Monday, June 3, 2013

Ram Kumar Baniya: An Entrepreneur

Introduction

Family Background

Born in an affluent family, Ram Kumar Baniya (1988, age 24) grew among best of the facilities. His family owns lots of land in Kathmandu and in its outskirts. Besides that, Ram’s father (Rajan Baniya) is a contractor who earns a fair amount of money to sustain a high standard living. 

 But, Ram chooses to be a farmer! Started towards the end of 2011, the name of his company is Jalapa Agriculture Development Garden P. Ltd. In just 15 months, Ram is already into third phase of the project and has already invested 6 million rupees in the vegetable farming that has spread in 25 ropanies of land. There are people 18 people (6 fulltime, 12 seasonal) employed in his farm and are earning their living. On the part of Ram, he himself work at least 6 hours a day besides his ‘anytime’ commitment to the farm. He is now planning for the fourth and the fifth stage of the project.

Education

Ram completed his schooling from Heartland Children Academy School and for the high schooling, he joined British Gurkha Academy. After completion of high school in 2007, Baniya wanted to do build a farm of his own. But his parents wanted him to go outside, which took him to United Kingdom. After completing higher level diploma in management, when there was only a year left for his graduation he wanted to change the subject.

Then he went to Thailand to study International Relation in Webster University. After three semester of International Relation, he wanted to change the subject, once again. He returned Nepal to study Social Work in St. Xaviers College. Even after two semester of Bachelor in Social Work (BSW), he can’t enjoy the subject. Moreover, he found too many negatives and drawbacks in the professional involved in the social work. So, he dropped himself out of Social Work. Then, because of his interest in political science, he went to Pune and joined Fergusion College. Again after one year in Fergusion College, he realized that time is running out for him to do something of his own.

Inspiration

During his stay in Pune, he got his inspiration to return back to Nepal and create something of his own. Here is the inspirational story in his own words:
There was an unused space beside the apartment I lived. The space was all covered with herbs and shrubs. One day a girl came to that place and started clearing the space. At the beginning it seemed a tedious and an almost impossible task. She even looked foolish for all the cleaning she was carrying out. But that girl, single handedly started growing vegetable in the open space after three months. The creative conversion of an unused land to something of economic importance made me remember my own lands that were not used optimally. So, with a vow to do something in my own country I returned back to Nepal.

Into Farming

Ram chose farming because he never had longing for any kind of job. He actually hated the word ‘ja-gir’. And yes, besides that he was never a good student. Unlike his parents who wanted him to become government officials, he always wanted to build a farm. As a youth, he constantly dreamt of inspecting his farm spread over 10 thousand to 20 thousand ha. of land in a horse. Moreover, he persistently imagined all the Nepalese eating products from his farm. Also, he has always wanted to export Nepali vegetables to Europe and USA as Can-food. Such farm is his dream.
After he came back to Nepal he joined political science in Ratna Rajya College and started farming as well. The main reason for joining Ratna Rajya College even after returning from Pune was to read and do politics at the same time. Through politics he wanted to make his way towards the level of policy making. Through policy making he wanted to uplift farmers’ condition because to develop Nepal, Ram thinks, 61% people involved in farming have to be addressed. But, he found road to politics and policy making difficult without support from people. So, in order gain support from people and to understand farmers’ problems at the first hand, he directly got involved in farming. Two years down the line, the picture is getting clearer now.

Rationale for Choosing

How do we reach him?

Ram Kumar Baniya was an unknown name until he was broadcasted by Sajha Sawal as an entrepreneur few months ago. We followed the same program to reach him. To find the contact details of Mr. Baniya, we search him in facebook and sent him a message about our assignment. He resoponded the same day and gave us his contact number. Finally, we went to Baniyataar, the farm site, for his interview.

Justification

Mr. Ram Kumar Baniya does not look an entrepreneur with his vegetable farming because he is not the first one to be involved in vegetable farming in Kathmandu. However, given his young age and more importantly, his effort to convert a useless land to a vegetable farm, makes him an entrepreneur. Also, if above discussed qualities like desire for responsibility, preference for moderate risk, confidence in their ability to succeed, high level of energy, future orientation, value achievement over money are taken into consideration, Mr. Baniya very well qualifies to be an entrepreneur.

