I recently relocated to Jamshedpur, also known as Tatanagar (i.e., Tata Colony). Like other industrial cities that developed around one manufacturer, everything in Jamshedpur revolves around Tata Steel. In the most literal sense, Tata’s main steel plant and blast furnaces sit atop the only hill, overlooking the entire city. Nearby, there is a Tata hospital, Tata school, Tata research archives and museum, and even Tata security – the only public structure missing is a Tata Temple. However, unlike Nike in Niketown or Benz in Stuttgart which are deified in public, Tata is even ubiquitous in the home, thanks to its horizontal diversifications into the manufacturing of every commercial good. We cook with Tata salt, drink Tata tea, watch TataSky tv, which is powered by Tata electricity. [Most recently, Tata has started bottling water as well, so it’s only a matter of time before that catches on]

But much as I mock the invasion of Tata branded everything in my life, it is also a blessing to live under Tata’s competent operations. There are parts of Jamshedpur which are maintained by the public government of Jharkhand, and the differences in quality of life between the privately and publicly managed areas are stark.

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During these hot summer months when electricity is in high demand, load shedding is a part of life.  My building’s electricity is supplied by Tata’s power plant, but the building across the street is not and is instead wired to the public grid. The dependability of Tata power versus public power is as different as fire and ice. Tata power suffers infrequent outages the longest, of which I’ve experienced, lasted ~15 minutes.  In comparison, it’s not uncommon to watch the lights across the street suddenly spark out every other night. As the heat reaches 50C in the peak of summer, these outages are also becoming more frequent across the street and last for longer periods. The luckier families across the street have small back-up generators, but for the large majority of those who live in humble houses, they sit in darkness without light and worst of all, without a fan to relieve them from the heat. Last week, the publicly supplied power was out for 3 days straight.

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Jamshedpur proper has a reputation of being the “Green City” and “Clean City”, titles which it lives up to. Most areas of the city are exceptionally clean and litter-free, remarkable for a metropolitan in India. Jubilee Park, a popular gathering place for families during the evenings, is spotlessly kept with neat rows of trees and well tended green lawns. The streets of the city even have sidewalks, which pedestrians use! Tata has taken a great effort as a private corporation to maintain the city, and it shows. The contrast is on the other side of the tracks (literally), in Jugsalai – a periphery of the city, which is maintained by the public government.  Immediately upon crossing the railroad tracks, the narrow streets are covered with trash and order is left behind. The rubble piles, common to most cities in India, narrow the already crowded streets. In order to drive through Jugsalai, one has to inevitably drive over piles of building materials – gravel, sand, etc. – and avoid running over people and cattle who walk in the middle of these streets because the sidewalks have disappeared.

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It’s hard not to favor private management over public management when I witness such disparities within one city. As a stranger to this city, it’s hard for me comprehend how these two sides of Jamshedpur co-exist and how the public government can evade taking actions to improve the situation. How has there been no demand by the population to close the gaps between these two realities? I would demand a more dependable supply of power that won’t leave people sitting in the dark looking across the way into the brightly lit living rooms of their neighbors. The public government should start with that at least, otherwise Jamshedpur will always continue to be two cities – public and private – and we know which one wins that competition.

Access to healthcare has become the topic du jour thanks to the monumental legislation in progress in the United States. On this side of the world also, healthcare accessibility is also a pressing problem, but on a level that Americans would have a hard time fathoming. Most of the rural population in India are more than 3km from the nearest Public Health Center (PHC) which makes it extremely difficult for them to access health care. Even more concerning is that basic maternal healthcare is still unavailable in many rural villages. The UNDP estimated that 60% of births in India are still unattended by a medical professional.

A number of social enterprises have risen to the challenge and have low-cost models for providing the essential basic healthcare that each person deserves. The Villgro fellows visited with a few during the past month of training (both models are public private partnerships):

• Byrraju Foundation runs a healthcare clinic in each of its adopted villages, where patients can seek diagnosis and treatment for common conditions – e.g., hypertension, diabetes, etc. These patients pay a nominal fee of Rs. 20, which allows them to get a routine check-up from a nurse and a consultation with a retired doctor.

