Leaving debt behind: How a start-up is helping to secure the livelihoods of Indian smallholders
The situation of smallholders in India is devastating. Many of them are deeply in debt and see taking their own lives as the only way out. Platforms like ConnectFarmer.com help the smallholders to sell their products at decent prices and to improve their situation. This was the idea of Germany-Alumnus Shrikrishna Hegde Ullane.
Almost half the Indian workforce is employed in the agricultural sector, which in turn only contributes 17.9 percent to the country’s gross domestic product (GDP). The financial yields for the farmers, who are mostly smallholders, are therefore very low. This is made worse by crop failures through natural disasters like soil erosion or floods. The effects of climate change as well as pest infestation are additional burdens for the farmers. And furthermore, intermediary tradespeople often pocket the small and hard-earned profits.
As a consequence, many Indian smallholders are in a very difficult financial situation, a great many of them are debt-ridden. According to estimates from 2016, since 1995, nearly 300,000 smallholders have chosen to take their own lives as a last resort in this desperate situation. But if the main provider of a family disappears, their economic situation deteriorates even further: Poverty and hunger increase.
Dates and facts on India
- Population: 1.2 billion (17.2 percent of the world’s population)
- Labour force: 502.2 million (48.9 percent in agriculture, 24.3 percent in industry and 26.8 percent in services)
- Population below the poverty line: 350 million (29.8 percent of the entire population)
- Population aged under 24. 46.15 percent of the entire population
- Gross domestic product (GDP): 204 billion US-dollars (third largest economy in the world, following China and the US)
- Economic growth 2015/16: 7.5 percent, 2016/17: 8 percent (estimate)
- Contribution of sectors to GDP: services 52.7 percent, industry 29.7 percent, agriculture 17.9 percent
- Literacy rate: 74 percent
Suresh, a smallholder from South-Western India, produces syrup from the kokum fruit as well as dried bananas. He is not sure what prices he could sell his products for or how to find customers. So he depends on intermediary traders, who end up keeping a large part of his profits as provisions.
“And this is exactly where our platform ConnectFarmer.com comes into play”, says Shrikrishna Hedge Ullane. Suresh registers with the platform. There, he will get the necessary marketing training to be able to estimate the sale value of his products. Furthermore, the platform connects him with the end customers. Suresh now receives regular orders – directly from his customers. Intermediaries are no longer necessary and Suresh takes prices that represent the true value of his products.
Representing smallholder interests
Shrikrishna Hegde Ullane has plenty of success stories like this to tell today. He is managing director of the platform ConnectFarmer.com. Ullane himself was born and raised in a small, remote village in the Southwest-Indian state of Karnataka. He comes from a family of smallholders who have been in farming for many generations.
“So, I have known about the hardships of the smallholders from an early age. Sometimes it is pest infestation, sometimes it is flooding – but despite all these natural disasters, the farmers have always been able to produce a certain harvest with great effort and difficulty. Unfortunately, it is always the intermediary tradesmen who pocket the profits and the farmers end up making losses.”
According to Shrikrishna Hegde Ullane, the farming community in India have no control over the marketing of their products so far. It is still completely in the hands of intermediaries. Government efforts for improved protection of farmers’ interests have shown no success yet.
Video: Drought in India – Driving Farmers to Suicide
“Since 1995, more than 300,000 farmers have taken their own lives – because of their financial problems. That is an average of one suicide nearly every 30 minutes!”
“I have always wanted to do something to solve the farmers’ problems”, says Ullane. He studied economics at college, which gave him a clearer picture of business processes. “I started thinking about how we could apply the same principles to agricultural marketing by joining many smallholders together”, he explains. “I found out that a cooperative is the best method of solving the smallholders’ problems. Most of the existing cooperatives had not been working professionally and had not produced any real benefit for the farmers.”
This is how the idea for an online platform emerged. Together with Balchandra Hegde Sayimane, who also comes from a family of farmers, he founded ConnectFarmer.com in 2013, creating a virtual marketplace that connects farmers directly with end consumers and enables them to sell their products.
