Farm Livelihoods under DAY – NRLM

Gujarat Livelihood Promotion Co. Ltd.

 Objectives of Farm Livelihoods interventions

Every poor household is supported on at least 2-3 sources of livelihoods – both farm and non-farm

Assured annual incremental income of more than Rs. 50,000 per family, Income streams throughout the year

Year long income, food & nutritional security for the household

Creation of Social capital for livelihoods extension services

 Index

ORGANIC VILLAGE CLUSTER

01 Overview, Current status, Roll out strategy, Financial layouts and
Implementation Plan

VALUE CHAIN DEVELOPMENT

02 Overview, Strategy, Objectives, Expected outcomes, Funding &
Convergence, Process and Fund flow.

PRODUCER ENTERPRISES
03 Overview, Identification, Business model, Operations, Risk, Principles,
Sequence of activities

MKSP
04 Overview, Process & Activities and Expected outcomes.
 Organic Village Cluster - Overview
• Organic Cluster Development is a sub scheme under Farm Livelihood component of DAY-NRLM.
• The project comprises of formation of local groups in the selected clusters and registering them on PGS Portal while
providing them hand-holding support to facilitate conversion in organic.
• The project may be rolled out in convergence with Agriculture dept., with the help of a PIA or by consultation of
thematic experts.
Name of the Dedicated No of CC’s Clust Villages
Blocks block placed ers #
Current status
coordinators #
placed
• Formation of cluster has been completed.
• 53 clusters have been identified. SAYALA N N 1 4
• 118 local groups have been formed. CHOTILA N N 1 4
• Regional Councils or Technical Support Agency
PATDI N N 1 4
(TSA) has to be taken on board as a next step to
facilitate training of local groups and their DAHOD N N 1 4
certification. GARBADA N N 1 4
LIMKHEDA N N 1 4
SANJHELI N N 1 4
DEDIYAPADA N N 1 4
SAGBARA N N 1 4
 Organic Village Cluster – Roll out strategy

Selection of village clusters Identification of CRP & MT

01 Villages, Clusters and phasing – 25% (Y-1) Data collection, FFS and identification of 05
progressive farmers

PHASE - 2
PHASE - 1

Staff placement PGS Certification

02 Project manager, Block & Cluster coordinators, LG, VO sensitization, aggregation & processing, 06
Data entry operator FFS, appraisal mechanism and resource mapping.

Tech. support & Partnerships Training and CB

03 TSA for organic farming & certification, Training to cluster & block level staff, training 07
identification of partnerships for module preparation with the help of TSA & KVK
implementation.

Identification of Mahila Kisan Consultation & regulatory frame works

04 SHG members – Agri. as core livelihood, and Support from thematic expert institutions and 08
3 Non-negotiables FSSAI & food safety & standards (Organic foods)
 Organic Village Cluster – Financial layout

Sr.no Component Pattern of assistance/ Total per ha Total per

ha area for 3 cluster of
1st 2nd 3rd years 1000 ha
Year Year Year each Rs in
lakh.

A. Programme implementation through Support Agencies

1. Cluster formation and Capacity building including 1000 1000 1000 3000 30.00
exposure visits, and trainings of field functionaries.
2. Deployment of manpower and management cost for 1500 1500 1500 4500 45.00
implementation of programme including data
management and uploading.
B. PGS Certification through Regional Councils
3. Service charges to RCs for physical verification, 700 700 700 2100 21.00
certification endorsement and certificate issue
4. Residue analysis through Zonal Councils/state 0 300 300 600 6.00
Departments in NABL accredited laboratories @ 3
samples/per 100 hec.(LRP area) from 2nd year.
 Organic Village Cluster – Financial layout
Sr.no Component Pattern of assistance/ ha Total Total per
1st 2nd Year 3rd per ha cluster of
Year Year area 1000 ha
for 3 each Rs in
years lakh.

