The village economy in India is in bad shape and india is a country with majority 70% population living in villages. The reason for this has been largely shifting of all economic activities to urban areas and capitalists intensive economic models. The Centre Govt has been recently looking at this scenario start talking about cooperative models but more with set patterns of few venture limited to Amul type initiatives. Looking at site of the recent formed Ministry in this regard show lack of any clear vision or programme how to realise anything worth vile for rural population in this direction.
http://cooperation.gov.in/ProgrammesAndSchemes.aspx
The state Govts like Punjab has also taken inititave to empower more of its Panchyati system with entrusting owneship of village lands to the village panchayats by amending laws recently. This initiatove can be taken forward by making village centric economic models making optimum use of common land resources and ownership, branding and managemnet in decentralised ways
Background
The Agriculture and dairy has been over time reduced to less profit type profession and eventually resulted in day by day lack of local or even migrant labour participation due to difficulties paying at market rates to labour by land and dairy owners. This has resulted in farmers moving more toward mechanisation and moving to crops and rural based venture less labour intensive.
The lack of extensive Industrialisation and large population without job avenues has forced Govt to come up with scheme like MNREGA to free ration for poor unemployed labour targeting 70% population. This notional social security schemes have still unable to contain massive malnutrition in India with 40% children stunted.
The massive commercialised approach to farming has led to many other problems.
- Ground water depleting.
- Soil condition deteriorating.
- Excessive use fertilizer pesticides.
- Health issues farmers and consumer.
- Glut of grains in market and Govt refusing procurement. Though with war in Ukraine and Global warming there is shortage of grains World over and export houses benefitted presently.
- High prices of other agriculture commodities from vegetables to local fruits of India grown in past in majority terrains locally like jamun, gauva, nimbus etc. These things has been adversely affecting the poor and labour communities.
- Growing of crop and vegetable varieies with more production per acre replacing old varieties with taste and aroma etc.
- Lack of labour trained for labour intensive jobs like harvesting pulses and other diversified crops discontinued.
The approach of commercialisation of various village based economies and making cities middle mans as centre for all economic activities has further resulted in
- Adulteration of milk and spurious milk and milk product market.
- Adulteration of honey.
- Lack of taste and quality with emphasis on production with falling prices and those with paying capacity also have limited options.
- Corporatisation models pushed by govt with contractual farming taking plea of quality parameters etc.
- Lack of quality poultry eggs and meat with over commercialisation, growing birds with steroids in short spans etc
The urban centric economic model has created vast disparity in society with conditions that even the produced basic food grains are beyond reach of majority poor population and presently distributed through PDS to 70%. The farmers are committing suicides and abandoning agriculture or will be forced to abandon with scarcity of water and global warming. This will make things difficult for India with population of 1350 millions to feed and increasing. All this has created an unhealthy imbalanced society with life style and adulteration related diseases and extensive market for dependency on medicines.
Problems Society at Village Level
The bringing in cooperation for any cooperative model among the various segments of land owned and landless society in villages has problems peculiar to Indian society with some variation across the regions/states.
- Feudal mindsets and large disparity in holding of lands and economic conditions.
- Divided society. Caste structure, religious and political affiliation divisions.
- Lack of education among poor and faith on land owners.
- Lack of skills for entrepreneurship among all classes.
- Lack of large financial investment.
- Lack of financial discipline and problems of addiction etc
- The panchayats turning into tug of war among few families and not optimum use of common land and other resources.
- Disassociated selfish educated middle class from villages shifted to cities.
This totally incohesive society at village levels working independently get exploited by 30% urban society which have become hubs for connecting not only the 30% urban society but also the 70% rural society both for economies centric to villages production and industries.
Solution proposed
The creation of any cooperative models, need first the society at villages be more cooperative in day to day activities and become moe cohesive bringing a comprehensive change. The Amul based cooperative society models have limited utility, catering to distant markets and can be just one part of larger cooperating society at each village level in India, which will work as a joint machine.
The core principle of model proposed is that it does not involve aggregation of resources land or equipment, which will neither be possible nor manageable in India. The model involve just creating opportunities for society various segments in the village to undertake various ventures and assure a market for same with ensuring quality and reasonable profits both as producer or exchange facilitator(honest trader).
Further the portion of limited centralised exchange trading activities taken profits be utilised by panchayats for organising society essential services like education health etc considering as localised taxing model. This will also reduce burden of large scale indirect taxes imposed both on producer and provider of services by mutual exchange.
