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M. Moni
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Rural India should be given a chance through digital networks for farmers, e- ooperatives, and digital SMEs to usher in a digital inclusion for fostering rural prosperity and grassroots level development.
Science and technology offers tremendous opportunities for improving rural livelihoods. Digital opportunities have emerged as a power tool for fostering agricultural growth, poverty reduction and sustainable resource use in developing countries. The Indian government has initiated several efforts to develop Digital Networks for Farmers (DNF) and to ensure digital inclusion for fostering rural prosperity and reducing spatial disparities in India. To be specific to the ICT for sustainable rural livelihoods programme, the Digital Initiatives: (a) e-Cooperatives & CoopNet, (b) AGMARKNET and (c) ICT Diffusion for Small and Micro Enterprises (SMEs) growth and development, are explained in detail in the following sections.
e-Cooperatives & CoopNet: an Internet enterprise development programme for fostering agricultural and rural industries
There are about 0.55 million cooperative societies in India with a membership of more than 236 million and working capital of more than Rs. 3400 billion1 . Cooperatives have made remarkable progress in agriculture, banking, credit, agro-processing, storage, marketing, dairy, fishing and housing(Table 1). This network covers 85 per cent of rural households and occupies a key position in agricultural development with respect to resource use, input use, harvesting of water resources, marketing channels, storage facilities, distribution channels, value addition, market information and a regular monitoring network system. Cooperatives are also engaged in economic activities like disbursement of credit, distribution of agricultural inputs (seeds, fertilisers, and agro-chemicals), etc.
Table 1: Outreach of
Cooperatives
|
| Sr.No |
Outreach of Cooperatives |
Coverage/
Contribution
|
1
|
Rural Network
(Villages Covered) |
100% |
2
|
Coverage
of Rural Households |
71.0% |
3
|
Agricultural Credit Disbursed |
42.8% |
4
|
Fertiliser Distributed (6.049
M.Tonnes) |
36.17% |
5
|
Fertiliser Production
(3.509 M.Tonnes N&P) |
25.0% |
6
|
Sugar Produced (10.164 M.Tonnes) |
50.5% |
7
|
Wheat Procurement (6.926 M.Tonnes) |
33.5% |
8
|
Animal Feed Production/Supply |
50.0% |
9
|
Retail Fair Price Shops |
20.3% |
10
|
Handlooms |
54.0% |
11
|
Fishermen Cooperatives |
21.0% |
12
|
Storage facility (Village level
PACS) |
64.5% |
13
|
Direct Employment Generated |
1.15 Million |
14
|
Self-Employment Generated |
14.79 Million |
|
Source: Indian
Cooperative Movement A
Profile, 2004: Developed by National Resource Centre, National
Cooperative Union of India
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Cooperatives have inherent advantages in tackling the problems of poverty alleviation, food security and employment generation. Cooperatives are also considered to have immense potential to deliver goods and services in areas where both the public and the private sector have failed (Verma, 2004)2 .
By and large, cooperatives (except a few large ones) are local institutions, addressing local needs, employing local talent, and lead by local leaders. A situation is emerging wherein there is a possibility of people migrating back to rural areas, as the cooperatives exhibit vast potential for generating self-employment opportunities at grassroots.
The Primary Agriculture Cooperative Societies (PACS), which are about 100,000 in number, are the major players at the grassroots level, helping farmers with credit, inputs, marketing, advisories etc. Credit is a very powerful instrument for the empowerment of the resource-poor people. Credit can generate accelerated economic growth, when loans are easily available, properly utilised and repaid in time. A cumulative upward movement of capital supply increased productivity higher real income higher capital supply is necessary for sustainable rural development (Tapan Chakraborti, 2004)3 .
These PACS can play a major role in revitalisation of cooperative credit structure, provided they are networked using ICTs so as to facilitate streamlining the cooperative credit structure for hassle free flow of credit. Urgent steps to revitalise cooperative credit institutions are required.
With a view to ensure appropriate positioning of cooperatives in the emerging liberalised competitive economy, it is essential to:
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Promote cooperation among cooperatives,
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Develop coordination among cooperatives,
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Strengthen Primary Agriculture Cooperative Societies (PACS) through business development plans for their self-reliance,
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Increase involvement of rural poor in the Cooperative movement through Self-Help-Groups (SHGs),
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Develop cooperative insurance system,
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Promote international cooperative trade,
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Undertake human resource development,
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Develop agro processing industries,
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Widen the scope in marketing of food products, seeds and fertilisers,
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Provide market support to farmers,
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Make available all essential agro-inputs to the farmers,
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Undertake livelihood generation projects in tribal areas for marketing development of tribal products,
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Facilitate cooperative planning,
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Transfer of technology to its members and common public,
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Assess the needs of its members and disburse credit accordingly,
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Provide all types of banking facilities,
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Provide godown, cold storage and processing yard facilities,
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Develop market intelligence related to supply, demand, price trends, supply/market chain, value addition and processing facilities, product quality specifications, product applications, market trends,
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Disseminate information to the members as well as planners, researchers, associate organisations and business circles etc,
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Develop and establish sound information network among cooperatives sector wise,
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Develop ICT enabled services in cooperatives, and
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On-line services to its members.