C. Incentive to farmers through DBT

5. Incentive to farmers for organic conversion, inputs, on-farm 12000 10000 9000 31000 310.00
input infrastructure to be provided as DBT for direct farmers
account.
D. Value addition, marketing and publicity
6. Support for marketing, common packaging, branding, space 0 500 1000 1500 15.00
rent, transport, etc.
7. Value addition infrastructure creation through FPC/FPO case to 0 1000 1000 2000 20.00
case basis.
8. Brand building, trade fairs, exhibitions, local publicity, organic 1300 2000 2000 5300 53.00
fairs/melas, local marketing initiatives, participation in national
trade fairs.
Total 16500 17000 16500 50000 500.00
 Organic Village Cluster – Implementation Plan (1 cluster)

5-6 villages & 50-

1 cluster per district 100 women
farmers per cluster

Identification and training

of selected farmers with 6 100 – 200 ha area
agriculture universities of coverage per cluster
Gujarat.

E-NAM and online

trainings Formation of FPO

Convergence with Soil testing, demo plot

 Value chain development– Overview

• National Rural Economic Transformation Project (NRETP) envisages moving towards higher order
livelihoods interventions and aims to promote value chain interventions for establishing sustainable
market linkages for small and marginal producers focusing on post farm-gate market linked initiative
as one its core components.
• Ministry of Rural Development launched “Mahila Kisan Sashaktikaran Pariyojana” (MKSP), a sub
component of the National Rural Livelihood Mission (NRLM) to improve the present status of women
in agriculture, and to enhance the opportunities for her empowerment.
• The primary objective of the MKSP is to empower women in agriculture by making systematic
investments to enhance their participation and productivity, as also create and sustain agriculture
based livelihoods of rural women.
 Value chain development – Strategy
Focus on Value addition
More focus on processing,
packaging and marketing
would be more robust and
more sustainable.
Robust Business Model
The business model has to be
robust enough to clearly define
value proposition for the
farmers, for the consumers and
for the PE.
Dedicated HR
Human Resource with relevant qualifications
and experience as staff of the PE in the PE pay
roll to manage the PE operations and business.
There need to be a dedicated team of experts
with business skills at the SRLM level.
Capacity Building
Mentoring and capacity building of small
farmers is essential for the sustainability of
PEs.
Financing
Procurement infrastructure,
processing infrastructure,
working capital and viability
gap funding to the PEs
Under NRETP & MKSP would be critical
by promoting the PE’s
 Value chain development – Objectives under NRETP
To ensure higher price realization for the agriculture and allied activities, dairying and NTFP produce for the small
and marginal women farmers

Increasing influence of women farmers on the commodity value chain

To ensure increased bargaining power of small and marginal producers by achieving economy of scale and therefore
negotiate better prices.

To develop robust business models at scale for the commodities produced by small and
marginal women farmers
To develop scalable and sustainable Producers’ Enterprises to implement the value chain development
interventions

To create opportunities for value addition of commodities

To take up Capacity building of the community for better post-harvest handling, knowledge of
quality parameters
To promote the use of ICT for accounting, inventory management, payment to producers and market
information dissemination in a transparent manner
 Value chain development – Expected Outcomes
Better price realization
Establishment of scalable and sustainable
women Producers
Establishment of professional management
structure
Equitable sharing of profits among the members
Access to market information
The expected outcomes of
each project proposal
Establishing market linkages
submitted under NRETP will
be achieved through the
planned interventions velit
Development of SOP’s
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sustainable – financially, environmentally and
socially
 Value chain development – Funding & Convergence
• Ministry of Rural Development (MoRD) would provide funding support of up to 60% (90% for Assam) to the project
submitted by the SRLMs under NRETP, balance is to be contributed by the respective state governments.

• The investment per household should not exceed INR 15000 over the period. Dairy value chain development requires
higher infrastructure investment, hence in the case of dairy value chain projects; the investment per household should not
exceed INR 18000 over the project period.

• The total project cost for any single project shall not exceed INR 45 crores.

