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Salt Workers Economic Empowerment Program



Implementing Partner Self-Employed Women's Association

Program Information

The Salt Workers Economic Empowerment Program (SWEEP) is a collaborative project of GFI and the Self Employed Workers Economic Women’s Association (SEWA) designed to improve economic opportunity and empowerment for women salt farmers and introduce environmentally sustainable energy solutions to lower production costs so that the poor too can benefit from “green technology.” Capitalizing on sustainable technology and production methods, improved links to high-value markets and greater local control of energy costs, SWEEP gives women salt producers tools, access and voice to better realize profits and maximize their personal and community livelihood goals.

The Challenge

India is currently one of the largest producer of salt products in the world, employing close to a million salt workers across 9 states. The majority of salt farming in India is carried out in the Surendranager District, an area spanning 900 square miles which is completely flooded during the August/September Monsoon. From October to May, salt is “manufactured” from the natural brine deposited in wells of soft gravel, sand, clay, and mud and is “harvested” in a process that has changed very little over the centuries. “Agarias” are the small-producer family farmers that work the salt flats during the dry months and harvest salt for use in manufacturing and commercial processes or in a refined form as table salt.

As with most harvesting and related agricultural work throughout the world, the majority of the production is handled by women and adolescent girls. More than even traditional agricultural labor, the process of “farming” salt is physically intensive and the working conditions on the sun baked and isolated salt pans is severe. Yet, out of tradition, circumstance or simply the lack of any other opportunity, women salt farmers toil in some of most marginalized conditions known on the globe.

Since 1992 SEWA has been working with women salt farmers in the State of Gujarat; focused in the Surendranager District, they provide services including child care, literacy, nutrition, and health care classes. Over the years women in the salt farm communities have increasingly expressed to SEWA a desire to take greater ownership of the salt production process and to get out of the “middlemen” trap where control of the product value chain and profits are controlled by predatory transporters, sellers and processors. In response, SEWA has partnered with GFI to offer technical training to improve product value and production and SEWA has also organized women into savings groups so that investments could be made into direct ownership of production and distribution mechanisms. Additionally, partnerships have been created with research institutes to introduce processes such as reducing calcium sulphate from the sub soil brine to create higher value salt.

While many of these steps offered needed progress and greater solidarity amongst the women salt farmers, breaking the underlying poverty and empowerment cycle remains a major barrier. Salt farmers continue to see potential profits poured into middleman services and despite improved product values, available markets have remained limited. Most significantly, however, women salt famers were held back by the exorbitant cost of diesel fuel. This is due to the unique process of producing salt which requires thousands of gallons of briny water to be pumped into salt pans by means of large diesel powered pumps. The cost of running these pumps represents nearly two-thirds of the total input cost of farming salt in the Surendranager pans and is the major economic barrier for women salt farmers in India. Remove this barrier and add improved market access and greater control of product value chains, and the result is meaningful livelihood development and economic empowerment for women salt farmers. With this goal in mind, the Global Fairness Initiative and SEWA are proposing the launch of a comprehensive Salt Farmers Economic Empowerment Program (SWEEP) in Gujarat.

How GFI Addressed the Challenge

Drawing on SEWA’s successful work with the Surendranagar’s women salt farmers, the SWEEP Project takes an important step forward by introducing environmentally sustainable energy technology to replace the existing diesel system and to create additional market opportunities and greater ownership of the production value-chain. The key underlying goal is to improve livelihoods and empower 30,000 woman farmers to own both the product and the production process of their salt businesses. Through SWEEP, salt farmers retain profits and increase livelihood opportunities by replacing expensive diesel fuel costs with renewable, locally owner power alternatives built around environmentally sustainable energy solutions deployed at a large. Introducing a local ownership model also allows salt communities to leverage surplus power production and realize additional profits from distribution of power through community based or modular utilities. Specifically, the excess energy obtained through a sustainable grid design creates an enabling environment for the development of sideline industries and enterprises.

Additionally, SWEEP advances local ownership of production inputs (pumps, pans, etc.) and processes (refining, packaging, distribution, etc) to help women salt farmers avoid the costly and demeaning experience of working through predatory middlemen. This ownership is developed through a combination of realized profits and debt financing for targeted infrastructure and supply chain investments. In conjunction with the energy and infrastructure upgrades, a multi-stakeholder engagement process will be undertaken to open linkages to a larger set of end buyers and energy suppliers. This engagement process puts women farmers in direct contact with market players and in lead roles of addressing regulatory and financing barriers. Through this process, and the introduction of new technology, SWEEP taps the livelihood potential of more than 80,000 salt producers in the larger Surendranagar community and creates a diverse and sustainable foundation of economic opportunity and empowerment for women producers.

