Innovating Nepal’s Food System from Farm to Table

In Nepal, over 40% of fresh fruits and vegetables are wasted daily during transportation and handling, a stark contrast to developed countries where most food loss occurs at the household level. The United Nations Environment Program has highlighted that Nepal's annual per capita food waste is 79 kg, surpassing global and South Asian averages. Challenges particularly in the perishable fruits and vegetables value chain contributing to this waste include: inefficient supply-demand matching due to limited information flow, leading to unsold or under-priced produce; excessive handling points in logistics with inadequate tools; absence of operational cold storage facilities along the chain; and a lack of local demand for dried fruits and vegetables. The inefficiency in the value chain disproportionately affects farmers, with intermediaries retaining over 60% of the consumer payment due to high margins driven by perceived food loss risks.

To effectively address the issue of food loss in the context of Nepal, we recognize the need for an integrative solution that takes the entire food value chain into account, involving all stakeholders rather than isolated interventions. Our proposed solution aims to confront the aforementioned challenges by introducing a subscription-based service that establishes a predictable demand for vegetables and fruits, aligning supply accordingly within an optimized value chain. This approach not only minimizes food loss but also enhances farmers' income by ensuring that a greater share of consumer prices reaches them.

The subscription-based model is a venture from aQysta’s GROWN ERP technology, an easily-navigable digital tool for enhancing transparency, efficiency, and connectivity within the agricultural ecosystem. GROWN ERP is used for gathering data, analyzing insights along the agriculture value chain, facilitating connections between farmers and buyers, and virtually educating smallholder farmers on best practices. Integrating the subscription service onto the platform will streamline the process of matching supply with demand by providing real-time market intelligence and predictive analytics.

Complimenting the technology, the solution also leverages aQysta’s Grown Farm Incubator, where we provide hands-on support to farmers, including irrigation solutions, farming knowledge, financing, and market linkages. This support is provided to farmers without any upfront payment. Instead, we align our interests with theirs and take a collaborative approach to risk and benefit sharing. With the integration of the subscription service, farmers enrolled in the Incubator program will receive tailored assistance in adapting their farming practices to meet subscription demands, as well as ongoing support in managing subscription accounts.

This solution marks a new venture for aQysta, representing a significant shift towards our overarching goal of increasing smallholder farmers' incomes while reducing food loss through direct farmer-to-consumer relationship.

Our solution primarily serves smallholder farmers residing in rural, under-served areas, who currently face significant challenges in achieving commercial viability or sustaining their livelihoods solely through farming. These farmers lack access to reliable markets and are heavily reliant on intermediaries for any market access and price determination. The prices offered to them are often opaque, and they do not receive fair compensation for their produce, as a substantial portion of the consumer payment is absorbed by intermediaries who impose high margins to mitigate potential risks of food loss. Moreover, while starting in Nepal because of the high prevalence of food loss and feasibility of our work in the country, aQysta also operates in Malawi and India, where we recognize similar challenges and hope to roll out the solution in the future.

aQysta Nepal is a subsidiary of social enterprise aQysta B.V., based in the Netherlands. The collective, global team is well-positioned to deliver this solution firstly because it embodies a deep connection to the communities we serve. This is especially rooted in our Co-founder and CEO Pratap Thapa's personal experience growing up in a Nepalese farming community. His and a number of other staffers’ first-hand exposure to the challenges faced by their own farming communities have been a driving force behind our innovations – most notably, our hydro-powered irrigation pump that has brought benefits to over 15,000 farmers in 27 countries.

With upwards of 30 employees, including a dedicated team in Nepal, the team comprises individuals with diverse expertise in agronomy, engineering, business development, sales, and marketing, enabling us to comprehensively understand and address the challenges we set out to address. Secondly, our close relationships with smallholder farmers have been nurtured over more than 10 years of engagement since aQysta’s establishment. This community-driven approach is strengthened by our extensive network and reputation, including partnerships with government organizations such as the Ministry of Agriculture and Irrigation in Nepal, which plays a crucial role in enabling our operations in the country.

We have selected the scaling stage because our solution has evolved beyond initial testing and has demonstrated viability at a larger scale. The process toward scaling the subscription-based model began with a proof-of-concept conducted with 30 restaurants in the Kathmandu Valley. Over a three-month period from May to July 2023, we supplied vegetables, fruits, and herbs worth $22,000. While the majority of the supply was facilitated through distributors, we directly linked 5% of the produce to farmers, offering a glimpse of our long-term vision. This initial phase served to demonstrate the value proposition of the subscription-based model to consumers and provided valuable insights into the types, volumes, and ordering frequencies of produce required by restaurants.

