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EDITORIAL

A.K. GargEditor-in-Chief

Articles to be published in thisjournal may be mailed [email protected] only. Authorsmay indicate their postal addressand contact number. Articles maybe between 4,000 to 6,000 words.Relevant photographs may also besent.

Apart from providing sustenance to a family, urban farming is asustainable and desirable activity in itself for a variety of reasons. Itprovides jobs and income and ensures food safety and security for

growers and consumers. It is energy-saving as it cuts out long distancetransportation. In the issue of Financing Agriculture, we delve into this urbanmode of sustainable agriculture and issues pertaining to it. Our writers debateabout the topic and reach the conclusion that the biggest beneficiaries arethe poor living in urban and suburban areas as it enables them to grow somefood not only for their personal consumption but also be a supplementarysource of income.

Read about the transformation of the Microfinance sector in India in ouroverview section. The article discusses issues that have triggered thistransformation that include size, diversity, sustainability, focus, and taxation.There is also an article on MFIs in India which discusses the recent problemsfaced by them in the wake of burgeoning profits experienced by some ofthem.

Our cover story investigates the role of RWAs in Delhi in securing a standardlevel of carbon through plantations. Instances of successful plantations havebeen given due recognition in the above article.

Also featured in this issue; A special story on the impact of women Self HelpGroups in the economic development of Andhra Pradesh and book reviewson Nigel Watson’s An Appeal To Reason: a Cool Look at Global Warmingand The Talent Master authored by Bill Conaty and Ram Charan.

Do send in your research article on topics related to financing agricultureand allied sectors at [email protected]

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Urban Agriculture in India: A Survey ofExpertise, Capacities and Recent Experience .... 6By Gisele Yasmeen

City Farming – the Natural Alternative,Experiences in India .................................... 12By R.T. Doshi, Sunil Doshi and Vandana Shah

Urban Agriculture: For Sustainable PovertyAlleviation and Food Security...................... 14

Securing Standard Level of Carbon throughPlantation................................................... 20By Harjeet Singh and Binaxi Chauhan

Impact of Women Self-Help Groups inThe Economic Development of AndhraPradesh – A Study ...................................... 25By Prof. Gurajala Sudarshan

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Published byAgricultural FinanceCorporation Ltd.Dhanraj Mahal, ChhatrapatiShivaji Maharaj Marg,Mumbai 400 001

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Profit V/S Problems: A Study of Micro -Finance Institutions in India ........................ 30By Dr Arjun Singh Sirari and Mr Narendra Singh Bohra

The Transformation of The MicrofinanceSector in India: Experiences, Options andFuture ........................................................ 34By M.S. Sriram and Rajesh S. Upadhyayula

Off The Shelf: Who says there’s globalwarming?................................................... 38Amit Bhattacharya

Here’s How To Get The X Factor ................. 39Shobha John

Agri News .................................................. 40

6Financing Agriculture

How will South Asian cities be fed?This is an important questiondemanding attention due to the

rapidly growing urban population of thesub-continent. Urban and peri-urbanagriculture (UPA) is one set of activitiesresulting in greater food production,improved livelihood opportunities forurbanites and the enhancedenvironmental quality of cities. Thisreport provides an overview of existingUPA resources and activities in India withparticular emphasis on Delhi andBangalore though many examples fromother Indian cities are also presented.Documentation on UPA in India is

extensive, particularly concerningcomposting initiatives, advances indairying in urban and peri-urban areasand horticultural activities in cities. Inother sectors as well, such as peri-urbanaquaculture (particularly aroundCalcutta), the rest of the world has atremendous amount to gain by payingattention to what has been taking placein India.

Key research issues and challenges withrespect to UPA in India and the rest ofthe subcontinent involve recognising andbuilding the innovative activities alreadytaking place there. This includes

dissemination of information andfostering the extension and replication ofexperiments and local schemes in otherparts of the region. Other challengesinvolve gathering more informationabout less documented areas of UPAincluding animal husbandry, foodprocessing and safety/health issues andconnecting India to the larger UPA world.

