Babban Gona’s Agri-Franchising Model: Scaling up Challenges

Abstract
Africa’s most populous country, Nigeria, is home to millions of smallholder farmers who, due to low economies of scale, have some of the lowest yields in the world, making subsistence farming unsustainable for them. This has led to large-scale unemployment, especially among the youth. Poverty, unemployment, and a rapidly growing population have made Nigeria a breeding ground for extremist organizations like the Boko Haram.
Kola Masha through his for-profit social enterprise, Babban Gona, is taking this challenge head-on by creating an innovative agricultural franchise model which provides professional management and investment for grass-root level farmer groups. Babban Gona’s holistic end-to-end service delivery model has resulted in farmers reducing their input costs, increasing their yields, realizing a higher price for their produce, and more than tripling their incomes. Babban Gona also embeds into its model, a risk mitigating model, which helps to reduce risks and increases the confidence of its financiers. The organization has the audacious vision of transforming the lives of 1 million farmers by 2025. But, does the model support such levels of scalability?
The case study brings out the challenges involved in setting up a social enterprise in agriculture and the scope of an agricultural franchise in the developing world. It underlines the need for and importance of a risk mitigating model that is constantly updated. The case allows students to analyze and debate the scope for scalability of Babban Gona and the additional risks and challenges it could face in realizing its vision.

AuthorsManish Agarwal & D Satish
InstitutionICFAI Business School Hyderabad, India
Competition Year2018
PlaceRunner Up
TrackSocial Entrepreneurship
Key WordsAgriculture, Smallholder farmers, Low economies of scale, Nigeria, Youth unemployment, Poverty, Agricultural Franchise model, Trust group, Risk mitigating model, Babban Gona
CoursesEntrepreneurship, Social Entrepreneurship
Target AudienceMBAs, MS level program
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posted June 5, 2018

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Dharani: Nurturing the earth, fostering farmers’ livelihoods

Abstract

Timbaktu Collective is a non-profit organization in southern India, working for the sustainable development of rural communities with an emphasis on ecological principles and social harmony. One of the core areas of its work is with small farmers in the region who remained marginalized in a fiercely competitive market dominated by large players. Inspired by its success with organic farming and in collectivizing rural people Timbaktu Collective promoted a business enterprise for procuring, processing and marketing the organic produce of farmer-members in the district of Anantapuramu.

In 2008, Dharani Farming and Mutually Aided Co-operative Society Limited (Dharani) was started as a farmer owned, cooperative enterprise that procures and sells the members’ organic produce. This case discusses how Dharani not only developed external markets for small farmers’ organic produce but also articulated an ethical model of local production, distribution and consumption. For nearly a decade, Timbaktu Collective and Dharani have worked together to increase membership in the cooperative from only 70 in less than a dozen villages to 1800 in 35 villages in 2015. Dharani recorded net profit of over Rs 15 lakh in 2014-15, despite repeated droughts in 2014 and 2015. Besides financial benefits to members, land fertility had also improved substantially: acreage of certified organic land had grown from 80 acres in 2005 to 7500 acres in 2015. With a network of 246 retailers, bulk buyers and direct consumers, Dharani’s brand of products, “Timbaktu Organic” had also been firmly established in 40 towns and cities of South India

But Dharani’s operations had to expand significantly if they had to benefit all the farmer-members of the cooperative. For this Dharani has to (1) increase procurement of farmers’ organic produce from the current level of 300 tons to 1500 tons,  (2) increase value of the procurement from Rs 1 crore to Rs 5 crore and (3) increase net profits from Rs 24 lakh to Rs 50 lakh. How could Dharani continue its growth as a business enterprise while remaining a socially responsible and ecologically sensitive, famer-owned cooperative?

