Dairy innovator Promethean Power Systems is helping bring better prices, reliability and transparency to smallholder farmers. Sustainable technology connects farmers with national supply chains for the first time – and helps women take on new roles in their communities.
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India’s dairy sector produced 198 million tonnes of milk in 2019/20. But millions of less wealthy dairy farmers – those living in remote communities with just a few cattle – have no access to cold chain. This makes it harder to sell their milk, and keeps the price they can attract for their produce low.
Promethean Power Systems has a long track record in sustainable dairy chilling technology and services. Now Ashden’s Fair Cooling Fund has allowed the business, a partner NGO and rural villagers to develop and launch community run micro-chilling hubs in rural communities in Latur, Maharashtra. These centres chill milk deposited by smallholder farmers, which is then collected by Promethean and sold into regional supply chains.
The system offers fairness and transparency – with the amount of milk produced and signs of quality, such as the fat content, recorded during processing. Chilled milk fetches a better price for farmers, who know that their produce won’t be wasted, and can grow their businesses with confidence.
The micro-hubs have boosted farmer incomes by an average of 30%. The hubs also offer support services such as animal feed and veterinary care – these have helped some farmers double the amount they earn. The arrival of the micro-hubs is encouraging people to start new enterprises, and invest more in their existing activities.
“The hub located in our village has given me confidence to invest in dairy farming and I have been able to significantly increase my income by expanding my dairy farm” – Latur villager
The first hub opened in early 2021, and by March 2022, Promethean was supporting 100 hubs (made possible by our fund’s investment, and a USAID grant unlocked by the Fair Cooling Fund).
This means 3,000 farmers are enjoying new economic opportunities – 80% are women. By launching new hubs and attracting new users to its existing ones, the company aims to reach a further 7,500 farmers by the end of 2023 – and 136,500 by the end of 2025.
The hubs are powered by intermittent grid power and thermal energy storage technology. This takes away the need for diesel generators that would consume four to six litres of fuel a day, while cooling also allows less frequent trips to the villages by milk collection trucks.
The business model has also created a new role of franchisee hub managers, who oversee the milk collection at each centre. They also help people access the extra services offered by some centres – such as animal feed and veterinary care. These roles are mostly taken by women, who can expect to earn 12,000 Rupees ($150) a month managing a centre serving 30 farmers.
Promethean’s partnership with local NGO Swayam Shikshan Prayog has helped it to recruit women to participate with no up front costs, apart from a small deposit. Women have always played a key role in India’s dairy industry, but this new opportunity can help address deep-rooted gender inequality in rural areas. Oxfam reports that in India 85% of rural women are engaged in agriculture, yet only about 13% own land.
“We have been able to earn more for our milk, receive payments directly into our own bank accounts and build up savings for our family for important things such as health care and education” – woman dairy farmers, Latur
Participation in the micro-hub initiative has given most customers a digital record of their earnings for the first time, giving them a better chance of accessing financial services. Promethean has piloted offering micro loans and dairy animal loans through some of its hubs, and is looking to expand this offer later in 2022.
The company is also selling its micro-hub technology and services to other organisations – from farmers’ co-operatives to a small organic dairy.
With India’s dairy sector predicted to rebound strongly from the damaging impact of the coronavirus pandemic, Promethean’s innovation can put thousands of marginalised farmers at the heart of a growing sector. Strong local partnerships, community engagement and holistic thinking mean the hub service is not just raising incomes – but knocking down social and financial barriers too.
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