Pinching where it hurts

Mango harvests, the local wisdom maintains in Bihar, follow a biannual cycle of plentiful and inadequate produce. I arrive at this place in one of the fortunate halves of this cycle. One part sickly-sweet and one part rotten smell hangs in the streets as you pass by trees bent down with this year’s bloom. Seventy percent of millions of kilograms of export quality mangoes around me will either be sold at pebble-rates or will never make it to the market.
It isn’t a one off sight in rural India- I have seen crude pyramids of potatoes lying unclaimed on the roadside along Delhi-Agra highway last June. Come July and you’d see kilos of tomato produce decaying beside the motorways connecting Jamshedpur and Ranchi. And as my newspaper tells me, farmers in Madhya Pradesh and Maharashtra often prefer incinerating their harvests of cotton and sugarcane to clear up land for next sowing season in the absence of attractive sale prices.
‘Cash’ Crops
Cultivation of cash and commercial crops has become a permanent feature of agriculture in post-Green Revolution India in more fertile areas of this country. Critics of new economic policy refute the cause-effect relation between sunrise manufacturing sector driven by consumer demand spurring commercialization of agriculture . Instead, they claim such a transition is a consequence of subtle coercion and superficial enticements in terms of cheap credit for modernization that has long been pushed by political and business lobbies with vested capitalist interests.
Whatever side of economic and social ideological divide one belongs to, it becomes unavoidable to look at the fall out of so-called well-intended and logical move towards modernization of agriculture and integrating it with the needs of a booming urban economy. Marginal farmers find loans turning toxic as enormous quantities of fibre crops , fruits , beverage and medicinal crops are sold away at throwaway prices. Hundreds commit suicide every year seeing no option out of a vicious cycle of credit consumption beyond means. Cold storage facilities and warehouses fall far short of harvest requirements or have charges prohibitively expensive for cultivators . Ubiquitous dumps of bumper produce and incineration of standing crops just highlights the disappointing ability of commercial crops to generate real profits for cultivators.
It has reinforced the clamour against liberal policies of post-1991 governments that allow agricultural imports at relaxed tariffs and has raised the spectre of a possible nexus between government and corporate out to expand their domination in what has traditionally been an autonomous , self-sustaining and organic sector for centuries .
A common mistake of comprehension in this issue is oversimplification of the state-of-affairs as a clash between tradition and sinful and amoral modernity , a battle between a fiercely autonomous farmer and a ruthlessly hegemonic corporate procurer. Compound this with the ideological prejudices we all invariably pick-up through experience and company, and we have already begun to erase away important evidences even before solving the case.
A less appreciated feature of this story has been the quantum leap in productivity – a result of application of modern scientific innovations in farming, made available to farmers through credit institutions , something that ironically has given them more reasons to worry about. It is the integration of this abundance in rural India with centres of cumulatively appreciating demand for consumer goods in urban areas that has eluded us so far.
In over-production and increasing yield per hectare we have an opportunity and in the absence of viable firms or institutions to act as intermediaries between demand and supply, we have a problem. The stage seems to be set for the rise of a new breed of entrepreneurs, from unconventional rural settings.
The demons within
I once had a conversation with an alumnus of BITS-Pilani, Mr. V.V.Ramanan- who is a social entrepreneur with special interest in development sector , where he repeatedly emphasised on the importance of ‘social conditioning’ as the foundation over which any entrepreneurial culture can be built.
Nowhere is this lack of social conditioning more evident than in North India , where most migrants from urban centres come from regions abundant in natural resources which in the past formed the back-bone of a pre-industrial economy.
The roots of caste stereotypes and hierarchy run so deep that it becomes virtually impossible for youth from non-mercantile castes to start entrepreneurial ventures.
Youth from backward communities running enterprises in villages often find themselves either boycotted or are forced to run their ventures only in impoverished quarters they inhabit – consequently being compelled to migrate to cities . The landed class and communities on the upper end of caste spectrum shun entrepreneurship on entirely different grounds. So deep is the fascination for a fail-safe “naukri “ and so high the regard for entitlements and privileges thrust upon them by their colonial masters and Hindu society , that most upper caste families would rather let their assets under-perform and feast on the nostalgia of old days than consider starting up.
The result- a thoroughly entrenched syndicate of oligopolist agricultural merchants who buy or reject produce at will from hapless farmers and sell the same at prices that ensure a super normal profit. In the region spread a 100 km around Patna, I discovered the turbulent landscape of these whimsical , cartelized prices as potatoes varied between Rs. 5 a kg in village haats to Rs. 20-22 per kilo in residential areas.
Obstacles outside
An eight hour power cut in urban areas has enough ammunition for media to blow it up into a crisis , but even fairly agriculturally advanced states like Haryana are hardly able to prevent an eight to twelve hour power outage from becoming a daily occurrence ( Frontline , 11 Oct 2009).
Storage facilities and warehouses fail as a result and run under-capacity with whatever alternative power arrangements at hand . The revolution in production has surely not been matched with a concomitant transformation in storage and handling.
Corruption as the bane of development , is the unsaid and pervasive enemy of agriculture as an emerging sector. I wouldn’t elaborate on a subject that has been meticulously researched and manifests itself with all its clichéd motivations across social and economic spheres including agriculture.
What really adds muscle to the arms of middlemen , whether in transportation , loan business or crop procurement is the enormous political clout of such lobbies that makes it difficult to dismantle local cartels through innovation , forcing businesses to step into dirty territory.
To lay a framework of acheivables for an aspiring entrepreneur requires more insight than from someone like yours truly who has been involved with rural communities in North India through CEL only over the last two years. Yet, even for a person of limited experience, the prospects of an entrepreneurial opportunity are conspicuous. Baby steps in this regard have even been dared by entrepreneurs – While working with TERI last year, I met some engineers from ACME India Pvt. Ltd, refrigeration experts and project partners of TERI . They had found an enthusiastic customer base for their chemically refrigerated carts which required no electricity , among the youth of districts bordering Gurgaon .Expansion in scale of such ventures and encouragement to innovation is eagerly awaited.
In fact, every time you shell out an exorbitant Rs. 40 for a kilo of tomatoes, remind yourself that there might be another quintal of red vegetable which could have been available to you at more reasonable rates- if only for an entrepreneur.