In developing and emerging countries, there is still no nationwide fixed access to the internet. But nowadays, many people have a smart phone which they can use as a mobile access to the internet - and so information can reach even remote areas.
The advantages at a glance:
- Online platforms enable farmers to exchange information and even small-scale producers have a better estimate of their products’ value.
- By joining forces over an online platform, marketing of the products is also focused and becomes more efficient – a much larger range of customers can be reached.
- Contact with end consumers is established.
- Intermediate traders, who would usually keep a large part of the profits, are no longer necessary.
In this way, initiatives like ConnectFarmer.com can contribute to the promotion of decent working conditions and more economic growth. This makes them highly efficient in the fight against poverty and hunger – especially in rural areas of developing and emerging countries.
“I had a dream – that was all”
It was not easy for Shrikrishna Hegde Ullane and Balchandra Hegde Sayimane to launch the platform ConnectFarmer.com. “It took a lot of time and sacrifices”, Ullane tells us. “Since I come from a poor family, I had no money, and at the same time I had to complete a difficult course of education.” Initially, the start-up had to finance itself. Since 2015, it has been receiving funding from the DO School in Germany.
A global education platform connects young social entrepreneurs
In 2015/16, Shrikrisha Hegde Ullane was one of 19 students from all over the world who took part in the programme “Entrepreneurship for good fellowship” hosted by the DO School. His expenses for the trip to Germany, including his airfare and accommodation, were covered by the Westerwelle Foundation. After a ten-week orientation phase at DO School, Shrikrishna Hegde Ullane won the first prize for the best presentation of a business idea (a so-called pitch) in the category “Best social enterprise”. The award sum of 3,000 Euros was donated by H & M.
The global education platform DO School supports people from more than 70 countries in finding innovative answers to issues of the future, and to implement them through business solutions. In its programmes, the institution communicates important method foundations and creates networks between students, young social entrepreneurs, companies and organisations. DO School is an award winner of the competition “Landmarks in the land of ideas”. “Without the support of DO School, it would have been much more difficult for me to have made ConnectFarmer.com into such a success”, says Shrikrishna Hegde Ullane.
There were other challenges that Shrikrishna Hegde Ullane had to overcome before he could start the platform: His first difficult task was to convince his family of his decision to found a social enterprise. Next came his exams, managing the finances and building a team of like-minded colleagues. “Everything was a challenge for a young man from a remote village. I had a dream – that was all.“
Despite all the challenges, he received very positive feedback from the onset. And that is why his plans for the future of ConnectFarmer.com are optimistic: “We would like to expand the platform’s services to larger parts of the country and, in addition, want to establish a national farmers’ cooperative”, Ullane says.
Shrikrishna Hegde Ullane also has a personal wish for the future: “I would like to get a Master’s degree in Agriculture or Rural Development – and my favourite place to do this would be Germany. If I could find financial support through a scholarship, that would be a great help. Then I could advance my training and be able to support the farming community in my country even more.”
THE GLOBAL GOALS – powered by Alumni
Shrikrishna Hegde Ullane is a good example of how, due to their experience and their networks, Germany-Alumni can play an important part in achieving the 17 Sustainable Development Goals. ConnectFarmer.com is contributing to Goal 1 “No Poverty”, Goal 2 “Zero Hunger” as well as Goal 8 “Decent Work and Economic Growth” and Goal 10 “Reduced Inequalities”.
Webinar “Social Entrepreneurship”
Social Entrepreneurs want to address social challenges by developing innovative and sustainable solutions. How can socially relevant entrepreneurial start-ups be planned and how can we implement our initial social, cultural and ecological ideas? How can we use business approaches to meet social challenges? And what opportunities and programmes of advanced training are there in this field? These are some of the questions discussed in the Webinar “Social Entrepreneurship”.
Watch the entire video recording in our Community group “Social Entrepreneurship” and discuss the topic with other Germany-Alumni!