Case3-Vision of HLL

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Rural Marketing Shikha Wadhwa

V I S I O N F O R AG R I C U LT U R E O F

H L L

Submitted to

Prof. Rakesh Bhavsar

______________________

In partial fulfillment of the requirements of the course

Rural Marketing

ON 20THNOVEMBER, 2006

BY

Shikha WadhwaMBA SS-05-07

Indian Institute of Planning and Management 1

I N D I A N I N S T I T U T E O F P L A N N I N G & M A N A G E M E N T ,A H M E D A B A D


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Case2.1 VISION FOR AGRICULTURE OF HLL

Q1. Critically evaluate the thesis of Mr. Banga.

According to Mr. Banga the central problem in the agriculture sector is of the higher

procurement prices which is somewhat balanced by hiking issue prices for the publicdistribution system but in reality has lead to low productivity compounded by a wasteful

process of procurement, storage and physical distribution.

In order to address such issues HLL vision is a three-pronged. Though country is well

aware of the fact that precision farming, crop insurance, supply of inputs and leasing farm

equipment are the methods of raising level of production but it fails to communicate andeducate the farmers in the right way. According to the HLL visions first dimension, the

same can be done by farmer service centers which would be a systematic approach to

the services for the small farmers in terms of inputs by way of knowledge of precision

farming, prudent water management, crop selection, price and weather information etc.

Such centers can be run by both the government and the private enterprises combiningwith banks, insurance companies, storage companies etc. This would be a very apt

approach to address the problem of higher procurement prices. As the input costs are veryhigh the farmers would get better knowledge of about their crops. They would be more

educated and aware about their crops which according to economies of scale would lead

in higher levels production with same procurement costs and would thus provide abalance for PDS too.

The second dimension of the vision is about revamping the legal framework for freeingtrade in food commodities from restrictions and harmonizing multiplicity of food laws

not only at the central and state level but also with the international CODEX. The thirddimension of the vision is about the issue of fiscal levies on agricultural commodities like

mandi fee, sales tax, octroi, central excise etc. the existing regime that discriminates

packaged goods as against food products sold loose for the purpose of such taxes needs to

be revisited. Both of these approaches suggests improvement of the legal framework inthe agricultural sector which would lead to freeing the restrictions of trading food

commodities both at national and international markets, opening up new market

opportunities matching the international standards.

All these approaches are very deserving to be included in the tenth plan but as been

mentioned in the case too, there has to be a model to closely examine the official biasagainst the entry of private corporate in the agriculture sector.



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Q2. From your understanding of the Indian economy, make suggestions to make

rural farming more viable.

Rural farming in India accounts for a major part of income and a very important

component of GDP. According to the present scenario of the agricultural sector of Indian

economy, there are many farmers who are committing suicides because they arent ableto pay back or crop failures. With such situation where inflation is reaching at its peaks,

increasing procurement costs and dynamic economy there are several measures which

can be taken in order to make rural farming more viable as listed below:

With the kind of suggestion Mr. Banga gave about the farmer-service-centers,apart from providing them knowledge of farming, prudent water management,

crop selection, crop insurance through insurance companies and banks etc thefarmers can also be provided technology. They should be made aware of the latest

technology coming in the sector which would help them in having a competitive

advantage in markets. With low costs labor pool available in the country they can

also earn foreign exchange through exports. Proper knowledge should beprovided for the same.

With the knowledge they should also be trained on field, may be by closesupervision from the time seedlings are planted till the harvest.

Initiatives should be taken to avoid such suicides by providing them micro creditsat minimal interest rates.

Though government is already giving lot of subsidies in this sector, initiatives canalso be taken to develop a plan which provides training-on-field adding up to free

close supervision by experts or scientists and replacing the crop if infected free ofcost. The plan can be developed targeting a particular area. Some awarenessprogrammes should be developed for that area and carried on from time to time at

uniform intervals keeping in mind the proper frequency and reach.


Case3-Vision of HLL

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