'Farmers need predictable linkages with markets'

Civil Society News, New Delhi

After their agonizing experience in cities during the lockdown, migrant workers, in very large numbers, are back in their villages. Can the rural economy sustain them? Will they find ways of earning? The rural employment programme, MGNREGA, offers hope. But it remains to be seen whether in the current context it is the solution.

Rural areas have for the longest time been denied the investments which could have generated the economic activity needed to keep people from migrating. The current crisis is an opportunity to have a better understanding of how this can change.

In our search for answers we turned to PRADAN (Professional Assistance for Development Action), an NGO devoted to nurturing rural livelihoods. PRADAN works in seven of India’s poorest states — Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan and West Bengal.

It has been behind initiatives for boosting agricultural productivity and linking farmers to markets through cooperatives and producer companies. PRADAN’S work has led to several successful examples of income generation. 

It has promoted the National Smallholder Poultry Development Trust (NSPDT) which supports 11,351 women poultry farmers across 23 cooperatives. It has also nurtured the Tasar Development Foundation (TDF), which works with 20,000 farmers to rear cocoons for silk. PRADAN has  been at the forefront of organizing women into self-help groups and linking them to financial services.

We spoke to Narendranath Damodaran, executive director, on PRADAN’s journey and what can be done now to deal with the tricky problem of surplus labour in the countryside.

 

Do you think the village economy can absorb all the migrant workers who have returned? 

I don’t think it is currently possible. In some of the villages in Jharkhand where we work, we have seen the population increase by almost 30 percent. That’s a large number.

Almost every family has one or more members who have come back so there are many more to feed. One of the things we have been trying to push is MGNREGA. But people who have returned may not have the skills to do earth work in MGNREGA. They haven’t been doing hard manual labour for a few years. About 20 to 30 percent don’t have job cards. Around 30 percent are able to join MGNREGA work. We find 50 to 60 percent are sitting idle at home. A negligible number has started small enterprises like small shops.

About 60 percent won’t stay back in the villages. They are waiting for the lockdown in cities to lift and for shop floors, retailers, eateries, construction sites to reopen so that they can get back to their earlier jobs.

 

Why do they migrate?

We have been working in villages for nearly 37 years. Our objective has been how to get people to stay back. I know all 100 percent can’t be absorbed but about 30 to 40 percent of those who migrate and have now returned can probably stay back. They will add to the pressure on existing resources. Our endeavour has been to enhance the carrying capacity of those resources so that this additional 30 to 40 percent of migrant workers can be engaged and involved.

 We work in tribal areas. When we did a ballpark study we found 70 percent of migrating people from Jharkhand or Bihar are distress migrants. There are no opportunities in their villages. Only 30 percent are aspirational migrants who go because they have skills or want a better education for their children or amenities for their families. This is a minuscule number from the poorer states. From better-off states, the southern states or Gujarat, migration could be of a different kind. But from poorer states, the purpose is distress. They go out of poverty. 

 

What can be done to create opportunities?

Land and water are not going to expand in our villages. To overcome resource constraints we look at new ways of agriculture, new technologies and market linkages for better realization. These are the rural hinterlands which are not linked to the market. You have to go through layers of middlemen. In the city you pay high rates for vegetables but in the village you hardly get anything.

When the lockdown was forced on the rural hinterland, farmers had grown a large quantum of cash crops like fruits and vegetables for the rabi season, due to our interventions. We were expecting excellent returns in March-April, the main selling season. Last year, the cost of production was Rs. 3 to Rs. 3.50 per kg and the farmer got Rs. 8 from buyers. This time they got just Rs. 2. About 70 percent got a mere pittance. They couldn’t transport their produce to industrial towns like Bhubaneswar or Rourkela. And they can’t hold on to it either. Transport services and cold storages are the facilitating market linkages we have to create so that farmers aren’t short-changed when uncertainty happens. We have to create predictable market linkages for farmers.

Obviously, one focus area is to ensure that people at least have access to food and nutrition. The issue they are facing right now is there isn’t enough food. Fifty percent of people have reduced their food intake. There is no cash in the house to buy food. Markets haven’t fully reopened as yet.

Most of them are now dependent on the Public Distribution System (PDS). About 70 to 80 percent are also getting rations. But they are getting only wheat and rice and not pulses, oil or spices. About 25 percent of people told us they had food stocks for just one week. And 50 percent of rural families in the poorer states of the country say they have food stocks for two weeks with reduced intake. 

Our endeavour this time is to ensure that they grow enough food during the kharif season — from June to October — so that it lasts them six months.

 

And in terms of jobs?

The question is how do we employ this additional labour. We have to remove uncertainties in agriculture by improving market linkages. I mentioned storages, transport and, most important, organizing farmer-producer groups so that people can produce and reach the market in a more coordinated manner. We can provide information on markets. We are trying to build these linkages so people get better realization for their produce.

Secondly, how do we diversify their sources of income. One is farming, the second is livestock. When farming fails, livestock is a life saver. Tribal communities already keep goats, sheep, ducks, backyard poultry.

We enhance the quality and quantity of livestock and provide veterinary support — we have trained barefoot vets called pashu sakhis in villages. They can do vaccination and first-aid and reduce animal mortality rates. Better livestock means better income.

Another important area is forest produce. One of our established products is tasar silk. It’s a wild silk with a good price in the market. Then there is sal patta, indu patta, etc. We enhance storage capacity and marketing and ensure people get a better price.

Our fourth strand is to build the skills of people and help them become entrepreneurs. Marketing linkages and transport can provide work. They can also use their technical abilities to get a Mudra loan to set up local village enterprises.