IDRC’s ‘Cities Feeding People’ programinitiative has resulted in the Centrebecoming one of the world’s foremostauthorities on urban agriculture and aprominent repository for information onUPA. The release of this report signals a

Urban Agriculture in India:A Survey of Expertise, Capacities andRecent ExperienceBy Gisele Yasmeen*

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growing interest at the Centre on UPAissues in Asia, the world’s most rapidlyurbanising mega-region. IDRC’s SouthAsia Regional Office is in a position tobecome actively engaged in the CFPprogram. Suggestions for thisinvolvement are highlighted in theconclusion and consist of playing a crucialrole in the dissemination of informationon UPA in the sub-continent. Linking theagents identified in this report throughinformation and communicationtechnologies (ICT) and serving as aclearinghouse for this information will bepivotal. The Centre should also drawattention to the link between improvedUPA, poverty alleviation, effective post-harvest technologies, distribution andmarketing. IDRC can produce and fundmore research on UPA in the South Asianregion, particularly participatory, action-based research.

Extensive appendices accompany thisdocument. The first lists more than 100individuals, institutions and private sectororganisations involved in UPA in India andtheir full contact information including e-mail where available. The second majorappendix is a comprehensive, thoughcertainly not exhaustive, bibliography ofalmost 120 documents. Links to relevantwebsites are also included.

Introduction

The International Food Policy Research

Institute in Washington, DC summarisessome of the reasons urban agriculture isa fundamental issue to be examined. Insome cities, urban agriculture is animportant coping strategy forhouseholds. Because women often havethe responsibility for food procurementfor the household, they are frequentlyinvolved in urban agricultural productionand sales. Urban agriculture presents anumber of challenges, includingcompetition for scarce land, degradationof soils and pollution. At the same time,urban agriculture offers new potential forrecycling urban wastes, saving onmarketing-transport costs and providingthe poor with employment.

This report reviews and summarises theextent of research, existing resources andkey activities related to urban and peri-urban agriculture (UPA) in India. Urbanand peri-urban agriculture (UPA), isdefined as “an activity that produces,processes, and markets food and otherproducts, on land and water in urban andperi-urban areas, applying intensiveproduction methods, and (re) usingnatural resources and urban wastes”(IDRC 2000, www.idrc.ca/cfp).

Research was focused primarily ongathering secondary data in Delhi andBangalore, but a significant amount ofinformation was also garnered withrespect to Mumbai. Other parts of Indiaare referred to where information was

available. The result is the creation of a‘map’ or scoping document whichprovides information on the individuals,organisations and agencies involved inUPA as well as brief summaries of theiractivities and projects.

A concise review of the key issues withrespect to UPA in the sub-continent moregenerally introduces each section of thereport. The report also lists existing on-line resources such as websites anddatabases both interspersed within themain text and toward the end of thedocument and also includes an annotatedbibliography of published and othermaterial.

The conclusion summarises the mainfindings of the reports and points tolacunae where further research may beundertaken. It also suggests areas whereIDRC and others might consider gettinginvolved in future projects.

Definitional & MethodologicalIssues

In any context, defining what is meantas a “city” can be complex. While thereare very well delineated legal boundaries,which separate, say, urban from ruraldistricts, these borders can changeregularly depending on fluctuating socio-economic and demographic conditions.In Asia in particular, defining ‘urban’,‘peri-urban’ and ‘rural’ is especiallychallenging where high populationdensities can result in ‘rural’ areas beingmore populated per square metre than,say, Canadian and American cities. Inaddition, the well-documented trend of“rural industrialisation” has resulted in afurther questioning of what is meant byurban versus rural and a blurring ofboundaries between activities related tothese ostensibly distinct types of places.1For the purposes of this report, urban andperi-urban have been based on simplelegal and geographical definitions, whichidentify certain talukas2 as urban, and therural (or peri-urban) districts immediatelysurrounding these cities. At times, someinformation may be included for what areclearly thought of as rural areas in India.These data have been included becausethey are deemed to have relevance in oneway or another to urban and peri-urbanagriculture and related activities.

