes a white elephant.The money is in the wrong hands and the poor starve to death.Looking at Kenya and Ethiopia;it is hard to explain that some areas which had recorded bounty harvests were the worst hit by drought and they suffered.Why is this so?The poor farmer in the village will want to sell when everybody else is selling and hence the prices are low.Some few months later the same farmer will go to the market and will want to buy the same commodity which is now at a higher price since it is a scarce commodity.He will actually be paying more for the same produce he sold.

There are many interventions and divergent views on what can be done to save the situation.At the end of the day whether food or money goes out;the poor need the basic calories to create a better tomorrow which is full of hope.