Monday, 20 October 2014

How much money from your grocery budget actually ends up in farmers’ pockets?

- more efficient value chains and cold storage facilities could help West Bengal’s producers of fruits and vegetables improve their profit margins

It is 07:30 in the early morning of a hot and humid day at Sealdah station in Kolkata buzzing with commuters, “coolies”, and travelers going about their business. We, two members of the IGEN-RE team of the German Development Corporation, catch one of the local trains taking us through and out of Kolkata and its peripheries, through rice paddies and jute fields up North to Nadia District. We meet Ekta Jaju from SwitchOn, a grassroot organization working on creating an ecosystem to facilitate last mile access to energy.

Increasing farmers’ incomes is not synonymous to increasing productivity levels as is often commonly believed. To the contrary, a more efficient point of intervention could be tackling the post harvest value chain of fresh agricultural produce, which, at its current state, is far from optimal. “For us, it is important to take an integrated approach”, says Ekta; “one-sided approaches will not necessarily have the greatest impact in a multidisciplinary and complex sector such as agriculture.” Possible points of intervention, which have partly already been undertaken by SwitchOn while others are yet to take off in the near future, are the establishment of an adequate cold storage facility for perishable produce, the support of pump entrepreneurs to switch from diesel to solar, the establishment of a farmer producer company – short FPO - , the improvement of marketing chains, as well as business ventures into organic farming and  food processing.

Local market where farmers' produce is auctioned 
to middlemen - the process is facilitators often 
reap a significant share of the total profit margin
Due to inefficient marketing chains not much of the money paid by consumers for fruits and vegetables actually ends up in producer’s pockets, but is reaped by a range of middlemen who cannot be considered to add much value to the overall transaction. The establishment of a FPO is supposed to change this by enabling producers to gain greater profit margins from their goods. Currently, few farmers market their own produce but instead depend on brokers and wholesalers to do so leaving farmers in poor bargaining positions. This is where the FPO comes in: the FPO has a small truck which enables them to collect large amounts of produce and sell it at the market where prices are highest on that day. In order to be a member of the Farmer’s Producers Company, 5 shares for 500 INR have to be bought. In return, minimum prices for produce equaling the best available market price on this day are being offered. FPO members will further benefit from less tangible services such as soil testing, better access to high quality and good price seeds and fertilizers, and technical trainings, for example on organic farming.

Construction of the cold storage facility in September 2014
But this is not all. Today, about 30% of fruits and vegetables that are harvested in India go to waste. Most food consumed in India is perishable; however, adequate storage facilities are lacking resulting in a dilemma for producers who are forced to sell their harvest as soon as possible, regardless of market prices. This leads to price fluctuations for producers and consumers alike since price crashes during peak seasons and price hikes in off-seasons are the natural consequence. The main influencing factor in shelf life and product quality is temperature control; however, cold storages are capital and energy intensive making them inaccessible for small-scale farmers. With the support of IGEN-RE programme, SwitchOn is in the process of installing a hybrid cold storage facility powered by PV panels during the day and grid electricity during night hours. The plan is to store high value as well highly perishable produce, which is expected to yield higher market prices in the near future.

The role of IGEN-RE is to monitor the set up and operation of the facility ensuring data collection of the type and quantity of produce stored, running cost incurred, and price differences achieved. The aim is to test the economic viability of the hybrid system and to generate lessons learned regarding the scale-up and replicability of similar projects.

Wednesday, 13 August 2014

Does the support from the Selco Incubation Centre assist enterprises in providing access to energy? – Time to look back

-- Nilanjan Ghose

Is the support of the Selco Incubation Centre actually helping enterprises with their business in providing access to energy? Would the new enterprises ventured out even without the support from Selco Incubation Centre? Is it necessary to have a “hands -on” operational incubation support? Should the incubation support be limited to the development of business plans? What can be done to support clean energy enterprises even better? These are just some of the questions asked during the detailed impact assessment study by the Indo-German Energy Programme-Renewable Energy Component” (IGEN-RE) programme of GIZ which has provided financial support for setting up and operating the Incubation Centre for the last 20 months (August 2012- February 2014). Since then, the Embassy of Switzerland and Deon Foundation are supporting the operations of the incubation centre.

Has the engagement with Selco Incubation assisted the clean energy entrepreneurs?

