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Transcript of The Hyphen_Agri-Business Club
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Agri-Business Club, IIM Ahmedabad The Hyphen
September 2010
September 2010O N N E C T I N G B U S I N E S S T O A G R I C U L T U R E
Experts Opinion on
Retail Revolution in
India
Tapping The Rural
Markets
Biodynamic Agriculture
in IndiaRural Entrepreneurship-
Exploring opportunities
Indian Dairy Sector:
Opportunities and
Challenges
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Agri-Business Club, IIM Ahmedabad The Hyphen
September 2010
Dear Readers,
It gives me immense pleasure to put forward the first issue of
The Hyphen for the academic year 2010-11. I am pleased to inform
you that the Agri-Business Club of IIM Ahmedabad has decided to
make The Hyphen a quarterly magazine from this year onwards.
Consisting of articles contributed by students, academicians and
industry experts, this compilation aims to present different
perspectives on a variety of issues affecting the agri-business sector
today.
Let me take this opportunity to give you more details about the Agri-Business Club and its
activities. The Agri-Business Club of IIM Ahmedabad was founded in 2000 in the light of a
separate course PGPABM being offered at the institute. The mission of the club is to provide
students a forum, outside the classroom, which they can use to delve deeper into the arena of
agribusiness. It aims to provide a channel for interaction between the students, academia and
industry participants to develop this nascent area further and to allow them to achieveexcellence in this field. To facilitate this process, the club hosts a variety of formal and informal
activities throughout the year. It includes conducting workshops involving industry experts,
organizing various student events and competitions, maintaining an article repository and
holding a summer preparation program for PGPABM participants.
With this I leave you to explore the world of agribusiness. Hope you find this edition of
The Hyphen interesting, enriching and enthralling. Feel free to write us your feedback and
comments.
Happy reading!
Vaibhav Kumar
Coordinator, Agri-Business Club
From the Coordinator
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September 2010
The Hyphen team would like to acknowledge the constant guidance and support extended by
Professor Sukhpal Singh and the panel of evaluators for Hyphen. We are also grateful to
Professor P.K. Sinha for giving us his valuable article and being associated with The Hyphen.
We would also like to express our heartfelt gratitude to Mr. Shiva Mudgil, an IIMA alumnus and
presently, Dairy Analyst, FAR, Rabo India Finance Ltd for contributing his article to the magazine.
And of course, as for any student magazine, the mainstay for Hyphen also remains the same -
contributions from the student fraternity. We take this opportunity to thank one and all who
contributed articles, helped in editing and proof reading and all those also whose articles could
not be published, for their painstaking efforts in Connecting Business to Agriculture.
Team Hyphen
Acknowledgement
IIM AHMEDABAD
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Agri-Business Club, IIM Ahmedabad The Hyphen
September 2010
Agriculture not only gives riches to a nation, but the only riches that
she can call her own. -Samuel Johnson
The quote given above is applicable to the entire gamut of commercial
activities that form what we today know to be the Indian
Agri-Business Sector. The only sector capable of quite literally
producing wealth.
Welcome readers, to the first issue of The Hyphen, for the academic
year 2010-11. In its quest to bring out the burning issues at the frontiers of agribusiness, this
edition of Hyphen includes valuable insights from the leading academic researchers of IIM
Ahmedabad, cutting-edge analyses from industry experts, and of course excellent contributions
from the budding future business leaders of our country.
The next decade belongs to Retail. With foreign players intensely lobbying the Indian
government to open up this sector for FDI, the retail sector looks to be on the cusp of an
economic explosion. With rural markets projected to dominate the industry landscape in India(acquiring a total market share of over 50%), and food and grocery items expected to lead the
growth in the organized retail industry; this sector fully deserves to be the center of our
attention. In this context we have Professor PK Sinha and Professor Sukhpal Singh of IIM
Ahmedabad drawing our attention to certain easy-to-miss yet critical concepts that are required
for a successful foray in this sector. Under Industry Speak, we have an analysis of the Indian
Dairy Industry from industry expert Mr. Shiva Mudgil, of Rabo Bank, highlighting the
Opportunities and Challenges within the sector.
While at it, the importance of the Rural Sector can never be downplayed within agribusiness.
Tapping into the Bottom of the Pyramid has become more important now than ever, as
companies move away from cut-throat Red Ocean territories and explore for uncharted Blue
Oceans to unlock their profit potential. Hence we have several budding future business leaders
look at the various strategies that can be used to tap these lucrative rural markets, poised to be
the next big thing since the Klondike Gold Rush.
From the Editors desk
Editorial
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Agri-Business Club, IIM Ahmedabad The Hyphen
September 2010
Of course, in all this one cant forget Sustainability, the differentiator between a flash in the
pan and the legend. The world of today, with its exponentially growing population, needs
solutions that not only work today but will remain workable tomorrow. To this end, our
contributors examine two cutting-edge innovations Bio-Fuels and Bio-dynamic Agriculture.
Finally we also bring to you certain unique, interesting and fun facts related to the agri-business
world. We hope that you enjoy reading this edition of The Hyphen as much as we enjoyed
creating it.
Please share your feedback at [email protected]
Happy reading!!
Abhinav Jha
Editor, Hyphen
From the Editors Desk.. continued...Editorial
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Featured:
Tapping the Rural Market
Ms. Arpita Kar, Consultant, Deloitte
Opportunities and Challenges in the Indian Dairy
Sector
Mr. Shiva Mudgil, Dairy Analyst, Rabo India Finance
Ltd.
Campus Hues:
Biodynamic Agriculture in India
Jyotsna Kumari
Expert Opinion:
Dont Fight Nature: Yours And Others
Dr. Piyush Kumar Sinha, IIM Ahmedabad
FDI in multi-brand retailing in India: Issues and Im-
plications for smallholders
Dr. Sukhpal Singh, IIM Ahmedabad
Contents
08
25
15
11
17
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Contents
Beyond The Campus:
Achieving 20% Bio-fuel blending
Akansha Saxena, SIIB
Winning the Rural Mind
Saiket Mondal, IIM Lucknow
Rural Entrepreneurship - Exploring Opportunities
Saurabh Dhawan, IMT Dubai
Others:
Invitation for Articles
Rajendra Singh - Jal Purush or Waterman of Rajast-
han
Spirulina - The Latest and Greatest Superfood defined
New Interesting Innovations in Food technology
Some Facts
22
27
30
33
10
14
24
21
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Featured
Tapping the Rural Markets
Participatory inclusion of rural markets has always been a matter of vehement debate and
discussion. This article will largely focus on the more fundamental issue of recognizing the
significance of financial deepening in the larger perspective of economic growth.
