Responding to the pandemic as an early-stage startup
When we founded Gramhal, the most important question that loomed at us was – from which location should we start? Our founding team came from agrarian households in Haryana and Maharashtra, and thus our discussions fiddled between these regions. It slowly became clear to us that we will have to start from the region where farmers need our intervention the most. We agreed that we don't want our work to be a quick fix to the problems of smallholder farmers; instead, we were hoping for a structural change that would truly bring about a difference in farmers' lives. We decided to start our work in Vidarbha's Yavatmal district – India's most distressed agricultural region, where 53% of the 189,000 smallholder farmers live in a vicious debt cycle.
It was a leap of faith for us – because the likelihood of our model failing was so much more than if we would have worked in a region with better farmer conditions. But we were clear – that we didn't want to catch the low hanging fruit. After many rigorous pilots, we launched our model in December 2019 via one small procurement cum warehouse center located in Sawali village. The response was beyond what we had imagined - we got overwhelming support, and in just two months, we were working with 150 farmers across 26 villages of the region.
In March 2020, as our work hit its peak, COVID hit the ground. Even with the best of the harvest season, smallholder farmers in the region struggle to fulfill the basic necessities of life. When COVID 19 hit, we knew it would push them to a further vulnerable position. We were unsure about how to move forward. But we were sure about our need to respond and support farmers during such challenging times.
With just four months of field operations – we struggled to find our feet during the initial days of COVID. But as we struggled, we learned that Gramhal's work of providing bundled post-harvest services of storage, credit, and market linkage via a digital platform had become more relevant than it ever was.
With all markets closed and broken supply chains across the country - COVID amplified the very problem that Gramhal aims to solve – lack of agency among farmers and distress selling.
Our immediate response was to protect farmers from distress selling and build their financial resilience. Even during this crisis, we wanted to ensure that farmers are not coerced to sell produce at an unfair price and have the agency to decide whom to sell, when to sell, and at what price. Our decentralized, village-level model allowed us to respond immediately, and we were back on our feet, providing services within a week.
The physical proximity of our warehouses and staff to the farmers allowed us to act fast and continue our services to farmers even during the lockdown.
We responded to COVID by doing the following:
Rent-free storage: With all the markets closed, farmers had nowhere to sell their produce. Most small farmers of the region also don't have a storage facility at their homes. We partnered with three warehouses at the village level and offered farmers a rent-free storage facility for the produce.
Interest-free credit: We wanted to make sure that farmers don't sell the produce at an unfair price just because they needed the money. So, using the farmers' produce in the warehouse as collateral, we provided farmers interest-free credit for up to 60% of the produce value. This gave them monetary support and breathing space to wait for a favorable time to sell the produce.
Direct linkage to market: We send farmers daily price information via SMS and WhatsApp. If they like the price, they can either respond to our message or call us to sell their produce.
Safety protocols: To ensure the safety of all our frontline employees and farmers, we curated a system where farmers would take an appointment before they come to our warehouses to store the produce. To ensure no overcrowding was happening, we only gave a few appointments each day. We took all hand-washing and social distancing precautions at our center.
As soon as our COVID response was launched, we saw a huge spike in demand for our services. In just three months, the number of farmers seeking our services doubled.
(Farmer storing his produce at our village level warehouse cum procurement center during COVID-19)
At an organizational level, our aim during COVID was to repurpose money and preserve it. However, we wanted to make sure that our last mile employee is not the first one to become vulnerable. Thus, we decided that in times of crisis such as this, the cost-cutting and saving should not begin from the bottom of the organizational pyramid, rather from the top. As a first step, our CEO took a 100% salary cut for straight three months, when we realized that COVID situation would be prolonged, the second line of leadership took a 50% salary cut, and it continues to do so.
This act of our leadership team has set standards where the effects of the financial repurposing should first be absorbed by the top leadership and reach our most vulnerable employee the last. We hope that we keep abiding by these values in the years to come.
As we work with 450 farmers today to build their agency and financial resilience each day, we know that our effort is a small drop in the ocean, and there are many more farmers that we need to work with and support. But we are proud to be a young organization that abides by its core values of being farmer-centric and has the courage to step up and deliver in the hardest of times.
About the author: Simeen is Director at Gramhal. She builds processes and contributes to the verticals of communications, fundraising, strategy, and HR.