Another difficulty involves deciding whatexact range of activities are to be included

ISSUE FOCUS


in a report on Urban Agriculture capacity.This is beyond substantive concerns suchas whether to include dairying and animalhusbandry but refers to how many andwhat type of “upstream” and“downstream” activities – in addition tothe production of food and otheragricultural products – are to be included.For example, to what extent shouldrelated activities such as suppliersproviding inputs such as fertiliser, seeds,composting and technology be includedin the inventory? The same applies todownstream services such as thosepertaining to the marketing anddistribution of urban agricultural productsas well as associations representing cityfarmers (such as the All-India KitchenGarden Association). The approach usedfor this report was a broadminded onethat includes references to individuals andorganisations working in a myriad ofupstream or downstream activitiesdirectly connected with UA.

A final note about constraints involvedin collecting information on UA in India.My assistants and I were dependent onthe goodwill and co-operation of variouscontacts in order to complete this study.While many resource persons andorganizations generously gave of theirtime to respond to our questions, othersdid not provide information (perhaps dueto an incorrect address, contact personor lack of time on the part of the person/organisation concerned). All contacts wecame across through word of mouth, on

the key actors of Mumbai in UA –particularly Dr. R.T. Doshi and KisanMehta of Prakruti – will be introducedlater in this report.

The most comprehensive scholarly study of

UA with respect to a specific Indian

metropolis concerns the forward-looking

policies and experiments undertaken in

Ahmedabad, Gujarat, particularly while

Keshav Varma was Municipal Commissioner.

The city is known for progressive UA

policies with respect to urban

horticulture, forestry and solid waste

initiatives (Furedy, 1999 - comment on

www.cityfarmer.org).

The City of AhmedabadProfessor Suganda Ganapathy of the Indian Institute of Management, Ahmedabadwas conducting an extensive research project in the early 1980s. In his reportentitled “Urban Agriculture, Urban Planning and the Ahmedabad Experience”(1984) he concentrates extensively but not exclusively on horticulture and tracesthe historical trends and future potential for UA in the metropolitan area.

Professor Ganapathy concludes that while there has been a decrease in subsistenceagricultural activities in the metro area, there exists great potential for greatervegetable and fruit cultivation in the urban area and peri-urban fringe. Similarly,though there was, at the time, a decrease in garden land available, market gardensand home gardens were found in all the villages of the Ahmedabad metropolitanregion. Increased peri-urban production was responding to the demand of thegrowing middle and higher-income groups. At the same time, the author pointsto an increase in home gardens for the middle and higher income groups, whichreflect aesthetic and recreational considerations rather than food or income securityconcerns.

Professor Ganapathy provided details on the link between co-operatives and UA.The Ahmedabad Co-operative Vegetable and Fruit Growers Association had 2000members in the mid-1980s. At the time, municipal hospitals were buying produceexclusively from this supplier. Finally, the report explains the Ahmedabad MunicipalCorporation’s ‘Kitchen Garden Scheme’ of 1983/84 to encourage the productionof food in urban areas.

The Centre for Built Environment (“A non-profit Society for Architecture, HumanSettlement and Environment”) based in Calcutta, organised a major internationalworkshop on urban agriculture in December, 1995. Unfortunately, no publicationsissued from the conference due to a lack of funds. However, this event yielded anumber of interesting resource persons on UA in India more generally. Thesepersons and the results of the 1995 international workshop might be used as abaseline for future activities in the sub-continent on UA.

Two other general studies pertaining to UA in South Asia exist, but it has beendifficult to obtain information about the findings reported in these documents.One, by Sandhiya Chatterjee entitled “A preliminary study of Urban Agriculturein New Delhi” was completed for ETC’s India office in 1993. A second consists ofthe results of a workshop on UA in Dhaka hosted by Proshika, one of Bangladesh’slargest non-governmental organisations, in 1997. Further research would beneeded to obtain details about the findings of these two projects.

the internet or through existingcompendia – whether they directlyanswered our queries or not – areincluded in this scoping document.