Given the sophisticated array of markets and services that are available in the financial domain
today, the work of policy executives is as much to innovate as it is to find ways and means to
reduce the existing skew of these services merely
towards large enterprises. According to World Bank
estimates, close to 51% of the Indian population is
financially underserved as compared to 45% globally.
These numbers convey a significant urgency of
analyzing the current state of financial inclusion in
India and devise means of improving these statistics.
Reserve Bank of Indias credit policy for 2006-07 re-
quired the Convener Banks of the SLBC in all states to reach 100% financial inclusion in at least
one district under their area of operation. The No frills Bank accounts approach has the clear
objective of reducing the cost of financial intermediation so as to reduce entry barriers for the
rural poor. The Priority Sector Lending scheme imposes mandatory obligations on banks to
provide as much as 18% of net bank credit for direct agricultural activities.
Despite these efforts, it is still imperative to say that establishment of infrastructure both in an
institutional as well as in a technological sense form the core of any advancement towards
incorporating the rural population in the financial mainstream. Building strong institutional
infrastructure is pertinent. Though private capital is welcome, there is greater merit at this time
to encourage Public Private Partnerships which can help in developing more efficient systems.
Existing services
The presence of myriad microfinance institutions in the developmental sphere over the past
few decades has been noteworthy. It is remarkable that more than three thousand models
Ms Arpita Kar is an IIM Ahmedabad alumna from the PGPABM 2010 batch. She is presently
working as a Consultant with Deloitte. She can be contacted at [email protected]
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Featured
have emerged of a framework that relies on the basic ideology of the poor being capable of
taking responsibility of their lives and being self reliant. The primary impediments to the
transformation process vary from regulatory to ideological to operational issues, each of which is
significant enough to obliterate the process. Some of these are given below:-
Requirement of improving customer service As regulated commercial institutions, MFIs will be
in a position to provide a range of financial instruments. It is therefore imperative that these
institutions raise their level of customer service to address the need of an expansive client base.
Requirements of accountability An increased focus on the regulatory purview brings issues of
maintaining transparency and accountability.
Regulatory environment Evolving a legal structure unique to the requirements of the
microfinance industry poses a definite challenge. Resolving this criterion requires environment-
specific solutions that take into account political viability as well.
Human resource requirements A strategic cultural shift to a regulated financial institution
requires communication to the staff and giving clear direction and vision to the organization.
Requirement of competitiveness - While the advantages of a wider stakeholder base will be
available to the MFIs they will also have to deal with the repercussions of increased expectations
and competition. This will require operational efficiency as well as translating clientrequirements to a product portfolio to satisfy them.
The Private Equity Model
The recent interest of private equity in the microfinance sector is quickly blurring the division
between social and financial objectives. PE firms are primarily observed as substantially more
aggressive and difficult to regulate. However, there are inherent benefits to pursuing this road.
These may broadly be listed as
Substantial returns
Building scale while reducing costs
International expertise in finance and technology
However, the associated problems are both significant in number as well as magnitude. They are
Aggressive lending leading to over-indebtedness of clients
Shift of attention from poorest areas due to lower costs of transaction
Financial statistics may overrule development objectives
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Featured
In the light of this, it can broadly be concluded that the reduction of cost of financial
intermediation in India is still work in progress and definitely requires to be closely watched by
traditional fundamentalists.
References
1Reference- FINO, retrieved from http://www.moneycontrol.com/news/business/ncrfino-partner
-to-overcome-barriers-to-fin-inclusion_383801.html
2Reference- Financial inclusion calls for new initiatives, retrieved from http://
www.hindu.com/2006/07/31/stories/2006073103551500.htm
Rajendra Singh-- Jal Purush or Waterman of Rajastan
Rajendra Singh is popularly known as the Jal Purush or Waterman of Rajasthan because of his
commendable efforts in revival of Johads, streams and rivers in the Alwar District of Rajasthan.
He and his organization Tarun Bhagat Sangh, is working along with the help of local villagers on
finding solutions for water harvesting. The organization also worked on revitalization of the five
rivers that went dry for a long time. Due to the active participation and hard work of the teammembers, River Ruparel and Arvari River basin
have revived and have become sources of water
after three decades of dryness.
Rajendra Singh has expansion plans in other
villages and also taking up a project on River
Luni. The work done by Rajendra Singh is an
inspiration for millions of others in the nation.
He was awarded Magsaysay Award for
community leadership.
Source -
1. http://www.ecoindia.com/education/water-man-of-rajasathan.html2. http://www.tarunbharatsangh.org/
http://www.moneycontrol.com/news/business/ncrfino-partner-to-overcome-barriers-to-fin-inclusion_383801.htmlhttp://www.moneycontrol.com/news/business/ncrfino-partner-to-overcome-barriers-to-fin-inclusion_383801.htmlhttp://www.hindu.com/2006/07/31/stories/2006073103551500.htmhttp://www.hindu.com/2006/07/31/stories/2006073103551500.htmhttp://www.ecoindia.com/education/water-man-of-rajasathan.htmlhttp://www.ecoindia.com/education/water-man-of-rajasathan.htmlhttp://www.tarunbharatsangh.org/http://www.tarunbharatsangh.org/http://www.ecoindia.com/education/water-man-of-rajasathan.htmlhttp://www.hindu.com/2006/07/31/stories/2006073103551500.htmhttp://www.hindu.com/2006/07/31/stories/2006073103551500.htmhttp://www.moneycontrol.com/news/business/ncrfino-partner-to-overcome-barriers-to-fin-inclusion_383801.htmlhttp://www.moneycontrol.com/news/business/ncrfino-partner-to-overcome-barriers-to-fin-inclusion_383801.html -
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ExpertOpinion
Dont Fight Nature: Yours And Others
The winter and fall seasons* have lived up to their nature. Retail Industry has seen the worst
winter. For the organized retailers this is the first real winter after a very prolonged spring. I
always wonder how we try to alter the nature and the nature comes back to prove its real
nature. Came this winter and you could see white all over. The large trees covered with no sense
of life and the medium ones buried. Interestingly, small retailers, like grass, are flourishing and
seem to have come out winners. Everything seems to have gone into hibernation. Whatever
leaves were there on some of the trees fell during the fall season. Never ever did the Indian retail
industry witness such a wrath of nature. This time of course it was the human nature of greed
and running after a rainbow.
In spite of all this, I firmly believe in the Phoenix. Those with good intent and customer value
based business model would rise from the ashes.