The aim of this cooperating society should be to
- Shift all economic activities possible to Village with maximum exchange of produce and labour services in a just way and proper accounting.
- Ensure quality nutritional food for all members of society within the village and extended to urban population with possible direct marketing or distribution networks.
- Provide equal opportunities for progress for all segments of society irrespective of caste, religion or holding of land.
- Fixing reasonable rates of labour within village and providing all these produce and other services to labour community at reasonable rate. Experts in field can evaluate these exchange rates of produce and labour after due diligence.
- Diversify crops and produce to cater for village participating community first and transfer surplus to urban markets saving on water and soil resources.
- Take charge of activities like public education systems with ensuring better management and even employing additional teachers from village community especially at elementary level in case not provided by the Govt.
- Take on most lucrative segments benefitting village population on priority in initial phases like wholesale medicine at much lower prices for village population etc
- Make Village Centralised Exchange Centre (VCEC) employing own youth within village for produce locally catered to local population at locally fixed price, purity and sending surplus to urban areas. Items mostly produced locally by the village and where non available from VCEC of neighbouring villages, whole sale markets or as VCEC cluster procurement from the producers other states directly. Villages internal production items:
- Dairy Milk and milk products Paneer, butter, Desi ghee, curd,
- Grains and Pulses
- Vegetables and Fruits
- Desi eggs chicken, goats, Fish
- Honey, Sugar cane products Gur, Ghacak etc.
- Corn & products etc
- Fodder or silage can be lifted ex producer
With time the VCEC can evolve as hub and spoke type model with certain centralised stores and in turn warehouses catering to storing items requiring larger populations.
- Move to promoting viable business within the village either individually or as part centralised village run stores with fixed profit margins and with bulk procurement and reduce dependency on urban business centres. This can also be part of VCEC colocated as a separate division or located separately. Where viability of things at single village difficult aggregation of cluster of villages demand and cater accordingly in hub & spoke structure. These items can be added with time in a phased manner with shifting maximum village economy to villages.
- Medicine. Models for how this to be established meeting licensing requirement etc to be worked out. Franchise type models to be developed or clubbed with village clinics.
- Masalas grinding locally replace MDH etc ensuring quality for lower price.
- Fresh snacks like bhujia etc produced locally to replace packaged snacks.
- Washing soaps manufactured initially and slowly moving to bathing soaps paste either manufactured to order or moved to in house units.
- Cold drinks if needed manufactured by units one in a cluster of villages or outsourced ensuring quality etc.
- Procurement of clothes in bulk.
- Importing items like cycles, LED TVs, mobiles etc or purchasing in bulk.
- Getting quality shoes manufactured to order and provide at reasonable price.
The above list is just illustrative in nature and things will be added quickly as the systems will evolve with catering from reliable sources or adding to own manufacturing category. This may look similar Baba Ramdev type model but in hands of large village cooperatives VCEC with purpose to empower them.
- The agriculture appliances and other capital intensive equipment will be encouraged to be optimised with making calculation and planned for buying and holding with certain individual in village and providing paid services to the other at rates fixed by village governing body or calculated by NGO and based on prevailing rates in region.
Execution of Model
There could be an NGO of educated village background placed in high positions in various spheres from Universities to administration. The NGO has to work on details of these models and provide all datas and risk analysis of various things involved with adequate catering to insurance etc
A governing body or Village panchayat and Kissan Unions etc be involved with calling for meeting at each village level and explaining the model to village people.
The demand of local consumption using datas of per person consumption, population, along with present economic condition and condition post implementing the model be calculated. The demand for production in urban areas in vicinity present and future be also assessed.. The major task will be how to distribute the various rural economy based production avenues among the various land and landless population from dairy, poultry(Desi Chicken), vegetables, honey, goats & rabbit farming etc Production of initial basic things like washing soaps, achars, papar etc already some NGOs working and with their help to promote in various communities.
The other major task will be establishing of Village Centralised Exchange Centre. This could be owned by village governing body panchayat or given to a group in village and will involve
- Finding land like Panchayati common Land or arranging land by individual group etc.
- Raising of basic Infra using modular fixing economical designs both building and interiors.
- Training of village youth in managing and tie up on back end initially with help of NGO.
- Financing from financial Institutes and pooling in of own resources with lending from supplier etc.
- Making business model and fixing profit margins etc
- Making models of rasing firm demand by village population and bulk economical centralised procurement.