In terms of a comprehensive, citizen-driven approach to agriculture in anurban setting, the example of Mumbaistands out first and foremost in India.Perhaps due to the fact that it is the mosthighly urbanised ;concrete jungle’ of thesub-continent combined with a lack ofspace for waste disposal the right typeof environment has emerged for thecreative cultivation of plants and wastereduction through compost developmentin a dense urban environment. Some of

Urban agriculturepresents a number ofchallenges, including

competition for scarceland, degradation of

soils and pollution. Atthe same time, urban

agriculture offers newpotential for recycling

urban wastes, saving onmarketing-transport

costs and providing thepoor with employment

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Pollution & Health HazardsAssociated with UA in India

As Kathleen Flynn has observed, thehealth hazards associated with UA have“traditionally been understudied”(LaBond, 2000). However, with the rapidgrowth of cities internationally,sustainability and related health concernshave come to the forefront. South Asiais similarly plagued by the ills ofunharnessed urban growth andconcomitant hazards such asdeteriorating air, water and soil quality –all fundamentally related to the healthurbanites as well as of flora and faunafound in cities (Cf. SDRI, 1998 & 1999).Some hazards “are a direct result offarming practices,” such as the highdensity of livestock in a specific location(LaBond, 2000). Given the important

Vegetable Cultivation and Marketing in Delhi

Two helpful publications, which shed

light on peri-urban agriculture, concern

vegetable marketing in the Union

Territory of Delhi (Bhupal, 1989 &

1999). “The study finds that the

economic indicators, demand for

vegetables and overall profitability of

vegetable cultivation, compared with

other competing crops are favourable

for the promotion of vegetable

cultivation... around Delhi” (Bhupal

1989, i & iv). Given the fact that the

capital city has the highest per capita

income in the country, vegetable

cultivation and distribution can be a

very profitable activity (Bhupal 1999,

1).

In the earlier study, Bhupal explained

that local producers “mainly cultivate

in the Yamuna bed and in outer North-

West Delhi from Teekri Border to

Najafgarh” (1989, 4). At the time, he

explained that almost two-thirds of the

total area in Delhi fell under the

classification of rural Delhi. Most

vegetables were grown in Alipur,

Nangloi and Shahadra and were linked

to the main wholesale market in

Azadpur by pukka13 roads ranging in

length from 11-35 kilometres.

Ten years later, due to the tremendous

growth of the city, the author identified

the peri-urban hinterland where

vegetables are produced as expanding to

six districts in two neighbouring states.

Haryana (Gurgaon, Sonepat, Faridabad,

and Rohtak) and two districts in the state

of Uttar Pradesh (Meerut and Gaziabad)

were included (Bhupal 1999, 4). He also

established a typology of major actors in

the market, which helps the reader put

commercialised UPA activities into the

larger perspective of the urban food

distribution system.

In both studies, Bhupal describes the

nature of farming activities on the

outskirts of Delhi. First, there are the large

commercial farms employing expensive

agriculture inputs and cheap migrant

labour. These farmers benefit from

economies of scale and all have cold

storage facilities, technology, financing

and extension services at their disposal.

This is a stark contrast to the peri-urban

agriculture being conducted by poor and

marginal farmers who employ family

labour, rent their land and even their

bullocks thus reducing their profitability

and long term livelihood prospects in

UPA. “Around Delhi, because of an

assured market even the landless are

engaged in this profession and are

somehow able to subsist, which in

remote areas of the country may be

unthinkable for them” (1989, 11).