When I look at the players in the industry, I can very clearly see the emerging classification of
retailers. The players need to understand that they have a DNA of their own and any other kind
of behavior would need genetic engineering which may not always be successful. The
classification is based on the size of a firm and its posture as given in the figure -
Dr. Piyush Kumar Sinha is Professor, Marketing and Chairperson, Center of Retailing at the In-
dian Institute of Management, Ahmedabad. He has over two decades of academic and industry
experience. Dr. Sinhas areas of research include retailing and consumer behavior. He can be
contacted at [email protected]
* The article was written in November 2009. Readers are advised to bear that in mind.
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September 2010
ExpertOpinion
Tiger Retailers
Predators by nature, these are large players with killer instinct. They have power and speed. They
would identify their targets and would keep pursuing till they have hunted them down. Very
shrewd in their thought, they are much focused and would not mind using guile. They have the
ability to hunt during night. They are aware of the market and its structure to the T. What adds to
their stature is their majestic look and poise. Like the real jungle, they cannot let another tiger
enter their territory. Any other tiger coming in would face very stiff challenge which may lead to
one of them being killed. A constant warfare would be witnessed, till they have settled their
territory or one of them has been recognized as the leader of the pack. Such retailers are very
aggressive in their customer acquisition plans. After all they are hunters and would hunt even for
customers. They would tend to play the price and promotion game almost as a chore. The low
margin necessitates a large customer base and a large merchandise mix to service them. This
leads to larger store sizes fuelling the need to sell more due to higher costs. Thus, like the tiger in
a jungle, they would hunt the customers and feed on it to the fullest. Their business model is
designed to generate higher share of the wallet in every visit of the customers.
Elephant Retailers
These are large but are not predators. They have power but do not tend to be fast, unlessagitated. They are likable, look docile, and are respected for their unexercised power. They are
playful and believe in being part of a group. They set their target and keep moving on a
designated path. Nobody dare cross their path; not because the fear of attack, but the fear of
being stampeded by chance. Elephants feed of a variety of foodstuff and would seldom destroy
the tree or foliage. Essentially herbivorous, they know that their customers would not run away
and hence would tend to build a longer term relationships than a transaction based relationship
as in case of tigers. Their competitive strength comes from the fact that despite being powerful,
they use their energies to care and service the customers. Even when they match the prices of
other competitors, they use non-price values to attract customers. While due to their large size
and slow movement, they seem to be easy target. But they are not. They are nimble footed when
they choose to be one. As they say, one of the most pleasant sights in the jungle is a dancing
elephant. And the only animal that the tiger is afraid of is the elephant. Their business model is
designed around maximizing the share of the requirement of the customer.
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September 2010
ExpertOpinion
Piranha Retailers
These are small retailers who are week individually but as a school they can eat a whale out
within no time. Their power is their unity. Examples of these were seen when Cadila wanted to
enter the retail business. Just before their launch, the retailer association threatened to boycott
their products. The company had to postpone their launch and could not start their operation for
almost a year. Similar incidences were noticed with the entry of Metro as Reliance. As a move to
counter hypermarkets, some of the shops in the main street of Rajkot adopted the same brand
name. The small retailers in Europe form or become members of buying groups or centers to
achieve the economies of buying and offer product at a competitive rates.
Grass Retailers
These are independent small mom-and-pop stores. Most of the retailers in India would fall into
this category. Like the grass, they survive on small resources and grow everywhere. Unless the
weather is very harsh, they do not die. They live even during peak summers and winters. Even
after being weeded out, they pop up. Their resilience is well known. Even after being stampeded
by elephants they grow up. Most importantly none of the other types; Tigers, Elephants and
Piranhas eat them. They also do not attack and are happy with whatever comes their way. Their
competitive strength comes out of the immense emotional value that they create with theircustomers.
Recognize Your Nature
This classification brings out the fact
that while all of them live in the same
jungle, they have their own territory
(customer segments) and path. Despite
the power of the large retailers, even in
Europe and USA, more than 75% stores
are small. It is also noticed that even
the oldest formats are existing today.
Added to this is the information that
despite being the largest in the world Wal-Mart has just about 12% market share, indicating a
very fragmented industry. With the low cost of entry and exit of the small retailers, the
competitive intensity is high and consolidation a longer process.
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ExpertOpinion
It is an established fact that, as consumers, all of us have a primary retailer and secondary
retailers, indicating that customers derive different values from these different formats, even
when buying the same merchandise. The business models of each of the formats is different,
hence the DNA of each of the types of retailers is different. Thus, even if a company enters
through a hybrid format of large and small store, the way of managing them is very different and
unless the company is designed and structure differently, it would be difficult to succeed. There
are not many examples of retailers across the world that has succeeded with several formats at
one time. Even Tesco and Carrefour started with one format, consolidated their business and
then introduced other formats one by one. Thus, If this is the nature of business, Indian retailers
must realize that (a) they need to co-exist with small retailers who simply cannot be obliterated,
( b) do not bite more that what they can chew and (c) recognize that to change the DNA and
behave like other formats one requires genetic reengineering.
SpirulinaThe Latest And Greatest Superfood defined
Spirulina is a microscopic blue-green algae in the shape of a spiral coil, living both in sea and
fresh water. It is a common food supplement produced primarily
from two species of cyanobacteria: Arthrospira platensis, and Ar-
throspira maximaProtein
Spirulina contains an unusually high amount of protein with,
between 55% and 77% by dry weight, depending upon the
source. It is a complete protein, containing all essential amino
acids. Apart from essential amino acids it also contains, vitamins,
minerals, pigments, essential fatty acids.
Spirulina has been proposed by both NASA and the European Space Agency as one of the pri-
mary foods to be cultivated during long term space missions.
Key Features of Spirulina tablets are:
One 3 g (6 x 500 mg tablets) serving supplies the
nutritional equivalent of TWO servings of
fresh vegetables!
Rich in antioxidants
Boosts energy and cellular health
More than 60% easy-to-digest all-vegetable protein
Rare food source of the essential fatty acid GLA
References:
1.http://www.relfe.com/
spirulina_health_benefits.html
2.http://en.wikipedia.org/wiki/Spirulina_
(dietary_supplement)
3.http://www.feralfoods.org/Spirulina.html
http://www.relfe.com/spirulina_health_benefits.htmlhttp://www.relfe.com/spirulina_health_benefits.htmlhttp://en.wikipedia.org/wiki/Spirulina_(dietary_supplement)http://en.wikipedia.org/wiki/Spirulina_(dietary_supplement)http://www.feralfoods.org/Spirulina.htmlhttp://www.feralfoods.org/Spirulina.htmlhttp://en.wikipedia.org/wiki/Spirulina_(dietary_supplement)http://en.wikipedia.org/wiki/Spirulina_(dietary_supplement)http://www.relfe.com/spirulina_health_benefits.htmlhttp://www.relfe.com/spirulina_health_benefits.html -
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CampusH
ues
Biodynamic Agriculture In India
Amid the whole hullaballo of sustainable agriculture and organic agriculture, yet another name
has come to join the queuebiodynamic agriculture. Its proposers say it is a mix of art and
science of sustainable agriculture. Although it is an age old debate about soil being living or
non-living, they consider soil to be living as a worker on the farm. Biodynamic agriculture
involves certain principles and practices for healthy soil, plant and food for human beings and
feed for animals. In this system, energies from cosmos, mother earth, cow and plants are
systematically and synergistically harnessed.