According to Mr. Rustam Sengupta, Founder of Boond Engineering & Development Pvt. Ltd, a last mile clean energy enterprise, Selco’s services have been beneficial. “The engagement with the Selco Incubation Centre has supported us in focusing on quality control of our products, assisted us in organizing banker’s awareness camps. The close interactions with the bankers have helped us in developing linkages for end user financing” says Mr. Sengupta. He adds that “last but not the least, it has assisted to raise capital from market without compromising on our core business model”.

“Yes, I would still have moved into the area of providing clean energy products and services even without the support of Incubation Centre. Actually, I started my operation before I came to know about the Selco Incubation Centre” points out Dr. Susmita Bhattacharjee, Managing Director / Founder, Pushan Renewable Energy Pvt. Ltd. “However” she continues, “the support from the Incubation Centre has allowed me a smoother transition in understanding of the technology and has also assisted me to have a better knowledge of the existing ecosystem.”


Pic 1 : On the job training in progress for the Selco Incubates


How can the incubation centre assist the clean energy entrepreneurs better?

Despite the largely positive feedback of entrepreneurs, Selco Incubation is searching for ways to customize and improve their programme. “Access to working capital is one of the key challenges which Mangaal is grappling with”, says Mr. Soraisam Devakishor Singh, Founder, Mangaal Sustainable Solutions Private Limited. “I have a ready market but have to slow down due to lack of working capital. Access to some initial working capital to support the firm’s growth is essential until the firm raises the first round of capital. The combination of access to working capital along with operational training would be of great help to us”.


Pic 2: Incubates with the Selco Incubation professionals

Eastern Envo Protect (EEP), a Guwahati based enterprise, is providing clean energy based home lighting systems to villages which are located within the flood plains of the Brahmaputra, one of the main rivers in eastern India, is in need of support for product innovation. “There is an opportunity to design the solar home lighting systems in a manner which can be easily removed/ dismantled from their present location in case of emergency. The flexibility of dismantling the system under stressful situation may be a unique and a key feature for the product” says Fazle Illahi, co-founder of Eastern Envo Protects.

Based on the discussions with different incubates, we feel that there are potentials for innovations to serve end users better. GIZ plans to focus on the product and process innovations necessary to encourage entrepreneurs to customize their products and services for rural consumers for different geographical regions.


About Selco Incubation Centre

The Solar Electric Light Company (SELCO) through its Incubation Centre is promoting the access to energy by supporting clean energy enterprises. The objective of the Incubation Centre is to provide technical support to start-up enterprises selling clean energy products and services in rural area. The incubation centre strives to strengthen both, internal capacities of the enterprises and assists in developing the external market ecosystem to support the enterprise.

Apart from assisting in developing the technical capacity of the enterprises to design solar home lighting systems, the Incubation centre also helps in training and capacity building of the selected rural technicians in the operation and maintenance of the system and in addressing the after sales services. In order to facilitate an enabling ecosystem, the centre is also organizing awareness creation camps for the rural bank officials within the project area of the entrepreneurs.

Assessing the needs of the entrepreneurs, the Incubation centre has developed three training curriculums for incubates and rural technicians both in English & Hindi (regional language).

Tuesday, 6 May 2014

Spread the word on solar pumping ! Supporting farmers in Bihar to adopt clean technologies to improve agricultural outputs

                                                                                                                by Franziska Kohler

Water is running through irrigation channels to the fields where vegetables, maize, mustard, wheat and other crops of Vaishali farmers are being cultivated. The water is supplied by Vaishali Area Small Farmer Association (VASFA) – which has been supporting irrigation groups since over 40 years, providing more than 700 farmers with water from their diesel powered pumping systems in exchange for a monthly membership fee and an additional amount paid for water on an hourly basis. Recently, however, the usual loud pounding of the diesel pump has fallen silent.

The GIZ initial study titled “Solar Water Pumping For Irrigation” highlighted that low awareness about the technology among farmers and financial institutions, who can play significant role in the development of market for solar water pump by providing consumer finance, is a major challenge. Renewable Energy Component of the Indo German Energy Programme (IGEN-RE) of Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH hired the service of Claro Energy a private company providing off-grid solar solutions, to replace two diesel pumps with solar powered ones.  At these demonstration sites, diesel pumps, which were being operated by two VASFA groups, were replaced by solar water pumps, and the tariff collected by these groups will contribute towards upfront costs of replacement for the remaining groups.

