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GNS REDDY

India,

Dr. G.N.S. Reddy is reversing urban migration in India by increasing the economic opportunities for small and medium farmers. By making organic dairy farming a central unit of farm design, his work creates a profitable vehicle to enable farmers to be micro-entrepreneurs of their farms.

This profile below was prepared when GNS Reddy was elected to the Ashoka Fellowship in 2013.

INTRODUCTION

Dr. G.N.S. Reddy is reversing urban migration in India by increasing the economic opportunities for small and medium farmers. By making organic dairy farming a central unit of farm design, his work creates a profitable vehicle to enable farmers to be micro-entrepreneurs of their farms.




THE NEW IDEA

Dr. Reddy is creating a new model that not only uses dairy to supplement the income of farmers but also leverages it to create a closed loop of inputs and outputs that add significant value to the farming cycle. Focusing on farmers whose major crop are small orchards (like coconuts and mangoes), Dr. Reddy shifts their farming practices to use the free ground to grow fodder and other crops and to introduce automated organic dairy farming. He supports farmers to invest in cows, milking and chilling systems for the milk, a biogas plant, and a sprinkler system for the farm. To run this technology, the cow manure is funnelled into a biogas plant that provides electricity to the entire farm. Equipped with technology and the energy to run it, Dr. Reddy has handed over the dairy production and manufacturing chain to the farmers and made them the managers of operations and marketing for their farms.

By acquiring farm land and animals and experimenting with new crops and farm technology, Dr. Reddy’s work is improving the economic situation of farmers and is thus attracting young people back to farming. He enhances the entire process by providing support to farmers in areas such as technical expertise, farm design, and access to finance. Further, Dr. Reddy has created a system of farms connected to an urban hub, allowing the urban population to visit the farms, learn about organic farming, and have direct access to the produce. 




THE PROBLEM

Agriculture is unquestionably the most significant contributor to India’s national GDP and the principle means of livelihood for the majority of its population. However, productivity and income for farmers, hard as they try, stagnates at miniscule proportions that often drives them into debt, desperation and even suicide; an estimated 14,000 to 19,000 farmers in India took their own lives due to poverty in 2011.

Eighty percent of India’s farms are small- and medium-sized, with between three to five acres of land. The average income of small and medium farmers in India is under the poverty line of US$1.25 per day. A third of these farmers cultivate fruits from tall growing trees, like coconuts, mangoes and apples. Since they can only sow two crop cycles, and fruit farmers only have one annual crop cycle, interventions to increase their income have focused on introducing a new crop cycle or crop that has better market prices. However, learning to grow a new crop has a steep learning curve, and is a high risk intervention. If the trial crop fails, for example, the farmer loses all income that year. Thus, farmers need interventions that do not substitute their current agricultural practices, but provide value and minimize risk to their existing farm.

Dairy has often been used to create a supplemental revenue stream for farmers and has proven to be lucrative produce with a short cash flow cycle. Fruit farms are uniquely positioned to do this as the ground below their high growing trees is lying fallow and available to grow fodder and other crops. However, it has always been seen as an independent revenue stream and few efforts have been made to optimally leverage the by-products of cattle rearing and dairy. 

Further, the condition of farmers is worsened by the burden of manual labor of farm work, especially for women. Most farmers are off-grid and get less than four hours of electricity a day from the government. As a result, they have no access to farm technologies and mechanization that can reduce this burden. Less than a fifth of India’s farmers use farm machinery and this results in India’s agriculture productivity being 43rd in the world. These factors make it harder to adopt organic farming methods, despite their desire to adopt such practices—making organic fertiliser and pesticides demand more labor. Banks are reluctant to give loans to farmers to mechanise their farms because of the high default rate among farmers across the country. Low incomes, high costs and the labor associated with farming has been driven large numbers to leave farming and migrate to urban areas for employment. 30 percent of all urban migrants are farmers who became daily wage laborers in cities. The large numbers of farmers quitting agriculture is pushing India toward an impending food crisis.

