Against the Grain: Permissionless Innovation in Nepal

A thick fog blankets the wide expanse of farmland each morning in the small village of Sugauli Birta, an agrarian community near the Indian border of Nepal. There is an accompanying silence as women and men rise with the sun to work. Sugauli Birta is a 9-hour drive—or an 11-minute flight—from the Nepali capital of Kathmandu, and the region’s biodiversity is as robust as the work ethic of its people. Driving along winding roads through the Chure Hill range to the Terai plains, the hard work of the people living there is evident. Rice, wheat, sugarcane, and other crops form the foundation of the local economy.

The locals rely on agriculture not only for their livelihood but also their own subsistence. It is the norm for many to travel several hours, lugging heavy sacks of grain, to mills that grind wheat and rice. This consumes many hours that might otherwise be put toward more life-enriching activity, but families need food, so mothers and fathers have no choice but to spend time and money—25 Nepalese Rupees (NPR, about $.20 USD) per 10 kilograms to grind their grain.

Up until recently, that was life in Sugauli Birta.

Lorik Prasad Yadav had a better idea. Why force people to travel long distances to process their grain when he could put the mill on wheels? With the help of a bank loan, Lorik bought a tractor and affixed a platform with three threshers. He drives that tractor—his mobile mill—from house to house, customer to customer, bringing an essential service directly to the people who need it.

Food is a necessity, and Lorik has made it easier, cheaper, and quicker for thousands of people in and around Sugauli Birta to process their crops. He keeps his prices low, charging only 15 NPR per 10 kilograms of grain—and he even leaves the chaff behind so that local farmers can recycle it as organic fertilizer or feed for their livestock. His customers save their chaff, save money, and save themselves the exhausting, multi-hour trip to town.

Of course, any time the status quo is upended, someone is bound to take notice.

Traditional brick-and-mortar mills saw Lorik as a threat to their continued livelihood and filed a complaint with the Nepali Office of Cottage and Small Industries (OCSI) that argued no explicit provision existed in the law for operating mobile mills and that, naturally, mills require a permanent location for their operation. The OCSI chief did not want to shut down Lorik’s business, but he had no legal authority to register the mobile mill. So Lorik was compelled to suspend his operation.

But the spirit of this entrepreneur could not be so easily broken.

With the support of his fellow villagers, Lorik reached an agreement with the stationary mills. He offered to continue service for those farmers who were too far away to reach the mills easily, but he would not do business with those who were close. Despite this agreement, Lorik is still unable to register as a formal business due to Nepal’s antiquated laws—laws which the Samriddhi Foundation, an Atlas Network partner based in Kathmandu, is seeking to reform.

The team at Samriddhi has worked for years to facilitate easier business registration in Nepal, but change is complicated. Nepal has had 27 governments in the last 28 years, and the tentative reforms of one administration are often rolled back by the next. That lack of political stability prevents the modernization of laws that might otherwise encourage more people such as Lorik to create new ways to add value to their communities.

That instability has put in place many barriers to prosperity and opportunity, and the lack of opportunity at home is driving a massive outmigration of Nepal’s youth. Today, about 1,500 of Sugauli Birta’s young men and women are living and working in the Gulf countries. In Lorik’s case, his business doesn’t have a stationery address, which it must have in order to be registered. Because he can’t register, he doesn’t exist—which means he has no access to credit or other tools that might help his business grow. Enterprising young people such as Lorik have become handcuffed by policies that destroy the value they’ve worked hard to create. And so they leave.

Samriddhi works to modernize Nepal’s laws so that it’s easier for resourceful problem-solvers such as Lorik to develop local solutions to local challenges. The country’s outdated laws have often protected few at the expense of many. “Thirty million Nepalis like Lorik are being deprived of economic freedom,” says Akash Shrestha, Samriddhi’s research coordinator. The world has changed considerably in the last few decades, and Samriddhi believes Nepal’s laws ought to change with it. Business-enabling reforms and the opportunities they create can do much to not only slow the outmigration crisis but also to reverse it.

By recognizing a problem that no one else realized existed, this enterprising young entrepreneur created value for his community, exemplifying the bottom-up approach to poverty alleviation that Atlas Network partners—with the support of Atlas Network—seek to encourage and enable. Such creative people, given opportunity, lift up the country. Lorik’s permissionless innovation, despite being limited by bad policy, has even inspired others to follow his model in other villages.

Lorik’s cause symbolizes Samriddhi’s countrywide fight for opportunity—but the team knows that the real solutions will come from communities like Sugauli Birta, where people themselves know best what difficulties they face in their communities and what is needed to overcome those challenges.

Atlas Network supports civil society organizations like Samriddhi—where local experts work together to remove barriers to human flourishing—all over the world. Our partners provide local leadership and expertise, seeking targeted solutions to poverty that take into account local culture and the unique policy environment of each community. Our Doing Development Differently initiative, which was launched in 2017, seeks to empower those organizations in their pursuit of increasing opportunity, prosperity, and individual freedom in their local communities.

And it is working.