When it was launched in September 2004, the India Growth-Oriented Microenterprise Development Program (GMED) was USAID’s first enterprise development project in India. A 4-year, $6.3 million program funded under the Accelerated Microenterprise Advancement Project (AMAP), GMED was an innovative program that developed sustainable and scalable approaches to job creation in agriculture by fostering the growth of micro and small enterprises (MSEs).

GMED’s components included agribusiness and urban services. The agribusiness component focused on fruits and vegetables, organically certified food products, maize value chain improvement, and the integration of HIV/AIDS-affected communities into commercial supply chains. The urban services component worked to improve municipal solid waste management through outsourcing to MSEs. GMED was solely a technical service program and had no grant or subsidy component, making it unique for a donor project.

Strengthening the Value Chain through Partnerships and Technology

GMED adopted a value chain approach to enterprise development following the principle that the growth of micro and small enterprises must be driven by sustainable growth strategies for all of the firms in a value chain. ACDI/VOCA developed partnerships with larger firms and nongovernmental organizations (NGOs), which then provide embedded business development services to associated MSEs as an integral part of their commercial transactions. Thus, GMED was a service facilitator, rather than a service provider. The ultimate goal of the project was to enhance MSE growth opportunities by expanding the scope of the embedded services being provided by corporate and NGO partners, helping to make them more effective.

Addressing Opportunities and Challenges

• GMED, with two partner NGOs, organized and obtained organic certification for several thousand small, marginal, mostly women farmers. It also helped to effectively market and export these organically certified products.
• GMED helped several major Indian corporations and larger NGOs integrate smallholder farmers into commercial supply chains by increasing their capacity to meet market demand. Growing demand represented significant potential for smallholder fruit and vegetable farmers, who account for the great majority of fruit and vegetable production in India—provided that these farmers can gain the ability to produce to market specifications. GMED helped two of its principle corporate partners establish three model smallholder vegetable farmer production bases to illustrate the measures required to accomplish this.
• In addition, ACDI/VOCA pioneered the Village Extension Agent model to expand the availability of private agricultural extension services at reduced cost while providing employable skills to local youth. 18 under-employed farm youth from within a vegetable production cluster were recruited, trained in the rudiments of crop, soil, water and pest management and stationed in their home village. The village agents, who spoke the local dialect and were acquainted with the village farmers, were trained provide solutions to less complex farming problems and could call on professional agents whose work they supplemented.

ACDI/VOCA and GMED demonstrated commercially viable solutions to MSE growth constraints through development of these models, inspiring other industry participants to adopt them. This bodes well for the sustainability and scalability of GMED efforts, benefiting SMEs and the industries involved through enhanced competitiveness and greater growth opportunities in India.

Alex Pavlovic
apavlovic@acdivoca.org

Sept 2004 - Sept 2008