A summary of the Address delivered by Dr M S Swaminathan at the MMA Seminar on “Corporate’s Role in Rural Development” held on 27th March 2007 at Chennai.

I am glad that MMA has taken this theme of “Corporate’s Role in Rural Development” because this is one issue that everyone is talking about. As Mr Tyagarajan said, we should have social inclusion and it is important to think of the 70% of the people. The 2001 census showed that 70% of Indian population is still rural.
I am particularly happy that MMA has taken this theme because what is lacking is the whole question of management; management is one that helps you to get the best out of resources; whether it is human resources, infrastructure, or whether it is a factory. I can see beautiful buildings, beautiful universities, but finally there is nothing at all because management is lacking. Leadership is lacking as to how to get the best out of the people. I think rural India is crying, particularly small farm management revolution is one whose time has come and that is why I am happy that Madras Management Association has started to think about the areas apart from the business opportunities. But I think it is important to know that in terms of peace and security today, in the larger interest of business, in the larger interest of more well to do, we cant have very large divides in this country. It is pretty clear, as mentioned by Dr Montek Singh, according to the document, more than 200 districts in the country are affected by naxalite movements and you are seeing more and more violence. I remember, when I was young once in 5 years one murder story would be much talked about. Today, killings etc., everything have become such common place. On the hand, there are a lot of advances in many area. Why have they not reached the rural India, in spite of the fact that Mahatma Gandhi frequently said, ” Gram swaraj is the pathway to Poorna Swaraj”. We don’t have full independence of the country. unless the villages are also prosperous and self reliant in their basic needs of food, nutrition, health care, sanitation, the basic needs, what Jawaharlal Nehru talked about 60 years ago, and finally some work to do, or in other words employment so that you can earn your daily bread and not to be given your daily bread. We all talk about China. Today China’s conditions have also become different. But when they started the reform process in 1979-80, they started really with the village. They did not start from the town; they did not start from the industry. They started with the agriculture. When you say rural areas, they are human beings; they are not cows and animals as there are only 20% of animal population. But we all forget them, they also need food. In fact, in many cases I have seen, especially in drought in Maharashtra, it is the enriched urea and molasses which saved many animals. So they have an alternative for the bio-mass or another demand, whether it is rice straw and so on. The Chinese started by dividing the people in the village in 3 categories, in their case land is still socially owned and not individually owned. But Chinese started with the philosophy that everyone should have his/her earning capacity. Those who have land, those who do not have land and then the artisans. The primary sector is the dominant sector. The secondary and the third sector are smaller and less significant in terms of economic well being. If you look at our villages and divide the people into three categories, the human beings, I believe rural development is finally human resource development. You should convert and maximize the benefits of this large population. Take portion of land, obviously the productivity and water of the land is important, those who are landless, in our cases many dalits and socially under-privileged sections of the people do not have access to land and finally rural artisans, the various kinds. In all these cases, one can look at what is the role of the Corporate Sector in helping the farming population, in the landless labour population which consist of most of the under privileged population who are the most important, requiring greater attention. If we go to the rural areas, and start looking at the farm population obviously they require 4 kinds of assistance from you; those who have some land, you can teach them some technology; technology both at the production side and post-harvest side, and post-harvest utilization of the bio mass. When we produce about 250 tonnes of food grains; the plants produce another 450 million tons of bio mass. And how are we using it? Are we using it wisely? Are we adding value to the bio mass, for whatever purpose, may be for energy purposes, it may be purely on animal feed also, you can keep a fodder bank. So one can use the bio mass in may ways. Today, it is important to improve the productivity of the land also. The latest data show the marginal farmers are increasing largely because of the land division. When you have a father with 4 sons, the land gets divided in 4 ways. Therefore gradually from every decade, the number of small farms are going up; How do you get the power of scale, the economy of scale to small producers? How do you provide services to them? I think, here some of the management associations can educate in the small farm management revolution. ITC’s e-Choupal, it has become famous all over the world as a method of empowering people on knowledge and markets. They started essentially first with soya bean; As informed recently they willenlarge the concept of e-Choupal to make them into Gyan Choupal, i.e. e-health, e-education, e-commerce or e-governance, whatever is needed, those which are demand driven and dynamic information. One can, in my view, expand this Common Service Centre around this kind of gyan chowpal or knowledge centre; One can provide the number of services needed for the small farmers; each one can provide management devices as we have suggested in our report, the large number of suicides from Vidharba are cotton farmers. Once upon a time cotton was a very prosperous crop in that region. Even the soil there is called the black cotton soil but today they are in distress; I would not like to go into it. But they can be helped a lot, many things can be done with technological assistance. So, first you can go with technology both at the production side and the post harvest side to those who have land, live stock or fish pond. Today in our country, to take fisheries the largest advance is in inland fisheries, not the coastal fisheries. Even if you take coastal fisheries, Tatas have developed a number of software, may be you can give them to those who are going into the catamarans in the coastal areas, what is called as artisanal fisheries, a cell phone which has a GPS data to show them where the fish is. So they can go towards the fish. You can technologically empower. If you look at the rich-poor divide, from the days of the industrial revolution in Europe, it is technology that has been applied over this change. Even today, like how Bill Gates has become the richest person in the world, he did not inherit the property. It was purely intellectual property plus technology, which manifested in tech. One of the things with sugar cane companies, you have much more symbiotic relationship with sugar cane growers and the sugar cane factories. But it is missing in cotton. I am sorry to say, I told the Gunjan Cotton Mills Federation : Prime Ministers and all others have gone to Vidharba. But you have not gone. It is your raw material. The emotional symbiotic linkage between the producer of cotton and the user of cotton is not there. Like sugar, tobacco and many other commodities, there is that kind of linkage which is missing in the case of cotton.