AuthorsJoseph Satish V & C Shambu Prasad
InstitutionsUniversity of Hyderabad, India & Institute of Rural Management Anand, India
Competition Year2017
PlaceFirst Prize
TrackSustainable Entrepreneurship
Key WordsCSR, Socially Responsible Investing, Environmental Performance, Social Performance
CoursesSustainable Finance, Strategic Management, Finance, Business Sustainability, Business and Society, or Environmental Entrepreneurship
Target AudienceMBAs, Undergrads
Permission rightsThis case is part of the oikos free case collection. Download a free online copy below. If you are a faculty member and you are interested in teaching this case, you can request a free teaching note by sending us an email to freecase@oikos-international.org.
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oikos International

posted June 19, 2017

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IFC Funding of Dinant Project: Call for Overhaul of Risk Assessment for Sustainable Finance

Abstract

The case study is based on a dilemma faced by IFC, one of the financing arms of the World Bank Group, on whether it should release its next round of funding to Corporación Dinant (Dinant), a Hondurus-based vertically-integrated palm oil and food company, to enable it to develop young palm oil plantations. IFC, which proposed to invest US$30million of the total estimated project cost of US$75million, had disbursed US$15 million in November 2009.

Civil society groups had alleged that Dinant had been involved in gross human rights violations and accused it of forced eviction of farmers and inappropriate use of private and public security. The civil liberty groups alleged that IFC had not exercised due diligence in its review of the social risks attached to the project and that it had not responded adequately to the context of intensifying social and political conflict surrounding the project after its commitment to it. The World Bank’s own watchdog Compliance Adviser/Ombudsman (CAO) in its report found multiple failures by IFC in the handling of the Dinant project.

Having faced a backlash from civil liberties groups and having admitted to lapses, IFC now has to decide on whether to go ahead with its next round of US$15 million financing to Dinant. IFC is engaging with Dinant actively but the decision on funding the next round has to be taken. Backtracking on the funding would be seen as a serious blow to sustainable financing while releasing the next round of financing could only happen after Dinant gives a series of commitments to work closely with the community. All in all, the case study will definitely raise issues and call for discussion on appropriately assessing, forecasting, and pricing risks of sustainable finance projects, especially in conflict prone countries in the future.

AuthorsD. Satish and Manish Agarwal
InstitutionIBS Hyderabad, IFHE University, India
Competition Year2016
PlaceSecond Prize
TrackSustainable Finance
Key WordsSustainable finance framework, IFC, Honduras, Dinant, World Bank Group EHS guideline, Oxfam, ESAP Conditions, Compliance Advisor Ombudsman, Bajo Aguán, Stakeholders engagement, community development, Environmental social management
CoursesCorporate Sustainability, Business Ethics
Target AudienceGraduate level students
Permission rightsThis case will be published at the Case Centre shortly. You find an inspection copy for download below.
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oikos International

posted June 27, 2016

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KTDAL – Building Sustainability through Inclusion

Abstract

Kenya Tea Development Agency Limited (KTDAL) follows a unique model under which small tea farmers are shareholders. By the end of 2013, it had around 560,000 such shareholders. The farmers not only get money for the tea leaves they produce but also receive a share in the profits, which means they receive a higher price per kg of tea leaves than tea farmers anywhere else in the world. KTDAL’s inclusive model has empowered the farmers to control and own the entire tea industry value chain. KTDAL’s market driven sustainable model has managed to get the market closer to the small tea farmer and make Mombasa one of the world’s top tea auction centres.

KTDAL promotes sustainable agricultural practices among its small farmers through its Farmer Field Schools and, apart from achieving economies; the business model reduces costs by collective bargaining. It improves efficiencies and quality by leveraging on modern agricultural and processing techniques. KTDAL’s benefits go beyond commercial viability with the social, environmental, and economic lives of 4 million people being impacted, directly or indirectly.

The KTDAL business model, which has made small farming viable, can be replicated to address some of the basic issues and challenges facing the developing world, which has millions of small farmers. However, the model has been facing tough challenges of late. The KTDAL small farmers are facing price fluctuations, rising production costs in the form of increasing labour costs, environmental concerns, and unfavourable climatic conditions.

Amidst this uncertainty, some farmers have called for abandoning KTDAL and going back to the old Parastatal system in which the government of Kenya provided aid and relief to small farmers in case of natural disasters like floods and famine and also purchased the produce at a minimum support price. This facility is not available to the KTDAL small farmers as KTDAL is registered as a private company. It remains to be seen how KTDAL will address this rebellion within and whether it will emerge stronger.