To begin with, it is suggested to network about 146,000 primary agriculture and credit cooperatives, 19 national level cooperative federations, 367 state level cooperative federations and 2,890 district level cooperative federations. Networking of Cooperatives through state-of-the-art technology is essential, as it will facilitate to get connected to a National Data Centre (24/7 infrastructure) for achieving the following:
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Build relationships and alliances faster
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Re-engineer and integrate their processes
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Develop more and better value-added products and services
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Share knowledge and experiences
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Enhance innovation
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Promote web-based business trading
AGMARKNET: a government ICT initiative for rural empowerment
As a step towards the globalisation of agriculture, the Union Ministry of Agriculture has embarked upon an ICT project: NICNET based Agricultural Marketing Information System Network (AGMARKNET). The AGMARKNET project has already networked 735 Agricultural Produce Wholesale Markets (APWMs), during 2000-02 and embarked upon an additional 2000 markets during the Tenth Plan Period (2002-2007). As of 31 March 2005, 1347 APWMs have been brought under the AGMARKNET Programme, which has helped in developing the database on 300 commodities and about 2,000 varieties. The Government initiative of the networking of agricultural produce markets (AGMARKNET)4 and the AGMARKNET portal would facilitate the development of Business-to-Business (B2B) and Business to Community (B2C) e-Commerce Model in the Country (Moni, 2001)5 . This project has the potential of expansion to about 7000 wholesale markets located throughout the country and further to 35,000 rural markets in India. This ICT Project is a farmer-centric project to put the progressive farmers on global free trade zone on Internet.
AGMARKNET appears to be filling a gap by providing access to information at reasonable cost. The AGMARKNET venture is a welcome initiative from the Government. The advantages of this database accrue to the farmers, as they are not forced to sell their produce in the nearest market at uneconomical prices. The challenge, if the full potential of such ventures has to be utilised, is to take IT to the rural India in a big way. Some of the constraints are (a) connectivity in rural areas, (b) training the stakeholders and (c) ensuring data updation in real time frame (http://www.eapf.net/ casestudies/in/agmarket.asp).
This Digital Advantage Project has already achieved the following:
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Reaching the unreached i.e. resource poor farmers
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Reduction of distress sale
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Right to information
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Base for production planning
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Base for marketing led agricultural extension
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Increased competition
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Reduced marketing margins
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Vertical linkages in export crop markets that connect multinational traders to domestic traders
There have been requests for AGMARKNET venture in various developing countries including the ASEAN nations and countries from Africa. The Regional Workshop of Asian Productivity Organisation (APO) at Manila in 2004 recommended the AGMARKNET system to its member nations.
Digital opportunities: a way forward for reduction of spatial disparities and enhancing opportunities for development of SMEs to penetrate into export markets
Small and Medium Enterprises (SMEs) have always been the engine of growth, both in developing and transition economies. In India, SMEs are the second biggest employment generators after agriculture, providing jobs to over 9.2 million people, and accounts for 39 per cent of industrial production and 34 per cent of exports. It is estimated that there are around 350 urban SME clusters and approximately 2000 rural SMEs in India. This does not include the small and marginal farmers (SMFs), who constitute about 67 per cent of the farming community in India. The process of globalisation has impacted SMEs more than it has larger business enterprises, and SMEs find themselves at the veritable crossroads. While developed countries have already taken a lead in this direction, developing countries are yet to exploit this system fully particularly to invigorate the SMEs (Jürgen Bischoff, 2001)6 . There is a need for serious global thinking on how to ensure greater stability of SMEs, how to provide greater social security for those working in this sector and at the same time, how to retain the dynamic force that drives this sector (Vajpayee, 2002)7 .
The challenge for entrepreneurs is to think about creating solutions for the twin engines of future growth Rural India and SMEs.
The rapid emergence of knowledge-based economies requires a paradigm shift in technology transfer services from traditional methods (i.e. horizontal company-to-company transfer of commercialised technology through a worldwide network of technology brokers) to Internet and vertical transfer of technology from R&D labs to industries. SMEs face information asymmetries in two ways: (i) in their own access to market and business-related information, and (ii) as providers of services to poor people. The successful evolution of SMEs calls for attention to be given to the external factors related to the digital economy that affect SMEs development in the era of globalisation, namely:
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Structural changes in SMEs organisation and management related to the impact of digital economy;
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Changes in the competitive scenario that may affect the SMEs evolution;
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Interventions and policy instruments that have contributed to foster the SMEs adaptation to digital economy.