So what is it all about? How are farmers taking it? How is market recognizing it? Is it profitable
enough to practice this mode of farming or its just like the corporate social responsibility type of
concept? Lets walk through this page to find answers of these few questions.
Bios means life and dynamos means energy, so here comes the word biodynamic which says
about keeping the nature forces at balance while producing food which will nourish and vitalize
humanity. By now, it must be clear to the readers that it involves using all the organic methods of
farming i.e. fertilizers, pesticides and most of the inputs which are generally used in their
chemical form. But it has some other features also which differentiates it from organic
agriculture. In biodynamic agriculture, people plan their activities according to lunar calendar i.e.
right from ploughing, sowing to harvesting, everything is planned with lunar calendar to have the
right balance of all energies in their farm ecosystem.
Jyotsna Kumari, PGPABM-II, IIM-Ahmedabad. The Author can be contacted at
[email protected]. You can also write to [email protected]
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CampusH
ues
Biodynamic agriculture provides a lot of benefits to the farmers though its a slow process and
takes time to show results. Farmers are slowly realizing its benefits. Here are some favorable
results obtained from biodynamic agriculture:
Biodynamic agriculture is a relatively new concept. It was introduced in India as late as 1993. It
has a formal association called Biodynamic association of India (BDAI) which certifies the farms
which are practicing Biodynamic agriculture and the produce of such farms get the label of being
biodynamic products which has great significance in the exports market. It is widely practiced in
various places including the tea gardens of Darjeeling, Maikaal cotton project in Madhya Pradesh,
South India (Singampatti Oothu), Iskcon farm, Nandavan Estates etc. This association also gives
training to farmers through some formal courses.
To put it in a nutshell, it seems like this unique mode of farming is here to stay and give new life
to the soil and agro-ecosystem of the farms where it is being pursued successfully. And the
emergence of new markets with environmentally sensitive customers will only add to it s growth.
References
1.http://www.biodynamics.in/
2.http://www.fao.org/es/esc/common/ecg/278/en/Pathak.pdf
3.http://www.agricultureinformation.com/mag/?p=6404.http://planningcommission.nic.in/aboutus/committee/wrkgrp/wg_organic.pdf5.http://www.i-sis.org.uk/biodynamicFarming.php
http://www.biodynamics.in/http://www.biodynamics.in/http://www.fao.org/es/esc/common/ecg/278/en/Pathak.pdfhttp://www.fao.org/es/esc/common/ecg/278/en/Pathak.pdfhttp://www.agricultureinformation.com/mag/?p=640http://www.agricultureinformation.com/mag/?p=640http://planningcommission.nic.in/aboutus/committee/wrkgrp/wg_organic.pdfhttp://planningcommission.nic.in/aboutus/committee/wrkgrp/wg_organic.pdfhttp://www.i-sis.org.uk/biodynamicFarming.phphttp://www.i-sis.org.uk/biodynamicFarming.phphttp://www.i-sis.org.uk/biodynamicFarming.phphttp://planningcommission.nic.in/aboutus/committee/wrkgrp/wg_organic.pdfhttp://www.agricultureinformation.com/mag/?p=640http://www.fao.org/es/esc/common/ecg/278/en/Pathak.pdfhttp://www.biodynamics.in/ -
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ExpertOpinion
FDI in multi-brand retailing in India: Issues and
Implications for Smallholders
Introduction
The discussion paper put up by the Department of Industrial Policy and Promotion (DIPP) for
public discussion and comments describes the various aspects of the Indian retail sector like its
size and nature, growth over the last few years, and
its economic and social significance besides the limi-
tations of the present setup before going into posi-
tive and negative implications of Foreign Direct In-
vestment (FDI) in retail sector based on the recom-
mendations of various committees, studies, and
bodies- both academic and business/political and
official and non-official. It, then briefly summarizes
the experience of other developing countries like
China, Thailand, Russia, Chile, and Indonesia with FDI in retail including the policy on FDI in retail.
After this, it goes on to make an argument for FDI in retail trade in India and lists issues for
discussion. This article discusses the existing domestic perishable produce supermarket
experiences in India from a smallholder perspective in section 2 followed by the Asian experience
in section 3. It concludes with discussion of regulatory issues and mechanisms for protecting the
interest of smallholders in the presence of supermarkets.
The Indian Food Supermarket Experience
The DIPP papers concern about producers share in consumers rupee being lower in India than
in other countries is really not so valid as, in value added products, it is not percentage share, but
the absolute net surplus which a producer gets which matters, because even after getting a
higher share of consumers price, s/he may still make a loss. The operations of fresh food retail
chains in India have not made any difference to this producers share in consumers rupee so far,
Dr. Sukhpal Singh is Associate Professor in Centre for Management in Agriculture at the
Indian Institute of Management Ahmedabad, having Ph.D.(Economics) from ISEC, Bangalore, Dr.
Singh's areas of research include Agribusiness and Rural Development Policy and Management
with focus on marketing, and the WTO related issues. He can be contacted at
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ExpertOpinion
other than lowering the cost of marketing of the producers, as retail chains have collection
centers in producing areas unlike the Agricultural Produce Market Committee (APMC) markets
(mandis) which are in distant cities and
town. But, these retail chains buy only A
grade produce and only a part of the
farmers output. The farmer ends up going
to the APMC mandi to dispose off the
remaining or rejected produce. Recent
studies across chains and states reveal
that other than lower transaction costs,
the farmers did not realize any major
benefits from dealing with these chains.
The chains were procuring from contact farmers without any contract or commitment to buy
regularly. Further, it was relatively large and/or resourceful farmers who were working with the
chains, with the exception of just one or two retail chains (Singh and Singla, 2010; Pritchard et al,
2010). Thus, the involvement of supermarket chains with producers was low and there was no
delivery of development or improvement in supply chain efficiency.
So far as investments needed in farm sector for improving supply chain efficiency are concerned,
the case of fruits and vegetables is highlighted in the DIPP paper with estimates of wastages and
value addition potential. But, it is important to remember that fruit and vegetable crops account
for only 2% of gross cropped area in India and suffer from lack of production and/or market risk
management at the farmer level as cost of inputs is high, quality standards are crucial, there is no
minimum support price, yield risk is high, and bargaining power low due to absence of
collectivities of growers. Further, by and large, retail chains or food processors or exporters do
not work with smallholders due to higher transaction costs of doing so. Therefore, the noise
about smallholder benefit in high value crops due to retail chain linkage is exaggerated and the
direct linkage is either not there or is pretty weak.
