Energising agriculture: Funding trailblazing solutions for marginalised farmers

Why energise smallholder farming?

Worldwide, 733 million people go without access to electricity – 80% of them in rural areas. Many of those affected are smallholder farmers living in, or on the edges of, poverty. For these communities, access to electricity can be a lifeline, securing a more nutritious diet and in some cases dramatically raising incomes and productivity.

In rural communities with no prospect of grid connection, renewable energy can power cooling, water pumping, or processes such as drying, milling and threshing. These processes help farmers protect their crops, grow more and add value to what they sell.

The growing impacts of the climate crisis make the case for energising smallholder farming even stronger. Clean energy is an essential adaptation tool – helping farmers irrigate in the face of higher temperatures, or keep harvests cool when heatwaves strike. More than 2 billion people depend on smallholder farms for food and income, yet currently less than 2% of global climate-related finance is devoted to helping them adapt to climate change.

Spiralling food prices in recent years have underscored the precarious nature of our global agriculture systems. Ahead of the long-term prize of setting countries on the path to a zero carbon future, access to clean energy may become a matter of survival for the world’s most threatened communities.

While proven solutions are changing lives of smallholder farmers every day, innovators working with the most marginalised in the last mile and first mile stage of enterprise struggle to attract financial backing. Grants and philanthropic funding have huge potential to de-risk trailblazing solutions and business models, encouraging more mainstream investors to commit resources to this area. Increased support will also boost the visibility of ‘best practice’ solutions through evidence-based storytelling giving governments and global institutions more confidence to step up their action on this crucial issue – by helping to close the imagination gap between policy and practice.

This initial investment will have maximum impact if it considers the full supply chain and enabling environment affecting smallholder farmers. We also urge funders to resist siloed strategies that treat raised incomes, improved health and community resilience as unrelated outcomes. In reality, a single well-designed initiative can meet all these goals and more.

Common features of outstanding innovation

This briefing draws key insights from four inspiring organisations energising agriculture among marginalised communities in Africa and India. Each operates as a ‘farmer-allied’ intermediary, and their success underscores the power of such intermediaries to facilitate inclusive access to technologies, markets, and services. They have placed a premium on understanding the needs of less wealthy farmers, with results ranging from affordable products to new models for financing and product aggregation.

All case studies share common threads that reveal the hallmarks of successful initiatives energising agriculture for vulnerable farmers around the world. Taken together, they show that impact comes from a holistic approach – rather than offering a single product or service, these innovators address the multiple barriers faced by marginalised rural communities. One common thread through these case studies is the enormous potential of schemes supporting woman farmers. Worldwide, women face barriers to owning land, challenges accessing finance, and the expectation to earn an income alongside carrying out domestic tasks such as childcare. Tailored support and opportunities can enable women to reap greater economic benefits from their farming work.

Another key thread is the need for initiatives to address market linkages post harvest – acknowledging that raised yields are useless unless farmers have someone to sell to. Related to this is the power of aggregation – bring smallscale farmers together to sell their harvests as one – connecting even the most marginalised with powerful buyers and new markets. A similar opportunity lies in the power of communities to buy inputs such as seeds collectively at a lower price.

Advances in digital technology can make these collective approaches more viable – for example, by creating new or more affordable ways to track the inputs of different farmers. But equally powerful is innovation in community organisation, which can have the added benefit of tackling gender inequality – by creating new leadership roles for women. Another key element of the holistic support needed is in skills and training for farming communities. In this area and others, partnership between NGOs and social enterprises can be extremely fruitful.

It is also relevant that solutions with a holistic approach will be attractive to a wider range of funders and investors, particularly those focused on social impact – and so stand a better chance of receiving financial support.

Finally, our case studies underline the need to design bespoke solutions with communities. The most marginalised, and those working with little land or resources, will necessary face unique barriers and challenges – from economic fragility to insecure land tenure. Solutions to these can range from access to finance, to products and services that allow them to sell in small volumes. Contextual approach is crucial – as the following initiatives show.