Overall, aQysta has made significant strides, engaging with more than 2,500 farmers and facilitating the connection of 350 tons of produce to over 50 market partners. These milestones have resulted in revenue exceeding $400,000. They have also helped us secure a letter of interest from Midsona, a trailblazer in the European organic food industry, for purchase of dried fruits, presenting additional income opportunities for the engaged farmers. Here on, our objective is to roll out the subscription model to directly link farmers' produce with food manufacturers (with whom we have already been making linkages but not in a subscription model), HORECA, the export market, and households (on which we conducted a survey to understand their purchasing habits and best inform features of the subscription service).

We are applying to the MIT Solve Challenge because we see the initiative as a unique opportunity to address specific barriers hindering progress in the development and scaling of our solution. Most crucially, we seek financial support to enable us to invest in research and development, enhance our technological infrastructure, and expand our operational capacity. Recognizing Solve’s affiliation and access to MIT’s technological facilities, we seek to leverage this in aspects of enhancing our Grown ERP tool. Furthermore, Solve's global platform presents an opportunity to elevate our visibility and reach a broader audience of potential partners and customers.

Unlike traditional interventions that focus on singular aspects of food loss, the innovation of our solution lies in its integrative approach to tackling the root causes of this issue across the entire food value chain, specially through:

• Diverse market catering – Serving varied buyer segments, including HORECA, B2C, export, and food manufacturers. This inclusive approach ensures that our solution both meets the needs of and engages various stakeholders in addressing their respective contributions to food loss.

• Direct farmer-to-consumer connection – Establishing direct, transparent links between farmers and consumers. By streamlining the value chain and eliminating unnecessary intermediaries, we create a more efficient and transparent system. This lean approach reduces handling points, minimizes product damage, and enhances traceability, leading to improved product quality and safety.

• Subscription-based demand generation – Facilitating predictable demand for produce that align production with market needs. This proactive approach reduces the risk of unsold produce and forced sales at low prices, thereby minimizing food loss while ensuring fair compensation for farmers.

Our theory of change is grounded in the belief that forging a direct connection between farmers and consumers holds the key to transforming the food value chain and combating the widespread problem of food loss. First, we engage consumers by encouraging them to subscribe to their supply of fruits and vegetables. This subscription model aggregates demand, providing a clear indication of market needs. Next, we translate this demand into a demand calendar shared directly with farmers. Armed with this information, farmers can strategically plan their crop cultivation to align with consumer demand, optimizing their production process.

By bypassing intermediaries and establishing direct farmer-to-consumer supply chains, we streamline the value chain, reducing handling points and minimizing associated food loss. This streamlined, demand-driven approach yields numerous positive outcomes. Farmers benefit from a more predictable demand for their produce, mitigating the risk of unsold crops and ensuring fairer prices and income. Simultaneously, consumers gain access to fresh, high-quality produce directly sourced from the farm. This leads to reduction in food loss as produce is harvested and consumed in accordance with market demand, fostering a more sustainable and efficient food system for all stakeholders involved.

Evidence attesting to the potential success of our solution can be drawn from Shreenagar Agritech Industries Ltd. (SAIL), leading Nepali agribusiness company’s subscription-based farm-to-fork platform. As in many parts of the world during Nepal's COVID-19 lockdown from March to July 2020, a notable shift to online shopping emerged due to closed traditional shops. Initially averaging one daily sale on their online platform, by April 2021, Shreenagar had steadily seen an increase to 127 monthly sales, showcasing the platform's appeal. With the persisting trend of e-commerce post-lockdown, Shreenagar's experience is a testament to the viability of implementing a farm-to-consumer model in adapting to evolving consumer behaviors and market dynamics.

More importantly, we anticipate longer-term impact by complimenting the provision of our subscription-based service with tailored farmer support. Through the GROWN Farm Incubator program, we aim to promote sustainable farming practices and foster community resilience.

Our impact goals are focused on empowering smallholder farmers and providing consumers with access to quality food, while mitigating negative effects on the climate. Over an initial five-year period, we aim to achieve the following.

For farmers:

1. Increase the farmers’ share of prices paid by consumers to 75-90%, which is double the current average of 40%.

2. Engage 13,000 farmers in our Grown Farm Incubator, aiming for 4,000 in the first year, and overall ensuring they experience at least a threefold increase in income.

For consumers:

1. Increase access to fresh, high-quality produce.

2. Enhance food security and nutrition by providing consistent and reliable access to a diverse range of produce.

3. Increase consumer knowledge about and appreciation for the benefits of supporting local farmers and sustainable agricultural practices through educational marketing of the subscription service,

4. Strengthen trust between consumers and farmers by highlighting the origin and journey of food also through educational marketing of the service.