In 1989, Bhupal argued for land reform

and policies that favoured the

distribution of vegetables through co-

operatives - such as Super Bazar and

Mother Dairy - and overnment

agencies. This has indeed taken place,

but farmers do not seem to have

benefited as a result though the quality

of vegetables has increased and waste

has been reduced due to improvements

in storage and distribution. As far as

the promotion of “alternative”14

urban horticulture is concerned, the

work of the Institute of Natural and

Organic Agriculture (INORA), and

specifically the contribution of Dr.

Ramesh T. Doshi stands out in Mumbai

as a lead in the area of urban

horticulture (see Box 1). In India in

general, there is a lot of interest in

alternative agriculture and its link with

integrated resources management and

social sustainability perhaps due to the

success of the well-known Ralegan

Siddhi transformation.

presence of goats, sheep and particularlycattle in Indian cities, this point warrantsgreat emphasis and the work summarisedin the next section (with the exceptionof remarks made with respect toaquaculture) does not adequately addressthis issue.

The only work that, to our knowledge,

systematically addresses one of the

health hazards associated with UA in

India is a two-phased project managed

by Dr. Fiona Marshall of the T.H. Huxley

School at Imperial College. The project

is entitled “The Impacts and Policy

Implications of Air Pollution on

Agriculture in Urban and Peri-urban

Areas of India.” It is mostly funded bythe Department for InternationalDevelopment (DFID) and has beenfocused in and around Delhi and Varanasi

(formerly Banaras) over the past fiveyears (Marshall, personal communication,2000).

Horticulture

A few general remarks need to be made

about the nature and important role of

horticulture in Indian cities. First, there is

a great deal of household as well as

commercial horticulture taking place in

urban and peri-urban areas of India. Not

necessarily all of these horticultural

activities are ‘organic’ and, indeed, there

are several examples pointing to the

extensive use of chemical fertilizers,

pesticides and herbicides in both private

gardens and commercial market gardens.

Finally, extensive vegetable gardening

fed on uncomposted organic waste is

practiced in Calcutta.

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well-known of these cooperatives is theAnand Milk Union Limited, or AMUL,India’s largest food products marketingorganisation. It comprises 10, 183 villagesocieties for a total of 1.95 millionproducer members (www.amul.com/gcmmf.html). AMUL supplies milk anddairy products, such as butter and curd,throughout the country. AMUL’s successhas resulted in it often being referred toas simply the “Anand model” based onco-operatives and the ownership andcontrol of small-scale women dairyfarmers.

As a result of Dr. Kurien’s efforts with thefirst fledgling milk cooperative in the late1940s and 1950s, the National DairyDevelopment Board (NDDB) was createdby then Prime Minister of India LalBahadur Shastri in 1965. When

Padmashree recipient, Dr. Ramesh T.

Doshi, an economist by training and

one of the founders of the Institute for

Management Development &

Research (IMDR) in Pune, was

associated for many years with the

marketing of NPK products which

included nitrogen, fertilisers, organic

manure and other agricultural inputs.

After retirement, he began working on

his farm near Pune and became aware

of the many challenges associated with

subsistence agriculture — particularly

low returns, high labour input and low

profitability. At the same time, he

began to reflect on the high cost of

food in the cities and the need to

produce more food in urban areas.

Urban agriculture also lessens the need

for the use of toxic chemicals as

fertilisers and pesticides.

Hence, Dr. Doshi began experimenting

with food production on the terrace of

his bungalow in Mumbai after retiring

at the age of 61. He has perfected a

method of growing fruits and

vegetables for domestic consumption,

which involves relatively low labour

input, organic production methods and

very high yields. “Dr. Doshi today

grows vegetables, pulses, fruits and

The box below profiles the commercialaspects of peri-urban agriculture in thecapital city of Delhi.

Dairying

Entire books have been devoted to the

“white revolution” that has taken place

in India over the past few decades

(Candler and Kumar, 1998; Chen et.al,

1986; Doornobos and Nair, 1990; Kurien,

1992, 1997). India’s transformation from

a situation of grave milk scarcity in the

1940s and 1950s to becoming the

world’s number one milk producer in the

1990s is a well-known success story. The

most celebrated figure associated with

“Operation Flood” - the official name of

the program designed to increase milk

production while keeping power in the

hands of typical milk producers - is Dr.