• Health Management and Research Institute (HMRI) runs a mobile clinic program, where once a month, a healthcare van with medical supplies, 2 qualified nurses and pharmacist operate a temporary clinic in the village.
  

  HMRI Mobile Clinic Van

  Patients are provided check-ups, medication, and if necessary, consultation referrals to the nearest PHC. The emphasis is to encourage villagers who normally wouldn’t seek treatment for ailments at the PHC due to the distance to come forth and get treated. Particular emphasis is placed on maternal health, where the local ASHAs are charged with the task to get pregnant women to come to the clinics for monthly check-ups.

Both of these models are providing great services to the rural villages, but it’s still not enough. While visiting HMRI, the district manager told us that these clinics faced a difficulty in getting pregnant mothers to come for check-ups – their husbands often prevented them from going to the clinics. This deeply disturbs me. By denying their wives access to pregnancy check-ups, these husbands are risking the lives of both the mother and child. There are a few reasons, both rational and irrational, for why this is so:

1. 1. Opportunity Cost of Time – going to the clinic, even in the village will take half a day of the mother’s time, which is also equivalent to half a day of wages. Pregnancy check-up is not valued highly enough to justify the lost wages
2. 2. Distrust of Nurses – distrust of examinations that may compromise her modesty is a perceived barrier that is reinforced by cultural tendencies to shelter women from the public arena
3. 3. Undervaluing Women – although less frequently an explicit reason, there is still a systemic undervaluing of a woman’s life that leads a husband to bar his wife from receiving free clinical check-ups. There still persists the idea that a man can remarry easily, or to put it bluntly – she is replaceable

HMRI has counseling and intervention systems in place to deal with the first two reasons. The ASHAs as well as HMRI personnel who are trained will prevail upon the husband to help him understand the value of regular check-ups during pregnancy. Often, it’s merely a lack of awareness and education and the problem can be corrected.

However, the third reason is more insidious and is a cultural problem that many developing countries face. Women still need to be empowered all around the world to be able to exercise their right to seek healthcare, particularly maternal healthcare. The WHO estimated recently that for every 100,000 births, there are 540 maternal mortalities. That is an astoundingly high number, which organizations like HMRI are trying to improve. But unless women can actually access the care made available by HMRI, the high maternal mortality rate will persist. For all the women that HMRI is able help, there are many more who are unknown to HMRI who are prevented from receiving care.  For those women, it’s not the access to healthcare that we need to worry about, but rather the right to access the existing healthcare that we need to fix.

Last week, the 2010 Villgro fellows took a trip out to Gobichettipalayam, site of Villgro’s pilot project of 10 retail agricultural supplies stores. Located in the Erode district of Tamil Nadu, Gobichettipalayam is the heart of paddy (rice) country. According to Wikipedia, the fertile paddies of Gobi are the cause of the perpetual influx of Tamil dancers and singers who like to film amidst all the lush greenery. The same lush fertile paddies were also the same reason that Villgro decided to pilot its retail store model in Gobi – the local farmers had steady enough crops year round to be willing to try out new agricultural products. Gobi was just ripe for retail agriculture.

The Model

Villgro’s retail model revisits an old-fashioned salesman model that has since gone out of fashion in the West – the Avon model (see model in photo).

In order to address the challenge of reaching small rural farmers, Villgro has come up with the concept of a Village Level Entrepreneur (VLE), who are local farmers and act as the direct sales representatives for Villgro. Each VLE is responsible for 4 villages, and each Villgro store has 5 VLEs, thus each store can reach 20 villages in an are. Like the Avon ladies who go door-to-door to sell cosmetics, the VLEs reach out to each individual farmer in their village to demonstrate and sell crop fertilizers and animal feeds. VLEs help to increase the credibility of the products by providing local endorsements. In addition, each Villgro store conducts pilot tests locally of each product before they are sold. The pilot tests serve to both demonstrate to farmers the value of the fertlizers / feeds, as well as increase the brand visibility. All of these labor and cost intensive measures are necessary in order to overcome the difficulties of building the trust and distribution channels for sales penetration of the rural market.

