The Green Livelihood Campaign: Supporting financial inclusion and renewable energy for salt farmers in India
"Now it’s like a sun of gold. Earlier I needed about 1,000-1,200 litres of diesel for producing 600 tonnes. This year I consumed only 500 litres of diesel thanks to the new solar pump, which replaces diesel in the day time. It has also increased the yield by about 100-150 tonnes as I use solar pumps for a longer time during the day without worrying about fuel cost."Vijuben, salt farmer
High diesel fuel prices and lack of access to finance and market information left many salt producers in India with little or no income. The Hariyali project and SEWA helped the farmers increase their profits through the installation of solar-powered pumps and access to better loans.
SEWA and the Hariyali project helped women farmers become part of the entire energy value chain as owner-managers. Ownership of income-generating assets by women, such as the solar pumps, ensured that they have a voice and a say in the decisions making process of their families and communities.
Clean energy and savings
The project helped salt farmers in rural India increase their income and savings by replacing diesel-powered pumps with solar-powered ones. The use of clean energy also led to saving close to 2.7 tonnes of carbon dioxide emissions per year.
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The Hariyali project can offer:
- experience on solar powered pumps for salt production; and
- training on managing savings, technical issues and skills for salt farmers
Self-Employed Women’s Association (SEWA), Grassroots Trading Network for Women (GTNfW)
2009 - present
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In India – the world’s third largest producer of salt – salt farming is the sole livelihood of 43,000 Agariyas, a community living in Madhya Pradesh and Uttar Pradesh. Compelled to take high-rate loans from money lenders, farmers work long hours in the scorching sun to produce salt that sells at very low rates. To help them improve their livelihoods, the Self-Employed Women Association (SEWA) has supported financial inclusion, capacity-building and access to renewable energy for 15,000 salt farmers.
In local Agariya communities, salt farming is the only source of income. Farmers migrate for eight to nine months, live in makeshift houses and bear harsh temperatures. Children usually start working at the age of 10 and have little education. During the dry season, salt farmers pump out briny groundwater to produce salt using expensive diesel pumps. Before they were able to access institutional credit, salt farmers borrowed from money lenders, who acted as traders as well as middlemen and bought the salt at artificially low prices. This arrangement prevented Agariyas from profiting from their production, especially considering that yearly diesel expenditures were about 40-70 per cent of their already small earnings.
The challenges Agariyas face are mainly related to the cost and quality of their equipment. Salt farmers have been using inefficient, diesel-fuelled pumps that frequently break down. Additionally, the high cost of diesel requires farmers to borrow from money lenders, which prevents farmers from selling their salt at market prices. Lacking access to knowledge and new technologies, Agariyas remain completely dependent on money lenders and are unable to improve their livelihoods.
The Self-Employed Women Association (SEWA) has been working with Agariya salt farmers by organizing them into producer cooperatives and offering financial and technical training. After farmers complete the training, SEWA starts providing them with credit at much lower interest rates than other local banks do, enabling the farmers to avoid requesting loans through money lenders. SEWA also supports Agariyas by providing them with linkages to markets, which help the farmers bargain for a better price directly with large buyers and salt factories, bypassing the middlemen and traders.
In 2009, SEWA launched the Hariyali (Green Livelihood) campaign, a program aiming at supporting green energy, financial inclusion and women’s empowerment. Under this campaign, SEWA enabled salt farmers to replace their diesel pumps with solar pumps – which also helped lower the farmers’ production costs by reducing the need for expensive diesel.
In 2013, through the Haryali campaign as well as the Grassroots Trading Network for Women (GTNFW), SEWA started working with women salt farmers in remote villages of Surendranagar. Based on the farmers’ specific needs, as well as affordability and environmental friendliness, GTNFW installed solar-powered pumps and tested them with the salt farmers.
The Hariyali project also customized instalment plans to help farmers repay their loans. Repayments were always lower than the farmers' savings, ensuring that the farmers could pay the instalments. SEWA and Hariyali then actively worked with potential lenders and donors to increase low-cost financing for salt farmers to purchase solar pumps. The first donor grant was used to provide a first-loss default guarantee to the lender bank, substantially reducing its risk. As a result, the bank was able and willing to lend money to the salt farmers, a previously unbanked segment of society.
The solar pumps emerged as an effective solution to reduce costs, increase productivity and help poor Agariyas access clean energy. As a result of cheaper loans, farmers were able to save more, create their own assets, buy more solar pumps, and further improve their food security and health. In the first phase, Hariyali successfully installed 450 solar pumps for the salt-farming members of SEWA.
- 1,150 Agariya salt farmers reduced expenditure on diesel and increased salt production by approximately 15 per cent. Moreover, by installing the solar panels for the pumps on the roofs of farmers’ homes, the project helped farmers save on electricity bills during the off-season.
- Each of the installed pumps saved 2.7 tonnes of carbon dioxide emissions per year.
- Women are part of the entire energy value chain as owner-managers, building energy self-sufficient communities;
- Women’s ownership of income-generating assets ensures that women have a voice and a say in the decision-making process of their families and communities.
Lessons Learned/Potential for replication
The key factor of success of the Hariyali project was building a sustainable, replicable and scalable model: a women-led energy value chain. Furthermore, knowledge-sharing about the financial and health benefits of the solar pumps led to an increase in salt farmers’ requests for the pumps. Hariyali is now ready to implement its second phase and scale up the installation of solar pumps to its 5,500 members, eventually reaching all 16,000 members of SEWA.
The next step for SEWA is to replace all 17,000 diesel pumps owned by its Agariya members with hybrid solar pumps. SEWA has developed agreements with local banks to enable salt farmers to buy and install up to 600 solar water pumps through yearly instalments.
SEWA and Haryali continue their advocacy work at both national and international levels, to implement new employment-generating technologies. Further, in collaboration with the Government of India, hydrological students and interaction with its members, SEWA is working on establishing a regular supply of irrigation water for small and marginal farmers through a farm mixed grid approach.
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Last update: 07/02/2019