India’s Changing Rural Scenario - Bihar Can Emulate

by Indra

Dec. 13, 2006

The news of suicides of farmers in rural India pains one and all. But many good things are happening all over India that brings hope of a better tomorrow even in rural India.

1. In Bilaspur, Himachal Pradesh, Jagdish Thakur has sold 2.5 lakh carnation stalks, grown on a part of his 13-acre plot, in the last seven months at the whole mart in New Delhi. His earnings have been Rs 10 lakh. It didn’t happen the first time. In 1997, when Jagdish experimented with gladioli flowers, it turned out to be a dismal failure and he lost Rs 20,000. But with time changing, Jagdish tried again. And by this time he knew about the greenhouse technology that helped increase yields. Further, he could ship his products directly to Delhi-based commission agents, without depending on local middlemen. The demand of flowers has boomed. A Dutch company wishes to import his products.

2. Jaswinder Singh Bhondli village in Ludhiana Punjab is making hay by selling vegetables, instead of traditional crops like wheat and rice. From the 22 acres (of the 35 he owns) devoted to vegetables, he gets an annual income of Rs 14-15 lakh. And he’s building a Rs 35-lakh mansion, and waiting to ink a contract farming deal with either Reliance Industries or ITC.

3. As reported, another Bilaspur farmer is making a killing by growing red and yellow capsicums, which sell at Rs 100-140 per kg in Delhi, and each plant yields nearly 10 kg. His income from just one crop sowed on a small portion of his 20-25 acres (most of which is devoted to traditional crops like maize) this April: a whopping Rs 9 lakh.

4. An employee of Spencers, a retail chain spotted Yellapa, a poor farmer from Mallu village near Bangalore who used to travel to the city to sell coriander, spinach, and other vegetables on the roadside. With help of Spencers, Yellapa increased his yield of spinach from 50 bunches a day to over 800. Yellapa has taken the land of his neighbour too on lease.
This is happening across the country. Retail chains, food processing companies, and even restaurants like McDonald’s with huge requirement of farm produce are increasingly avoiding the city wholesale dealer and instead, are talking directly to farmers, eliminating middlemen, deciding on mutually beneficial prices and collecting the produce in their own trucks directly from the farmers in villages. Farmers are not spending on transport or sharing revenues with middlemen anymore. And that is resulting in better earnings for the farmers.

A farmer such as 40-year-old Shiwarkar has become the direct supplier to the retail chain Spinach that has 17 stores in Mumbai. He does not deal with the transport agent anymore, nor the market agent. Instead, it’s the executives from the retail companies he’s in touch with the most. The men from the Spinach retail store monitor the packing of tomatoes. The intermediaries are going out from the value chain, and for the farmers, hopes, opportunities and wealth are all finding their way into their homes. Some advantages are incredibly basic. Once farmers take their goods to the market they are at the mercy of the market forces. They cannot take their vegetables back to the village if the prices are too low. Now, everything is neatly settled by the corporate.

Further, the traders in mandi used to be unscrupulous. As narrated by one farmer, on an average, the net weight loss used to be 10 kg for every 100 kg of produce due to faulty measures. So the weights are right, payments are instant and damage to the crop is less. And the farmers can have an assured demand all year round.

As the organized retail sector moves further in, the biggest gainers will be the farmers, especially those who are small and illiterate and completely dependent on the village agent.

I only wish these retailers or its employees didn’t get too greedy. It all means the farmers need to change from the traditional system to make their earnings better. The success stories above can only provide the inspirations to go for more perspiration and, in turn, prosperity.

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