Convergence

• Ministry of Agriculture,
• Department of Animal Husbandry, Dairy and Fisheries
• TRIFED
• Other schemes and departments in their respective States.
 Value chain development – Process
• Identification of project areas
• Project implementing agency (PIA)
• Proposal submission
• Proposal approval Stages
o Desk appraisal
o Pre-Empowered Committee meeting
o Empowered Committee
• Role of the State Rural Livelihoods Mission
o The State Rural Livelihoods Missions (SRLM) as Project Implementing agency (PIA) will place a dedicated team at the
State level as provisioned under NRETP for proposal development and subsequent facilitation of the project roll-out.
o Under NRETP, State Rural Livelihoods Mission has to engage dedicated staff as per the advisory issued under NRETP.
o Further, to provide technical support in value chain proposal development one Technical Support Agency need to be
engaged from the very beginning for which budgetary provision has been made under NRETP.

• Project Period – Within years

• Eligible Items of Expenditure

o Support to SRLM
o Technical Support Agency
o Support to Producers’ Enterprise (PE)
 Value chain development – Fund flow

• Fund release to Producer Enterprises will be made through electronic transfer systems, to the extent
feasible.
• The fund releases to the PE would be based on the business plan and the fund requirement
projections approved by competent authority.
• All releases to the PEs would be accounted for as advances in SRLM books of accounts except for
working capital. Advances should be adjusted against the UC submitted by the PE to SRLM.
• Actual expenditure reported to be booked as expenditures and the unspent balances are to be
refunded to the SRLM.

1St installment - 10% (15% after approval of DRP)

2nd installment – 50%
3rd installment - 25%
 Producer Enterprises – Overview

• Organization of small and marginal producers into member owned and member controlled Farmer Producer
Organizations (FPOs) or Producers’ Enterprise (PE) has emerged as one of the most effective mechanism to
address challenges faced by small and marginal farmers such as access to markets, access to credit and access to
technology and inputs and markets.
• Producers’ Enterprises (PEs) can be defined as registered, formal organizations of farmers including co-operatives
and Farmer Producer’ Companies.
• The primary objective of these organizations is to ensure better economic return to the farmer producers by
helping them to take up business activities.
• These enterprises operate as commercial organizations and being economically viable is of paramount
importance for these organizations.
 
 Producer Enterprises – Overview
Benefits
• Economies of scale and increased
bargaining power
• Improved market reach
• Access to finance
  • Risk mitigation
• Improved access to extension
services
• Increased policy influence
• Professional management
Role of SRLM
• Identification of commodities, preparation of business
plan and proposal
• Assist in pre-incorporation activities of the PE
• Positioning the dedicated PE staff (core staff)
• Assistance to the PE in operations for at least 2 cycles
and ensuring compliance
• SHT and NMMU would be responsible for business
counselling, regular review of performance and
progress and provide regular feedback for performance
improvement and achieving results.
• To build a larger level eco-system to facilitate trade /
market linkage.
• Facilitate convergence for leveraging resources
 Producer Enterprises – Identification of AOI
Steps Process Data & Tools
Step 1 Shortlist
  Geography / area 1. Presence of NRLM SHGs
  of intervention 2. Level of SHG mobilization
    3. Areas where productivity enhancement activities have already been taken up under NRLM
Step 2 List of potential
  commodities 1. Secondary data analysis
    2. Commodities cultivated/ collected by small and marginal farmers
    3. Number of producers involved
Step 3
  Shortlisting 4-5 major 1. FGD with the community
   commodities for intervention 2. FGD at local market / mandi
    3. SWOT analysis of the commodities
    4. 3E Model – To assess the external environment of the commodity
    5. End-use market analysis and value chain study
Step 4 Validation of the
  commodities 1. FGD with the community to validate the shortlisted commodities and fill any information gaps.
  selected  
 Producer Enterprises – Identification of AOI (Cont..)
Steps Process Data & Tools
Step 5 Commodity profile
  (production to end
  market)
    1. Scale - Number of small and marginal HHs covered, Marketable surplus
    2. Production system (pre-harvest, harvest, post-harvest)
    3. Uniqueness of the commodity (seasonal advantage, active ingredient)
    4. Market dynamics – Existing and potential markets, Legal barriers, Demand supply dynamics, price
    volatility Analysis may be conducted with the help of Technical agency / competent manpower at SRLM
    level
 Step 6 Creation of
  portfolio of
  commodities and 1. Seasonality/ cyclicality
  the commodity- 2. Member affinity / ease of building transactional intensity
  wise interventions 3. Gaps in the existing value chain
    4. Defining the business models
    5. Business viability / profitability for each commodity intervention
    Each commodity must have the potential to be a profit center
Step 7
  Validation of the commodity 1. FGD with the community to validate the interventions and fill any information gaps.
  portfolio  
 Producer Enterprises – Business model