Verghese Kurien, India’s “milkman” andrecipient of the World Food Prize (1989)among many other honours. Dr. Kurienis now nearly 80 years old and still activein the communities he has nurtured overthe past fifty years.

In 1998-99, India surpassed the USA interms of dairy production making it theworld’s largest milk producer (NDDB,1999). However, unlike the NorthAmerican strategy of “modernising” thedairy industry, India has not sacrificed itssmall milk producer. Instead, India’s whiterevolution has been based on organisingthe country’s traditional milk producers- most of whom are women who onlyown and tend to one or two cows orbuffaloes - into federated co-operativeswhich then sell the milk to modernchilling and distribution centres. The most

Dr. R.T. Doshi’s City Farming Initiative: Bandra, Mumbai

cereals... and has raised mango, fig andguava plants and also harvested bananasand sugarcane.” {City FarmingInnovations, 2000).

His methods have been adopted

throughout Mumbai and also in

neighbouring cities, such as Pune

“leading to a profusion of city vegetable

gardens, and improving local

environments, family nutrition and public

health overall”. The ‘Doshi method’

involves planting in polyethylene bags or

45 gallon drums with the bottoms stuffed

with biomass, such as sugarcane stocks

from sugarcane juice vendors (something

that normally goes to waste). One

quarter of the bag is then filled with

compost and the remainder with soil. Dr.

R.T. Doshi attributes his success to the

ideas of Shripal Achyut Dabholkar from

Kolhapur who set up an institution called

“Prayog Parivar” devoted to “natural”

farming based on indigenous practices

with a community focus.

In Bangalore, the work of Agriculture ManEcology (AME), with the support of TheNetherlands administered by ETCNetherlands, is actively promoting organicfarming and “Low External InputSustainable Agriculture” (LEISA) inconjunction with 30 NGOs in the states

of Karnataka, Andhra Pradesh and TamilNadu. Mans Lanting, Dutch agronomistand Director of AME estimates that “atleast 15 per cent of all farmers aroundBangalore are small scale ones and caneasily go organic” (Daksha Hathi,1999). “Seventy per cent of farmerswith whom we have dealings arewomen belonging to self-help groups,and they are motivated,” adds Lanting(R.J. Rajendra Prasad, 2000).

Having recently published a manual onorganic farming, AME is now workingwith small-scale farmers, home gardenersand medium-scale farmers in Bangalore,Dharwad, Coorg, Hubli, Chitradurga andMysore. These efforts have resulted inorganic vegetables becoming available toconsumers in five outlets in Bangalore(Daksha Hathi, 1999). In addition, AMEpublishes the LEISA India Newsletter andhas had generous coverage by the mediain India resulting in broad disseminationof information on their work. There areseveral other not-for-profit agencies,public or private enterprises andindividuals that can be mentioned in thissection on urban horticulture. Thefollowing play a supportive role in thefostering of fruit and vegetablecultivation in cities and their immediatehinterlands.

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Operation Flood was launched in 1970to replicate the Anand Model, only 278thousand farmers were involved in theprogram producing 190 tons of milk.Eighteen years later, over six million dairyproducers in 50,000 co-operatives wereproducing three million tons of milk peryear reaching more than 500 cities andtowns throughout India. Though someof these dairy producers are located inwhat are firmly considered to be ruralareas in the Indian context, many moreare located in peri-urban areas so thatthey can more easily supply the largenumber of urban consumers.

With the growing rate of urbanisation inIndia, there are increased opportunitiesfor dairy producers to supply value-addeddairy products such as butter, curd(yoghurt) and ghee due to increaseddemand and urban women’s changingroles. Whereas, traditionally, even city-dwelling women would make their ownbutter and ghee, today, few young

women have the time, skills and desireto do so.