All four frontline organisations in this briefing have been supported by Ashden’s annual awards, a rigorous process allowing us to amplify valuable innovation insights  or the Fair Cooling Fund – a groundbreaking programme of grants and support for cooling entrepreneurs. From 2020 to 2022 the fund helped seven organisations leverage a total of 6,355,181 USD into cooling for marginalised people, showing how philanthropic grant funding can unlock wider support.

Energising agriculture is also a key theme of the Power Up campaign, launched by Ashden in late 2022. Power Up is a call for wealthy nations to greatly increase climate adaptation funding, with major investment in access to green, affordable energy for those facing climate catastrophe. 

Case study: Promethean Power Systems

Promethean Power Systems

Small-scale dairy farmers in the Indian state of Maharashtra often go without the means to chill and store their milk. With no chance of selling to big cities or faraway markets, their incomes are limited, making day to day life more precarious.

Promethean Power Systems offer sustainable technology that brings cooling within reach of more milk producers. Through the Fair Cooling Fund they have developed a compact and portable unit for use in more remote areas – those most likely to be excluded from supply chains. Villagers rent access to the units and Promethean offer affordable credit and manage milk collection too.

Women are at the heart of dairy processing in the region, and many are stepping forward to manage milk collection and processing in their communities. Promethean is working with a local NGO, Swayam Shakshan Prayog, to maximise the social impact of its work.

Under the Fair Cooling Fund, 20 micro-chilling hubs were set up in villages and a packaging and distribution facility opened in March 2022. There are now over 1,650 active farmers consistently accessing over 55 refrigeration facilities, which are experiencing growth in interest and milk volume collected.  

By the end of 2023, Promethean expect to expand to 500 villages and service 10,000 farmers

Promethean is an example of an organisation which worked to support sustainable intensification by overcoming barriers to village-level cold storage facilities by working, and developing solutions, with their beneficiaries.

They achieved this by incorporating user participation at both ‘ends’ of the process. As a result, they gained a better understanding of both their customers’ needs and the dynamics at play within the market system. 

Key insight: The role of local ‘farmer-allied’ intermediaries is important to facilitate access to rural climate solutions and associated markets and services. 

Case study: CInI

Collectives for Integrated Livelihood Initiatives (CInI) is a non-profit, supporting women to raise their incomes – and become leaders in their communities. Its Lakhpati Kisan programme, in the Central Indian Tribal Belt, helps farmers use clean energy technology to boost production of vegetable crops such as tomato, chilli, eggplant and other staple crops.

Helping women form farmer producer groups is at the heart of the programme. These groups allow women to receive training in new techniques and practices and sell their produce collectively for a larger profit. Membership also brings access to affordable finance for technologies such as solar water pumps and biogas digesters, and the chance to buy seeds, collectively, for a lower price.

An impact assessment, by Deloitte, found that the average yearly household income for those taking part has increased by about 250%. Ganesh Neelam, CInI’s executive director, says the programme deliberately takes a long-term approach to deliver lasting change. 

“The most important investment is in the capacity of communities and their institutions. Their learning is over a seven to eight year period. You can’t just provide infrastructure over a year or so and expect the change to be taken care of.”

Bonita is a farmer producer group member from Debihudi Village in Odisha. She says: “We now produce so much that the vendors come here twice a week during harvest time. We have bargaining power because we aggregate our harvest, thanks to the producer group.

“Earlier, women did not have any money, now I have an account in my name and the savings go into my account. Earlier we didn’t have the courage to make decisions – even about my own children’s education. But now with more exposure and savings, the women have the power to decide.”

Key insight: challenge gender roles to unlock economic potential.

Case study: S4S Technologies

Another organisation deploying holistic, gender-focused solutions to Maharashtra – with help from government and NGO partners – is S4S Technologies.

The company’s patented solar conduction dryer is suitable for dehydrating a wide range of harvested crops, including fruit, vegetables, grains, and spices. This increases shelf-life by about six months.

Under its ‘buy-back’ mechanism, S4S Technologies buys suitable crops from local farmers and trains agricultural entrepreneurs, usually landless women farmers, to dry them.