But we need the State, the business community and NGOs to come together to think how opportunities can be created in villages and small towns. That is an advocacy activity which we will be engaging in with others. 

 

Do the government’s recently announced reforms in agriculture help? 

They are freeing up the market. It’s a very good reform for small farmers and weaker communities since their negotiating skills are low. For such communities NGOs like us get involved and try and organize them into Farmer Producer Organisations (FPOs) or cooperatives. If there are too many rules and regulations governing markets then their mobility gets restricted. Many of the existing establishments have been taken over by powerful vested interests. 

The only strength small farmers have is that they can come together and sell. Many are first or second generation farmers so they are not so savvy in the marketplace. Less restrictions make it easier for them to get linked with terminal markets.

An interesting experiment we tried during this rabi season was to collect the produce in the village, put it in a vehicle and sell it to customers directly. We called it ‘veggies on wheels’. It’s a producer-to-consumer direct linkage. The farmer herself went to residential apartments or small markets with farm-fresh produce and earned much higher returns. Now this requires a free market.

 

What about agro-processing units? Why have these not taken off or been encouraged?

Agro-processing needs medium-level entrepreneurs. It’s difficult for farmers with a hectare of land or 50 to 200 mango trees to set up an agro-processing unit. But then entrepreneurs don’t want to go to small towns, rural areas, the hinterland, because of infrastructure, transport, electricity and perhaps some law and order issues. No bank will finance you either. The dynamics are different. Which is why we don’t have that last mile linkage.

The FPOs we have created in fruits and vegetables are not robust enough right now nor do they have the capital to set up and own agro-processing units. But in poultry farming where we have worked for nearly 20 years, we have organized cooperatives of rural women who run poultry farms and they have set up a producer-company. They have been selling chickens in the market and now they have enough capital to set up their own processing units. Once you have enough capital, banks and institutions come in.

It took us years and years of work to set up those backward linkages. We started with the basic poultry farm. Currently we are trying to take these lessons to fruits, vegetables, pulses, oilseeds and other produce. It will take us a few years but we will be able to set up robust farmer-producer institutions which will have capital and the risk-taking ability to set up processing zones.

There is help from the government in terms of soft loans and subsidies. If business people were to come to smaller towns, take the risk and set up processing zones or even small manufacturing industries, a lot of our people can get employed. This will have double benefits: it will create employment and put more money in the hands of farmers. 

 

What you need is domestic investment?

Actually, if some of the bigger processing units downscale their smaller units to towns it will have multiple impacts. It will take the urbanization process into smaller towns. Why shouldn’t I aspire to go to Ranchi or Dhanbad for a better life? Everybody in Jharkhand wants to go to Delhi, Ahmedabad or Mumbai. In fact, the maximum migrants have come back from these three cities. They travel 10,000 km to earn Rs. 8,000 extra in a most undignified manner. If they could do the same thing in Ranchi, Dhanbad, Giridih or Hazaribagh, small towns would become aspirational. The villages will be better places to stay. There will still be migration but that will be aspirational migration, which is what people want.

 

You mentioned the forest economy. Are tribal communities getting access to forest produce?

Legal provisions exist on paper. There is the Forest Rights Act, a progressive law. But the general attitude is that the forest belongs to the forest department. So it’s very difficult for communities to access the forest. People aren’t even allowed to plant trees because that is what the law says. 

One of our focus areas this year is community forest rights. We have put in applications in 500 cases. In about 100 cases we have had some success, mainly in Odisha. We are working with other organizations on this. We will need to bring in technology to map village boundaries and work with the system.

If each village can have access to 400 to 500 hectares of forest land, they can rejuvenate the forest, replant trees and take minor forest produce.

Forest land has multiple uses. One is its cultural importance for the community, second is that forest produce like mahua, honey, sal patta, tendu patta, silk can be harvested, third is for livestock rearing like goats, and from an ecological perspective, forests can harvest a huge amount of water if you build water harvesting structures. Most forests are in the upper reaches so ponds and wells in villages downstream can be recharged.

The Forest Rights Act is an attractive law but very difficult to realize because of the red tape involved and because the forest department is reluctant to give away its power over forests.

 

How much would a person living in a village in Jharkhand need to live a decent life?

About Rs. 100,000 per year. Of course, this is a ballpark figure for a decent life at current prices. This amount will enable them to have some savings and send their children to schools — private ones, unfortunately. The current families we work with have on average an income of `50,000 so we have to double that from all sources. The migrant worker sends home `2,000 to 3,000 on average per month and adds to the family income, which is why migration is very important for them.

 

They would be earning that much in the city?

Yes, but they need to spend it in the city for food and rent. From our side we are looking at an income of Rs. 15,000 to Rs. 16,000 from all sources. In about 40 percent of families we have been able to increase income to that level. 

There are huge opportunities in Jharkhand. One is that landlessness is reasonably limited, unlike in Bihar or UP. In tribal areas you have access to at least one hectare. You can have two crops a year. You can grow fruits like mangoes, and do livestock rearing.

There are upwardly mobile young people who have managed to earn up to Rs. 1.5 to Rs. 2 lakh a year. Youth stay back when there is an income.

We work with women SHGs. If a woman is able to get credit and her earnings from agriculture, goat rearing and forest produce increase, the first thing she does is to call the husband back. We have many stories of reverse migration.

I would say we could hold back 40 percent of migrant workers if we intensify agriculture and build market linkages. What we require is irrigation. That means creating water harvesting structures through MGNREGA.

We are helping farmers build ponds, bunds and set up horticulture farms. We also need solar power. All this requires investment which has to come from the government or philanthropy. Lastly, you need human resources of high calibre to work in our villages.