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KAUSHLENDRA KUMAR

India,

Kaushlendra, known as the Vegetable Wallah, is reinventing the vegetable supply chain from beginning to end, making it possible for small farmers to compete in big markets in India.

This profile below was prepared when Kaushlendra Kumar was elected to the Ashoka Fellowship in 2009.

INTRODUCTION

Kaushlendra is overhauling the vegetable supply chain at both ends – production and sales.  Starting in the state of Bihar with plans to spread throughout the country, he has created a system in which small-scale farmers who are getting fair prices and organized into producer groups supply directly to local vegetable vendors whose roles in the supply chain are now valued and legitimized.  The process reduces wastage due to spoilage by 30-40 percent and passes the savings on to the farmers and vendors themselves.




THE NEW IDEA

Beginning with 1,000 vegetable farmers in the northeastern state of Bihar and 800 vegetable vendors in Patna, the capital city, Kaushlendra has created a complete vegetable supply chain that can directly supply branded vegetables to vendor groups in cities as far away as Delhi.  His objective is to make Bihar the vegetable capital of India with small-scale farmers as the foundation.  

To do this, he has created two member-owned companies, one upstream and one down.  At the source and centered on the rural areas of Bihar, an independent producer company coordinates hundreds of farmers and faming clubs.  Downstream, scattered vegetable vendors who once had to succumb to the pressures of intermediaries now work in a coordinated way with a marketing company that supplies branded and guaranteed-fresh produce.  Both companies are coordinated by Kaushlendra and the parent organization, the Kaushalya Foundation, and because of the effective and streamlined communication between all parties, costs are kept low, uncertainties are reduced, and more profits end up in the hands of the poor farmers and vendors.    

Kaushlendra has taken vegetables, once merely a highly perishable commodity and, by capturing efficiencies throughout the supply chain, significantly increased their appeal, availability, and quality.  Into what was not long ago a non-viable industry, Kaushlendra has introduced professionalism, specialization, and new technologies.  Particular vegetables are sourced from the regions in which they grow best and many more varieties are available fresh, cool, and daily at one-stop vendors in Patna.  

Based on this successful model, the links between small rural produces and disenfranchised urban vendors are strengthened and Kaushlendra has created an economically viable space for continued innovation and improvement.




THE PROBLEM

Though the state of Bihar is blanketed with fertile ground and fed with abundant streams, it remains today one of the poorest states in India.  Crops grow well in the silt-rich and wet soil.  But though the landscape is lush and the population dense, much of the available land is lying fallow since ninety percent the people working the cultivated areas don’t own the land on which they toil.  Because of population density, plot sizes are small and valuable and they remain in the landlords’ names even when these more prosperous individuals move to cities far away.  The poor villagers who remain survive by leasing and working their land, but the owners don’t agree to written contracts so as to continue to receive any government subsidies and effectively circumvent a policy that recognizes the owner of a particular piece of lands as anyone who has farmed it for twelve years.  So year after year, these small, marginal, and landless (SMAL) farmers continue to grow just enough to get by and invest little more than their labor into the land that isn’t even theirs.  

But it is not just parsimonious landlords who these small farmers are up against.  In Bihar, vegetable and subsistence crop growers are currently at the bottom end of a long supply chain overflowing with intermediaries and mired in inefficiency.  In fact, the entire vegetable value chain has no less than six intermediaries between the original farmer and the final consumer – typically a village level aggregator and transporter, a commission agent, the paikar, a wholesale-seller, a semi-wholesale-seller and the roadside vegetable vendor. 

Nonetheless, it appears that no other options are available at present.  Due to small land holding, the majority of farmers cannot gather a truckload of vegetables (much less hire a truck) and they therefore must depend on intermediaries if they wish to sell surplus produce outside of their villages and for cash.  Since vegetables are a perishable commodity, transporters often exploit the farmers by delaying transportation and, due to the fear of decomposition, force the farmers to sell at whatever price they dictate. And the rest of the intermediaries don’t actually add any value but earn a huge profit just for connecting the local farmer with vegetable vendors and their customers in a region where there are more rivers than roads and communication technology is limited for the poorest of the poor.  

Finally, by the time produce is purchased by vegetable vendors, the prices are so high that there is little room for a final mark up.  In this arrangement, the farmers on the one end remain poor and the vegetable vendors on the other end fare no better.  Of the 12,000 vegetable vendors in Patna, the capital of Bihar, almost 70% are women.  The have little to no bargaining power or legitimacy.  They face daily harassment from police and civic planners as they operate in unofficial spaces and many are forced to pay weekly taxes to the local mafia.  Most work as many as 16 hours per day and most nights they are forced to slash prices as their produce begins to perish in their open and unrefrigerated stalls.  