So I think, one thing that the MMA can do in the area of agriculture is how to improve the productivity and profitability of the small holdings, which are going to be the predominant holdings. I do not accept the view that some people say because the National Sample Survey Organisation says that 40% of people want to quit farming; if they have an alternate to do so. If you have got an exit policy for the small farmers, you must have some entry policy somewhere. If you do not have the exit and entry at the same time, you will create nearly 50 crores of landless labour in this country. To those who are advocating this policy, the very small farmers having one acre or two acres, they should sell their lands and quit farming, you will have 50 crores of landless labour. What will you do here? The only area which is a job-led growth is the agriculture area – not only agriculture, stock husbandry, animal husbandry, fisheries, foresting and agro processing. Hence we should look at those who have land , how do we improve their income, improve profitability from small holding, there are many methods. We are not the only country with small lands. Countries like Taiwan, Japan and China and Holland which are a few of the most prosperous countries today, they all have added to the value chain. If you have a small land, how do you maximize productivity. Programme which is going to be launched shortly, more income per drop of water, how do you maximize your income.
Second is the question of the artisans and the skill formation in those areas, many of them are skilled but there are lot of problems. China is also facing the same problem. The two major industries of Tamil Nadu; Leather and Textiles – both of them are associated with enormous pollution problems. Courts have intervened many times. Courts have intervened in aqua culture also. A sun-rise industry became a sun-set industry in no time, the whole aqua culture like Mayiladuthurai and so on as there is a public interest litigation. Anybody who pollutes, some people go to court. There are Green panels and so on and it is a very good thing in fact, at least the check is there. The media and judiciary are the guardians of the many of the important freedoms of the common people. So how do you help these people? CLRI has good technology, in terms of pollution controls. Similarly, Tirupur Cotton industries, and Dye industries bring in lot of pollution. What is lacking in these cases? They are again small producers. How do you manage this pollution collectively? We require management tools which can confer some benefits to the small people. The whole area of very landless labour – they are the ones who go to the residual employment, or they migrate to the towns, I find in one of the write ups of the seminar about the unplanned migration of the local rural poor to the urban areas, which is becoming a serious problem. Some of these methods which are happening- lack of knowledge, lack of information and lack of services, how are you going to help them? Many of them are illiterates. Especially women in the landless labour family are socially and economically under privileged. Here you can be of help; especially the MMA in one of the centres where there is the National Rural Employment Guarantee Programmes, you can start adult literacy programme in the evenings. We started in some tsunami affected areas with the help of TCS. They have both the Azim Premji Foundation and Tata Consultancy Services. They have excellent software called as “Joyful learning” and not the “class room learning”. How do we involve ourselves in literacy? Sarva Sikshya Abhyan is important. But unless we now use modern technology, you cannot eradicate illiteracy. You know, in our country government always gives the figures in terms of percentages. Supposing I have 40% poor people our of 300 million, Subramanya Bharathi sang song ”30 crores of people”, and now I have 20 crores out of 1.1 billion which is almost the whole of India at the time of independence is now below the poverty line. We can say that 300 million or below the poverty line. Every year, 17 million children are born in this country. Population is growing. We talk of jobs for 50 thousands, 100 thousands. So I would say, if you are going into rural areas, any corporate sector or a group of consortium of corporate sector also, do you want to extend your support to the farming sector, do you want to extend your support in the other areas of skilled employment, the non-form employment viz. creation of energy or any such things, or do you want to help the purely landless labour, in that case, the Human Resource Development largely is the highest priority. While I was in Mumbai yesterday, Mumbai Media Forum and several of the journalists traveling, they said, “The Corporate sector is associated with the minds of the villagers as those who want to grab their lands! They are land grabbers and not of any help and so on. I think there is an important message here because in our country today, the real estate value is going up and from the history you can see that countries that have undervalued the human resource and over values the material resources like land, they always remain poor or there will be large differences within the country. We are in state now when we are completely over valuing material like land and totally under valuing the human resource. How are you going to break it? Where is the Gram Swaraj of Mahatma Gandhi?