For climate resilience:

1. Completely prevent food loss at the farm and processing stages, thereby reducing emissions from wasted food that end up in landfills.

2. Promote sustainable agricultural methods like agroforestry to reduce usage of chemical fertilizer and enhance soil organic matter.

3. Save 26,000 tons of CO2, reaching 570 tons within the first year.

Our solution harnesses the power of aQysta's GROWN ERP technology, a versatile digital platform designed to revolutionize agricultural practices and foster sustainable farming ecosystems. GROWN ERP serves as a comprehensive tool for gathering, analyzing, and leveraging data across the agriculture value chain, facilitating seamless connections between farmers and buyers while enhancing transparency and efficiency. In integrating a subscription-based model onto the platform, we streamline the process of matching supply with demand, leveraging real-time market intelligence and predictive analytics to optimize resource allocation and maximize productivity.

GROWN ERP acts as a hub for data collection and management within aQysta's Farm Incubator program, empowering farmers with valuable insights and optimized decision-making capabilities. Currently, farmers and agriculture practitioners utilize the platform to digitally record farming activities and associated costs. This allows for decentralized tracking and oversight of farmers and facilitates the planning and automation of field tasks. Furthermore, GROWN ERP incorporates advanced features such as remote sensing data integration, providing valuable insights into plant health and harvest forecasts, which enables proactive production management and helps mitigate food loss risks.

GROWN ERP is a pioneering digital tool that combines modern technology with traditional knowledge systems to drive positive impact and sustainable development within the agricultural sector. Powering this solution, GROWN ERP provides the interface through which we can directly connect farmers with consumers across various market segments.

Full-time: 30

Part-time: 30

2 years 

At aQysta, we are committed to fostering a diverse, equitable, and inclusive workplace culture that minimizes barriers to opportunity and ensures the full participation of all team members. Our recruitment policies and procedures prioritize equivalent employment opportunities and prohibit discrimination or harassment based on any characteristic protected by law, including race, color, religion, gender, sexual orientation, age, or disability. These principles guide our actions not only during recruitment but also throughout the employment journey.

With overall about 60 international employees, 31% being female, we embrace and gladly benefit from the richness that comes from our diversity. Our global team also comprises individuals with no formal education just as well as those holding Master's degrees, highlighting our commitment to providing equal opportunities for professional growth and development regardless of background. As we continue to grow and evolve, we remain dedicated to fostering an environment where all team members feel welcomed, respected, supported, and valued. We actively seek to amplify diverse voices and perspectives, recognizing that innovation thrives in inclusive environments. Through ongoing initiatives and open dialogue, we are committed to continuously improving our DEI practices to ensure that we remain a place where everyone can thrive and contribute to creating positive impacts for farmers and the world.

aQysta is a social enterprise, adding value specially to smallholder farmers and various customer segments across the food value chain, including food manufacturing companies, hotels and restaurants, and export buyers. Our primary offerings are agricultural technologies and services facilitated through an incubator program: GROWN Farm Incubator.

For smallholder farmers, we provide access to our technologies and services, namely irrigation solutions, farming knowledge, financing, and market linkages, all without requiring any upfront payment. Instead, we operate on a revenue-sharing model. This approach not only aligns our incentives with the farmers’, ensuring mutual success and sustainability, but also minimizes financial barriers against them.

On the customer end, we offer access to high-quality, sustainably grown produce sourced directly from smallholder farmers. Currently, this access is facilitated through distributors. However, our developing subscription-based model is intended to bypass the unnecessary intermediaries by establishing direct connections between farmers and consumers. Consumers will be able to subscribe to regular deliveries of fresh produce, ensuring a steady supply of nutritious goods while supporting local farming communities. aQysta will generate revenue through the subscription fees.

Furthermore, aQysta secures funding through impact investments and philanthropic grants, which play a vital role in de-risking the financing and other forms of free-of-charge support provided to farmers. Grant funding also enables the company to invest in research and development initiatives, ensuring continuous improvement of our technologies and services.

Our plan for achieving financial sustainability entails continued leveraging of multiple revenue streams, with a primary focus on the sales of agricultural produce from our GROWN Farm Incubator program. Through our subscription service, we aim to drive market demand, thereby increasing sales volume and profitability. We are also diversifying our revenue sources by actively seeking grants and private investment, with plans to open a fundraising round towards the end of 2024. We have already secured $750,000 in convertible notes from esteemed backers such as DRK Foundation, Ecosia, GLS Treuhand, and various angel investors. These successful fundraising efforts demonstrate our ability to attract and manage substantial funding, forging the way for a sustainable financial future.