ARUN FIRODIA’s Views on Rural Transformation

Arun Firodia, chairman, Kinetic Group keeps on expressing his views on rural transformation. It interests me. I am sure his ideas carry some freshness to bring out revolutionary changes in the quality of life in Indian villages even for governments with limited resources. I have met him once, but I don’t know if he has some root in village and first hand experience or he is just a thinker of the subject only. Here is the gist of some key points mentioned in his latest lead article in ‘Times of India’ editorial page:

World trade in food products, seafood, herbal products and flowers is about $395 billion. India ought to have a 20% share in this market, since India possess 20% of world’s irrigated land. Fortunately, nature has provided India with large tracts of fertile land, nine to 10 months of sunshine, average rainfall of over 1,000 mm and great biodiversity. India must leverage this to focus on export of a variety of processed food, seafood, herbal products and flowers. Rural India can become the world’s agribusiness powerhouse.

Banks can provide such finance and insurance companies the necessary cover. The government should exempt agribusiness units from income tax, sales tax and excise duty.

More than 25% of the farm produce is lost in storage and transportation. A chain of cold storages can be of great help. As I know government in many villages in Bihar got constructed ‘godowns’ in 70s or 80s that had never been used and are now depilated. I wish all the future rural projects in a village get developed in a cluster. Going by my own village or as I have seen in villages around mine, all the government owned buildings such as schools, panchayat, and godown are in different locations away from the main habitation. If they would have been one single cluster, it could have better use as well as supervision of their status by villagers.

Food Bank
Mr. Firodia proposes a new arm of the banks that are having some 68,000 branches all over the country called ‘food bank’. A food bank would own a cold storage unit and function like a safe deposit vault. A farmer could deposit his produce (or milk) in a food bank when he needs to and withdraw it whenever he chooses. A food bank should give him a loan against this security to help him buy seeds and fertiliser for his next crop.

Electronically wired food banks can act as commodity exchanges and help the farmer in deciding the right time and the right destination to sell his produce.
A food bank can lend to agribusiness units to help them modernise to international standards. It can even open a retail counter. A food bank can provide all these services at a much lower rate than the middlemen. That would increase farmers’ take-home sharply which he can then invest in his agribusiness.

Rural Bio-energy Cluster

Oil companies in the country could help create a bioenergy cluster in each village that uses locally available feedstock to produce biogas, biodiesel and ethanol.
India has 1250 million cattle. Cow dung coupled with other farm residue like rice husk can be a source to generate enough biogas. And the rural population can use it for cooking, running agricultural pumps, energising cold storages and powering transport vehicles. Biogas can also help in producing electricity, bio-fertilisers and bio-pesticides. Waste heat from the generating set can help in generating safe drinking water too.

Every village is having a lot of wasteland- a total of 41.5 million hectares in India. Rural population requires empowering to plant some 400 different types of bio-diesel trees like jatropha, neem and karanji. Seeds from these plants can produce enough bio-diesel to meet their requirement of diesel. Bio-diesel and ethanol can be sold to oil companies for further processing and blending with diesel and petrol. Carbon credits under Kyoto Protocol will improve the clusters’ economic viability.
India has 108 million hectares of non-irrigated farmland where farmers can grow sweet sorghum, corn or similar energy-rich plants or grass that can be the source for ethanol to meet our petrol needs.

The Agriculture Finance Corporation has estimated that an agriculture-led strategy can generate 7.5 lakh jobs in Pune district alone. If we implement this strategy in 350 districts we can create 270 million jobs. Banks and insurance companies will do a great social service if they encourage this concept.

With a liberal but responsible rather accountable credit policy and some rural level leadership, every village on its own can become prosperous. The major national political parties, both ruling and those in opposition that claim to believe in developmental politics must have post-election campaign to rebuild the country side on its on resources and must start using its cadre at village level for the projects such as those suggested by Mr. Firodia or other innovative ideas suggested by the grass root levels for improving the local conditions.

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