The Need Of The Hour: Agri-Business Innovation

Editorial

May 15

Over the past decade, my career and professional endeavors have focused on the alleviation of extreme poverty.

In this line of work, it’s natural to feel that one is straddling two very different worlds. When I’m visiting a project site or village in India, I am often reminded that the wonderful people we are working with regularly face challenges that I do not have to contend with in my daily routine back home in the US. I learn so much from them, and I aspire to emulate the courage, optimism, and resilience that they so naturally demonstrate.

To simply view these contrasts through a binary “us versus them” lens, however, leaves out a lot of nuance and an opportunity to forge a common human understanding. Just beneath the surface, we have a lot more in common than meets the eye.

I recently read a blog piece that drove this point home. The author, Willy Foote, Founder and CEO of Root Capital, a friend to Upaya, and an entrepreneur I’ve long admired wrote, “To feed a growing world population, we’ll have to at least double agricultural production by 2050,” citing statistics from a recent National Geographic report. No matter where in the world you are, the sources of fresh, nutritious and life-sustaining food are coming under increasing threat. None of us can take for granted that fruits, vegetables, grains, and meats will be readily available to us in the medium- to long-term.

It is estimated that 80% of the world’s food is produced by family farms, those with modest landholdings. Of all farms globally, roughly 72% are smaller than one hectare. There is a high degree of correlation between small-holder farming and poverty: 78% of the world’s poor people, or 800 million people, rely on agriculture as their main source of income.

Farmers around the world face intense pressure. Steadily rising cost of inputs, combined with downward pressure on prices, and price volatility in general, make it difficult to predict how much income one can earn in any given season. Fewer and fewer youth are interested in the profession, quite possibly because of the volatility they’ve observed, and worldwide, the average age of a farmer is now 60 years old. Many struggle with the manual labor that is involved. The agricultural sector has not benefitted to the extent that others have from technological advancements, and this has resulted in declining output over the years.

Perhaps no other sector is in as dire need of a shake-up. Despite the grim trends, I am optimistic that dedicated entrepreneurs and creative business models can usher in the operational and technological innovations that are needed.

In 2011, I co-founded Upaya Social Ventures with the mission to create dignified jobs for the poorest of the poor by investing in, and consulting with, small and growing businesses. It’s been incredibly rewarding to support entrepreneurs with their business ideas, and then watch as those businesses grow and create thousands of new jobs in otherwise highly marginalized communities.

Upaya has supported agri-business ventures in the past; Krishi Star and Parvata are two examples. Given the increasing pressures faced by farmers, however, and threats to global food production we decided to double down on our efforts and devote our 2018 accelerator program to innovations in the agricultural sector that could create and improve farmer livelihoods.

We were delighted when we made a call for applications in March and received 281 applications! There is a tremendous amount of entrepreneurial energy in this space, and with careful, deliberate due diligence we narrowed down to the 11 that we’ll be welcoming into our 2018 cohort. We feel they represent the cutting edge of process- and technological advancement, and are all laser-focused on improving farmer welfare.

Take Yasasree Viroha for example. The young, Andhra Pradesh-based enterprise supports primarily women citrus farmers by providing on-farm training, direct market linkages, access to credit and quality inputs, and pricing guarantees that ensure healthy margins. FIB-SOL, a venture founded by an agricultural scientist, has developed a patented nano-fiber technology to safely and efficiently carry biofertilizers. The product has demonstrated a drastic reduction in input costs for farmers while helping to improve their yields. A full list of our 2018 cohort can be reviewed here.

These ventures understand the various factors that need to occur for farmers to thrive: reign in expenses, improve working conditions, ensure farmers pocket more of the revenues from sales of their produce, and overall, bring dignity and autonomy back to this age-old profession.

When these factors converge, hope and prosperity are restored, and we’ve seen this first hand. The experience of 31-year old Nitin Ranmale is a good case in point. He lives in a rural, farming community in Maharashtra and supports a family of five. His family owns a two-acre parcel of land, but they struggled to make it productive. Unable to rely on the land for income, Nitin would migrate into the cities for a good portion of every year to do odd jobs to earn a living. He, however, hated the cramped urban living conditions and being away from his family for long periods of time. A few years ago, his luck changed when he discovered work with a food processing facility that set up shop in town, and is affiliated with Upaya’s partner, Krishi Star. He procures fresh tomatoes from local farmers and processes them in the factory; he is earning far more today than in any of his prior jobs. He is also learning about sound farming practices, and his dream is to diversify his income by selling his own crops and even setting up a processing facility of his own someday.

Tenacious agri-business entrepreneurs can help farmers like Nitin make the most of their land and even encourage future generations to embrace this work. Doing so is important if we have hopes of feeding an ever-hungry and growing global population.