Mr. Baniya thinks himself as an entrepreneur because he supposes that field he is involved in is a productive one. Unlike some other field which only boost consumerism, he thinks that he is enhancing people’s quality of life by providing organic food to them. Moreover, the gradual expansion of the business and the local employment it has created also makes Mr. Baniya an entrepreneur.

Entrepreneurial Activity

Agriculture is the main entrepreneurial activity that Ram is primarily involved in. In agriculture, vegetable farming is his field. But before discussing about what Ram is doing at present, let us know about how he actually started the business.

The Early Phase

After his resolution to do farming, Ram contacted his family lawyer and asked him to carryout all the legal procedure to start a company. He requested his lawyer to state the objectives of the company clearly in the document.

Then, upon reaching Kathmandu, Ram went to Khumaltaar and met Dr. Bharat Poudel. There, one of his dreams get shattered after he knew that Nepali agricultural products do not meet the standard to get exported to Western countries. So, producing export quality vegetable products became his target while he started his own farming.

He started with a 3 days training given every month to agro-entrepreneur by TWN, an organization run by B.K Dalit. After the training, he met an old friend Binod Nepali and finalized to work together. Since Binod had no money to invest, Ram assured[2] him about the investment and agreed to share profit.

Before actually starting the tomato farming business, Ram did ample amount of research on different vegetable products that he can grow on the type of soil his land have. He visited almost all the farms in Kathmandu and got information about the various vegetables that are being grown by farmers. He learned about the production process of different vegetables. In addition to all this, he collected information about market structure and price of vegetables. Finally, Ram decided to go for tomato farming because of good market for tomato through out a year as compared to any other products. Moreover, the price of tomato which is always on higher side gave him the push to start the farming. Above all, availability of good seeds which lead to higher production played the crucial role for Ram choosing to produce tomato as the major product of our farm.

So, tomato farming was the first venture Ram decided to start. Binod desired to work in production and local marketing while Ram opted to look after technology and go for trainings. However, the most important thing was his father’s positive reply regarding his dream to start a farm of his own.


Present Activities

Till now, there are three phases of his work. In the first phase, he produced tomatoes using chemical fertilizers, insecticides and pesticides which didn’t proved to be profitable. Now, in the second phase he is planning to do organic farming. The pilot projects are already going on. In this phase, besides tomatoes, he has planned to grow other vegetables as well. To meet the need of natural fertilizer, the second project also has a pilot project underway for the production of vermin-compost. At present the third phase of the business is under operation. The third phase of the project involves developing a website where farmers can upload information about their products. The whole idea of the website is to avoid the middle men from the business. Moreover, marketing of the products that farmers are going can also be done.

Problems Faced

·         No short term benefit

Agriculture does not have good short-term return. Ram’s friends who started other business like food stall and other with lesser amount of money than Ram have invested, are already reaching break-even within 6 months. But, even after 15 months of continuous work Ram has only collected 10% of 5-6 million rupees that have been invested. The problem in Ram’s words:
The problem with agriculture is you have to invest all the time. For example, you have to till the land, plant seeds, look after the plants, use fertilizers and harvest every time you grow something. It is not like a cyber where you invest for computers once and wait for customers. But agriculture is a productive business. You have greater satisfaction of helping your country in this field.

·         Inadequate Research

The vast research done before the start of the business still proved to be insufficient because later Ram found out that there are no good fertilizers available in the market, there are no proper technical assistance that are available from the governmental and non-governmental organizations. Moreover, he found that there are no help to farmers who wants to do organic farming.

·         Unavailability of Proper Assistance

The first lot of tomato produced from our farm was all destroyed because of blossom-end rot, a physiological disorder in tomato caused by lack of calcium in the plant. Even the professional in the field could not or didn’t help us in this matter. Had we a constantly visiting JTA, we could easily dealt with the problem. This way unavailability of professional and sometime wrong information from the professional involved in helping farmers costs us a lot of money. We seriously lack technical people in the business.

