Re: Indian villages - our strength or our weakness?
Indian villages are no more our weakness. India survived because of its agricultural produce. The indian economy was basically agriculture economy. But villagers in India are no more behind than their urban counterparts. I had written an article on this for our CS magazine. I am attaching herewith the same.
Nandigram, Vidarbha land acquisitions are painful stories of how land acquisition though for industrial betterment may result in violence. New concepts like SEZ, townships, sustainable development are being opposed because corporates in india neglect the rights of the natives staying in villages. But ignoring the native farmers or land owners while developing SEZs, townships, industries cannot escape clashes because of enlightened farmers and land owners demanding recognition for their rights. Traditional rural-urban migration exists in India as villagers seek to improve opportunities and lifestyles. In 1991, 39 million people migrated in rural India to urban India. The rural- to-urban migration has shown a gradual increase, with its share in total migration rising from 16.5 percent to 21.1 percent between 1971 and 2001 along with a slight increase of urban- to-urban migration to 14.7 percent from 13.6 percent over the same period.
One solution for such problems was found by forming of farmers’ company. In Khujner town of Raigarh district of Madhya Pradesh to protect farmers’ interest, a company called the Khujner Agriculture Producer Company (Private) Limited (KAPCL), registered under the Companies Act
has been incorporated. All shareholders and directors of the company too are farmers.
Around 1200 farmers own the company’s stock by contributing Rs. 10,000/- each. The Madhya Pradesh government has provided financial assistance of Rs. 7 lakhs from a special state fund. Also the banks are helping the companies to expand by giving them adequate loans.
People living in these remote areas have come a long way in adopting a more positive approach to livelihood by introducing more market-driven processes at the village level. This is because of the World Bank’s rural livelihood program in India. The Project has raised the agricultural income level of participating families by 66 percent while savings of CIG (community interest groups) households have gone up by 183 percent. Fifteen crop producers’ companies, one dairy and one poultry producer company have been formed with a membership of 44,800 shareholders. These companies have successfully generated a turnover of Rs 4.84 crore. This has resulted in reduction in migration from the rural to urban areas.
Sironj Crop Producers Company Limited, is the first producer company of Madhya Pradesh dealing in agriculture crops like soybean, wheat, gram ginger etc. The farmers are its shareholders and crop productivity enhancement programs & seed programs are run by the company. Many such companies have been encouraged by District Poverty Initiatives program, Panchayat & Rural Development Department, Government of Madhya Pradesh. Similarly, a group of 50 farmers from Punjab and Rajasthan has proposed to form a company “Kudrati Kheti Producers Company Limited” to market their produce directly to the end users.
The Executive director of the company feels that their aim is to build a farmer-based civil society movement for ecological agriculture, environmental conservation and economic sustainability of rural India. At least two lakh farming families have quit agriculture in Punjab alone in the recent years. They have evolved a two-pronged strategy to make farming profitable, one by freeing it from cash exodus by large-scale adoption of input-internalised natural farming. And two, by providing farmers a reliable option for marketing their natural farm produce.” This instance emphasizes the need for such a company to make farming profitable since there is no organisation at the village level in India to support farmers in their marketing initiatives. “
Other success story is of INDIAN ORGANIC FARMERS PRODUCER COMPANY LIMITED under registered Part IX A of the Companies Act, 1956 incorporated on 10th September 2004 in Kerala. The company is running on the concept of patronage of shares. The patronage
of one share is fixed at Rs.40,000. The holder of one share could market his/her own organic products worth a maximum of Rs.40,000. Each individual could purchase more than one share,but will have only one vote, disregarding the number of shares he/she holds. The company
handles only organic products, hence only producers with organic certification are eligible for membership. The company markets organic products through a brand name. The company provides services to both the farmer and the consumer. While the farmer is benefiting from the venues for marketing, the consumer can avail himself of healthier food. Another solution for eliminating such problems can be of making these farmers the stakeholders in the land acquiring company.
One such success story is of the Magarpatta Township Development
and Construction Company Limited (MTDCC) which has made 122 farmer-shareholders partners in progress. Unlike a one-time payment for their parcels of land, the shareholders' get their share as per the market valuations of their holdings that the company buys from them and then develops. Thus, there is a two-part benefit; proceeds from the sale of lands as and when the company decides to develop a project within the township and the revenues from the sale of the finished project such as, a residential block after deducting the cost of the project, both in proportion to their holdings. Similarly City Corporation Limited has entered into Joint Venture agreements with some of the land owners in Hadapsar for providing them revenue as and when the sale proceeds are received apart from paying them a basic price for the land parcels which had been taken for development in the township from the farmer landowners. These form of stake-holding is less alienating and more enriching for the farmer than a currently popular notion of assigning shares to farmers in land-buyer companies, mooted in an
amendment to the Land Acquisition Act 1894. It is also a more attractive form of inclusive growth than any one-time compensation or rehabilitation package or even the promise of employment in a SEZ or township. It is, in short, the best form of stakeholder growth.
The above illustrations are seeds of success which show how rural India is turning its fortune around by adopting modern methods and going corporate. Corporate professionals like Company Secretaries should encourage such ideas in their own native villages to change the
face of rural India.
