Collective potato cold storage facility for small-scale farmers in Bangladesh
A potato cold storage facility that reduces post-harvest losses and increases farmer income through shared storage ownership.
EXPLAIN YOUR IDEA
Bangladesh produces 9 million mT of potatoes per year. Most of this production comes from small-scale farmers. Other than most crops potatoes are grown in winter, providing much needed extra income for farmers. However, a short harvest period causes a great imbalance in supply and demand causing market prices to take a free fall. As a result, farmers make a very low return on their investment and an estimated 1.5 million mT of potatoes get wasted annually. A few months after harvest, demand starts to increase and the local market price for potatoes rises threefold.
When farming, harvesting, pre-processing and storage are done properly, potatoes can stay fresh for over half a year without quality loss. Yet, there’s a great lack of storages in Bangladesh. The public and private storages that are available, charge high prices and fail to handle and cool the potatoes adequately. This leaves farmers with a dilemma: Sell their potatoes right after harvest against production price or pay a premium for unreliable storage.
Our team is working on an affordable, semi-central, 1000mT cold storage for small-scale farmers that will eliminate farmer uncertainty and food waste from the supply chain. The storage will be solar-powered and uses quality cooling technology in which humidity, CO2-levels and temperature will be controlled. Through a social business model, farmers gathered in a farm business group (FBG) will become shared storage owners over time simply by storing potatoes.
Small-scale potato farmers and their families benefit most from the cold storages. The men often take care of the actual farming, yet women are the experts and decision-makers. There are up to 40.000 Bangladeshi potato farmers in the PROOFS program that we aim to grant access to proper storage. Additionally, if we were able to prevent 1.5 million mT of potatoes from going to waste, an estimated 1 million people can be properly fed for an entire year.
WHERE WILL YOUR IDEA BE IMPLEMENTED?
In Bangladesh, yet the concept could be of value elsewhere (we are exploring Kenya too). Our current focus is at the Northern region of Bangladesh (Rangpur) where we aim to co-develop and pilot a cold storage with one FBG before the end of the year.
ARE YOU IMPLEMENTING IN AN ELIGIBLE COUNTRY?
EXPERTISE IN SECTOR
I’ve worked in a sector related to my idea for over a year
EXPERIENCE IN IMPLEMENTATION COUNTRY(IES)
Yes, for more than one year.
TELL US MORE ABOUT YOU!
We are the BoP Innovation Center, a not-for-profit organization from The Netherlands. In a joint effort with ICCO and iDE we've set up the PROOFS program in Bangladesh to improve food security among small-scale farmers in Bangladesh. Our PROOFS team is based Dhaka, Bangladesh.
IS THIS IDEA NEW FOR YOU OR YOUR ORGANIZATION?
Not entirely. The BoP Innovation Center provides services and tools to develop, learn about and accelerate inclusive businesses for bottom of the pyramid markets. We have been carrying out projects in the areas of inclusive innovation, marketing and distribution and inclusive business empowerment in Sub Saharan Africa and Asia for more than five years and work closely with global and local partners. Working on a number of projects in Bangladesh within the PROOFS program, over the past three years we have developed and implemented a number of innovations to provide profitable food security.
With our local team members, we’ve been exploring and researching the idea of a collective cold storage facility and knowledge center for small-scale potato farmers. Working on an idea like this is nothing new to our organization, the fact that we do this on our own account (as opposed to working on a contract-basis for our clients) is. We dove into this challenge as we firmly believe there is a solid, social and inclusive business case to build around potato cold storage in Bangladesh.
HOW IS YOUR IDEA UNIQUE?
Although in low supply, potato cold storages are by no means new to Bangladesh. The idea for a collective cold storage facility however, does bring something new to the table. Our proposed storages will run on solar energy instead of power from the grid, reducing environmental impact and eliminating power cuts. Quality systems for climate control will improve potato quality and lifetime. Tying these elements together in a semi-central capacity (small enough to be close to farmers, big enough to offer aggregating harvest to buyers) is unique.
