Opinion Factories and villages

educate them?

The latest World Development Report,which encourages migration from rural to urban centres, is bound to set the cat among the pigeons. People leave rural areas when agriculture and non-farm work in villages cannot sustain a growing population. Government after government has failed to provide alternate opportunities for village-folk. I have advocated in vain for almost two decades for government to incentivise the private sector to establish food processing plants in the hinterland. Over 40 per cent of our food rots due to the lack of infrastructure. What have we done about it? We have moved from processing one per cent of our total food production to just over two per cent. Over decades. The developed world processes over 35 per cent.

Factories would need to be established nearer growing areas,which would benefit farmers,as they would be selling directly to the end buyer with better prices. Ancillaries would create even larger employment opportunities,and different entrepreneurs would come up: dhabas,transport,wayside mechanics,printing and packaging. In addition farmers would gain from the practical protocols corporates would provide in order to increase yield and quality — as was seen with Pepsi and tomatoes in Punjab,or as is seen by Nestle with milk around Moga.

Government’s social schemes provide some sustenance to the poor,but will they give the rural poor cover for the long term? Without development in rural India,there will not be any change in the conditions there. Mamata Banerjee’s objection to Singur is something I cannot comprehend. I have already said on these pages that the people whose land is being requisitioned must get more than a fair deal; but,with Tata moving out of Singur,has the population there gained? So what did Mamata achieve? Why not instead negotiate a “great” deal for the affected people? Put a price on the objections and ensure that those affected gain substantially over what they currently have,and for a sustained period. Apart from those whose land is affected,the entire community would gain from employment and entrepreneurship opportunities in addition to increase in their land prices. This is Singur’s loss.

Similarly in retail. Here again,farmers would gain the most as the retail chains would need to source directly from growers to ensure freshness. Farmers would get better returns. Additional employment could be generated from grading and packing the produce before dispatch. The Parliamentary Standing Committee on Commerce said that lower “initial” prices would happen but “once competition was wiped out,they would be in a monopolistic position to dictate prices”. Prices are driven by supply and demand and competition. Had we adopted similar practices in telecom,our price per local call on a mobile phone would still be Rs16.

The arguments also suggest that organised retail will put the mom-and-pop shops out of business,and affect mandis. Our mandis exploit small farmers: by under-weighing,not paying for quality,making them wait for days to ensure they sell in distress. Smaller vendors will get affected to an extent,but mainly in towns where the retail outlets will come up,providing different employment opportunities. In the majority of the country,the smaller vendors will not be affected at all. However,in the larger towns where these outlets will come up,millions of consumers will gain from quality and price as the middlemen chain will have been broken.

Another opportunity in rural India is for logistics companies to set up hubs to break bulk for goods that would then be sold to the surrounding markets; and also,to aggregate goods from a fragmented supply-base of producers in those areas. These could offer numerous additional services to their clients: advertising,promotions,point-of-purchase material. Additional revenue could come from functioning as information kiosks,more popular by the day in rural regions. Rural research,which is currently a painful,suspect,expensive and time-consuming exercise could be offered much more efficiently. If such hubs could be established in the majority of districts,they would bring about huge employment in both the farm and non-farm sectors.

With the focus on urban India,with such glaring lacuna in the system for rural India,do you really expect migrant workers to go back to the conditions that exist in the village? I don’t.

The writer is CEO,Grassroots Trading Network for Women

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