Aranyak EcoHarvest: An innovation in connecting Small Farm Agri Foods (SFAF)
Aranyak Ecoharvest (http://aranyakecoharvest.com), an eco-social enterprise was launched in March 2016, to connect the small farmers with urban consumers and promote sustainable consumption and production (SCP; SDG12) around small farm agri foods (SFAF). We strive to connect the urban consumer to the small farmers growing food traditionally in rural landscapes and encourage conservation of the agrobiodiversity through responsible, healthy and nostalgic consumption. Through our engagements, we seek to contribute to sustainable rural livelihoods, rejuvenation of rural economy and resilient rural ecosystems and landscapes (SDG 2), while ensuring healthy lifestyle and consumption among Urban middle class consumers. (https://ecoharvest.in ).
Twin development problem : Poverty of Small farmers and Health of Urban Middle Class Consumers
Agriculture is the livelihood for an estimated 86 per cent of rural people (2.5 billion people) and provides jobs for 1.3 billion smallholders and landless workers. Half the total population of developing regions and a majority of the hungry and the poor are farmers and their families. (FAO, 2001)[2] Smallfarms in the world, produce up to 80% of the food consumed and support up to two billion people. In India, 85 per cent of farms are small and cover 44 per cent of land under cultivation, but provide of 60% of farm food for the nation. More than 90 per cent of the farms will be small by 2030. As a group, smallholder farmers are among the most disadvantaged and vulnerable in the developing world: half of the world’s undernourished people, three-quarters of Africa’s malnourished children, and the majority of people living in absolute poverty can be found on small farms. About 66 percent of the vulnerable population in India are small farmers as per IFAD. Nearly 70% of farm households in India spend more than they earn on average each month, pushing them towards debt, which is now the primary reason in more than half of all suicides by farmers nationwide.
South Asians comprise 60% of the world’s heart disease patients. More than hundred million of them will be diabetic by 2030, almost double than Europe. Increased income, per capita expenditure and rural-urban migration have contributed towards lifestyle changes, including shifting from traditional dietary habits. Shift towards fine rice, other refined grains and unhealthy trans fats are linked to increased diabetes risk. Some consumers are willing to shift to natural and healthy, bio-diverse, seasonal and geographic origin food (see next section). However, they are often not easy available/accessible (e.g. in only exhibitions or some stores) round the year, not affordable by MCC (e.g. high premium of organic and natural branded products) and many a times not reliable (poor packaging, traceability and certification), forcing consumers to continue with a unhealthy lifestyle.
Potential
Consumption by Indians has increased more than threefold in the past 10 years and is poised for similar growth in the next decade—leading to a tenfold increase in 20 years. By 2025, the ‘affluent’ consumer segment will become the largest, accounting for about 40% of all Indian consumption, up from about 26% in 2015) Food and Grocery constitutes almost 1/3rd of consumption basket in India and is sixth largest in the world. Rising health consciousness, changing lifestyles, and mounting disposable spending and growing availability of organic food products in shopping malls and retail outlets drive the current growth in the food market. Organic food sector is growing in India by 20-30% every year. Natural Foods are considered very important by 43% of Asia-pacific respondents (global 43%) in Nielsen survey, 2016. Environmental and socio-economic concerns are now influencing consumers in Asia, who includes now, sustainably sourced (43%), organic ingredients (36%) and local foods (27%) in their purchasing decisions, all of which are higher than global average. The willingness to pay a premium for healthy food is also higher in Asia-Pacific (93%) than high-income countries.
The innovation
Innovation in Aranyak is about building and fostering ‘connection’ between small farmers, producing traditional, geographically niche products with the urban consumers, looking for healthy, natural, nostalgic food, through short supply chains relying on innovative channels and strategies. Aranyak realizes the challenge in this elongated chain of P2C (Producer to Consumers) channel, which connects P2B, B2B and B2C, addressing it through a networking strategy of a partnership ecosystem. As a eco-social enterprise, launching an idea which looks into future of producers and consumers, it foresees substantial start-up investment, initial low-return, long- gestation cycle of investments and accordingly strives to connect grant with investment to sustain the business.
Aranyak builds it three verticals and connect them vertically and horizontally, with following strategy:
P2B Strategy : Forging partnerships with Government projects, NGO and Producer Organizations mandated to build value chain of farm products through development grants, it minimizes the deep pocket investment on establishing supply chains. This arrangement absorbs the transaction cost of small-surplus aggregation from scattered farmers, meets the cost of quality control, brings in investment for value addition, infrastructure and capacity building and takes care of working capital, as part of development investments to augment rural livelihoods. These partners find synergy in this connection, as sustainable and remunerative marketing has been elusive and mainstream trade channels too competitive and are willing to either supplement Aranyak with grant support or addresses the downstream investment on own. This set of strategies, help the small suplus of diverse and quality products, get aggregated and processed as per Aranyak’s market placement framework, in product catchments by producer institutions through own investments with mentoring support, ready to be supplied to Aranyak or its clients.
B2B strategy: It is built around building efficiency in logistics, gaining from IT platforms and diversifying marketing channels. Aranyak employs a sourcing system, which records and monitors static and dynamics information on producers, institutions, products (quantity, quality), processes (aggregation, value addition etc.) in real time through mobile platforms, integrating spatial and visual information. This ensures traceability and helps improve product movement efficiency. Low surplus volumes are moved through local small transport and bus networks, which has a better penetration in product catchment, thereby reducing cost and time. While final packaging and quality control are ensured by Aranyak directly, marketing is augmented through online, mobile, retail, bulk-trading and export platforms. Apart from developing own IT platforms, based on its core competency, Aranyak also partners with transporters, third party online marketing portals, wholesalers, retail chains, courier firms, institutional buyers (viz. hotel, restaurants, hospitals, canteens etc.) and export agencies to expand its outreach .
B2C Strategy : Aranyak provides urban MCC an option to get their choice of healthy, natural, nostalgic and responsible consumption through an easily all time accessible, affordable and reliable channel. It also invests in strategically communicating with consumer to promote informed and responsible behaviour towards diverse, ethnic SFAF and contribute to fair trade. It ignites informed behaviour among consumer around sustainable consumption by reconnecting them to ecology, society and culture. It provides a consumption-window to contribute towards reduced GHG emission, biodiversity conservation, farmer well being and sustainable development. With a growing trend towards green consumption, national obligations to promote SCP, it seeks to leverage grant resources to meet a substantial part of ‘connection’ cost.
To date, Aranyak has served over 5,000 small farmers from 3 states (Odisha, West Bengal and Manipur) and connected them to 2790 (and counting) Urban MCC in 16 states over different marketing channels viz. online, mobile, retail, exhibitions etc.
Aranyak has a plan in place to connect to One million smallfarmers and One million Consumers by 2020, through partners and innovations around technology and communications. It aims to contribute to SDG2 and India’s plan to double farmers’ income by increasing the income of its connected small farmers by at least by 20%, while also converting the monthly grocery basket of Urban MCC by same 20%.
References:
[1] SFAF, in this context includes sustainably and ethically sourced (viz. local, genuine-surplus, just-paid) bio-diverse food grown or produced in small farms or gathered from commons by farm-family members with comparatively lower GHG emission and more effective use of water, energy, chemical than mainstream agriculture.
[1] http://www.fao.org/docrep/003/y1860e/y1860e00.htm#TopOfPage