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Verapaz Community Empowerment Program

Program Information


Program Supporter The Swedish Postcode Lottery



GFI implemented the Verapaz Community Empowerment Program (VCEP), a two-year program funded by the Swedish Postcode Lottery based in Alta Verapaz, Guatemala. VCEP empowered indigenous Mayan producers by improving the value of agricultural production, strengthening access to markets, and building greater local leadership activity

VCEP worked with a community of 3,000 indigenous women and men employed in smallholder agricultural production. Close to 90% of the farmers are indigenous Q'eqchi' who have traditionally planted subsistence crops such as corn and beans. Although the available land is very fertile and capable of producing a wide variety of cash crops along with subsistence foods, when beginning the program, training and necessary market structures had not been adequately supported in the region. As such, the region suffered from a very high level of poverty and the related deprivations that economic marginalization creates. The communities had poor nutrition, limited access to healthcare, and most families couldn't support a child's education costs. Through VCEP, GFI targeted the interrelated barriers that contribute to the ongoing economic conditions in Alta Verapaz.

Progress

In the start-up phase and first quarter of the program, GFI and its program partner, International Development Enterprises (IDE), hosted drip irrigation and treadle pump demonstrations in two towns for over thirty participants. Affordable, user-friendly, and effective irrigation systems are one step towards establishing food security in the region. The drip irrigation system and corresponding trainings helps establish environmentally friendly water management in northeastern Guatemala. The drip irrigation systems, designed by IDE for farmers earning roughly $2 a day, were warmly received by community members, who recounted never having seen an irrigation system that takes such little effort, has extensive coverage, and is affordable. The deployment of this technology further served as a tool to build natural community leaders who took the responsibility to train other farmers and promote crop diversification for improved nutrition. Leadership trainings focused on program goals, a community engagement program, trainings in the methodologies of the stakeholder engagement process, and some technical input programming were also carried out during the first quarter of the program.

GFI's next phase then lead to trainings on household management, savings and formalization of land, and commercial activities. Awareness training addressed labor rights, obstacles in formalizing businesses, and the role of government in promoting training and economic development. Throughout this process, the program identified leaders from within the community to participate in multi-stakeholder engagement, which successfully extended social safety nets to informal rural workers in Guatemala.

Program Leadership Team

Headquarters: Caleb Shreve – Executive Director
Guatemala: Otto Navarro – Country Director

Feedback

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Promoting Informal Labor Rights

GFI is currently implementing PILAR (Promoting Informal Labor Rights), a two-year project initially funded by the US Department of State to improve government capacity to collect data on the informal sector while developing strategies that encourage formalization and provide capacity building to informal sector workers in Nicaragua and Guatemala. Using GFI’s multi-stakeholder approach, we have worked with a broad range of formal and informal worker organizations, government ministries, the private sector, and key civil society organizations to move forward feasible policy solutions.

Engaging Stakeholders to Assess the Problem

Beginning in 2008, GFI conducted national publicsurveyed stated that the lack of access to workers opinion surveys and focus groups on the social security was the worst aspect of informality. obstacles and barriers to formalization as well as on From the data assessment, GFI developed discussion ways to extend labor rights to the informal sector. In topics, which addressed the most pressing needs – Guatemala, the survey revealed that a significant while searching for consensus. These topics were percentage of informal workers (67%) are agreeable at national roundtables and also tied with discussed to registering and paying taxes if the processesdesign of a schedule of trainings for informal the are clear and workers gain access to government workers. services such as social security. In Nicaragua, 64% The national roundtables in each country focused on of strategies for formalization looking at various individual meetings, included government leaders, cross-cutting issues such as labor rights, women and informality, and labor union officials, civil society leaders, private sector vulnerable groups. The strategies included incentives – and informal workers. PILAR worked to representatives, for example, social security and better access to financial makers by building consensus among influence policy services and credit – to bring informal workers into the the private sector and civil society, finding government formal economy and improved government practices – allies, and working with multi-lateral organizations, such such as streamlining bureaucratic practices as the ILO, to cement policy recommendations under and improving tax collection. Participants of the roundtables, as well as of internationally-recognized standards.