Currently, farmers whose land are located outside VASFA’s catchment area either own private diesel pumps or rely on renting pump sets on an hourly basis. The former option is expensive, especially due to high maintenance and operating costs. About INR 3000 are spent by each of the farmer on diesel alone in the seasons of Rabi and Kharif. For renting a pump set for one hour farmers in the area pay INR 120 making rented pumps an equally  expensive as well as unreliable source of irrigation. “Getting water from an institution, such as VASFA, instead of private individuals”, Ram Chandra Thakur (62) says, “would give us more security concerning water access. Solar pumping would furthermore help us to save on irrigation cost.”

Educating farmers about solar pumping technology, including  operation and maintenance as well as technical features, such as output and operating times, is one of the main goals of the demonstration sites. About 250 farmers will visit the site(s) each year and attend the workshops and information sessions where their questions related to solar pumping will be answered. Simultaneously, these events will give solar companies the opportunity to gain a better understanding of their customers’ preferences and choices relating to the technology. In addition, the presence of bankers, NGOs and government agencies will be an integral part of these events giving them a better understanding about the technology as well as the obstacles faced by farmers interested in converting to solar. “The planning and installation of the two solar pumps has been a very enriching experience” highlights Nilanjan Ghose, technical expert of IGEN-RE. The sites for replacement of the two pumps were selected democratically involving all the irrigation groups under VASFA. The installation of the solar panels was customized to ensure minimum blocking of agricultural land. Santosh Singh, technical expert of IGEN-RE explains: “we hope that these demonstration sites will aid in educating and awareness raising amongst all stakeholders concerned, paving the way for similar installations and finally leading to a broader market-based uptake of the technology in Bihar”. GIZ is working towards development of market ecosystem for solar water pumps.

Water gushing out from solar pump to the agricultural fields at Lalpura Village at Vaishali, Bihar 


A solar pump demonstration site at Vaishali, Bihar

Monday, 20 January 2014

Lessons from the Indian National Programme for Improved Cookstoves (NPIC)

Data from the World Health Organisation suggests that indoor air pollution (IAP) causes around 480,000 premature deaths annually in India (WHO 2009). Improved Cookstoves can help the 150 million households in India that are still using biomass like wood, dung and straw for cooking, to reduce hazardous levels of indoor air pollution. Although multiple models of improved cookstoves are available in India, stove adoption has so far been low. How can we change this situation and build a functioning market for improves stoves? In fact, there have been several efforts in the past to bring improved cookstoves into Indian kitchens, but most of them did not result in any long-term impacts. What can we learn from these past experiences to make future cookstove programme more effective? The Indo-German Energy Programme has analysed studies on the largest cookstove intervention India has seen so far – the National Programme on Improved Cookstoves (NPIC) – to extract the most crucial lessons learned. 

Smoke produced while cooking emerges from a hut in Laxmikantapur, West Bengal
The NPIC was implemented by the Indian Ministry of New and Renewable Energy (MNRE) between 1983 and 2002 to reduce biomass consumption through the dissemination of improved biomass cookstoves. On the one hand it succeeded in “initially distributing tens of millions [around 35 million] of stoves and so achieved a scale well beyond the nascent commercial [cookstove] operations” (Shrimali 2011) that are currently underway. On the other hand, the programme had a limited long-term impact: In 2013 only around 0.3% of the Indian population was using an improved cookstove (GACC 2013). The dissemination of improved cookstoves was driven by subsidies and national/regional targets. 50 – 75% of the stove price was met by a direct cash subsidy. The detailed analysis of NPIC revealed the flowing five lessons:   
  1. A market-based approach with an appropriate user contribution ensures consumer orientation and long-term stove adoption
  2. Awareness raising is crucial to stimulating demand
  3. Involving local grassroots organisations is crucial to successful project implementation
  4. Effective monitoring and evaluation systems are a prerequisite for sustainable project implementation
  5. Considering local user needs and feedback is crucial for ensuring long-term adoption of improved stoves

The detailed report on the lessons from the NPIC is available for download at

A woman using an improved portable cookstove in Kunda, Bihar