AuthorsD. Satish and Nagendra Kumar M. V.
InstitutionIBS Hyderabad, IFHE University, India
Competition Year2016
PlaceThird Prize
TrackCorporate Sustainability
Key WordsSustainable Business, Inclusive Business Model, Social Vision, Corporate Social Responsibility, Parastatal system, Human Development Impact, Environmental Impact, Sustainable Farming, Sustainable Reporting, Two Leaves and a Bud, , Mombasa Tea Auction Center, Farmer Field Schools
CoursesStrategic Management, Sustainable Business Management
Target AudienceMBA, Undergrads, PhD
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oikos International

posted June 27, 2016

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Guayakí: Securing Supplies, Strengthening the Mission

Abstract

The case reviews the rise of Guayakí, a company that sells energy drinks produced with leaves from Yerba Mate trees, and a significant decision it now faces.  Guayakí’s drinks offer a natural alternative in the energy drink industry, which is dominated by large players selling products mainly made from water and chemicals.  The company started very small, had several “near-death” experiences, but eventually thrived, reaching $27 million in sales in 2014.  Its products are highly differentiated in the energy drink industry.

From the beginning, Guayakí has had a commitment to social justice and environmental restoration in South America.  Mate is grown best under the canopies of rainforests.  Difficult to cultivate, it is found natively in a region where Argentina, Brazil, and Paraguay meet.  Guayakí has engaged with several local communities that live in or near rainforests, to try to create a downstream market for mate that they harvest.  The company’s goal is to create 1000 jobs in this region, and to restore 200,000 acres of rainforest by 2020.

The case provides information that can be used to analyze the energy drink industry, and to appreciate the depth of Guayakí’s commitment to social and environmental goals.  The key focus, however, is on the company’s supply chain.  As Guayakí has grown and begun to require increasing amounts of mate, its model of social engagement with communities is coming under pressure.  How can it acquire enough mate to fuel its growth and yet still retain its social and environmental programs?  The case identifies and provides significant information on three options open to the company: continuing as now and scaling up via organic growth; purchasing land to secure its supply of mate, which might require restoration prior to the growing of mate; and collaborating with a land owner that shares its view of social and environmental stewardship.

AuthorsMichael Russo and Michael Crooke
InstitutionUniversity of Oregon, US
Competition Year2016
PlaceFirst Prize
TrackCorporate Sustainability
Key WordsCorporate sustainability, Entrepreneurship, Supply Chain, Energy Drink Industry
CoursesStrategic Management, Entrepreneurship, Supply Chain Management
Target AudienceMBA
Permission rightsThis case is part of the oikos free case collection. Download a free online copy below. If you are a faculty member and you are interested in teaching this case, you can request a free teaching note by sending us an email to freecase@oikos-international.org.
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posted June 27, 2016

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Exploring Complexities of Food Security at the oikos Winter School 2016

On Monday February 22nd, the Winter School team 2016 welcomed 16 participants from various countries to the Winter School on „How to feed the world?“. This first day was almost entirely dedicated to knowing each other and understanding why the topic of food security is so important to any country in the world. After many games and seeing a video that introduces the general idea of the topic, participants learnt more about oikos as an organisation. Participants were also divided into teams of 2, which were named coaching teams, as they would be reflecting on each day of the week with their partner and write down their most inspiring moment of the day on our board. The evening reached and everyone gladly tuck into bed as the traveling had made everyone tired.

 
12742489_10153373221966931_1659366138502730595_nThe first day of the content of the School was Tuesday. With an optional yoga session in the morning, Tuesday entailed workshops by two guests: Wilfried Bommert (World Food Institute) and Gertrud Falk (FIAN), respectively addressing the topics of the possibilities for the future and the right to food. In between the guest sessions were also two sessions that pushed participants to create schemes and diagrams of the food system as they saw it, the stakeholders within it and more. The day ended with full minds, as the load of information on the complexity of this field stunned participants. The third day also started with a joga session, and the role of international trade brought by Bernhard Brummer from Gottingen University. After a fish-bowl discussion with the professor another professor took charge of the second part of the day on productivity and hands-on soil exploration in the fields of Witten. This was led by Walter Rossing frm Wageningen University. The day ended with an interesting exercise called ‘contact jam’ and delicious dinner.