Focus on Workers

To complement GFI’s top-down strategy, roundtables kept in direct connection with informal workers’ needs by providing bottom-up trainings on a wide range of topics, including computer skills, budgeting, complying with government requirements, accounting and financial management of microenterprises, assertiveness trainings for domestic workers, and more. In this manner, PILAR took a new approach to formalization: GFI assisted self-employed street vendors in setting up their own association (FENTRAVIG), which today has over 2,000 members. We further worked together to start a cooperative, allowing them to import goods and reduce costs by ending dependence on middlemen. Working directly with government, we encourage relationships with municipalities and help promote policies, currently in effect, to benefit workers and enterprises. Finally, PILAR encouraged workers to be part of the political system and bring their needs to the table in an effective manner.

Roadmap to Formalization

A tangible result of PILAR is the Roadmap to Formalization, a document that compiles the consensual recommendations of the many stakeholders. The Roadmap’s specific proposals are different in each country, as it is based on the cultural, political, and economic realities of the diverse sectors of workers and microenterprises as well as on each country’s laws. However, the core findings can be systematized: First, decent work is the Roadmap’s guiding principle. It was clear through the survey and national roundtables that improving competitiveness and extending labor rights is not mutually exclusive; in fact, formalization can serve as a tool to establish long- lasting businesses and attract sustainable investment. Second, one of the pillars of good governance is sound information; hence the roadmap focuses on improved labor statistics for the design of government programs. Taxation is also at the crux of formality. Informal workers and enterprises pay “taxes” in the form of bribes or other hidden costs, which through effective governance can be directly collected and used for improved government services. Finally, reducing administrative barriers is necessary to ease the entry of workers and enterprises, taking into consideration the high level of illiteracy and the importance of work hours for street workers. To start implementing integrative policy, the Roadmap recommends launching a simplified registration system called “monotributo.”

Synapse Market Access Fund

The Synapse Market Access Fund (Synapse) is a registered institution with a 501(C)(3) status under the fiscal and administrative sponsorship of the Global Fairness Initiative (GFI). Synapse is committed to creating economic opportunity for the working poor by catalyzing the growth of inclusive financial markets and mechanisms in developing economies. By introducing innovative financing models and direct loan products to small producers in the agricultural sector, Synapse bridges the “Missing Middle” gap between micro-finance and commercial banking. Synapse’s investments are complimented by GFI’s initiatives, which are focused on building local capacity, strengthening market access, and eliminating regulatory barriers to enhance the value and potential return of the Synapse portfolio.

Program Objectives: Bridging Supply and Funding through Innovation in Asset-Based Lending

Bridging the Gap in Financial Expertise

Using techniques of asset-based commercial finance, Synapse’s model improves access to business credit for small and growing agricultural enterprises in developing countries that are not well served by banks or by microfinance institutions.

While bank products employing techniques of asset-based finance are available in many developing countries, they lack the capacity to serve Missing Middle borrowers. To close this capacity and access gap, Synapse partners with agricultural cooperatives, small and growing business, and equipment dealers in rural communities to transfer the technology of asset-based lending practices and provide necessary financing to key stakeholders.

Bridging the Gap in Equipment Supply

Through our work we have identified a need to involve and partner with US agricultural equipment manufacturers seeking financial models that would allow them to access new markets. As such, Synapse will leverage its political, trade, and commercial affiliations in the US and abroad to create and expand agricultural equipment sales channels to target areas.

Bridge Loans and Working Capital

Synapse will provide direct loans to cooperatives to increase working capital and streamline industries to facilitate larger and timelier stock purchases. These interventions help guarantee a market for producers of agricultural goods and ultimately reduce the overall risk of the portfolio.

Social Impact and Assessment: Scalability, Sustainability, Impact

Synapse is an impact investment vehicle that cultivates long-term financial relationships with scalable initiatives that strengthen the capacity of smallholder producers and entrepreneurs in rural communities. Candidates for funding in this model of “enterprise philanthropy” are measured by three fundamental criteria: scalability, sustainability, and social impact.

Synapse is an impact investment vehicle that cultivates long-term financial relationships with scalable initiatives that strengthen the capacity of smallholder producers and entrepreneurs in rural communities. Candidates for funding in this model of “enterprise philanthropy” are measured by three fundamental criteria: scalability, sustainability, and social impact.

Synapse has been working in Kenya for the last three years and has documented valuable information necessary to test and launch its Missing Middle financing concept at a meaningful scale. Proof of concept will begin with Kenyan and Ghanaian rural co-operatives and equipment dealers. In the initial stages, as milestones are reached, Synapse will access endowment and investor financing to scale up and expand programs in East Africa to Ethiopia and other areas, especially those that experience chronic food security issues and sectors that gainfully employ women. In later stages, such as when a sufficient track record in a given region has been established, Synapse will have demonstrated that the program model works: that is, bridging the gap between microcredit and commercial finance is a lucrative and viable space for mainstream financial institutions. Their entry will permit Synapse to unwind positions and recycle capital into more needy areas.