We visited with several VLEs and farmers who were conducting pilot tests for Villgro products around the Gobi area. They weren’t the most sophisticated business people, but they were financially savvy and understood the cost-benefit analysis behind the fertilizers and feeds that they used. They said that they saw dramatic benefits in terms of their crop yields and dairy production when they used the organic products distributed by Villgro. The farmer pictured below is a woman with 5 acres of land on which she grows 2 seasons of sugarcane and 1 season of rice. She stands amidst a health strong sugarcane crop that is fertilized using one of the organic products tested by Villgro. Even though she had little knowledge of the Villgro brand, she trusts the VLE who sells products to her and above all, she trusts the results that she sees from usage.

Sustainability

It’s undeniable that sustainability is a key issue in this model. Not only are there great risks in the VLE model, the same ones that have led to the negative perceptions of Avon and other pyramid schemes in the US, but there are also risks with the cost-heavy structure of the sales process. However, there are great benefits to be considered as well, which is why Villgro is hoping to roll out 20 more stores within the next year. The benefits are that farmers are finally aware of the products that are available to help them increase their income generation. The other benefit is also the development of a whole new level of entrepreneurs within the villages. VLEs, who undergo significant training and who develop these businesses, may just lead to the next generation of rural innovations. So even though the risks are high, it is a worthy undertaking and if Villgro can succeed to create a rural distribution channel to take it to that last mile, then we all profit.

This article was originally published by the Wall Street Journal on February 24, 2010, “Budget 2010: Will Rural India Get a Fair Deal”. Within the article, Ms. K. Seeta Prabhu of the UNDP in New Delhi raises a number of extremely relevant concerns about the rural poor of India:

• 42% of rural farmers live under the poverty line
• Small acreage farmers compose 84% of total farmers
• Low agricultural productivity
• Lack of permanent shelter
• Lack of electricity and highly inefficient energy usage
• Lack of employment opportunities outside of agriculture

The situation described demands attention. In response, Ms. Prabhu recommends that the government should take action by injecting massive amounts of stimulus money into large public work projects to build crop warehouses and public toilets, to usher in another “Green Revolution”, to incentivize the installation of bio-plant stoves, etc. The litany of public projects that Ms. Prabhu wants the local governments to undertake is daunting. I find no fault with the problems identified and the end objectives cited, but I do doubt the realistic feasibility of the list of public projects. These proposed solutions are in fact not new; they have been discussed by the development community for some time. The problem doesn’t lie in the solution ideas themselves, but in the implementation – what has been coined as the “last mile challenge”. It’s agreed that these solutions need to happen, but how?

In my opinion, the government is not the agent of choice for solving this implementation problem and promoting large public works projects is certainly not going to address the rural poor’s needs. Ms. Prabhu herself points out that past governmental initiatives to create employment have failed:

“The implementation of the National Rural Employment Guarantee Program has offered some succor but due to various constraints, the promised 100 days of employment have been provided only in the state of Rajasthan. In fact, the performance of the program is quite low in the states of Bihar, Orissa and Jharkhand, which have large numbers of the rural poor.”

The NREG program is a perfect example of how the government failed to reach the last mile. A Villgro associate recently visited with farmers in the impoverished state of Assam and asked them why they were not in the NREG program, which could have more than doubled their current annual income (~Rs8,400 or $170USD). The Assamese farmers said that they weren’t aware that such a program existed. The local governments in charge of the NREG hadn’t publicized the program and so, those funds disappear off into a vacuum and failed to reach the rural poor. How then, will more public programs and government projects help the rural poor climb out of poverty?

Instead of encouraging more public works programs, Ms. Prabhu would do better to promote additional funding for the existing social entreprises who have made immense progress in helping the rural poor increase their income. In Out of Poverty, Paul Polak specifically discusses how rural innovations such as the treadle pump have helped increase the crop yield and income of small acreage farmers far more more than the first “Green Revolution”. Millions of rural farmers have used drip irrigation systems, treadle pumps, and other agricultural innovations developed by social enterprises to grow off-season crops which generate more income or to grow crops during the dry seasons.