Dr. Reddy’s experiences of working in rural India with farming communities for more than three decades with Bharatiya Agro Industries Foundation (BAIF) has given him one key insight—every time a development organization withdrew from a program, it collapsed. In spite of his attempts to make the programs sustainable through monitoring village committees and livelihood generating models, programs do not sustain BAIF’s withdrawal. 




THE STRATEGY

Dr. Reddy’s organization, Akshayakalpa, was founded in 2009. He started a pilot with small farmers who own around three acres of land, and also worked with tree plantation farmers because those types of orchards and farms leave the ground empty to grow fodder for dairy cows as well as for intercropping. Dr. Reddy addressed the two main bottlenecks for agriculture development—energy to run technology and finance. He introduced dairy to farms so that the manure could be used to generate electricity in a biogas plant. Akshayakalpa partnered with leading banks for a wide network of financiers to give loans to farmers to set up the Akshayakalpa farm model. The initial investment requires farmers to purchase cows, milking and chilling systems for the milk, bio gas plant and sprinkler system for the farm. Farmers need a minimum of Rs. 5 lakhs (US$10,000) to set up the base farm model. Akshayakalpa facilitates a tripartite agreement between the bank, the farmer and the organization, under which Akshayakalpa finances the farmer, and in three to six months when the farmer is generating significant profit, the bank repays Akshayakalpa and takes over the farmer’s loans based on the project report prepared by Akshayakalpa. Akshayakalpa stands as the guarantor to reduce the bank’s risk to finance the farm model. 

Akshayakalpa develops a cluster of organic satellite farms around a knowledge and technological hub and processing plant for the milk and other produce currently managed by Akshayakalpa. Dr. Reddy calculates that 300 is the optimum number of farms to develop around a hub, ensuring enough to supply of produce, but not enough to flood the market so that prices go down. 

Additionally, Dr. Reddy designed the technological loop of the farm and continuously innovates and improves this loop with feedback and input from the farmers. Each farm consists of a free range enclosure for cows, where they are never tethered with sufficient fodder and water. The farmers are trained to prepare the nutritious fodder of five legumes, five non-legumes, and innovative high protein fodder, such as the water plant, Azolla. After the calves consume the required milk (10 percent of bodyweight), the remaining milk is milked by an automated suction and sent directly to a refrigerator. The milk is chilled at 4 degrees Celsius until Akshayakalpa vans collect it each evening. 

The milk collected from the farms by Akshayakalpa is processed according to European standards for organic milk. Thus the milk does not touch human hands and is not contaminated with additives from the cow’s udder. Akshayakalpa is building a market demand for this organic milk and milk products in urban centers around the dairy satellite farm clusters through advertising campaigns and creative strategies such as door-to-door early morning delivery. The convenience of this service and the quality and taste of the milk incentivizes customers. Akshayakalpa currently retails 2,500 liters of milk, including milk products like paneer, cheese, and ghee to around a 1,000 customers every day.

Currently, farmers are paid Rs. 35 per liter of milk compared to Rs. 11 paid to other dairy farmers, such as the largest dairy cooperative in Karnataka-Nandini. Akshayakalpa directly credits the loan installments to the bank and the remaining profits to the farmer. With the current low interest rates of 8 to 12 percent that Akshayakalpa has negotiated with the banks, farmers can repay the loan within a five-year term and have a remaining income of Rs. 85,000 (US$1,700) per acre per annum, compared to their prior income of Rs. 8,000 (US$160) per acre per annum, thereby increasing their livelihood income more than ten times. 

Akshayakalpa’s veterinary doctors provide supportive services to farmers 24/7. The body temperature and other health metrics of the cows are automatically measured by the suction machine during milking each day and sent to a central database at the hub, where any unusual health parameters are immediately flagged and addressed by veterinarians to ensure quality healthcare. These organic milk production measures and supportive services have reduced the mortality of cows from 10 percent to 0.2 percent, and increased milk production from a national average of 2.5 liters per cow per day, to 10 liters per cow per day. 