 
Thursday came almost too soon, as most participants could not even keep up with remembering what day it was. The day started in the best of ways with a breakfast, session and lunch with Hans Herren, winner of the World Food Prize, the so-called Nobel prize in this field. The open lecture attracted many students and professors alike. The afternoon was dedicated to understanding local markets and small-holder agriculture with Karina Brenneis from GIZ in Germany. A very magical dinner ended the day, with Pepe Dayad, from the initiative Nowhere Kitchen coming to cook and explain the concept of cooking with solely leftovers. The final day of the working week, but not of the School, featured four field activities that participants could choose amongst: insect food, aquaponics, Demeter farming and the German version of CSA. Groups of participants attended these different acitvities and were inspired by the extent of techniques that are possible and implementable. In the afternoon, the groups executed more research on the topics and presented their discoveries. The day ended with an insect dinner by essento, whose founder is an oikos alumnus.

 
The true final day arrived and was totally dedicated to design thinking. After an entire week filled with discussions, inputs and colours, it was now time to understand how to put it into project/startup/practice. The day was facilitated by Patrick Rebacz and even though some found the process less interesting than others, it was a great experience to be confronted with. The day ended with a wonderful feedback round, a big dinner and a relaxed party in the centre of Witten. On Sunday many participants were either too tired to join the final brunch or already had their trains in the morning, however, everyone left with a feeling of positivity, need to create solutions and an unforgettable experience. As an Indonesian participant put it: “even if I had come all the way to Europe just for the Winter School, it would still have been worth it!”

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oikos International

posted February 28, 2016

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Uniting Forces at the 11th COY in Paris

On November 26th, 2015, 14 oikos members entered the Hall 8 of the Parc des Expositions of Paris. Coming from Germany, Switzerland, France, Austria and the UK, they were greeted by a vibrant crowd of 4000 other young people from more than 180 countries.

One of the first workshops of the entire COY was hosted by two members from oikos Cologne on the Oslo Principles. oikos members then split themselves amongst the hundreds of proposed workshops and talks. Amongst the ones that were attended on the first day were a workshop on climate negotiations. Here members were asked to represent various parties, including one party which represented the Earth’s ‘soil’. Then, a talk was held on the INDC’s with a specific focus on Colombia’s case. A workshop was then attended on online communication. The hosts presented how a group of US and Chinese students managed to set up a combined online programme, despite living in opposite sides of the world, to tackle climate change. oikos members were also presented to YOUNGO and they considered a future involvement in the YOUNGO community, as well. The day closed with workshops by the UN SDSN (with a presentation on their DDPP project) and a French consultancy company (on the role of youth in taking action to combat climate change).

12274208_10153212278191931_1005791875663711265_n

The second day was a rather clear day from the start. In the morning oikos members
attended a talk on agriculture, its issues due to climate change and its required adaptation. The inspiring speaker gave worrying data and encouraged youth to understand that there are much deeper opportunities in agriculture than we are aware of. The first oikos workshop then took place. oikos hosted a workshop on the integration of sustainability in accreditation systems. With a participation of 10 countries and passionate students, Anita and Clementine managed to receive precious insights into what students truly would want their universities to entail in their programs. Moreover, students reflected on their education and understood that they are actually upset with the inflexibility of the system, with not being heard and with, amongst others, spending too much time just listening in schools and not enough time critically thinking. oikos members then moved onto participating to a talk on biomimetism and permaculture, moderated by an inspirational activist. Amongst the presentation of innovative food supply systems, the speakers highly critiqued the industrial agricultural system which represents the majority of production nowadays. The day ended with a workshop on higher education by COMMIT (hosted by oikos members) and a workshop on negotiations by the Italian Climate Network. Both workshops were retained interesting and oikos members were left inspired by the energy of the second day.

