services they will receive and when. Customers pay Rs 450 (US$10), including services tax, for a year of AGLED services.
Achievements
In 2009 BASIX had nearly half a million customers for AGLED services. About half of these customers were using agriculture and livestock services, and the rest were using services related to nonfarm activities. The details are as follows: • Agriculture: AGLED provided soil-testing service to more than 20,000 farmers, integrated pest management (IPM) or integrated nutrient management (INM) services to nearly 75,000 crop customers, and field surveillance to more than 30,000 farmers. It connected most customers to markets for inputs (seed, fertilizers, pesticides, and bio-inputs such as vermicompost and organic pesticides) and outputs. Weather index-based crop insurance was provided to more than 10,000 farmers for different crops and in different agroclimatic zones, in collaboration with private insurance companies.
• Livestock: BASIX AGLED services conducted health checkups of nearly 440,000 animals, vaccinated nearly 165,000 animals, and dewormed 125,000 animals. It trained more than 36,000 customers on feed and fodder and better dairying practices. More than 60,000 farmers were linked to milk marketing chains of cooperatives or private dairy companies. Livestock insurance was provided for more than 120,000 animals, in collaboration with private insurance companies.
Lessons learned
It has taken BASIX about six years to reach the scale described, and it has learned many lessons along the way. In the initial two years, the main emphasis was on market research to identify which services farmers needed. This research, conducted through a large number of field visits and group interactions with farmers, showed that small farmers preferred cost-saving and risk-reducing interventions over yield-enhancing interventions requiring greater cash outlays. It also showed that it was not possible to handle these interventions for a large number of crops, so BASIX focused on a few crops grown by a large number of farmers, such as groundnut in southern Andhra Pradesh, cotton in northern Andhra Pradesh, and soybean in western Madhya Pradesh. The next step was designing the service offerings. For example,
enhancing productivity could mean increasing the yield or reducing the cost for the same output. Local agricultural universities and research stations made available many packages of practices for increasing yields, so BASIX decided to focus more on cost reduction. One successful example of this approach was stem application of pesticide in cotton, which reduced pest multiplication and thereby reduced the need to undertake a large number of pesticide sprays later. Another example was introduction of soil testing, which led
to more precise and economical application of fertilizers. In the case of dairy animals, simple practices like vaccination and periodic deworming were more cost-effective than procurement of high- yielding crossbred animals. Based on such experiences, BASIX staff learned how to customize AGLED services for different agroclimatic zones, which enhanced the farmers’ willingness to pay for these services. Customer satisfaction surveys conducted by independent audit teams found that the satisfaction level was nearly 80 percent, with the main cause of dissatisfaction being inadequate visits of the LSPs. To improve service, field executives introduced tighter monitoring of service delivery, but this practice turned out to be expensive. BASIX is now pilot testing mobile phone–based monitoring of service delivery through which farmers will be able to report incidents of no visit or poor service.
Sustainability and future plans
The income from AGLED services in 2009 was nearly Rs 145 million (US$3 million), and BASIX made a modest profit of nearly Rs 22 million (US$450,000) providing these services to nearly half a million customers. With more and more LSPs reaching the breakeven number of customers, profitability is likely to improve. BASIX also plans to move some basic facilities like soil-testing labs and artificial insemination centers under its own control to improve its service to farmers. Although BASIX agricultural credit operations are aimed at
small and marginal farmers, the organization plans to extend AGLED services to larger farmers (to whom BASIX does not extend credit) in the same villages. These farmers’ enhanced yields will generate additional output as well as employment opportunities for the landless poor—outcomes that are in line with the BASIX mission. So far BASIX has worked mainly in poorer dryland districts, but it is also considering providing AGLED services in irrigated districts where it has no credit operations. With these changes, BASIX is confident of reaching 2 to 3 million farmers with AGLED services in the next five years. n
For further reading: BASIX,
www.basixindia.com; P. Chandra Shekara, Status of Private Extension in India (Hy- derabad: National Institute for Management of Agricultural Extension [MANAGE], 2002); R. Sulaiman and V. V. Sada- mate, Privatising Agricultural Extension in India, Policy Paper 10 (New Delhi: National Centre for Agricultural Economics and Policy Research [NCAP], 2000); S. K. Datta, A Perspec- tive on Farmer-Market Interface: Results of a Revisit to Selected Villages from West Bengal, Gujarat, and Maharashtra (Ahmeda- bad: Indian Institute of Management, 1999); V. Mahajan, “From Micro Credit to Livelihood Finance,” Economic and Political Weekly 40, no. 41 (2005): 4416–19; V. Mahajan, Be- yond Microfinance, in C. Moser, ed., Reducing Global Poverty (Washington, DC: Brookings Institution, 2007).
Vijay Mahajan (
vijaymahajan@basixindia.com) is founder and chief executive officer of the BASIX Group.K. Vasumathi (
vasumathi@basixindia.com) is associate vice president, Agricultural, Livestock, and Enterprise Development (AGLED) services, BASIX Group. They are based in Hyderabad, India.
INTERNATIONAL FOOD POLICY
RESEARCH INSTITUTE Supported by the CGIAR
www.ifpri.org
sustainable solutions for ending hunger and poverty Supported by the CGIAR
www.worldbank.org Copyright © 2010 International Food Policy Research Institute and the World Bank. All rights reserved. Contact
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