- Developing hub and spoke model within regions and establishing stocking and supply chain policies for various items etc
Villages Major Economic Activities Present/Future with Urban Population
Dairy Milk & Milk Products
The milk forms the core day to day exchange activity among villages and urban areas. This milk reaches from producer in villages to urban areas both through unorganised sector collection and distribution and organised cooperatives like Amul, Verka type collection and distribution networks. Large scale unorganised processing to milk products take place in urban shops and sold on basis of their personal repute.
The major issue with this exchange activity
- Massive adulteration by middle mans.
- Spurious milk production.
- Demand supply mismatch in winter and summers.
- Quality of milk production at source linked to fodder and animal health.
- Processing of Milk products at urban shops and adulteration.
- Insufficient pricing to producers milk at villages.
- Majority unorganised collection and distribution.
- Organised collection by big (name sake) cooperatives Amul and Verka.
- Producing pasteurised milk involving cumbersome process with more cost addition than value, when majority milk are consumed locally.
Better efficient mechanisms of exchange between producer and consumer especially to urban areas can be developed using Village based collection centres as part of VCEC ensuring quality.
The Milk collected at a particular village can be bulk packed in containers branded under village or cluster VCEC and dispatched to urban areas distribution centres catering a particular locality. Either the village VCEC manpower can undertake distribution door to door in urban contiguous areas or devise mechanisms like sealed containers or machines like Milk ATMs type etc or VCEC owned outlet with freezer facility in city etc to protect from adulteration.
The associated milk products like Ghee, butter, paneer curd etc can also be catered and branded on name of village CVEC or if processed at al level of VCEC hub of multiple villages accordingly. The internal planning, production of quality milk, collection & testing, cater proper fodder for cattle, training for hygienic conditions and veterinary services, breeding etc all be the responsibility of VCEC.
Additional Items VCEC under Branding and deliver direct in Milk distribution vehicle or through long term network of distribution centres in urban areas.
- Atta from quality wheat.
- Coarse grains as substitute to Oats etc
- Rice basmati and other good quality packaged.
- Vegetables & Local fruits
- Sugar cane products quality Gur, Ghachak etc
- Country chicken eggs and meat
- Goats meat, fish and other meat products
- Honey
- Biscuits and snacks bhujia etc
- Pickles, sauce, Jam, papars etc
- Masalas powder range.
This is just a suggestive list in the beginning and can keep growing with time as villages are turned in more manufacturing hubs of industrial products like Laundry Soaps, Toilet cleaner type products which are easy to manufacture for local use and in turn distribution. Forming larger clusters and networks of VCEC in long run and big market access can lead to getting into Surf, toothpaste, shampoos, cold drinks type FMCG products.
Conclusion
The rural India with its devastated economy and bringing in commercialised practices centric to urban markets has proved disastrous for entire society. Th solution is to shift the village economy centric to villages and thus saving the health natural resources and in turn health of dependent human race.
The greed of non producer middleman and corporate houses will otherwise will keep pushing the same to extreme disparity in society and unnecessary mechanisation and limiting the production towards quality for few at cost of starvation for majority. This proposed model is to reverse the damage already done and stop from further deterioration.
The model is based on not moving towards aggregation of land or pooling of central resources which are neither feasible in given Indian society but on cohesive model of mutual cooperation and exchange of produce and services between the rural society at village as entity and surplus to urban society with village community at the centre of exchange(honest trade).
The other traditional cooperative models of only centric to catering service to urban markets like Amul will naturally evolve from this larger cooperating model. The traditional cooperative model will be just a subset or extension of this larger cooperating model of rural economy proposed for further surplus processed for shelve lives to distant clients.
This model of VCEC catering local needs and needs of urban centres in vicinity will only extend its outward reach in future through digital marketing to export to distant and to world markets with passing the max dividends to producers and ensuring international standards compliance and demand supply balance etc.
The model will reduce expenditure by Govt on MNREGA to PDS etc in long run and should be invested for subsidised higher education to village communities to public sector health infrastructure. This village based economic model will reduce the conflicts at the village level to reduction in menace of of drugs and improve in overall law and order situation. This will also reduce conflicts based on caste to political affiliations and make villages a stronger entity organised with politicians also more alert to actual demands at the village level.
This model will also open way for better use of Village common lands (Shamlet lands) whose ownerships has been transferred to village panchayats by amending laws in states like Punjab. Further the organised progressive villages with diversification and balancing demand supply to conserve water resources will further be moving towards building/restoring water bodies like ponds(Chappars) in villages to conserve rain water, arresting fast depleting ground water levels backbone of village economies.