5 Lessons For Entrepreneurs And Investors Restoring India’s Farms and Forests
Around the world, businesses are shifting away from a narrow focus on profit to an inclusive approach that benefits the planet and the people. In India, some of these entrepreneurs are looking toward the land, which has suffered from decades of degradation.
Their mission is to heal this damage and build strong rural economies. The opportunity is big: 42 percent of land in India could benefit from protecting forests and restoring the land. By growing trees and helping farmers produce more sustainably, these entrepreneurs are creating jobs for women, marginalised people, and forest dwellers. But these leaders need help accessing finance, networks, and technical know-how to scale up their work and benefit more people.
The Land Accelerator, an on-going global initiative aimed at bridging this gap by building a curated network for restoration entrepreneurs through a rigorous selection and training process, recently concluded its first round in South Asia. After sifting through more than 300 applications, a vibrant and enthusiastic cohort of 15 companies presented their businesses to an international group of investors in December.
As the dust settled down, we analysed five lessons learnt from this one-of-its-kind initiative, which had entrepreneurs, investors and mentors brainstorming over six months to effectively restore India’s farms and forests.
1. There are multiple business models for restoring land
Every ecosystem and landscape can be restored in a variety of ways. For example, a recent analysis showed that over 75 percent of the land in the Sidhi district of Madhya Pradesh could benefit from eight different restoration techniques. Entrepreneurs from the Land Accelerator are building successful businesses that restore land in all of those diverse ways and reflect the priorities of local communities.
We have identified four key business models that these successful companies are embracing. They are 1) Improving soil health by selling organic fertilisers, land amendments, and artificially intelligent insect traps; 2) Developing value chains for non-timber forest produce like tamarind and custard apple; 3) Growing crops on tree-filled farms in a sustainable, productive, and profitable agroforestry systems, and 4) Helping farmers adopt smart technology, like groundwater recharge systems, to reduce their water withdrawals and other farm inputs while increasing their crop yields.
2. Restoration startups need to communicate consistently and clearly
Some businesses have an easier time than others explaining what they do, according to Karthik Chandrasekar of Sangam Ventures, South Asia regional partner to the Land Accelerator. To attract funders and customers, entrepreneurs need to build a clear and unique narrative that highlights how the profitability of their enterprise (which may seem surprising to some) is directly tied to its environmental, cultural, and social impact. For example, entrepreneurs that work with farmers should be ready to tell how their products have directly improved the livelihoods, food security, and health of their customers and employees.
Entrepreneurs also have to communicate consistently with their customers, especially when their products are only available during certain seasons. This is especially true for companies like Bastar Se Bazar Tak, which works with 250 tribal farmers in Chattisgarh to grow custard apple (sitaphal), palash flower, tamarind (imli) and black plum (jamun) for the market. The company’s founder, Satendra Lilhare, has learned that he has to explain to customers why the availability of his products is tied to the natural cycle of the seasons – or risk losing business.
3. Entrepreneurs should tap into farmers’ organisations
India’s Farmer Producer Organizations (FPOs) and Companies (FPCs) bring together hundreds of local farmers. Tapping into their extensive networks as a source of employees, outgrowers (contracted farmers that grow a crop for a business), and customers can help scale up companies, providing them with new markets and expanded access to land. However, these organisations tend to be under-funded, making it hard for entrepreneurs to access smallholder farmers through them.
According to Deepthi Reddy, the CEO of the Samunnati Foundation, seed capital from foundations, the government, and the private sector can come in to boost the efficacy of FPOs and FPCs. When these organisations receive technical and financial support, they can link smallholder farmers to the products and services that budding restoration entrepreneurs are selling, which, in turn, can help them build stronger rural livelihoods while protecting the environment. For its part, Samunnati is catalysing sustainable value chains that make markets work for smallholders through its AMLA (Aggregation, Market Linkages, Advisory) approach.
4. Businesses need to protect their unique intellectual property
The first question an investor asks an entrepreneur is often: “Is your product or service patented?” While this only applies to some of the Land Accelerator businesses, like Ibanss (which makes bioplastic granules from bamboo) and AI Genix (which makes artificially intelligent insect traps), it’s key. When a business officially registers its novel technology or technique as its intellectual property (IP), it legally protects the inventor from copycats that could steal their product and gives investors confidence that what the company is selling is unique. This process needs to be started before commercial sales start.
Even though most restoration businesses are working at the cutting edge of their fields and may not feel pressure from competitors, the biggest mistake that IP expert Isha Sharma, Director of advisory firm Trayambak Overseas, sees entrepreneurs make is neglecting to secure their IP before the competition comes creeping up. She recommends that budding entrepreneurs themselves access the IP websites of their home country and apply there as soon as possible.
5. Investors are beginning to see the value in restoring land
Over 20 investors watched the entrepreneurs pitch their businesses in December at the virtual Land Accelerator Demo Days. Several are now exploring partnerships with the programme’s 2020 cohort.
This is a good start, but we need to build a strong community of investors that realize the economic, social, and environmental potential of restoring India’s land. The long-term payoff of these investments – $7-30 for every $1 invested – can serve as a source of long-term, sustainable income for financiers willing to take the early plunge. And that initial step often is not too expensive, either. Often, these companies need just Rs 40-50 lakhs (around $50,000) to scale up their businesses to reach more customers and restore more land.
This community of restoration investors won’t build itself. The organizers of programs like the Land Accelerator play a key intermediary role between investors and companies. They serve as neutral sounding boards for funders, helping them understand the true opportunity of investing in restoration businesses. By joining these accelerators as mentors, investors can also learn more about inner workings of dozens of companies and business models at one time.
Kavita Sharma, Amanda Gant, and Will Anderson work on the Land Accelerator team at World Resources Institute’s Global Restoration Initiative. Views are personal.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)