The real difference we make revolves around a social business model in which the FBG will gradually become the storage owner. This makes them less dependent on current storage owners, less volatile to fluctuating market prices, and it allows for additional income and improves the bargaining position.
To implement this idea, we currently have 200 fully active FBGs. Several FBGs are willing to invest time and resources to set up a pilot with us. Furthermore, the BoP Innovation Center has a broad network of partners, that may offer technical support and contribute to turning this idea into a success.
WHO WILL IMPLEMENT THIS IDEA?
The PROOFS program is a joint effort by the BoP Innovation Center, ICCO and iDE. Our (local) team is taking the lead in setting up a pilot by the end the year. In order to make this happen, we have found several parties interested to take responsibility for construction, cooling technology, solar power and farming expertise. Daily operation is the responsibility of the FBGs farm business administrator and will be monitored by our team. We are looking for partners to help us scale and expand.
HOW HAS YOUR IDEA CHANGED BECAUSE OF BENEFICIARY FEEDBACK?
Focus group sessions with farmers from two FBGs, using storytelling and visualizations of the storage and the supply chain to map out the user experience (find attached), brought several changes and improvements to the concept.
Our initial focus was on growing and storing processing (instead of table) variety potatoes, and storing the entire harvest for several months. As it turns out, the farmers are not ready to switch potato varieties, according to agro-experts increasing the production of table potatoes is far more feasible and promising. Therefore storage capacity should be higher, around 1000mT. Furthermore, the farmers are incredibly willing to take a share and invest in their own storage and want to pay a premium (30% more than regular storage fees) to store their produce in their own storage. Yet, they want to have some cash directly after harvest to pay of debts (for seed potatoes and pesticides), and prefer to store 80% of the potatoes and sell 20% directly.
Agro-experts tell us that through knowledge sharing and proper quality control before storage (pre-processing) the yearly harvest will be much higher (double or triple) and the potato quality will be better.
WHAT ARE SOME OF YOUR UNANSWERED QUESTIONS ABOUT THIS IDEA?
1. The storage, and the potatoes it contains, will be owned by the FBG. How to orchestrate this shared ownership? How do we finance the startup costs? How to design a fitting financial model?
2. How to translate functional requirements for a proper cold storage to a product that all farmers want to invest in?
3. How do we increase our impact? What partner(s) should we work with to scale and expand?
4. How do we optimize the storage occupancy? What other crops needs cooling?
5. How can we optimize the cold storage building process and reduce costs? How do we organize maintenance locally?
6. How do we secure ownership by participatory design methods? How do best organize this?
WHY DO YOU THINK THE PROBLEM YOUR IDEA SOLVES FOR HASN'T BEEN SOLVED YET?
First, setting up collective cold storage requires lots of farmers and a handful of suppliers to work together. It takes a lot of organizing and necessary capital to make this happen. No organization thus far has taken up the challenge to lead such an initiative.
Second, many do-good-organizations, provide training to farmers to increase their yield, yet the cold chain to stomach this produce is lacking entirely. Commercial businesses do focus on large-scale storages, but mostly work with contract farmers, creating increased contractor dependency rather than farmer income. In order to really, sustainably improve farmer livelihood, cold chain issues need to be tackled collectively.
WHAT WOULD YOU ULTIMATELY LIKE TO ACHIEVE WITH THIS IDEA? WHAT IS YOUR NEXT STEP TO GET THERE?
We want to turn financially uncertain farmers into self-sufficient storage owners that can take care of their families and their future. We believe moving up the supply chain, by granting farmers access to quality cold storage, is necessary to take to make this happen.
We have no doubt the cold storage will greatly benefit farmers and their families, the next step for us it to run a pilot with an entire farm business group and prove the success of the concept to the world.
MEMBERS OF MY TEAM HAVE BEEN WORKING TOGETHER FOR:
MY INTENDED BENEFICIARIES ARE:
Within 100 km of where our team does most of its work
MY ORGANIZATION'S OPERATING BUDGET FOR 2015 WAS:
Between $500,000 and $1,000,000