What are the management tools, which are coming in for providing the power of scale or economy of scale to small producers? One which is going fairly well is the Self Help Group for particularly in women, it has not caught up in north India but has in the southern states of Tamil Nadu and Kerala. In Kerala they call it Kudumba Shree and so on, these are methods by which people have come together and started manufacturing, producing and marketing. Because management and marketing are two important requirements. Management skills must be given; that is why we have recommended Self Help Group, Capacity building and mentoring centres, because what is happening in the political sphere is a numbers game. We have a set of hundred thousand SHGs. Many of them are not viable at all. There is no market for produce unless you produce it. The MMA, even as an experimental measure those who are interested can set up a Capacity building and Mentoring centre for Self Help Groups, where you provide them management skills, marketing skills and those accounting software, and much more. Dr. Kurien started 50 years ago and that is one area we are proud, they were producing 15 million tons of milk in 1950. This year it is 100 million tons and that has come from a very small scale industry. We don’t have large ranches, 2 buffaloes, two cows and so on, we don’t have large animal husbandry; It is owned by numerous people. In fact, the ownership of animals is much more egalitarian than the ownership of land. That is why life stocks and livelihoods are very closely related in our country. But how did this milk revolution come? Even Dr. Kurien did not start it with cross breeding and so on; started with processing and marketing side. If you give the good price to the farmer, he will do the rest. Why are the Punjab farmers producing more and more wheat and rice and not other crops, because there is ready market for these items. As soon as they harvest, they get fairly remunerative price and so on. Ultimately when the person has done the hard work throughout the season, when it comes to harvest, the price, the market assured, and the remunerative marketing holds the key to sustain the farmer’s interest in it. We can learn lessons from successful examples in our own country. The dairy industry, and in the last 20 years poultry people also have organized themselves like the Co-ordination Council at Namakkal and so on. Because these are true – in milk and egg where the primary producers get 80% of what the consumer pays. You take any vegetable, whatever may be the price, tomato or onions in Chennai City, when you go 25 KMs from there, they part with that with Rs. 2 or Rs. 3 per KG which may be Rs. 15 or Rs. 20 here. Tomato and onion are political crops, as in Delhi many governments are shaken by, even at that time, I saw in 1980, Mrs. Gandhi wanted me to go, suddenly the prices have crashed, they were high in that city, to Pune, Nasik and Dhule but there the farmers were parting with their onion at a low price because, as soon as the harvest, they want money. They are indebted, they have to pay to the money lender who is waiting. They don’t have a holding capacity. This is why warehousing or methods of marketing where you give them a part of the money when they harvest. Simple marketing techniques enable the farmers to earn much more, particularly perishable commodities like fruits and vegetables because processing is still low. The reason why still processing is low in our country is because the consumption capacity is low. How many people can afford to buy jam, jellies and so on. Just 10% of the population of the country. But the rest of them, unless the consumption base is widened, you will not have much more opportunity for processing.
I only hope Mr Ranganathan is a man of action. He combines business with compassion. I have seen the Ability Foundation, helping the disabled, whom we call differentially disabled. Today our rural India is also differently disabled. That is why I have to put this forward to him that he has to put in as much interest in those people because there the gap is widening within a section of people. You all must have seen in the recent issue of Forbes magazine – some, 34 Indians, the new entrants of the Billionaires Club is all Real Estate People, they have 25% of India’s wealth. If that is correct, that is an indication of what is happening in terms of a very big divide. It is not good for the rich people themselves because you can’t have islands of prosperity in the midst of the sea of misery. It is in the self interest of those who are well to do to share the blessings with others and that is what MMA is doing and I wish you all the best in this great endeavour. Thank you very muchn