The focus is adapting best practices to exploit the opportunities provided by ICTs to improve performance and visualise a digital SME in the process (http://www.etw.org),
characterised as:-
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An SME whose products and services are predominantly digital;
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An SME which uses digital methods as the primary means of carrying out core operations - marketing, sales, service etc (e.g. a pure dot com);
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An SME that exploits the benefits of digital methods to a significant extent.
An effective strategy to overcome this inherent weakness of SMEs is to network enterprises with institutions and organisations active in the area of SME development, information networks, and databases as well as with technology generators. Supply Chain Management (SCM) is important for SMEs, as the supplier, the customer, the logistics partner and the manufacturer are together involved in the material flow, the information flow and the fund flow. Indian SMEs have realised the importance of productisation and specialisation to survive in an ever-changing market. There have been attempts, as listed below, to provide Information services through ICT for SMEs.
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Technology4sme.com and Business e-Coach for Asia-Pacific SMEs, established by UN APCTT an Asia network of Model Technology Transfer Agencies (MTTAs).
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SMEs in India (www.smallindustryindia.com) with over 50 categories and 3 million records.
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TIFAC(Technology Information, Forecasting and Assessment Council) - http://www.tifac.org.in for technology and business links, partner with TIFAC;
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Indian Patent database - http://www.indianpatents.org.in
In India, the use of Internet among the customers and SMEs is quite restricted. The scenario of Internet connectivity is slow, access costs are high and connections are unreliable has been altered by the National Broadband Policy 2004s Always On data connection with a minimum download speed of 256 kbps. Availability of broadband services at affordable price levels shall have a significant impact on Indias GDP, facilitate new investment, create job opportunities, provide access to new and improved services, and increase productivity through infrastructure creation (Dayanidhi Maran, 2004)8 .
The diffusion of ICT throughout all sectors (primary, secondary and tertiary sector) is far more important than the production of ICT industries per se, to usher in economic growth and development based on digital technologies. India is expected to gain from the emerging Digital Economy, as it has:
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Affordable access to core information resources, cutting edge technology and to sophisticated telecommunication systems and infrastructure;
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The capacity to build, operate, manage, and service the technologies involved;
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Policies that promote equitable public participation in the information society as both producers and consumers of information and knowledge; and
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A work force trained to develop, maintain and provide the value-added products and services required by the information economy.
A synergetic collaborative relationship among Small Industries Development Organisation (SIDO), Khadi and Village Industries Commission (KVIC), National Informatics Centre (NIC), Indian Postal System (IPS), and Bharat Sanchar Nigam Limited (BSNL) can invigorate SMEs in India, through value chains and transfer of technologies. This will also facilitate SMEs to access both national and international business networks and emerge as digital SMEs. Establishment of Internet Enterprises in SMEs clusters on 24/7 infrastructure framework, as in the case of Software Technology Parks for IT SMEs, is desired for sustainable growth of SMEs in India.
Conclusion
Rural India should be given a chance through digital networks for farmers, e-Cooperatives, and digital SMEs to usher in a digital inclusion for fostering rural prosperity and grassroots level development. Grassroots level access to information will hopefully help bridge theory and reality at grassroots .
End notes
1 see http://ncui.nic.in/stat.htm
2 Verma S.K. (2004) : Cooperative Centenary in India, New Sector Magazine, Issue No 61, April/ May 2004
3 Tapan Chakraborti (2004): Speech of Mr. Tapan Chakraborti, Minister for Agriculture (Government of Tripura) in the meeting of State Agriculture Ministers held on December 21, 2004 at New Delhi
4 AGMARKNET: NICNET Based Agricultural Marketing Information System Network A Sponsored Project of the Directorate of Marketing and Inspection (Ministry of Agriculture), February, 2001 and also see http:// www.agmarknet.nic.in
5 Moni .M (2001) : Leveraging Information Technology for development of Agri-Business Agribusiness : B2B or B2C e-Commerce Model?, presented at the National Seminar on Managing Agri-Business in the New Millennium : Challenges and Opportunities, organised by All India Management Association (AIMA) , July 20-21, 2001, New Delhi
6 Jürgen Bischoff (2001): An Overview of Successful International Technology Business Incubator Programmes, , The First International Workshop on Technology Business Incubators in India
7 Shri Atal Bihari Vajpayee addressed the Global Summit on Small and Medium Enterprises (SMEs) in New Delhi on December 20, 2002
8 Mr Dayanidhi Maran, Union Minister of Communications and Information Technology, in The Economic Times, June 3, 2004
Author: M.Moni is currently Deputy Director General of National Informatics Centre, Government of India
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