Model: The Case for Asset-Based Financing in the Developing World

While lack of familiarity with non-cash transactions and lack of know-how are important barriers, lack of working capital to provide transactional credit is the fundamental impediment to a growing business’s efforts to access additional capital. This is clear as, in the developing world, a business with a desire to sell on credit appears to have little to no source of capital for such an activity. Synapse believes that borrowers can be well served by an infrastructure of nonbank, lightly-regulated credit providers—accounts receivable factors, purchase order lenders, inventory lenders, and equipment leases, among others. In this manner, Synapse will address the absence of a secondary market for payment of claims that normally arises from credit sales but, in developing countries, creates absence of capital for transactional finance.

In making a decision to extend financing, these external factors are more important to an asset-based commercial finance operation than the credit criteria -- including debt service capacity based on internal cash flow and balance sheet strength -- that are usually of concern to a commercial bank lender. Thus, asset-based financing can overcome obstacles that tend to inhibit capital flows, whether in traditional bank loans or equity investments.

Required Resources: Funding

To pilot the meaningful expansion of the Missing Middle financing concept, Synapse will require a total of $1,500,000 for agricultural equipment finance and an additional $300,000 for short-term working capital finance in each of its operating regions.

Approach and Performance:

This two-pronged approach addresses immediate capital equipment needs of farmers as well as chronic downstream market failures in markets for agricultural goods—thus reducing overall risk for each borrower and to the fund as a whole. The model indicates a return of principle in four years and, thereafter, an ROI that will appeal to commercial investors.

Impact Investments: Synapse seeks to access funding for loan capital in three tranches: $1,800,000; $300,000; and $300,000 as regional operations are rolled out. As an integral part of proving the model to future commercial investors, Synapse will reward first round and impact investors with a ROI of 5-6%. Also required are setup, evaluation, and monitoring costs for the first two years of which we seek philanthropic allocations amounting to 300,000.** In summary, we are seeking a total of $2,700,000 to reach all targeted regions and to strengthen the economic engines of emerging markets in Africa.

** A portion of this philanthropic allocation will be funded as part of Synapse’s endowment.

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Building Inclusive Shea Economies


Implementing Partners:
Pagsung, Ecoventures , Africa 2000 Network , International Development Enterprises , Concern Universal

The Challenge

In Ghana millions of women Shea nut pickers and processors register among the poorest of the poor. Despite being the primary collectors of Shea nut, women lack representation throughout the higher levels of the Shea value chain and are subject to exploitation by middlemen through a structured monopoly of the local and national markets.

The Opportunity

GFI has partnered with Pagsung, an association of over 800 Shea Nut pickers and producers, to implement Building Inclusive Shea Economies (ElSE) to strengthen harra's rural economy and help women farmers become self-sustaining by creating a women farmers-led business model. Designed in consultation with multiple local and international partners, ElSE responds to the concerns of Pagsung members about the lack of integration of the Shea Value Chain. To strengthen the overarching livelihood goals, ElSE addresses market diversification, supply chain management and ovmership, and decision-making mechanisms, thus ensuring women producers' rights (including equal employment and land ownership).

On November 2010, the program received the SEED Award for Entrepreneurship in Sustainable Development, facilitated through the United Nations Environment Program (UNEP). The award provided a $5,000 start-up grant and several benefits to Pagsung members, including access to a wide range of business services, support networks, and high-level profiling. Capacity-building activities focused on improved management practices for Pagsung leaders, including establishing clear governance, accounting, and revenue structures to ensure management sustainability.

GFI and Pagsung launched the South-South exchange as an opportunity for Pagsung to learn successful development strategies from GFI's partner, the Self Employed Women's Association of India. SEWA, through eight years of partnership and innovation, has seen significant advances in economic opportunity through greater value-chain ownership. SEWA's process offers a highly replicable model; and, thanks to a grant from the World Bank, the first exchange trip between GFI's partners Pagsung and SEWA became a reality in September 2011. Feedback from Pagsung indicates that the exchange was indeed a unique opportunity for the women to learn strategies for overcoming economic, legal, and cultural barriers and to develop practical business practices that adapt to women producers' needs.

ElSE is now working to seek funds to scale up production. Pagsung does not have storage facilities or space for women to select and process the Shea. With women doing most of the work at home, there is no traceability of the product, which is of key importance for larger buyers. To help the Pagsung women become competitive in the local and inter-national markets, ElSE's goal is to work with Pagsung to establish Transparency, Traceability, and consistent Quality as core business practices, as well as support the registration of Shea as a Fair Trade product.

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