5) Description of health product/service offering: Aharam trains women to cure ill-health from the root: - (a) malnutrition, (b) toxic, chemical food, (c) poor sanitation. Good food ensures good health and higher resistance, less susceptibility to diseases. Aharam also trains women in kitchen health gardens (KHG). Recovery is also faster with better diet. Even spiritual healing such as through “yoga” (oriental meditation and exercise system) is ineffective without matching food. Onion, garlic and meat for instance, is avoided in Yogic practices as it arouses wild passion and hot temper. Hence, Aharam approach of holistic health succeeds unlike mere cure-based ones if diet is not conducive: “reap as you sow”. Good quality grocery (pulses, oil and spice) products worth Rs. 500 (25 kg) per family monthly are procured from farmers and if less, from the urban traders at fair price. Its price is same or 10% lower than market, but Aharam quality is better.

Aharam also trains farmers in cultivating the crops using organic inputs such as green manure crops like the sun hemp and cow dung-urine as bio-tonic, and save 30-50% cost by dung recycling and avoiding chemical fertilizers and pesticides. Organic inputs conserve water and traditional crops are drought resistant, save seed cost by 30-50% and avoid monopolies. Ahram focuses on growing food crops to meet family needs first and growing the crops for market in the remaining land. This reduces the farmers’ losses in case of market crash and ensures food security. Good quality grocery (pulses, oil and spice) products worth Rs. 500 (25 kg) per family monthly are procured from farmers and if less, from the urban traders at fair price. Its price is same or 10% lower than market, but Aharam quality is better.

Aharam provides SHGs Business Development Services BDS) such as (a) technology training, (b) infrastructure building (c) availing financial loan and (4) market access through targeted market survey.

6) Description of innovation: Aharam innovation is curing the root cause of health problems- malnutrition and toxic food, grown using chemical inputs. Good food ensures good health and higher resistance, less susceptibility to diseases. Recovery of ailing persons is also faster with better diet. Even spiritual healing such as through “yoga” (oriental meditation and exercise system) is not effective without matching food. Onion, garlic and meat for instance, is avoided in Yogic practices as it is supposed to arouse wild passion and hot temper. Hence, Aharam approach of holistic health succeeds unlike mere cure-based ones if diet is not conducive. People follow the principle “reap as you sow”. B. Integrating SHGs as producers and consumers into single entity “prosumer”, is the key innovation the reduces the length of the supply chain and reduces the delivery cost by 30-50%. SHGs as a Community based organization (CBO) is good vehicle for both production and marketing. It provides “fair price” to the farmers and “good food” to consumers at the “farm gate” price, by avoiding re-selling by the urban traders to villages. Market rates or government support price is less than farm expenses, causing farmers’ indebtedness and suicides, 100,000 in India during 1993-2005. C. Identifying the viable, niche product segment is the third innovation. Dumping of cheap, subsidized imported foods products has eroded the market access to the local farmer. Thus, Aharam targeted grocery segment than competinf with subsidized rice or cotton. D. Local resources and traditional skills (LRTS) is a Unique Selling Proposition (USP) behind CBE success. For, traditions have evolved over millennia to tide over the local scarcity and other problems. It has a cultural brand value and politically convenient to generate employment, much needed in developing world. E. Recycling human and animal dung by soil-pit compost, than concrete toilets that waste nutrients.

7) Operational model: Aharam procures the regional products such as pulses, chili, onion, coriander, groundnut, Tamarind etc. from 100 farmers, often associated with the 600 women SHGs facilitated by CCD across 242 villages organized into 4 district federations. It imports non-regional products such as mustard (Madhya Pradesh state), gram (Orissa state), honey (Kerala state) etc. at 30% of the market price from partner NGOs across 6 states. These SHGs and their federations is the fulcrum of the CBE model, by integrating the forward and backward linkages of the supply chain. Existing offices (60) of the women’s Self Help Groups (SHG) and 15 shops deliver these goods in a packed form to 1,000 poor, landless farm labourers families. Aharam Business Development Services (BDS) includes technology training such as traditional recipes of nutritious millet malt, puffed rice, herbal juice powder, cooking oil etc. using Common Facility Centre (CFC) hosted modern tools. BDS also trains farmers in avoiding Rs. 6,000/- to 8,000/- expenses/ ha per crop and replace it with organic inputs costing only Rs. 2,500/- to 5,000/-. Green manure crops (pulses, hemp) are grown and mixed in soil as bio- fertilizer. Fermented solution of cow dung, cow urine, jaggery etc. is sprayed as bio-tonic. Cattle and human dung is composted and added. All this revives soil microbes, nutrients and reduce malaria etc. Healthy crops get less pests and diseases and avoid expense on costly chemical pesticides. With reduced input cost, farmers' income rises 60-70% even at the market rates. BDS provides access to urban shops that provide 20% more price to “trusted” organic goods and 40% to the certified ones as customers feel the need to consume non-toxic food for safety and health. “Unave Marandam” (i.e. food is medicine) is a local proverb. Aharam also trains consumers in chemical-free, seasonally appropriate “good food” diet, to keep the health balanced and resil

