The Hindu Business Line : Villagescope — Reviving the rural economy

During the British Raj, indigenous products were given a silent burial. But many of them still survive and are catering to the global market. The government has to ensure that market reform does not encourage sophisticated middlemen. A free and fair domestic trade practice and a cut in the risk cost would benefit a large number of farmers in India.

FOR CENTURIES India's villages have contributed to the growth and sustenance of the economy. Back in the 1700 AD, India's share in world income was 22.6 per cent, which was almost equal to whole of Europe's.

Agricultural produce, spices, handloom saris and handicraft constituted the major trade items, which took the silk and sea routes to reach Asian and South-East Asian nations.

During the British Raj, such indigenous products were given a silent burial. But many of them still survive to cater to the global market.

The handicraft sector, for instance, once the mainstay of the village economy, continues to thrive in spite of the dominance of the manufacturing sector. Today, the handicraft sector's exports are growing at 22 per cent. And the handicraft export target in the next five years is a whopping Rs 50,000 crore.

The growth in the tourism sector is also expected to touch 30 per cent in 2005. Indian folk dance, music, native cuisine and little known places generate huge tourist interest. India's 14 agro climatic zones produce all kinds of vegetables, fruits and foodgrains that grow anywhere in the world. There is a vast untapped market for Indian eatables in the developed nations. It is estimated that the organised food retailing segments in India has the potential to reach Rs 25,000-30,000 crore in the next five years.

The Indian culinary palette is variegated enough to tickle the Western taste buds. Sales per month of Indian cuisine among Indians in the US is estimated at $200 million.

If the country is to tap the food potential, it must begin by integrating its domestic market. Nine States have already brought in the single window market system to end the monopoly of middlemen in agriculture trade. The Agriculture Minister, Mr Sharad Pawar, hopes that another 16 States will follow suit. This will help farmers sell their produce to private buyers without hurdles and also turn the Agriculture Produce Marketing bodies more farmer friendly.

The government has to ensure that market reform does not encourage sophisticated middlemen, who will want to take advantage of the huge gap between the sale price of agriculture commodities in village and in cities.

A free and fair domestic trade practice and a cut in the risk cost would benefit a large number of farmers in India. Good road connectivity and transport facilities are the key to helping small and marginal farmers, retail businessmen and village artisans. Good village infrastructure will naturally attract private investment in the farm sector.

Leading private sectors entities are already in the rural areas. Reliance, Shriram, Bharti, Mahindra, Nestle and Amul, Tata, ITC and a dozen more source agri products. Huge private investment in agriculture also requires vigilance by government. A lucrative mono crop may affect the rich bio-diversity of villages; businesses motivated by profit may not strain to preserve the bio-diversity.

Here, agricultural scientists must step in to tell with practical advice on the effects of mono cropping and methods to address the issue.

Further, the Indian farmer must be taught about crop diversification, crop shifting and the effect of genetically developed seeds and fertilisers. The bitter experience of Bt cotton growers across the country and suicides by many of them will continue to haunt the planners. So, the farmers must be protected from the hype that surrounds new biotech seeds and fertilisersand educated about their compatibility to the Indian environment.

A few decades ago, Indian farmers were dissuaded from using DDT; its use was long banned in developed nations. But, by then, irreparable damage had been done to agricultural land.

India's 1,12,309 co-operative societies can be the conduit to Rural India. It is high time the political class allowed the farmers to cooperatise themselves and run their own affairs without outside interference.

More than a financial package, these societies need to freed from the grip of politicians.

Indian farmers have to compete with the subsidy rich farmers of the developed nations. But they can still come out ahead if they are given the opportunity to prove their immense potential.

(The author is a Pune-based freelance writer.)

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