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Dutch PM bats for farmer owned joint businesses

Jun 05, 2015

Farmers’ ownership of agri-biz value chains can solve food insecurity and rural poverty in India, proves Indo-Dutch initiative.

Mark Rutte

New Delhi: Farmers as Owners, a commercial initiative that aims to create world-class farmer-owned companies in India, received recognition today during the visit of Dutch Prime Minister Mark Rutte to New Delhi.

The Dutch Prime Minister is accomapnied by agriculture minister Sharon Dijksma and foreign trade minister Lilianne Ploumen amongst others. The trade volume between India and the Netherlands is about 6 billion Euros. There are large opportunities for Dutch companies in India, in particular in agriculture and horticulture, water management etc.

The Farmers as Owners initiative is a model example of Indo-Dutch colalboration. More popularly known as The Apple Project, it’s a unique agri-value chain model co-created by four partners from India and the Netherlands working together to serve themselves and the common good.

Rutte said, “Dutch cooperation will give a push to the farmer owned joint businesses in India.” He was speaking at a meeting of Indian and Dutch entrepreneurs in New Delhi today.

Added LP Semwal and Edwin Willemsen, co-founder of Farmers as Owners, “India can achieve food security when farmers, companies, investors and non-profits work together as true business partners.” Semwal is also director of Shri Jagdamba Samiti and Edwin Willemsen is director of Fresh Food Technology.

Rishikesh-based non-profit Shri Jagdamba Samiti started a decade ago to link apple growers in the isolated mountains of Uttarakhand with high tech agri-company Fresh Food Technology from The Netherlands. With an investment by social investor SHGW, the four partners set up joint venture companies to invest in facilities that improve efficiency and profitability in the apple value chain.

The joint ventures, which are co-owned by the farmers, invested in apple collection centres at the village level, where individual farmers can collectively sort, grade, pack and pre-cool their apples. Later on, the joint ventures collectively invested in a special kind of long term cold store, which can store apples for up to 11 months without losing quality, in refrigerator trucks and in an apple juice processing plant.

The results have been overwhelming for all partners. The farmers have seen their incomes rise significantly (20-30%). Their transport and trade risks have reduced tremendously and they have saved money and time on packaging, transportation and sales. Unsurprisingly, the number of partcipating farmers has grow quickly, from 500 to 4.000 farmers by the end of 2014.

Fresh Food Technology (FFT) successfully entered the Indian market through its wholly-owned daughter company Fresh Food Technology India (FFTI). The cold store that was commissioned by Farmers as Owners has attracted a lot of interest from industry, government and media. The installation is popular as ‘Little Holland’. Since 2011 the company has built over 150 controlled small and large cold stores for commercial parties throughout India.

Social investor SHGW has many reasons to be satisfied as well. Its loan to Farmers as Owners has not only structurally increased the incomes of farmers, it has also created 60 full-time jobs and part-time employment for a total of 10,000 man-days. Further, it has significantly reduced food losses in the area where it operates (down from the national average of 40% to 6%). On the financial side, 30% of the total investment in infrastructures has been repaid by mid 2015 as scheduled. The loan is expected to be fully repaid in 2018.

Finally, non-profit SJS has made an important step towards its goal to structurally contribute to rural prosperity and promote entrepreneurship among farmers. It has gained experience working with different partners and developing the co-creation agri-value chain model. In doing so, SJS has put itself on the map as an entrepreneurial non-profit organization, but most importantly, it has created a successful model that can be scaled up and replicated in the future to realize food security in India.

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