Young Bihari Entrepreneurs from IIM set up business of the vegetable-supply chain called SAMRIDDHII.

The IIM sabziwala

The face of Bihar is changing! While Chief Minister Nitish Kumar and the political stability, now evident in Bihar, are at the forefront of the change, young Bihari entrepreneurs with degrees from the Indian Institutes of Management and Indian Institutes of Technology are using their knowledge and special skills to transform rural life. Social sector investment bankers are providing financial backing needed for any meaningful transformation in rural India. 

When Kaushlendra Kumar did his MBA from the IIM, Ahmedabad, and won a gold medal and topped in agribusiness in 2007, he was confident of turning his dream of making his home state Bihar, blessed with the rich alluvial soil of the Ganga river, the vegetable capital of the country. While his colleagues from the IIM were marketing toothpastes, noodles and detergents for the multinationals, Kaushalendra set up Kaushalya Foundation and stuck to marketing nutritious but humble vegetables. 

Women, who were confined to their homes, are now involved in sorting, grading and packaging of vegetables at the processing centres. They earn anything from Rs 1,500 to Rs 3,000 each per month

The vegetable supply chain venture was so novel that the faculty at his alma mater and friends helped him design a light vegetable cart that could be pushed or attached to a cycle as well the technology that would enable him to increase the shelf-life of the vegetables through the summer heat. Initially, he even pushed his own cart to gauge public response and study the demands and gaps in his knowledge and marketing. And soon enough, Kaushalendra was nicknamed the IIM sabziwala. 

The nickname has stayed but the business of the vegetable-supply chain called Samriddhii has grown. It has yielded dividends for farmers who have joined his vegetable network, increased employment for women and won laurels for Kaushlendra and his Kaushalya Foundation.

Today, more than 3,000 farmers in Patna and Nalanda districts are growing and selling eight to nine tonnes of vegetables through the Samriddhii supply chain and their incomes have soared. While importance is given to cultivation of traditional vegetables like green brinjals, parwal or snake gourd and seasonal vegetables, growth of exotic vegetables like mushrooms, baby corn and special varieties of tomatoes in green houses, is also catching on. Broccoli and other exotic vegetables can also be grown but in the absence of five-stars hotels in Bihar, it is not yet an economically viable option, says Anuj Kumar, 28, one of the five MBAs associated with the Kaushalya Foundation

While his colleagues from the IIM were marketing toothpastes, noodles and detergents for the multinationals, Kaushalendra set up Kaushalya Foundation and stuck to marketing vegetables

 

Farmers are being organised to work together as a collective unit. If a group of 25 to 30 farmers in a village come together, a vegetable collection centre is set up in the village or its vicinity. These centres are managed by the farmers themselves and they get paid an additional 10 paise per kilo of vegetable that comes to the centre. The Kaushalya Foundation, however, keeps a benevolent eye, advising and solving problems if needed. The collection centres save the farmers the long trudge to the mandis with sack-loads of vegetables weighing 50 to 60 kg. So far, eight collection centres or Samriddhii grameen kendras have been set up in Patna and Nalanda districts. The vegetables are then taken by tempos to processing centres, where theseare cleaned, graded and separated according to their quality before being packed and dispatched for distribution. 

Vegetables are cleaned but not washed because soaking them in water decreases shelf life, says Anuj Kumar. The prices of the Samriddhii vegetables vary according to their quality. While the ‘B’ grade vegetables, used by bulk consumers like hotels and restaurants, are cheap, the ‘A’ grade vegetables, retailed through air-conditioned outlets to customers finicky about quality, are more expensive. Vegetables like potatoes, onions, tomatoes sold to bulk consumers are also big in size because they are easier to peel and chop and there is less wastage. The ‘C’ and ‘D’ grade vegetables sold to dhabas and wayside shops are the cheapest and have to be consumed quickly. If the A grade potato costs Rs 8 a kg, B grade would cost Rs 6 and C and D grade Rs 4 to Rs 3 a kg, respectively. Samriddhii also has pre-paid card facility to sell pesticide-free vegetables.

The faculty at his alma mater and friends helped Kaushlendra design a light vegetable cart that could be pushed or attached to a cycle. The technology-driven cart also has a cooling system – chemicals that convert into ice so that the vegetables stay fresh for five hours

Kaushalya Foundation’s objective

* To connect vendors and marginalised growers to the mainstream of the society
* To provide a platform and support to vendors and marginalised growers in the evolving economy
* To prepare vendors and marginalised growers for new market challenges
* Creating infrastructure
* Strengthening the link between growers and vendors
* Reducing the operational cost and increasing price realisation for vendors & growers.
* Providing added benefits to the vendors & growers like insurance cover for family and free education to wards.

The Kaushalya Foundation owns one tempo and hires other vehicles as per requirement.

The farmers have an assured market in the collection centres. They are informed about the purchase price of all vegetables the previous night and if the price does not suit them, they can defer the sale or take their crop to the traditional mandi. However, selling to the Samriddhii kendras saves farmers the cost of transportation, weighing and packaging charges and the commission that mandis charge. The income of farmers, who have joined Samriddhii’s vegetable supply chain, has gone up from 0.25 to 1.50 times.