With so many small-scale operators along the supply chain and such high rates of wastage, almost no big companies source produce from Bihar.  Instead, they work with commercial farmers in other parts of the country or with a few large and unscrupulous aggregators and intermediaries.  Farmers would need to be organized into producer companies in order to compete with large commercial operations.  In addition to that, for the poorest and most vital players in this system to truly benefit, the whole supply chain would need to be reoriented to capture more efficiencies and pass the profits all the way to the famers on the bottom and the vendors caught in the middle.  Short of this, Bihar, despite its abundant human and natural resources and great potential, will remain poor and continue to be out-produced by other states with bigger artificially-irrigated and chemically-fertilized plots.




THE STRATEGY

Kaushlendra, a 27-year-old from rural Bihar, has spent the last two years developing a comprehensive vegetable supply chain that bypasses all the intermediaries and middlemen in the current system and benefits poor farmers and vendors.  After graduating from one of India’s most prestigious universities in 2007 with a degree in engineering and a master’s degree in business, Kaushlendra accepted an academic prize worth of 25,000 rupees (roughly $500 US) but turned down a number of prestigious job offers.  Shocking family and friends, he spent his prize money and the next few months travelling extensively to villages in the region to see if his vision of a way forward for the poorest of the poor in Bihar, a vision he had been developing for years, could be communicated to and taken up by the poor farmers with whom he grew up.  

Working from the bottom up, Kaushlendra started gathering together groups of farmers and, in order to show how much more they could benefit if directly connected to markets in cities far away, he rented trucks, bought vegetables from them directly, and drove the produce to vendors in town.  His model today is much more sophisticated, but these first farmers and now 1,000 more in as many as 40 villages in Bihar are still the focus and today the direct links to vendors (and, ultimately, consumers) are only stronger.

To do this, Kaushlendra set up two complimentary organizations under the banner of the Proejct Samriddhii:  a production company and a marketing company, one working with marginal farmers and one focused on vegetable vendors.  Both companies are owned by members, employ professionals groomed from the region, and presently handle 8-10 metric tons of vegetables per day.  The management staff, Kaushlendra and four young professionals from Bihar, cover their expenses by taking a 3-7% transaction cost on produce before selling to the vendor.  Simply put, Kaushlendra and these two companies coordinate the movement of produce from rural farmers to urban vendors and consumers first by aggregating produce in villages, cleaning and sorting it at distribution facilities, and finally delivering it all to organized vendors.  

In each village, 5-6 groups of a dozen of so farmers make up collection and knowledge sharing groups called Kisangaclubs.  Each club elects a coordinator and two assistants who work with Samriddhii’s collection agents.  Since most farmers and, in some cases, entire villages grow only one or two varieties of vegetables, Samriddhii extension workers have identified 20 profitable varieties that can be grown in the region and, through the use of mobile technology, they coordinate the Kisangaclubs and distribution centers so that there is steady demand for all produce grown by club members.  

At the same time, Kaushlendra is reviving the extension services wing of the state’s agricultural department that had been lying defunct for the last fifteen to twenty years. The system was ingrained with dishonesty and corrupted by middlemen who, for a commission, perpetuated the system where subsidies continued to flow to land-owing non-farmers.  Over time Kaushlendra converted many of these middlemen to socially accepted paid consultants who proactively help the genuine farmers learn how to access subsidies and get their name on leases.   His team also conducts workshops to increase the interaction between the agriculture staff and the farmers and he has introduced a reward system to recognize the best agriculture staff based on assessment of the farmers. This helps ensure that the farmers can begin to gain a position of authority and that the playing field becomes more level. 

At the distribution centers, Samriddhii is able to sort and clean all the produce (providing numerous local wage jobs) and distribute the 20 vegetable varieties to their 800 registered vendors.  These vendors (as well as member farmers) all have group membership cards and agree to basic group principles.  This alone has been a huge step towards legitimizing these women and giving them more bargaining power in their interactions with local authorities and mafia types.  By bringing together and recognizing these vendors, Samriddhii has effectively created a paid professional services category for women in the region:  a paid and profitable group.

