Background
Margadidaddi village lies in a remote forested area situated in Munadagod, a panchayat town in Uttara Kannada district in Karnataka. Close to 25 households have been settled here for 50 years living in mud houses built by themselves. The people residing in this village belong to Gowli community, traditionally a cattle rearing folk. Only two to three households own land cultivating rice, areca nut, maize while the rest of the community engages in daily wage labour in other farms nearby. The community gets ration from the public distribution system in the nearest town as well as supplies like rice, jowar, chillies and other spices from the market once a month. Only 4 out of 25 households have grid powered meters facing power cut issues on an average of 1-2 hours and during the rainy season face power cuts of more than 4-5 hours a day. Today 95% of households have solar and some tap grid wires illegally, even with the solar present.
Solution
Kondu Bodekar adopted the solar powered flour and spice milling machine which is a hybrid machine. The ownership model is individual, entrepreneur run and the business is being run as a service model. Currently the milled product is used only for self consumption by the community. Post installing the solar powered grinding machine, he is able to approximately mill 5 kg/day (worst) to 10 kg/day (best), and are yet to experience any kind of season but estimate a supply of about 10-15 kg/day of milled output. As summer is the season of chilies, their demand for chilly grinding surfaces allowing him to operate the business through the year.
During the monsoons, the demand dips as there is tendency of the crops getting wet. He usually does not have to store the milled product, but in cases when he has had to, it has not been for more than a week. In order to collect the food grains, they go to the market once a week or once in 15 days and buy approximately 10-15 kgs. There is no market developed and hence no packaging or distribution involved. He has noticed that if the milled product is kept for more than a week, insects can destroy the produce and hence they mill and immediately give it to the end user or at least within a week max. However, Bondekar is open to selling packed items to the market but needs adequate support, training and awareness on market structures and dynamics.
System Design
The flour machine is a 1 hp single phase system that can mill 8 kg of grain per hour. It is a 3 hour hybrid system - meaning a combination of both grid and solar. The solar system comprises of 6 panels - 250W and 4 batteries - 150 Ah. Servicing is provided by the nearest SELCO Solar Pvt Ltd branch, the energy enterprise and offers any type of servicing for both the machine and the solar within 24 hours of the service request.
Financial Solution
Due to this being one of the first hybrid models tested, an R&D subsidy was provided to Bondekar. With the business model studied, if he were to make a 100% contribution through loan, his EMI amount would be INR 4,555 per month at interest rate of 13% with a tenure of 3 years which would not have been feasible leading to losses. Anything over the 25% contribution would have either amounted to longer tenure or increased EMI payments per month resulting in a long break even period. Bondekar took a loan from Vijaya Bank, Katur branch which is a public sector undertaking. There is a public sector bank - Vijaya bank in the nearest town, Katur. The loan was provided under the Mudra Shishu scheme which does not require any collateral/margin money. Bondekar is also part of an SHG group as a part of SKDRDP, a local MFI. They meet once a week and are a part of a training program which helps them maintain savings and keeping accounts.
Pre Intervention scenario
With a small community as such and being remote, there were no milling facilities in the village or nearby. People would have to travel to the closest town Katur, 5-8 kms away to access these services. Villagers travel by bike and many by walk as there are no public transport infrastructures connecting the village to the town. People would travel 2-3 times a week and would take 30 mins one way totaling to an hour of travel. They would have to wait for their produce to get milled, often in lines else would leave their produce there and come back in the evenings. The time spent on milling their produce was considerable. They would spend INR 5/kg on jowar and rice and chilly at INR 10/kg. Milling costs were INR 3 for rice, jowar and chilly.
Impact
Community Savings: The community would earlier have to travel 2-3 times a week for milling their produce spending an hour of travel each time as well as wait time of an hour or more, with a total of minimum 4 hours a week spent. Now, they are able to mill their produce as and when they require cutting out the time and travel costs completely. Due to the mill being run by one of the villagers themselves, there is trust involved which allows the community to leave their produce there and not spend time waiting.
Source of steady livelihood: Earlier, Bondekar was relying on daily wage labour for a living which was unsteady and unsustainable. He was keen on starting something of his own which he could rely on through the year to support his family. He is now running a business of his own and earns close to INR 6,000 a month.
Entrepreneurship: Bondekar has taken to entrepreneurship and is interested in selling packaged milled flour and spices. However, he needs adequate support, training and awareness on market structures and dynamics before he could branch out.
Service extended to nearby villages: Other villages close to Maragadidaddi which were also having to travel to Katur town are now able to access this milling service. They also save time and travel costs.
Uninterrupted service: The region is prone to power cuts on a daily basis and which can turn to days at a stretch during the monsoons. Due to the machine being solar powered, there are no interruptions during the run time of the machine. The machine is a hybrid system, and can run on both grid and solar. The solar back up of 3 hours is sufficient as he does not need to run the machine for over that time period.
Uninterrupted service: Bondekar has been able to continue running his milling service during the lockdown as well. As his service is located in a remote region, there were no run-ins with the local authorities with respect to permissions. With the machine being placed separately in a room which is at the entrance of the house, the villagers need not enter the space and can give the required input across through a counter. This has really helped maintain physical distancing norms for both Bondekar and the community. People from nearby villages were also secure due to his service continuing through the extended lockdown period and not having to rely on the mill in the town which would have been closed and also difficult to access with travel restrictions. With migrants starting to return, there is also a possibility of increased demand as consumption of essential rations will increase.