As members of the Samriddhii family, the farmers are trained in organic farming, taken on study tours and encouraged and supported for growing exotic vegetables like baby corn and mushrooms in low-cost green houses or poly-houses (polythene sheets spread over bamboo poles).

This year the Kaushalya Foundation is entering into an MoU with the Agriculture Department, Bihar, for subsidy for the cultivation of baby corn. Also proposed is one poly-house in each village at government cost. Last year, the Kaushalya Foundation constructed five poly-houses at its own expense — three in Patna and two in Nalanda, the hometown of Kaushalendra, Anuj, and of course, Chief Minister Nitish Kumar.

Farmers are being organised to work together as a collective unit. If a group of 25 to 30 farmers in a village come together, a vegetable collection centre is set up in the village or  its vicinity

There are 50 vegetable carts in Patna on the lines of the first designed in 2007. The new vegetable carts, attached to cycles and with better display and space for advertisements, are an improvement on the first prototype. The 60-kg carts have a five-year life and if these are able to get ads, it can pay the Rs 52,000 cost of the cart. Recently, the Bihar Government announced a subsidy of Rs 27,000 on these carts. The technology-driven cart also has a cooling system – chemicals that convert into ice so that the vegetables stay fresh for five hours. 

The neatly packed and graded vegetables, carrying the Samriddhii logo are bar coded so that the buyer knows the name of the village from which they come from, their price and weight. 

With the entry of the Kaushalya Foundation, there has been a spurt in employment in the farm sector, especially for women. Women, who were confined to their homes, are now involved in sorting, grading and packaging of vegetables at the processing centres and earn anything from Rs 1,500 to Rs 3,000 per month. However, the women need to know how to use electronic machines for weighing, packaging etc. Poly-houses are also being given in the name of responsible and capable women farmers. Anuj Kumar says the farmers of Bihar, because of their poverty, were not using much fertilisers and insecticides, so the soil is still very good. In addition, the ebb and flow of the Ganga ensure that the soil is rejuvenated annually. In the poly-houses coming up in rural Bihar, too, no insecticides and pesticides are used, and only the minimum chemical fertilisers are allowed. The vegetables, grown in the poly-houses, are priced higher and are available on demand. The order for the poly-house-grown vegetables have to be placed in advance at the processing centres.

While Kaushlendra, 31, and Anuj are shareholders and do not draw a salary, the other three MBAs attached with the Kaushalya Foundation are salaried employees heading different units like new ventures, project management etc.

 

“We have put our heart, soul and money into Samriddhii,” says Anuj. “We are single, have no family responsibility, and so, can work till late at night and do without monetary benefits at this stage. Recently, Kaushlendra’s elder brother, Dhirendra, has joined the business and he meets farmers, organises groups and looks after procurement.

Navin Ranbir Gautam (left) and Dhirendra Kumar checking vegetables for their quality

“Beginning with a bank loan of Rs 50 lakh for capital expenditure and working capital, for three years we were running at a loss. This year we have made a small profit,” adds Anuj. “And it is being reinvested in the business,” he says.

“The bank loan is also being paid off every month. In the next five years, the Kaushalya Foundation has set itself the goal of raising farmers’ incomes by 50 per cent. It is going to benefit us also, because once the farmers start getting better prices, they’ll be in a position to produce vegetables in a better way,” says Anuj.

The recognition and rewards are their sustenance. This year the organisation received the Sankalp award from Aavishkar and Intelecap, social sector investors. In 2010, the Willgro Award was given in Chennai. The Kaushalya Foundation has also been short-listed for the Canadian Katerva award for social enterprise and the UN Habitat Youth Fund. The May 2011 issue of the Time magazine also featured the Samriddhii venture in its business story on grassroots entrepreneurs in rural India — reducing the gap between rising India and the other India. It quotes one of Samriddhii’s farmers, Gulab Singh of Yusufpur, who has been able to sell tomatoes cultivated in his poly-house and now earns Rs 600 a day as against Rs 120 just a couple of years ago. 

The Samriddhii model is obviously working. This January it has moved into UP where it will working in a 50/50 partnership with a local entrepreneur – ORVEM (Organised Vegetable Marketing).

Hoping that Bihar can join the India economic miracle through its farms, Anuj says the state has the potential to feed the whole country with vegetables. Hopefully, it will provide the alternative model to industrialisation. 

(Left) The May 2011 issue of the Time magazine also featured the Samriddhii venture in its business story on grassroots entrepreneurs in rural India   (middle) Dhirendra Kumar, Anuj Kumar, Kaushlendra, Navin Ranbir Gautam and H. K. Patel are the five MBAs working with the Kaushalya Foundation Photos courtesy: The Kaushalya Foundation (right) This year the foundation received the Sankalp award from Aavishkar and Intelecap, social sector investors  source:The TribuneSaturday, June 25, 2011