There are also other entreprises that are addressing the other problems faced by the rural poor. In fact, Villgro has incubated a number of enterprises that address each of the problems cited by Ms. Prabhu. Innovations such as the Venus Burner help to make energy more efficient; the Pin Pulverizer is a small grinder that allows farmers to mill their grains before they spoil; Desicrew and other rural BPOs are creating lasting employment for women and youth. The list of rural innovations that are practical solutions addressing the needs of the poor continues to grow and their impact has been dramatic.  Although the implementation is still difficult, social enterprises have devised ingenious methods for distributing and marketing to that last mile. But most importantly, because the profitability and survival of these social enterprises is dependent on the adoption of the product or service, there is a guarantee that these solutions will actually reach the rural poor.

As the rural poor begin to increase their income through growing multiple crops per year (aided by drip irrigation), cost savings on more efficient energy and other activities, they can begin to invest their additional income to build the infrastructures that they value. Education, health, and permanent shelters are the next logical investments that the poor make, but they have to increase their income first in order to get there. If addressing the needs of the rural poor is the aim, Ms. Prabhu would be better served to support budget allocation of funds to existing social enterprises and the development of rural innovations rather than additional government stimulus and public works programs that fail to actually reach that last mile. The rural poor need practical solutions that place chapattis on their plates and rupees in their pockets, not grand social infrastructure schemes and empty government programs. After all, it’s only a fair deal if the rural poor actually benefits from it.

Returning to India, I’m struck once again by the dramatic differences between the sights, sounds, and smells (emphasis on the smells) of Chennai and those of New York or San Francisco. The perpetual honking of auto-rickshaws and smell of spices mixed with human bodies serves as a daily reminder that this is not San Francisco and I should not treat Chennai as if it is. This is an obvious statement when observing culture, so why isn’t the same logic applied to social impact?

Why do we still operate and fund social enterprises, which are trying to achieve impact in developing countries, from the comforts of a developed world city 20,000km away?

The question is not new, but the problem persists. Many social enterprises that are aimed at improving conditions in developing countries are still operated out of cities such as New York and San Francisco, which are far removed from the center of action. Ever since social entrepreneurship became the “it” industry for generation Y, more and more young professionals have expressed an interest and have engaged in social start-ups situated in the developing world.  While I am encouraged that more people are getting involved, I doubt the effectiveness  of the enthusiasts who have not spent a significant amount of time in the place they’re trying to help. I do not think a week-long field visit qualifies as significant.  This leads to an issue: what is often perceived as valuable by the social entrepreneur is not similarly perceived by the rural consumers. The simple fact is that it is not possible to understand the nuances of the context and in particular what the target consumer needs without investing a lot of time to experience it.

A quick story to illustrate my point: a couple of years ago, while traveling through remote areas of Xinjiang, I was invited to the house of a camel herder for tea. He lived in a one room mud house with his sister, brother-in-law and nephew. There was no running water and no furniture other than a carved dresser, which was a wedding gift. The communal outhouse of their village was a small bus shelter like structure with holes in the ground, that was 0.5km from the village. What would a someone who never interacted with them propose to install to “better” their quality of life? I would bet that a public toilet would be at the top of the list. What did the village choose to value instead? Television. The village had one windmill generating electricity, enough to power the one television set so that they could all watch CCTV dramas. Instead of spending their resources on running water or using the electricity for light or heating, they choose entertainment. And the choice becomes easy to understand when you spend time in their lonely remote part of the world. TV is their link to the world and to a little diversion and that marginal value is incredibly underestimated by those of us who don’t live there.

Coming back to India, I am looking forward to spending my time learning the context and understanding a different set of values. The social entrepreneur sector should not be about what we think the people need, but about how to better provide access to those things that the people tell us they need. The first step to figuring the latter out is by going to the source — by being here. I would encourage everyone who professes passion and interest in this sector to commit themselves to learning and reshaping their thoughts around what the Bottom of the Pyramid needs are by dedicating the time to truly immerse themselves locally and experiencing it firsthand. Until that happens, I remain skeptical of the effectiveness of arm-chair social enterprise supporters.