An important question in supermarket chain linkage is: Why do chains, in general, and those in
India, in particular, have only informal arrangements with growers which have come to be known
as contact farming instead of contract farming? There are no formal contracts as the
supermarkets do not want to share the risk of the growers. The system of no written contracts
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and consignments places the financial risks solely with the producers/suppliers and super-
markets/buyers do not run any financial risk as they need to maintain no stocks, carry no price
risk and have no commitment to buy. Besides, they have control over and traceability of produc-
tion, reduced risk of low quality produce, can impose standards and production requirements
anytime, and lower prices as there are no intermediaries. This puts farming businesses under
pressure which is passed on to the workers on the farms, who are often women, which results in
deteriorating work conditions, very low pay, and casual employment (Stichele et al., 2006).
The implications of the rise of supermarkets for farmers do not come from the type of store but
from the methods of procurement used and the quality standards applied. Supermarkets do not
use one channel of supply, they have multiple channels through the system of category
management and suppliers range from spot markets, or traditional wholesalers to preferred sup-
pliers and direct contracts with independent large growers, with the latter two increasing in im-
portance. Carrefour, Malaysias fresh fruit and vegetable supply chain was made up of
wholesalers (41% of total supplies)), semi-direct suppliers (wholesalers and suppliers) (41%), and
direct suppliers (18%). Similarly, GIANT obtained its supplies from multiple channels like farmers,
Federal Agricultural Marketing Authority (FAMA), contract growers and wholesalers, which were
delivered at its distribution centres in Malaysia. In 2002, it had 200 vegetable suppliers, whichcame down to only 30 in 2004 which included specialized wholesalers, general wholesalers,
farmers with oral contracts, and suppliers without contracts. In Thailand, similar changes have
been seen following the introduction of the TOPS distribution centre which had 250 suppliers to
begin with (Chen et al, 2005). This is known as supplier rationalization in supermarket
terminology. Though supermarkets initially offered higher prices to producers than those offered
by traditional channels, but farmers incurred extra costs like processing and packaging,
marketing, transport, and other transaction costs unlike their counterparts in traditional channels
(Cadilhon et al, 2006).
Regulation of food supermarkets
The biggest fear of allowing FDI in retail trade in
India is not that the FDI per se is worse than
domestic corporate investment for farmers; it is
that the government and its agencies may not
be able to regulate and monitor the operations
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of the global retailers. If the monitoring of wholesale cash n carry stores so far is anything to go
by, there is no regulation and the norms are being flouted openly at the store level by the
existing players who do retailing while being wholesalers.
Given the Asian and the Indian experiences, there is need to limit buying power of the
supermarkets by strengthening the competition laws. If contract farming is only an extension of
the flexible production systems prevalent in industry to farm production, then it is only logical to
extend legal provisions on the lines of Japans Fair Trade Commission with necessary
modifications to farming contracts. The Indian model contract farming agreement under the
amended Agricultural Produce Marketing Committee Act (APMC) 2003 is quite fair in terms of
sharing of costs and risks between the contracting agency and the grower. But, it leaves out
many aspects of farmer interest protection like delayed payments and deliveries, contract
cancellation damages if producer made firm specific heavy investments, inducement/force/
intimidation to enter into a contract, disclosure of material risks, competitive performance based
payments, and sharing of production risks.
There is a need to reduce the vulnerability of the growers due to fluctuations in market prices by
offering minimum purchase prices, not market based premiums as is being done by the chainsand other contracting agencies now. The essence of contract farming, among other things, is a
pre-agreed price which reduces farmers market risk. But, market price based price no way
reduces the farmer risk. Also, provisions for legally binding and clearly worded rules for fair
treatment of suppliers, an independent authority like a retail commission to supervise and
regulate supermarkets for supplier, consumer and labour aspects and support to local retailers,
are required. This kind of agency should ban buying of products below cost and selling below
cost, improve local traditional markets for small growers, delay the pace of supermarket
expansion, establish multi-stakeholder initiatives in the chains and provide support to small
producers. On the other side, the farmers organizations and the NGOs need to monitor and
negotiate more equitable contracts with the supermarkets. Government should also play an
enabling role by legal provisions and institutional mechanisms, like helping farmer co-operatives,
producer companies and producer groups, to facilitate smooth functioning of the contract
farming system, and not intervene in contracts directly.
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References
Bukeviciute, L, A Dierx and F Ilzkovits (2009): The Functioning of the food supply chain and its
effect on food prices in the European Union, European Commission, Directorate-General for Eco-
nomic and Financial Affairs, Occasional Paper no. 47, European Communities.
Cadilhon J-J, P Moustier, N D Poole, P T G Tam and A P Fearne (2006): Traditional vs. Modern
Food Systems? Insights from Vegetable Supply Chains to Ho Chi Minh City (Vietnam),Develop-
ment Policy Review, 24(1), 31-49.
Pritchard, B., C. P. Gracy and M. Godwin (2010) The Impacts of Supermarket Procurement on
Farming Communities in India: Evidence from Rural Karnataka, Development Policy Review, 28
(4): 435-456.
Chen K, A W Shepherd and C da Silva (2005): Changes in food retailing in Asia-implications of
supermarket procurement practices for farmer and traditional marketing systems, AMMF Occa-
sional Paper 8, FAO, Rome.
Singh, S (2009): Organic Produce Supply Chains in India-organisation and governance, Allied.
New Delhi.
Singh S and N Singla (2010): Fresh Food Retail Chains in India: Impacts on Small Primary
Vegetable Producers and Traditional Fruit and Vegetable Retailers, Final report, CMA, IIM,
Ahmedabad, April.
Stichele, M V, S v Wal and J Oldenziel (2006): Who reaps the fruit? Critical Issues in the Fresh
Fruit and Vegetable Chain, Centre for Research on multinational Corporations (SOMO), Amster-
dam, June.
Some Facts
India is the third largest market for alcoholic beverages in the world.
Largest market for packaged foods is for packed tea, followed by packaged biscuits and
then soft drinks.
In India, food is the largest segment of retail industry. There are about 3.7 million stores
with a turnover of 7400 billion.
Indians spend about 51% of their income on food, Americans 10%, French 18% and British
22%
Other than fruit, honey is the only natural food that is made without destroying any kind of
life.