• Feasibility Study – Triple bottom line – (Economic profit, Social impact &
Environmental impact)
• Trading and/or Value addition - Improving quality , Processing, Differentiation
• Business development services (BDS) – Input, Technical, Insurance, Networking &
 
Financial services
• Business Strategy and plan - Defining operational area, Financing, Strategic business
units, Margin and revenue model, Capital Mobilization strategy, Building reserves ,
Marketing strategy
• Profit Distribution - The distribution of profits has to be equitable and not equal.
 Producer Enterprises – Operations

The operational model of a PE has to be robust and clearly defined.

• Procurement Strategy - The procurement of the commodities would be done by the PE. The PE may establish
procurement centres at village or cluster level as per business requirement (volume, distance from markets) and the
infrastructure of procurement center would be leased or hired or owned and operated by the PE.
• Udyog Mitra
• Ensure fair and transparent procurement, storage and transportation
  • Fair and transparent record-keeping
• Ensure quality of the commodity procured.
• Improve communication between PE and members
• Information dissemination to the members
• Support regular interactions between PE members
• Pricing - • Price discovery – which are the benchmark markets for the commodity?
•  Pooling Price mechanism versus outright purchase
•  Grading and quality parameters

• Payment to members - DBT

• IT systems
 Producer Enterprises – Business risk
• Risk assessment
 
A risk assessment need to be carried out for the portfolio of commodities under the PE. Especially in the case of
perishables it should be rigorous.

• Risk mitigation
•Product diversification
•Spot transaction versus forward contracts
•Transportation
•Allocation of risk must be defined for the PE and the members–
1. Price risk
2. Storage losses and processing losses
3. Transportation losses
4. Quality / rejection risk
 Producer Enterprises – Business principles

Fair business principles SOP’s

• Protect the interest of Small and marginal producers • Procurement
• Equitable and not equal sharing of profits • Sales
• Transparency and Accountability • Pricing
• Storage and quality
• Fair Trading Practices
• Logistics
• Payment of a Fair Price • Finance
• Ensuring no Child Labour and Forced Labour • Human Resource (recruitment
• Empowerment of women and performance incentives)
• Providing Capacity Building
• Respect for the Environment
Producer Enterprises – Sequence of Activities
MKSP– Overview

Objectives

• To enhance the productive participation of women in agriculture.

• To create sustainable agricultural livelihood opportunities for
women in agriculture.
• To improve the skills and capabilities of women in agriculture to
support farm and non-farm-based activities;
• To ensure food and nutrition security at the household and the
community level;
• To enable women to have better access to inputs and services of
the government and other agencies;
• To enhance the managerial capacities of women in agriculture for
better management of bio-diversity;
• To improve the capacities of women in agriculture to access the
resources of other institutions and schemes within a convergence
framework
MKSP– Process & Activities
Focused activities

• Pre-harvest
• Post-harvest
• Storage
• Pest Mgmt
• Disease Mgmt
• Rodent Mgmt
• Nutrient Mgmt
• Soil & Moisture conservation
• Cropping patterns
 MKSP– Expected outcomes

Increase in Net income

Increase in area under cultivation

Increase in productivity

Improvement in soil health

Reduction in cost of cultivation

Increase in skill performance of women in Agri.

Utilization of gender friendly tools & technologies