·         Failure of Krishi Sanjal

In order to avoid middle-men and create direct reach of farmers to the market, Ram created an organization called Krishi Sanjal. The idea was to sell the agricultural products by the farmers themselves. For that, each farmer registered in the organization had to look after the common vegetable-stall kept in Kalimaati, as per the turn. But, some members didn’t responded well and were influenced from the middle-men that only benefited themselves not the farmers and the whole concept failed. This created mistrust among the farmers and Mr. Baniya as a initiator had to live the criticism.

·         Suicide of his ex-worker

Ram had a worker who was alcoholic. Later, due to family tensions, the worker suicide taking insecticide which he bought misusing the name of Mr. Baniya’s company.

This incident gave Ram a push to go for organic farming. Besides, the environmental problem, production of low quality products from the use of chemical fertilizers and most important of all the dependency that the chemical fertilizers, insecticides and pesticides create are the main reasons because of which Ram shifted towards organic farming.

Moreover, from the pilot projects, Ram has realized that even organic farming is not bad in terms of quantity of the vegetable produced. Indigenous Micro Organisms (IMOs) if developed in a good way can help in producing both good quality and quantity of goods. So, Ram is going into organic farming.

Corporate Social Responsibility

Before, Ram provided scholarship to 2-3 students from his own pocket money. Now, after having established an organization named Nature Conservation Society Ram have been helping local schools in Baniyataar.

Future Activities

Ram is planning to enter into horticulture in the fourth and the fifth stage of his entrepreneurial activities. He has decided to do Papaya and Pomegranate farming in Jhapa and Dang.
This time, to negate the lack of professional and technical people that the fruit farming demands, Ram is talking with some Indian companies and Indian big farm holder for a tie-up. The India companies and farm will provide technical assistance required for papaya and grapes farming. Moreover, the business tie-up with Indian companies and farm will help his products to have access to Indian markets.

Safety Network

Mr. Baniya and his company - Jalapa Agriculture Development Garden P. Ltd are recognized and supported by organizations like Krishi Sahakaari and Krishi Sahayatri. Despite, recommending for subsidized fertilizers, these organizations do not provide any monetary insurance to Mr. Baniya. So, in case of Mr. Baniya, who is somewhat a representative case of Nepal, there is low or almost no safety network.

View on Entrepreneurship in Nepal

Entrepreneurship in Nepal is still in nascent phase. Yes, there are very few innovative ideas that are being carried out. But, many people are happy copying the business idea of others.
Most worrying of all is the focus of entrepreneur in Nepal towards non-productive sectors like retail store, restaurant, cinema, etc. Very less people are focussing on production sector that can employment opportunity to higher number of people. All in all, short term vision is the major problem in current entrepreneur in Nepal.

Challenges of Entrepreneurship in Nepal

Challenges exist virtually in every thing. It is the challenges that provide you the opportunity. So, challenges must be enjoyed. However, there are some basic challenges that is hampering entrepreneurship in Nepal. They are listed below.

Political Instability

The frequent change of government in Nepal is the most troublesome challenge that Nepali entrepreneur face at present. The political instability makes the policy unstable and thus entrepreneur does not feel safe in investing in such instable environment. For example, the uncertainty about property rights after the arrival of Maoist in government has been making people reluctant to invest. If political stability is maintained then there is no stopping of development in Nepal.

Lack of Capital

Capital has always been a problem to investor in Nepal. There are no organizations which provide funds to good business ideas. Moreover, the banks in Nepal do not provide loan until someone a something to pledge as collateral.

High Interest Rate

Even if somebody has collateral, he can’t withdraw money from the bank because the interest rate is usually very high. Sometimes, the interest rate is so high that it even exceeds the rate of return.

Lack of manpower

Many Nepalese are in Middle-East at present. So, there is lack of productive manpower in the country. Another major problem associated with manpower is the lack of skilled human resources.

Lack of access to market

Lack of access to market is the basic problem that every Nepali farmers face. Because of infrastructural problem, Nepali farmers have to depend on the middle men for selling their products. The problem of middle men is that they pay very little to the farmers and sell the products to retailer keeping high margin which makes the cost of the product high in the market.