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Achieving 20% biofuels blending: All Smoke and No Fire
The recent decontrol of fuel prices will now make oil price spikes a
regular feature which we might have to deal with. With India
fulfilling more than half of its crude requirements through imports
which form 32% of the total imports, biofuels are gaining
increased public and scientific attention, driven by factors such as
the need for increased energy security, and concern over
greenhouse gas emissions from fossil fuels.
The National Policy on Biofuels announced by the Government of
India in September 2009 is loosely based on the National Biodiesel
Mission submitted by the Planning Commission of GOI in 2003
(Altenburg et al. 2009). The National Policy on Biofuels clearly reflects high expectation of GOI for
biofuels to address two important developmental problems, i.e. meeting rapidly increasing
energy demand and stimulating rural development for poverty alleviation.
The major policy instrument is very ambitious blending mandate, i.e. a minimum 20 per
cent blending mandate for both diesel and petrol with biodiesel and bio-ethanol, respec-
tively, across the country by 2017 implying a 30 times increase in the current plantation.
Setting minimum purchase prices for biofuels and minimum support prices for feedstock to
encourage biofuels and fuel crop production and to promote rural development.
As a whole package, this policy clearly reflects the ambition of GOI to revitalize rural economy
through significant scale of production of fuel crops (mainly Jatropha Curcus and Pongamia) on
marginal land, but it entails high uncertainty. Against this high expectation, the production of
biofuels in India is still at an infant stage and the current production level is negligible.
Secondly, feasibility of fuel crop production on marginal land is questionable. The National Policy
on Biofuels assumes that Jatropha Curcus can grow on marginal land without watering norfertilizing, but the accumulating evidence suggests that commercially viable yield requires good
Akansha Saxena, is a student of SIIB, Pune. The author can be contacted at [email protected].
You can also write to [email protected]
http://en.wikipedia.org/wiki/Energy_securityhttp://en.wikipedia.org/wiki/Greenhouse_gashttp://en.wikipedia.org/wiki/Fossil_fuelhttp://en.wikipedia.org/wiki/Fossil_fuelhttp://en.wikipedia.org/wiki/Greenhouse_gashttp://en.wikipedia.org/wiki/Energy_security -
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agricultural practices as well as appropriate condition of crop land (Biswas et al. 2010). The long
gestation period of at least three years (in the case of Jatropha) is another reason for the rather
slow development of the biofuels sector in India.
Thirdly, availability of land and water are quite severely
limited in India and drastic increase of fuel crop production
may negatively affect food supply.
Apart from this, the existing policies in hand such as
providing heavy subsidies on the price of conventional
fuels particularly diesel, keeping it artificially low do not
support the production and use of biofuels in India.
The major cultivation practices for biofuels include:
Government-centered cultivation, characterized by
cultivation on government (forest and/or revenue) and communal land, government as
risk-taker, and social motivations (employment generation for the rural poor, increasing the
national forest cover, and protection of the soil from further degradation). Farmer-centered cultivation, characterized by cultivation on private land, shared risk between
government, farmer and private processing companies, and the objective of developing
additional sources of income and/or new energy sources to sustain farmer livelihoods
without incurring major investment risks.
Corporate-centered cultivation, characterized by large-scale cultivation, private oil companies
as the main risk-taker, and the objective of achieving high returns on investment.
The main objective of corporate investors engaging in the biodiesel sector is to maximize
productivity and returns on investment. This objective implies the main potential of corporate-
centered cultivation: Large-scale investments in proper agricultural practices and R&D on TBOs
can boost the supply of biodiesel and possibly allow for spillover effects to other producers.
The effects of large-scale plantations on rural development may be far reaching but they are
ambiguous. On the one hand, they have the potential to generate employment and expand green
cover substantially. On the other hand, the need for productivity maximization may lead to
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monocultures and environmentally harmful use of inputs. Additional risks relate to the possibility
that corporate investors may invest on land that was previously used by the local poor, jeopardiz-
ing income sources and local food production.
The promises seem to have been made, the policies formulated and the committees set into
motion, but the groundwork still seems to be absent. A mere Rs 34 per litre procurement price
for biodiesel does not even cover the production cost. Will this be enough to increase supply by
2017? The common sense says No but the babus beg to differ.
New Interesting Innovations in Food Industry
Nanotechnology in Food - Flavor Changing Candy: Yes, when you put these babies in your
mouth, the flavors will change as you suck on it, like magic. It comes in 3 flavors (Apple, Grape
and Soda) and they each change to a different flavor after consumption. Japanese confectionery
company Kanro has introduced this product.
New Goody Good stuff sweets launched in the UK made using bio-gum: A new range of
gummy sweets made using pioneering techniques and natural fruit and vegetable extracts for fla-
vouring and colouring, the range alleviates the need for meat based gelatine.
New vending machine delivers a pizza in minutes:A pizza vending machine which can make
the classic dish from scratch in three minutes and costs around 3.30 has been launched in Italy.
References:
Altenburg T. et al., Biodiesel in India,
German Development Institute, 2009
National Policy on Biofuels, Govern-
ment of India
Gonsalves Joseph B.,An Assessment of
the Biofuels Industry in India, United
Nations Conference on Trade and
Development, 18 October 2006.
http://www.foodtechie.com/2009/10/changing-candy-does-just-that-it.htmlhttp://www.fdin.org.uk/2010/07/new-goody-good-stuff-sweets-launched-in-the-uk-made-using-bio-gum/http://www.fdin.org.uk/2009/03/new-vending-machine-delivers-a-pizza-in-minutes/http://www.fdin.org.uk/2009/03/new-vending-machine-delivers-a-pizza-in-minutes/http://www.fdin.org.uk/2010/07/new-goody-good-stuff-sweets-launched-in-the-uk-made-using-bio-gum/http://www.foodtechie.com/2009/10/changing-candy-does-just-that-it.html -
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Featured
Opportunities and Challenges in the Indian Dairy Sector
India is the largest producer and consumer
country of liquid milk in the world in volume
terms. The total milk production in India cur-
rently stands at 112 million tonnes in year 2010
and has grown at approximately 3.5 percent per
annum for the last decade. India offers a unique
combination of a large existing market with an
established dairy culture and substantial growth
prospects driven by income growth and the
introduction of value added products. The organised dairy sector, estimated to be INR 457 billion,
is expected to expand between 15%-20% over the next five years. Growth of organized retail
industry in India is resulting in the development of front and back-end infrastructure. Increase in
different food service formats is also driving out-of-home consumption of dairy products.
Increasing incomes, improved lifestyles, increasing health consciousness as well as need for
convenience are leading to a steady consumer shift to branded packaged products of high
quality.