The cow manure is flushed into a methane gas bioplant that can be turned on by the press of a button, compared to typical designs that require manual turning of a heavy motor. The biogas plant provides energy to the entire farm so the automated systems continually operate. The sludge from the plant is sprinkled on the farmland with sprinklers, which increases the fertility of the farm organically, without adding additional costs to buy chemical fertilizers. On the farms Akshayakalpa works with in the coconut belt, each coconut tree has gone from producing 8 to 10 coconuts to 40 to 50 coconuts per tree per year. The land below the trees is also used not just as fodder for cows, but also to grow vegetables and shrubs. Intercropping also organically resists major pests without the use of chemical pesticides, as pests are crop specific, and frequently changing crops does not let any species of pest grow and fester. Thus, in addition to the sale of milk, farmers increase their income from additional products and save money by reducing the input costs of pesticides and fertilizers.

Having worked with over 300 farmers in the coconut belt, Dr. Reddy is now developing 300 farms in a 30 kilometre radius around each hub and expanding to the mango belt region. While the hub is managed by Akshayakalpa, Dr. Reddy is identifying village youth entrepreneurs who will receive extensive training in the Akshayakalpa farm model and then take over and manage the knowledge and technology hub so that Akshayakalpa can leave to build new clusters. Farmers have weekly meetings at the hub, which is not just a space for Akshayakalpa to train them, but more importantly, a ground for intense peer learning between farmers to discuss common challenges and learn how to successfully solve them from others. 




THE PERSON

With a father in the medical field, Dr. Reddy grew up with a keen interest in improving health through natural means. As a child, however, he always felt more drawn to animal healthcare than human healthcare.

Dr. Reddy studied at the public school near his home, which was a daily 8 kilometre walk. Because of the distance, his brother and sister dropped out of school, but he persevered and finished his education. During school, Dr. Reddy was more interested in extracurriculars than academics and especially liked projects that involved using his hands. He led a kitchen gardening initiative at his school and was also skilled at sketching portraits. However, Dr. Reddy also enjoyed studying inspirational historical figures; deeply inspired by grassroots rural development leaders like Mahatma Gandhi and Vinoba Bhave. From studying their lives, Dr. Reddy developed a passion for village reconstruction. Further, his passion and love for animals led him to study veterinary sciences at Vijaya College, Bangalore. 

During graduation, Dr. Reddy only had two cows for the students to treat, work on and learn from, which meant there were 30 to 40 students lining up around one cow. This was never enough so during the five years of his veterinary sciences education he never took a vacation. Dr. Reddy stayed at school during all the holidays to be able to have the time to handle the cows and other animals. Doing this allowed him to gain more practical, hands-on training and he graduated with more experience than many practicing veterinary doctors. 

When Dr. Reddy returned to his family and village, the stark gap in services for farmers started made him uncomfortable. But he did not know what he could do about it. A lecture by Dr. Manibhai Desai, a Gandhian, who took over the Ashram after Gandhi, influenced him. Dr. Desai identified the same problem of a lack of services for farmers and found a way to address it through his organization, Bharatiya Agro Industries Foundation (BAIF). Dr. Reddy joined Dr. Desai and worked at BAIF for many years. By assisting BAIF’s existing animal husbandry programs, Dr. Reddy showed significant initiative and launched innovative programs from within BAIF on forestry, irrigation, and water shed management. The Gandhian strain of thought remains strong in Dr. Reddy’s Akshayakalpa model, such as in local production and sustainability, but in the most modern and automated farms.

For several years, Dr. Reddy tried initiating the spread of the Akshayakalpa model from within BAIF, but realized that it had become too bureaucratic, and any new program required several layers of approval, slowing down the innovation process. He founded Akshayakalpa as an entrepreneurial endeavour in 2002. 




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