8) Human resources: Aharam engages 15 rural poor women at value addition facilities such as building and machinery for the storage, powdering, packing, and labeling at the back-end. At the front end lies a team of 50 part-time workers i.e. about 1 member per 40 SHGs, and with 15 SHG cluster coordinators that handle 3 SHGs each. Thus, in all 65 people are engaged to reach out to 1,000 families i.e. 5,000 people, the ratio being 1 seller : 9 consumers.

9) Key operational partnerships: The stake holders include the 15 shopkeepers at the villages, who gain by having assured clientele due to the credit cards, rather than a fluctuating type. The 100 farmers and 11 urban traders from whom Aharam procures the good quality grocery now became quality conscious as they too gain from assured demand. SHGs that undertake the distribution responsibility as a social service. The Government partners included Small Industry Development Bank (SIDBI) that earlier promoted CBEs, leading to establishment of CFC and BDS. Tamil Nadu Women Development Society (TNWDS) wing of the government trained the SHGs in diversifying their activities, including trading. Coir board provided free training to the coir workers in Tsunami affected areas. Market uncertainties have forced all the stakeholders to find new partners and opportunities. NGOs and Friends of CBOs (FCBOs) from other states helped in procuring good quality and low price grocery. Some of them such as Ekgaon Co. (www.ekgaon.com) even developed Market Information System (MIS) using Information Communication Technologies (ICT). Ford Foundation support is the bedrock for Aharam. Inter-state partnership will be crucial in future to seek low cost, good quality crop produce. Here, farmers community based organizations (CBOs) would provide the material and initially neighboring NGOs such as CCD would engage the CBOs. For processing and marking, Govt. of India's Council for Appropriate Rural Technology (CAPART) may support.

10) Financial Sustainability

          • Fees charged to clients?: Yes

          • How do you assure affordability?: Saving expenses on advertisement (generally 20-30% of the business cost) through mouth publicity, and reducing overhead costs by using existing SHG office and staff, is the key to provide goods at low cost to buyers. SHGs save 5% in storage and handling i.e. Rs. 25,000/-which supports 15 SHG cluster coordinators (at Rs. 1,560/- pm). Grocery worth Rs. 500/- per month (25 kg) is delivered at home to 500 families no interest credit worth Rs. 500/- monthly for 3 months. Another 300 SHG member families buy these from 15 shops that also sell these to another 200 local SHG non-members. These 1,000 families earn about Rs. 40/- daily (0.9 USD) and spend 50% of their income on Aharam products and save 20% of medical expenses. Ford Foundation (FF) supported “no interest credit” of Rs. 1.5 million.

          • Earned incomes as a percentage of operating costs: 88

          • Other funding sources: Aharam is at the break-even stage today but will become profitable soon, after tapping the urban markets with high returns. Next year 15 staff and 45 SHG cluster coordinators will reach 5,000 home deliveries, besides 50 shops would cater to 5,000 member families, and 10,000 other families, to total the business worth Rs. 10 million monthly. Aharam central team would get Rs. 300,000/- monthly as commission (60 staff at Rs. 5,000, i.e. Rs. 150/- daily, higher than the urban daily wage rate- Rs. 100/-). Another Rs. 30,000/- would be charged by the 3 coordinators (procuring, processing and distributing). The staff would cost 3.3 % of the turnover, and another 5% (Rs. 500,000/-) would be the profit. Misereor, a German donor and Grameen Foundation, USA. Tata trust will support inter-state trade.

          • Strategy for long-term sustainability: The key to future financial sustainability would be to earn profits from the urban niche marketing to rich customers and redeploy profits to support the poor buyers. Famous food chain such as Spencer have also expressed interest in buying both the certified organic produce at 40% above the market price and the “trusts” goods from reliable sources at 20% above the market price. The average income of villagers is Rs. 1,000/- p.m. while that of the urbanites is 2.5 times that, so even an urban poor can afford Aharam products.