Rigmarole Procedures

Rigmarole of legal procedures that an investor has to go through is one of the problems that is preventing people from investing in Nepal.

Corrupt Governmental Organization

Ministry of Agriculture Development for the coming fiscal year 2013-14 has planned a budget of Rs 19.87 billion. This shows that, Nepal government spends a lot of amount in agriculture. But, the amount allocated for farmers to help them never actually reach them. For example, 15% of VDC budget which have to be spent in agriculture is not being utilized. The money is not going to actual farmers rather it is being distributed to so-called farmers who farm in 3 aanas, 4 aanas of land. The real farmers like Ram who really need the money, never gets the money. Moreover, the JTA does not come to farm and help farmers. Organization like Krishi Sahakaari and Krishi Sahayatri who are supposed to help farmers, function only as a source of reference that is required to buy fertilizers at the subsidized price.

The government subsidy disappears in the middle. Last year, despite the reference for 100 packets of chemical fertilizers and 100 packets of vermi-compost, Ram didn’t the required quantity. However, shopkeeper who bribes the government officials are provided the fertilizers in the subsidized rate which he sells from his shop at the price twice than is available from the government. A farmer does not get the required fertilizer even if he have all the necessary documents but such shopkeeper with business motives get whatever quantity they demand. This is where corruption lies.

Future of Entrepreneurship in Nepal

Situated between two most populous nations of the world India and China, Nepal has got big market opportunity; it is just that we need to access it properly. For that Nepal should create its niche. Moreover, changing the conventional mindsets of youngsters from being job seekers to job creators is also important for development of Nepal. Agriculture, Energy and Tourism are three things can flourish in Nepal.

Agriculture

The most exciting thing about doing agriculture in Nepal is its rich geography where, virtually, everything can be grown. Basically, areas like, tea and coffee farming, floriculture, fruit farming, farming of medicinal plants have high entrepreneurial opportunities.

Energy

Both, hydro and alternative energy have entrepreneurial potential in case of Nepal Nepal’s capacity to produce 83,000 MW of electricity should be tapped as early as possible because climate change is decreasing the water level in the river which will also decrease the electricity produced.

Tourism

Tourism is one of the three most important sectors that have entrepreneurial importance.  However, despite having many natural, cultural and religious sites that can attract tourist, Nepal still has not been able to exploit all its potential in the tourism sector.

Analysis and Conclusion

Being enterprising involves taking responsibility for decision making, becoming increasingly self reliant, pioneering, adventurous, daring, dynamic, progressive, opportunist, ambitious and holding your values, as well as being able to initiate ideas and see them through into action.

Entrepreneurship in case of Nepal is very important to take the country towards economic development. Till now, government has not been helpful in creating conducive environment for the entrepreneurs. However, Nepali entrepreneurs have been successful in creating their business even in the difficult circumstances. So, the whole credit goes to individuals who have dared to match their imagination with the needs of the time. Now, on the part of the country, Nepal should come up with necessary policy so as to help entrepreneur in creating their business.

The three main areas that Nepal hold competitive advantages over other countries like India and China, in case of entrepreneurship, are agriculture, tourism and hydro-electricity. These are the sector that has to be considered as ‘golden goose’ in case of Nepal. Moreover, regarding agriculture, Nepal government should pay special attention towards the development of agriculture sector because more than two-third of the people in Nepal are involved in this field. Problems related to market, fertilizers, capital, skilled man-power, technology, water resources, etc are the main factors that are hampering agricultural entrepreneurship.
Finally, the case of Ram Kumar Baniya suggests that age and education is no more a barrier for being a successful entrepreneur anywhere in the world. 





[1] This paper has been prepared by Amol Acharya and Dipak Poudel, based on interview with Mr. Ram Kumar Baniya. The view expressed in the document except for the ‘analysis and conclusion’ section are that of the Mr. Baniya and does not necessarily represent the writers view.
[2] Initially, to start the business, Ram has taken loan from his father which has to be paid back. The present expanding of business is from the revenue collected from the ongoing projects.

No comments: