Business models of SMEs as a mechanism for scaling climate smart technologies: The case of Punjab, India

A.E Groot,J.S Bolt,H.S Jat,M.L Jat,M Kumar,T Agarwal,V Blok

doi:10.1016/j.jclepro.2018.11.054

Abstract

Many Climate Smart Agricultural (CSA) technologies fail to achieve their full potential impact due to low levels of adoption by smallholder farmers and difficulties in scaling CSA. This paper presents how small and medium-sized enterprises (SMEs) can act as change agents for the uptake of CSA technologies where their business models may be seen as adoption and scaling mechanisms. Drawing upon our fieldwork in Punjab (India) during which over 100 respondents have been interviewed, critical issues and enabling factors for the business model of two types of SMEs, i.e. farmer cooperatives and individual service providers of climate smart technologies have been identified. Enabling factors supporting adoption are driven by scientific and practical evidence of CSA technologies, good partnership between SMEs and research institutes, good customer relationships and effective channels through farmers' field trials. Critical issues consist of distortive government subsidies on energy and the lack of market intelligence affecting the profitability of the business model. Scaling is enhanced through market intelligence and a favouring regulatory landscape. However, difficult socio-economic circumstances and distortive government subsidies limit the role of SMEs business model as mechanism for scaling.

Highlights

Agriculture faces the enormous challenge of feeding the world's growing population
This paper starts from the premise that the business models of small and medium-sized enterprises (SMEs) can be a mechanism for adoption and scaling of Climate Smart Agriculture (CSA)
The described case of Punjab shows that SMEs' business models can be seen as a mechanism for adoption of CSA technologies

Summary

Introduction

Agriculture faces the enormous challenge of feeding the world's growing population. crop yields have grown impressively in the last few decades, production still requires an increase by another 60e70% by 2050 to meet the expected demand (Neufeldt et al, 2013). Since 1980, climate change is estimated to have reduced global yields of maize and wheat by respectively 3.8% and 5.5% (Campbell et al, 2014). Climate Smart Agriculture (CSA) aims to respond to these challenges. It represents a strategy that could help to increase farmers' resilience to weather extremes (Aryal et al, 2016), adapting to climate change and climate variability, whilst decreasing agriculture's greenhouse gas (GHG) emissions (Steenwerth et al, 2014). Several options are available for farmers to sustainably increase productivity, enhance resilience to climatic stresses, and reduce greenhouse gas emissions, which are known as climate-smart agricultural (CSA) technologies and practices. Despite the availability of CSA technologies and practices, many of them are still not achieving their full potential impact due to low levels of adoption by smallholder farmers. Barriers in adopting CSA technologies vary in economic, political, institutional, organisational, behavioural or social character and/or are related to poor markets (Westermann et al, 2015)

Methods

Discussion

Conclusion