Adding value, one step at a time
By Rohinee Ram Shashidhar
Lakshmavva, a middle-aged small-scale woman farmer from Hunasekatte village, Sira taluk, Tumkur district gets ready to take her Foxtail Millet harvest to the processing mill, which is in the centre of her village. As she walks along with the vehicle that is taking the millet to the processing mill, she happily exchanges pleasantries with other women of the village. She tells one of her friends that she has made Bassaru (a lentil based stew, a staple food of South India, eaten along with rice), and after giving the millets for processing she will go home and cook hot rice for lunch.
As she walks, she thinks about the journey she took last year to get the millet processed. With a huge sigh, she recalls the travel of 40kms (~25 miles) on uneven roads, with her millet harvest to the processing mill in Hiriyur, Chitradurga District. The additional cost of INR 250–300 (~$3-$4) used for transporting, labour and the extra expenses when one goes out of the house for an entire day (food, coffee/tea, water, etc.) used to burn a huge hole in her pocket. Also, she shuddered with the thought of how middlemen fleeced her by telling lies and fooling her to believe her millets were of low quality and made her sell the millets at lower price than the market, from which she incurred huge loss.
She thankfully bows to her village deity as she passes in front of the temple, for saving her from all the trouble as the processing mill was established right at the centre of her village and the FPC supports her in selling the millet at a good price.
Lakshmavva reminiscences that the knowledge of cultivating of millet varieties like Foxtail and Kodo was passed on from generation to generation in and around Sira Taluk. Very few continued to grow them because of decline in the demand. But the recent trend of increased consumption of different types of millets in urban markets has caused many small-scale farmers to switch to millet cultivation again.
Millet is now branded as “smart-food”, which is climate resilient and grows with less water compared to other traditional crops. There are successes recorded in various stories where different varieties of millets are grown using less water compared to rice and wheat. Given the semi-arid climatic condition in and around Tumkur district, millet makes a perfect crop even when there is deficit in rainfall.
On an average a small-scale farmer harvests around 400kgs (~880 lbs) of Foxtail Millet from 1 acre of land in and around Sira taluk. Millet being a biannual crop, the harvesting and processing needs to be done twice a year. The expenditure to get the processed millet and to sell the same is as follows:
Table1: Expenditure to get the millet processed and sell it in APMC
The household income and expenses of a small-scale farmer growing Foxtail Millet in 1 acre of land, in 1 crop cycle:
Table2: Income and expenses of a farmer’s household growing Foxtail Millet in 1-acre land
The above tables clearly show the gap between the energy and money spent to grow the crop and the income generated. With meagre revenue generated out of their 1-acre land, the small-scale farmers cannot earn enough to gain socio-economic mobility.
To make up the difference, these small-scale farmers (and/or their family members) also have to take on many small jobs in the agricultural off-season.
The need to increase the income of small-scale farmers to get them out of the poverty cycle by decreasing the additional costs of processing, selling and the middle men’s commissions at APMC, made institutions like Salugatte FPC (Farmer Producer Company), MOTHER NGO (Multipurpose Organization for Training, Health, Education and Rehabilitation), NABARD (National Bank for Agriculture and Rural Development) and S3IDF-India come together. The unique solutions were figured out by exclusively working with grass-root level farmers, understanding their needs and demands and guiding the FPC at every stage to make the solution into reality.
The Salugatte FPC, supported by NABARD and guided by MOTHER NGO was looking for solutions to make the FPC profitable and to give the small-scale farmer extra income apart from what was generated through farming. At this point, S3IDF-India’s intervention helped them to find an effective solution, which not only included institutional support but the active participation of the FPC as well.
S3IDF-India through its multi-faceted approach (technology support, financial intermediation and business capacity building) recognized the need for a small-scale millet processing machine in the Hunasekatte village, which would serve as centre point for the farmers to process their millet yields. The idea of the small-scale millet processing mill was to cut down the expenses on transport and fleecing from middle-men in APMC and the buy-back of processed millets from the FPC itself, so that the small-scale farmers would save and earn more money.
The team members of S3IDF-India did a thorough study of millet processing machines installed in other places and realized that an FPC with the capacity of producing 7–8 tonnes of millet did not need the standard 20 tonne machine that is manufactured in Coimbatore and other industrial areas. This led the S3IDF-India team to discover a small-scale fabrication company called Bhavani Industries in Srirangapattana Taluk, Madya District that manufactures small-scale, compact millet processing machines, which was just perfect to process 7–8 tonnes of millet. S3IDF-India played a significant role in getting Bhavani Industries to talk to representatives of Salugatte FPC and make a deal to manufacture millet processing and cleaning machines.
Nitin Gopalakrishnan, Project Development Officer, S3IDF-India says, “the FPC expressed the need of having their ‘own millet processing mill’ that would ease local small-scale farmers’ access to value addition. Hence, identifying the right technology, which meets the needs of the market, efficiency and especially in the local context was key to this project. The next big step was to convince Canara Bank to extend credit to this newly formed FPC. As, lending to a FPC is still a nascent portfolio for banks, the partial loan guarantee from S3IDF and capacity building of the bank at various levels was crucial to make Canara Bank to come forward to give the necessary loan.”
The pooling of the required amount of money to set-up this millet processing machine by Salugatte FPC became a hurdle. Team S3IDF-India, spoke and convinced Canara Bank- Tavarekere branch to give a loan of 5 Lakhs (~$7,000) to set-up the small-scale millet processing unit. Canara Bank, according to its norms, required a loan guarantee to grant 5 Lakhs, which again was fulfilled by S3IDF-India by giving INR 3 lakhs (~$4,200) as a bank guarantee. Thus, Salugatte FPC had INR 5 Lakhs in its coffers, of which 3 Lakhs was used to procure and set-up the machinery and INR 2 Lakhs (~$2,800) as working capital.
The Salugatte FPC came up with the idea of aggregating the millet produce from the farmers so that the middlemen would be completely removed from the picture and the income for the farmers selling the millet directly to FPC will increase. S3IDF-India helped the Salugatte FPC in setting aside a working capital for the aggregation option, thus aiming to make the business viable, FPC profitable and increase the income of the small-scale farmers around Salugatte.
After this entire journey, today we stand at the helm of a new beginning of the small-scale millet processing mill at Hunasekatte, which is a critical value addition that S3IDF-India strongly believes will increase the incomes of the local small and marginal farmers. Value-adds like these would definitely help the farmers to break the cycle of poverty and flourish.