Milk demand in India, projected by National Dairy Development Board, will be c. 180 million
tonnes by 2020. While the Indian dairy market offers enormous growth opportunities, clearly the
realization of this potential relies on securing enough milk at an affordable price. The local supply
base will struggle to keep up with potential demand unless appropriate investments are made.
While farmers have done an admirable job of keeping pace with demand in the past, in recent
years this has become more difficult to achieve. Poor monsoons in 2009 had led to lack of
adequate domestic supply of milk. As a result, in 2010 the Indian government allowed duty free
import of certain products to ensure the market remained balanced.
Improving milk yield per cow remains the key challenge, as most farmers do not have thefinancial resources to increase the number of cattle. Indian cows on average yield 980 kilograms
Mr. Shiva Mudgil is an IIM Ahmedabad alumnus from the PGPABM 2005 batch. He is presently
working as a Dairy Analyst with Food & Agribusiness Research and Advisory (FAR) division
of Rabo India Finance Ltd. He can be contacted at [email protected]
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of milk per annum, less than half of the global average. It is also difficult to source quality feed
throughout the year, with a shortage of around 34% of green fodder, mainly due to the
prioritization of land used for growing crops for human consumption. The cost of producing milk
in India has already increased substantially in recent years; with cattle feed prices leaping 70-80%
in the last two years.
The Indian dairy sector will not only have to find a way of sourcing enough milk at affordable
prices in coming years, but it will have to embark upon the reconfiguration of its supply chain.
With vast majority of milk produced by farmers with just a couple of cows each, achieving
delivery of high quality milk, and efficiently, to the factory gate is extremely difficult.
Hand-milking is still predominant at farm level and results in a high bacteria count in raw milk.
Lack of supply chain infrastructure such as Bulk Milk Coolers between farm and dairy plant has
restricted the reach of quality milk to dairy plants for processing. Adulteration of milk between
farm and factory gate is also not uncommon in the informal sector. Only 20% of the total milk
produced is processed by organized players.
Currently less than less than two percent of total milk production is procured through dairy
farms. Part of the answer may lie in establishing larger farms. Extension activities like qualitybreed development, feed availability, proper hygiene along with infrastructure for immediate
cooling and storage of raw milk before its processing can be easily implemented with minimal
overheads compared to the option of servicing fragmented mass of small and marginal farmers.
However, the business viability on a large scale is still to be established, given that for small farms
the cost of labour is not really fully factored into the price of milk.
While Indias milk demand has increased significantly over the last two decades, issues like the
lack of adequate back-end infrastructure, huge unorganized market and restricted global trade
movement have made many players taking a cautious approach. Overall, while the Indian Dairy
sector offers immense opportunities, the above mentioned challenges must be overcome to
successfully engage in India.
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Winning the rural mind
Introduction
With growing size and demand base, the Indian rural market offers great openings to
marketers. The rural markets form an important part of the total Indian market as two-thirds of
countries consumers live in rural areas and almost half of the national income is generated
here.
With great opportunities come great challenges too. There is nothing qualified as Real Brand
Success in rural set up. Fast growing brands in urban markets see disastrous ends in rural
markets. The often failed companies even qualify rural market success as nothing but luck. The
companies which understand the social dynamics and attitude variations within each village,
succeed to create brand successes. Hence, any company cannot simply enter the market and
walk away with a substantial piece of share. Lately, the Information Revolution has helped
bridge the gap between the brands and their information to the rural customer, thanks to the
penetration of cable and satellite channels which have brought down the world at the finger
tips of the common man. But the picture is not that all rosy. There is still a wide divide in the
rural and urban psyche. While their ethos may be the same, their manners, lifestyles and
languages are still quite different. Therefore, the marketers need to develop a completely
different set of marketing mix strategies to win the rural market.
Rural Communication
Brand Managers often forget to take care of the Communication Strategies which play a very
vital role in rural set up. A simple local language which is devoid of jargons is the best for rural
communication. Communication has to take care of the regional disparities. Companies should
concentrate on regions with high population density and use non-traditional methods/
mediums of advertisings and promotions. There is also a need to carry rigorous studies in
targeted rural areas and then make communication strategies specific to particular areas.
How to hook the rural audience: Use of unconventional media
Some of the unconventional media which had been used to trap the rural psyche are as follows:
Saiket Mondal, is a student of Indian Institute of Management, Lucknow. The author can be con-
tacted at [email protected]. You can also write to [email protected]
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When Castrol entered in rural West Bengal, it painted the
Castrol logo on both sides of motorized launches and
ferries which used to ferry people across the distributaries
of the Ganges. Wall painting, though banned in urban
areas, is another effective medium that can be used for
advertising in the rural market as it is considered a status
symbol in rural India to get ones shops and houses painted.
In fact, HUL tried this for Lifebuoy and Wheel, and off late
Coke has also followed suit.
HUL went with its famous Vim
Bar Challenge in the rural districts, where the sales people
demonstrated how efficient Vim Bar was in cleaning utensils. Even
Kissan Tomato ketchup used dummies to foray into rural India.
Eveready tried a strategy through nautankis (village dramas): In
between nautanki performances, the lights used to go out. An
artiste carrying a torch appeared. The ray of light used to be so
bright that it disturbed actors on stage and one said, Who was
there? What was it that was shining so brightly? That wasEveready trying to make its mark ...
There is also a huge need for personal selling in rural India. For promoting Annapurna Salt,
Hindustan Unilever Limited educated people on the benefits of iodized salt and distributed free
samples. Companies like Star TV, LG and Britannia have used postal stationery (inland letters, en-
velops and postcards), vans and letterboxes for brand communication.
Though conventional media like TV and Radio help in developing a national reach for brands, the
use of unconventional media is indispensible in rural set up. Conventional media, in most cases,
fails to generate the desired change in attitudes of the rural consumers. The message may be
very good and the media may have good reach, but the rural consumers may not be able to
identify themselves with the advertisements. In this scenario, unconventional media seems
appropriate to win the rural mind.
The best part:
The best part about Rural Advertising is the faster responsiveness of rural customer due to his
interest and receptive nature. Arun Kumar of Aegis Media suggests that rural people would
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embrace mobile marketing at a faster rate than its urban counterparts. This is because of the
unique element of communication offered. He further suggests that once there is decent
penetration of mobile phones into rural India, mobiles would become the next platform for
advertisements in rural areas.
In fact Nokia recently soft-launched Life Tools, a new service for the rural population in India that
provides educational and agricultural information through entry-level handsets. The language
and information has been customized according to different regions. This would totally change
the advertising landscape in rural India.
The road ahead
Just a few years back, the rural market was given a step-motherly treatment by many companies
with firms taking the shortcut route of pushing the same urban communication by merely
translating the advertisement copy into a local one, but things are now changing for the good.