In order to make vegetable vending more professional and profitable, Samriddhii assures the vendors that they will buy leftover vegetables back if vendors agree not to drop prices at the end of the day.  They also ask vendors to use time-stamped receipts so that all Samriddhii branded vegetable carts can offer a freshness guarantee.  Customers can also rest assured that the clean and well organized produce they are buying hasn’t been artificially colored and that it is grown locally; the villages from which each item was sourced is posted.  In the end, all this can be done, vendors can increase their earnings, and prices can remain competitive (and even lower in most cases) because Samriddhii has been so effective in cutting out middlemen and reducing wastage.  

A significant new development here is a refrigerated vegetable cold cart.  These carts have 20 compartments lined in packets of cooled ethylene glycol, the same chemical used in mobile ice cream carts and to transport the polio vaccine.  Each night the packets are returned to storerooms in ice manufacturing companies with which Samriddhii has set up partnerships so that when vendors pick up their carts in the morning from the distribution center, they are refilled with fresh vegetables and lined with recharged ethylene glycol packets, ensuring that produce stays cool and fresh for the next ten hours. While Samriddhii piloted this project with just 10 of these carts in 2008, 50 more have now been ordered.  

Learning from this success, over the next few years Samriddhii will establish a complete cold chain from Bihar to Delhi and the rest of the country.  Kaushlendra has been setting up partnerships with ice manufacturing companies all along the route between Patna and Delhi so that trucks carrying vegetables from Bihar to larger markets down south will be able to switch out and recharge packets every seven to eight hours.  Trucks using this technology are more environmentally friendly and the costs are lower than when refrigeration is used.   

Locally, Kaushlendra will soon start sourcing produce from another region of Bihar, an area that has been cut off from Patna since a vital bridge over the Ganges was washed away in floods a few years ago.  In fact, he has already organized 5,000 farmers so that as the demand grows and more markets are opened in six major cities in Bihar and then Delhi, he will be able to quickly increase the local supply.  Farmers will eventually be able to start cultivating more of the fallow but fertile land in the area and extension workers will ensure that their rights are protected.  Through the Kisangaclubs, new techniques and technologies can be introduced and, with more cold carts in Bihar and other cities, the Samriddhii’s Bihar Fresh reputation and brand will continue to grow.  Farmers that are now organized into Kisangaclubs naturally have the option of selling to large companies and competitors, but with so many efficiencies and so few intermediaries, Samriddhii continues to be the best deal around.  And soon Samriddhii will begin processing and canning local tomatoes, ladyfingers, and a region-specific gourd variety.  As Samriddhii grows, farmers and vendors in the region will continue to prosper and Kaushlendra’s vision of transforming the river-rich parts of Bihar and then Jharkhand and Uttar Pradesh into India’s vegetable supply hub will become a reality.




THE PERSON

Kaushlendra grew up the eldest of three children in a village 58 kilometers from Patna, the capital of Bihar.  His mother was a local schoolteacher and his father farmed pulses, grains, and vegetables.  At the age of eleven he was sent to a government-run boarding school far from home.  Life was good, but hard, and though he felt a deep connection to the land he grew up on, his parents insisted that quality education and a good life far from home were more important considering that, at the time, the viability of farming in the area was in steep decline.  Just a few years earlier, a flood had washed away everything his family owned, as well as bridges and a railway track that was once the closest connection to the Patna market.  With no market, one could no longer grow cash crops and farming became much less lucrative.  

So Kaushlendra left for studies and, for the next ten years, excelled academically in high school, college, and professional school.  But his mind never strayed too far from vegetables.  While studying engineering in Gujarat, he marveled at how successful the famers in this drought-affected region could be.  The link, as he saw it, was that despite a more inhospitable environment, there was always a connection to the market.  If farmers could grow it, there was always a wallah or vendor to sell it and someone to buy it.  Locals were even branding their produce knowing that urbanites in Gujarat preferred produce grown in Thalal, for example.  

When he graduated from the Indian Institute of Management - Ahmedabad, the premier business school in the country, he moved right back to Bihar.  His father cried when he learned that his son had turned down lucrative private sector jobs and, though his mother supported him, many were skeptical of Kaushlendra’s plans for transforming Bihar’s agricultural sector.  Locals gossiped that he had trashed his family’s dreams and had no way to repay them for all they had invested in his education.  Many thought at first that that if they let him, his big ideas would spoil their lives.  But two years later, the young man who long ago dropped his surname to be unique has shown that his vision was possible.  He has transformed the lives of hundreds of farmers and vendors and, though he still introduces himself simply as Kaushlendra, throughout the region he is now fondly called Kaushlendra Sabzi Wallah, Kaushlendra the Vegetable Wallah.




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