S4S then aggregates the dried produce, does secondary processing at its own factory, and sells the final product to the food and beverage industry, consumer goods companies, distributors, hotels, and restaurants. In this way, S4S technologies eliminates waste, acts as a guaranteed buyer, and enables farmers to create a higher-value product.

S4S works with local NGOs, already deeply embedded in the community, to identify, train, and support agricultural entrepreneurs, boosting their business and technical skills. A holistic approach has helped farmers earn up to 100GBP a month.

Key insight: cutting risk for farmers by bringing tech, skills, and market linkages together.

Case study: Sokofresh

Kenya’s Sokofresh brings solar-powered cold rooms to the country’s smallholder farmers and helps them get a better, more reliable, income for 100% of what they grow. 

Their cold rooms, storing bananas, avocados, mangoes, French beans, and flowers, are solar-powered, mobile and have a maximum capacity of five tonnes.

SokoFresh has two business models – under its ‘pay as you store’ system, farmers can use the cold rooms on a cost-per-kg basis. With this model, SokoFresh also provides harvesting and handling teams and a market linkage service.  

Farmers are paid immediately with SokoFresh arranging onward sale of their produce in advance, bundling it with harvests from other nearby growers and cutting out middlemen. This approach creates the volumes that attract interest from large-scale buyers.

Traditionally the farmer would sell to someone with a pick-up truck who would sell on to someone with a larger lorry, and finally onto the buyer. This makes the chain opaque because the farmer can’t tell what the end price is, or negotiate on that basis, and the end-buyer has less information about where the produce came from.

The company’s second business model centres on leasing cold rooms to companies that already aggregate produce from growers. These include farmer co-operatives, wholesalers, and exporters. SokoFresh also offers training and technical support to these customers.

Key insight: aggregation brings benefits for poor farmers

Case study: Ecozen Solutions

Ecozen offers portable solar-powered cold storage rooms, with thermal energy storage back-up – powered by cutting-edge digital technology – that keep produce fresh, boosting sales and prices. Under the Fair Cooling Fund, supported by Ashden, India’s Ecozen piloted a smaller version of its Ecofrost storage unit. This brought cooling within reach of more low-income farmers in remote areas.

But new technology alone will not create stable, resilient futures. Ecozen also offered farmers affordable finance and market linkages, connecting them with buyers and supply chains. Through a package of products and services, it worked in partnership with marginalised rural communities to increase their resilience.

Ecozen prototyped and changed their product design based on customer feedback and testing off-site with the community. This allowed them to develop a more sophisticated design that met the needs of an underserved demographic more readily. By the end of 2023, they expect 37,000 people to have benefited from the new product.

Ecozen understood, through user feedback, that the communities needed smaller versions of their products but also, importantly, new business models that reduced the financial burden for the farmer in acquiring this technology. They also needed the aggregator to accommodate smaller volumes of produce and aggregation was needed to engineer a more equitable relationship with buyers.

Key Insight: Community participation in product development is essential to serve the needs and ambitions of the community.

How can funders drive change?

As Ashden’s own Fair Cooling Fund has shown, grants and philanthropic capital can be used to de-risk commercial investment, as well as to encourage support from development agencies and impact investors. But what approaches should funders take to maximise their impact?

First, funders should invest in in grants for research and innovation about new pro-poor business and delivery models, and pursue outcomes that solidify the business case for further investment by other parties.

Currently, the diverse impact of innovators across multiple Sustainable Development Goals – boosting incomes, health, gender equality and more, as well as lowering emissions – is not reflected in the siloed approach taken by many funders. Funders are still likely to disburse from ‘buckets’ concerned with a single outcome, an approach that misses the full potential of these interventions.

We also recommend that funders invest in the building of partnerships across different parts of the ecosystem, that tackle multiple challenges at once Awareness of the catalytic nature of investing in connecting supply chain stakeholders is low amongst grant funders, and there is still strong bias towards funding pure implementation projects.

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