12289662_10153212278311931_4458467205744952698_nThe final day at COY11, was a warm Saturday, The conference venue was filled with energy creativity and youth. The morning started with workshops on media projects across the Mediterranean and it continued with talks from National Geographic’s explorers bringing their fantastic experiences to a large audience. These exporters inspired youth to see the world differently, to keep looking and understand that not everyone needs to have a standard job. This was followed by a panel discussion on the role of education and research in attaining sustainability. The panel, composed of four young people involved in this cause in France, was critical and excited to help change education and research. Amongst the interesting reflections on the matter, was the question: how are we going to truly prepare the future? Are universities truly providing us with the appropriate tools to act? Amongst others, the panelists also presented two manifestos created by five organizations to call for a change in education. At lunch, all oikos members met for a photo in front of a project called Ribbons. Where everyone was asked to write down, on a ribbon, what they wish for humanity. The exposition of ribbons at the end of the conference was a show of inspiration, where the power of youth proved to be unbeatable. The day ended with another oikos workshop, that continued with participants from France, India and Haiti. oikos members presented their view on responsible leadership and a few current accreditation systems. You can still help us pursue this project by filling in the following survey. The Closing Ceremony was another moment of magic. The Polynesian delegation danced to show the world the importance of acting for climate change in order for their islands to not disappear within a few years. With talks from Laurant Fabius and Nicholas Hulot, amongst others, the main conference hall of the COY11 was overcrowded with young people who show that a difference can be made and it can be made now. The 250 volunteers who organized the COY11 closed the event by thanking everyone and urging them to see the COY11 as just a starting point.

“For me the most inspiring moment was when a young man from France, spoke about his adventures as an engineer. From working in Bangladesh and founding his own company, to learning how to sail and continuously finding alternative and sustainable solutions to complex issues. This young man showed the world that it is always by trying hard, getting out of your comfort zone, findings your passions and being capable of failing that you make the brightest innovations. Very inspiring what he achieved so far, including an online platform called Low Teach Lab.”  – Anita Negri, President, oikos 

See more of what went on at the COY11 by following Anita on twitter: @theanitanegri or the hashtag #COY11 and #COYwithus.

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oikos International

posted November 29, 2015

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MokshaYug Access (MYA) in India: Enriching India’s Dairy Farmers

Abstract

After gaining sound work knowledge abroad, Harsha Moily (Harsha), returned to India with a clear vision to build an organisation focused on creating income-generating opportunities for rural people. In 2006, he established MokshaYug Access (MYA), a limited company based in Karnataka, India with a seed capital of $2 million. Being a rural supply chain solutions company, MYA was committed to create an organised platform in rural areas by linking such platform to urban parts in India. For its Dairy Business Vertical, MYA procured milk from rural dairy farmers in various districts of Karnataka and sold the same to the institutional buyers. In this process, MYA implemented a scientific and technology-based approach, whereby MYA focused on increasing yield per cattle per day and improving quality of milk. To achieve this, MYA emphasised on deep engagement with the dairy farmers by making them aware about the best practices in the dairy farming and animal husbandry. Moving ahead, in late 2012, under ‘Farmer-to-Consumer Connect’ initiative, MYA launched its retail milk brand ‘Milk Route’ in Bangalore.

In addition, it also started selling fruits and vegetables under ‘The Good Chain’ retail stores. Identifying the strength in the business model, MYA was successful in securing private equity funds. But, experts felt that MYA was in direct competition with Karnataka Milk Federation (KMF) and Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), dominant players in dairy business in India. In addition, availability of manpower, convincing rural dairy farmers to switch to MYA and creation of brand was key challenges ahead for MYA. With such innovative practices, how MYA takes its operation to the next level of growth remained to be seen.

Authors: Rajan Shah
Institution: Amity Research Centers
Competition Year2014
PlaceRunner up
TrackSocial Entreprenuership
Key WordsMokshaYug Access; Supply Chain; Karnataka; Social Entrepreneurship; Dairy Farmers; Milk Route; The Good Chain; Farmers to Consumers; R&D; Innovation; Harsha Moily; Income Generation; Vinod Khosla; Unitus Equity Fund
CoursesEntrepreneurship
Target AudienceMBA
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oikos International

posted June 26, 2014

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