The greatest challenge for advertisers and marketers continues to be to understand the mindset
of the rural consumers. On an average the attitude of the villagers towards various non-
conventional and folk media has been found to be very positive and approving. With
conventional media like radios and television making entry into rural areas, marketers can use asensible mix of conventional and unconventional media. Further, it is important to be glued to
the region-specific requirements and cater to the typical tastes of the regional consumers, both
in terms of product offerings and communication packages. Therefore, marketers who
understand rural consumers and fine tune their strategies accordingly, are the ones who will
succeed in future.
References:
1. Sanal Kumar Velagudhan (2008), Rural MarketingTargeting the Non-urban Consumers,
Response Books, a division of Sage Publications.
2. Varma and Aggarwal (2008), Rural and Agricultural Marketing, Forward Publishing Com-
pany.
3. Parameswaran A M G (2008), The Great Indian Rural Consumer, The Business Standard(Online), February 15, accessed February 26, available at: http://www.business stan-
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Rural Entrepreneurship - Exploring Opportunities
Introduction
Encouraging rural entrepreneurship has been going on since a long time in India and world
over. In the year 2000, Hindustan Lever Ltd., started reaching millions of rural Indian
population with an innovative idea of empowering rural women to develop into entrepreneurs.
Started with Andhra Pradesh in year 2003 by encouraging woman named Mrs. Nandyala, who
took a $200 loan from a state-run microcredit agency to start her business, the work was
challenging and the returns modest -- $16 a month is her average profit. From 2000 to year
2005, 30% of revenues of the company came from its rural market.
With a big market still waiting to be captured, revenues that can be generated from rural India
are immense. 70 percent of worlds second largest population still lives in villages. As most of
women engage only in household
work, still a lot of work needs to be
done for generation of small jobs,
business opportunities and income for
the poor. With more and more
companies targeting rural India
(Specially Consumer Goods Sector),
more initiatives like one by Hindustan
Lever are yet to come.
In Bangladesh, according to the Financial Express, managing director of Bata Shoe Company
(Bangladesh) Ltd, J D Hearns, and assistant country director of CARE Bangladesh, Stav Zotalis,
signed the renewal agreement. Bata and CARE are working together to help increase the
income generating capacity of women and create new job opportunities through door-to-door
sale of Bata products. The number of women working under this program was 3000 by the year
2009.
Generating Rural Entrepreneurship and Economic Profits
Finance and credit services reached rural India more efficiently with MFIs when social cause
was linked to economic profits. More and more funds were invested from commercial banks in
Saurabh Dhawan, is a student of IMT Dubai. The author can be contacted at
[email protected]. You can also write to [email protected]
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MFIs. Standard Chartered Bank India is in deals with SKS Microfinance & Spandana Sphoorty
Financial Ltd, and from capital market as well with NCD of SKS worth INR750 million (US$15
million) listed on BSE. Similarly rural entrepreneurship programs have to come up as a social
cause with a mix of economic profits.
Only Non- Profit NGOs and Government organizations will not be able to reach to and provide
the much need entrepreneurial training in rural India. To extend the opportunity of a regular
income source to all, a model of economic profits with social cause has to be developed in rural
entrepreneurship programs as in case of
credit and financial services extended by
MFIs.
Rural Entrepreneur Program and MFI
Due to the low population density, opening
branches in the rural areas is not economical
for the MFIs. Thus alternatively agents can
be really helpful for MFIs to extend their
reach to the unreached and benefit of the
credit can be reaped by many. Here, agents are not only post offices and cooperatives but people
in the villages. If proper training and knowledge is given to the people in the village, the
penetration of the MFI can be much deeper because a villager with local dialect and same cast
will be in a better position to make people understand the usefulness and impact of micro
finance on their earnings.
Agents will prove to be cheaper than setting up small sale points in different locality and will
impart job knowledge to the rural population. This will be extremely helpful for microfinance in
expanding their reach and reducing cost of setting up branches.
Rural Entrepreneur Programs and Organizations
With a large number of micro finance institutions giving loans to the poor for starting something
of their own, opportunities offered by the organizations such as BATA in Bangladesh and
Hindustan Lever Ltd. in India can prove to be a sustained source of income and secured
investments for MFIs. Programs such as regular milk collection by companies like AMUL in India
http://www.standardchartered.co.in/personal/home/en/index.htmlhttp://www.spandanaindia.com/http://www.spandanaindia.com/http://www.standardchartered.co.in/personal/home/en/index.html -
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have helped the poor to take loan to buy cows and generate regular income.
Formal training on the sales and marketing and lessons on animal hygiene and care are given.
This requires initial investment from the organization but long term revenue generation from the
rural Indian consumers will cover the cost of training in long term.
McCain Foods India in the year 1997 started to invest in potato fry business in India. Research
was done on Indian potatoes and new breeds of potatoes were developed for the right quality of
potato fry products. This initiative not only proved helpful for the company in getting the right
quality of potatoes but also helped farmers learn about new varieties of potatoes and better
profits linked to them. This is yet another example showing how investment in tainting of
villagers can prove to be a long term benefit for the company and the poor.
Conclusion
For social and economic growth of the poor, job and business creation is as important as credit
reach to the rural areas. Organizations conducting Rural Entrepreneur Programs will work
wonders because of long term return of the investment to big organizations. It will not be a
profit only for organizations but will help poor develop sustained source of income for the poor
as well.
References
1. http://www.leathermag.com/m/fullstory.php/aid/13482
2. http://www.microfinancegateway.org/p/site/m/template.rc/1.9.35005/
3. http://www.thaindian.com/newsportal/business/gujarat-potato-plus-mccain-foods-is-mcdonalds-
indian-french-fry_10025269.html
http://www.leathermag.com/m/fullstory.php/aid/13482http://www.microfinancegateway.org/p/site/m/template.rc/1.9.35005/http://www.thaindian.com/newsportal/business/gujarat-potato-plus-mccain-foods-is-mcdonalds-indian-french-fry_10025269.htmlhttp://www.thaindian.com/newsportal/business/gujarat-potato-plus-mccain-foods-is-mcdonalds-indian-french-fry_10025269.htmlhttp://www.thaindian.com/newsportal/business/gujarat-potato-plus-mccain-foods-is-mcdonalds-indian-french-fry_10025269.htmlhttp://www.thaindian.com/newsportal/business/gujarat-potato-plus-mccain-foods-is-mcdonalds-indian-french-fry_10025269.htmlhttp://www.microfinancegateway.org/p/site/m/template.rc/1.9.35005/http://www.leathermag.com/m/fullstory.php/aid/13482 -
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Agri-Business Club, IIM Ahmedabad The Hyphen
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AGRI-BUSINESS CLUB
Vaibhav Kumar
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