11) Current and Future Impact

          • Total number of clients: 1150

          • Clients in the past year: 1150

          • Percentage of low-income clients: 95

          • Impact: Overall 1,150 families benefited in the first year- 2004- 5, including 1,000 who purchased to Rs. 6 million worth grocery annually, which saved them Rs. 0.6 million at the rate of 10% lower price than the market rate. Further, better nutrition and health quality of the grocery saved a considerable medical expenses amounting to above Rs. 100/- per family monthly. Kitchen Herbal Gardens for primary health care had earlier saved up to 50% of the medical expenses. However, Aharam further addresses the root cause of ill-health needed: toxic and nutrition-poor diet that Aharam tries to reduce. About 100 farmers benefited by getting secured markets, besides 20 women engaged in processing and 20 in trading, besides 10 men in transport. Some of them show entrepreneurial tendency.

          • Overall "market": The potential demand for Aharam supply chain is about 10 times- if all the 600 SHGs are covered (9500 families) engaged in the CCD dryland loop- worth Rs. 5 million (25 ton) monthly for just grocery, implying Rs. 60 million (300 t) annually. The non-member buyers’ number is estimated to be twice this. Recently CCD initiated CFC and BDS assistance to 6,000 families of farmers and artisans in Tsunami affected coastal areas in Tamilnadu, whose Their coverage implies 15 times up-scaling - Rs. 96 million (500 t) annually. BPL families across the 4 Ramnad plains districts numbers 50 times the present reach- Rs. 300 million annually (1500 t). SHG families (80,000), mostly BPL, including the Tsunami areas imply Rs. 500 million (10.7 million USD) business (2400 t) annually. In southern India, about 10 million families are potential clients or beneficiaries and nationally, about 26% of the rural families (i.e. 30 million families) that are BPL. The number amount to double this figure in South Asia, and at least half of it in Africa- which has today become the deathbed of humanity, though it was once cradle of human species where it originated, before spreading elsewhere.

12) Scaling up strategy

          • Stage of the initiative: Scaling Up stage.

          • Expansion plan: Aharam will reach 500,000 (0.5 million) families in 3 yrs from now, with the help of 10 NGO & CBO partners across 10 states across India: Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Goa, Orissa, Madhya Pradesh, Chattisgarh, U.P. and Bihar. A feasibility study for 6 months has been recently initiated with the funding from the Tata Trust for this venture. The coalition is known as “Community Enterprise Forum India (CEFI)”. It would trade in goods worth Rs. 3000 Million /yr (15,000 ton). Though 12% of the project costs are supported externally through grants, a business margin of 10% would be possible soon after reaching 4,000 families and profitable at 5,000 families onwards, due to "economy of scale" principle.

13) Policy change: A) The foremost policy change needed is reorienting the education syllabi to teach preventive care rather than post-ailment cure, in schools and colleges. It is happening today slowly and informally but needs to be speeded, notwithstanding the opposition form the pharmacies who fear loss of business. (B) Supplying herbal drugs through the government run primary health clinics and maintaining a herbal garden in its campus to train neighboring population needs change. (C) Farmers need to be provided fair support price, which will exceed the production cost, to the farm produce, so that they can avoid indebtedness and malnutrition. In particular, price of staple food crops need to be raised to avoid more farmers growing for the market and buying the food crops they need, causing ill heath and indebtedness, even suicides. (D) The government should favor herbal and agri-business.

14) Origin of the initiative: CCD's mission is to promote revival of Local resource and Traditional Skills (LRTS) based development to reduce rural emiration to city slums. CCD helped slum dwelling children 15 years ago, triggered by lack of employment opportunities in the semi-arid plains. Women collecting and trading medicinal plants, Tamarind fruits as condiment, Neem seeds as bio-manure etc. CCD promoted these and later Gram Moolige Company Limited (GMCL, www.villageherbs.com). GMCL prevented emigration in 1,000 collector-cultivator families, and 25% more in trade, transport etc. SHGs (30) together contributed seed capital of Rs. 500 thousand as seed capital, used as “working capital”, to initiate GMCL with the brand “Village Herbs”, 5 years ago. DANIDA, Tata Trust and Ford Foundation invested Rs. 5 million through FRLHT to build CFC. GMCL employs 1,000 landless labourer women with turnopver of Rs. 5 million.

Contact Information:
Muthu  Velayudham
Ashoka Fellow
Secretary
The Covenant Centre for Development -CCD
(NGO)
India
Website: www.ccd.org.in