Aquaculture

The only information that was obtained

on urban aquaculture in India pertains to

West Bengal. This is apart from general

works on aquaculture (Giriappa, 1999;

Shiva and Karir, 1996; Srivastava, 1993).

In particular, the Salt Lake area of

Calcutta is internationally renowned for

the harvesting of fish and other food

products in a wetland fed by urban waste

and rainwater. (Prof. CK Varshney,

personal communication, 2000).

Bengalis, being a fresh-water fish eating

population, have a long and distinguished

history of creating and managing

fishponds in both urban and rural areas.

Animal Husbandry

Apart from the information on dairying,it is surprising how little information thereis about animal husbandry in urban and

peri-urban areas in India given theubiquitous proliferation of livestock inSouth Asian cities. The preponderance ofcattle in the country’s urban areas isalready well known. According to Dr.Saket Bhusan, “India ranks first amongthe countries of the world in goatpopulation.” (Bhusan 1999b, 17). Thesame author documents the popularityof pig rearing among both urban andrural dwellers of the state of Mizoram, inthe Northeast, where he is lecturer inAnimal Husbandry at PachhungaUniversity College.

*The writer is a Ph.D in Principal, AgoraAssociates, North Vancouver, BC & aResearch Associate, SustainableDevelopment Research Institute, &Institute of Asian Research, University ofBritish Columbia.

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After retirement, Dr. Padmashri R.T.Doshi, started working on hisfarm at Kamshet, near Pune, and

discovered the immeasurable problemsfaced by farmers. He discovered that iffarmers include the cost of their labourin the calculation of farm profit and loss,all farms would be unprofitable. This ledhim to think very seriously about reducingthe costs of farming and labour. Dr. Doshihas experimented with a number offarming practices that enable citydwellers to grow their own food on everyavailable square inch of urban space,including terraces and balconies.

One of the innovations recommendeddoes not involve high costs, nor does thefarming require long hours of work. Everymember of the family can be involved inthe maintenance of the city food garden,including the elderly. The farm can

provide the family with ample nutritionfrom plant sources, eliminating the needto purchase one’s vegetables and fruitsfrom the market, where inflation makesa mockery of housewives’ budgets.

Innovative Experiences

High-density polyethylene bags are usedfor the growing vegetables and cereals(the kind used to pack 50 kg of cementor fertilizers), with a diameter of around22.5 cm and a length also of 22.5 cm.For crops like sugarcane, bags with largediameters are essential (35 cm). Fruittrees like fig, guava and mango have tobe grown in bags, that have a diameterfrom 45 to 52.5 cm. The bags must beopen at both ends; hence the base ofthe bag must be cut open. Afterselection of the appropriate bagsaccording to size, the next step is to fill

them with soil. If soil is put as it is intobags, it will fall out the other end, whichhas also been opened. To prevent this,the bottom half of the bag is tightlypacked with biomass of any kind. Dr.Doshi often uses waste sugarcane stalks,collected from a sugarcane juice vendoroutside his house.

The material is for free and the sugarcanejuice vendor is glad to get rid of it.Functioning as a kind of giant plug, thestalks keep the soil in the bag, but at thesame time, are sufficiently porous toallow the water given to the plant, todrain out easily. After the base is plugged,half of the remaining space inside the bagis filled with compost, either made in thehouse, or purchased from garden stores.At the institute compost is produced byputting cow dung, organic material andwater in polyethylene bags and leaving

An example of sustainable agricultural and sustainable initiative, usingtraditional and indigenous knowledge and appropriate technology

By R.T. Doshi* Sunil Doshi** and Vandana Shah***

City Farming – the NaturalAlternative, Experiences in India

SPOTLIGHT


them to break down for six weeks (asillustrated in Figure 1).

Compost can be made in many ways, butthe suggested method requires the leastamount of labour. It is ideal for city homessince the bags are kept closed andtherefore, there is little chance of thembeing infested with vermin or otherundesirable insects such as cockroaches.

The remaining space at the top ofstanding bag is filled with normal gardensoil; approximately 2 to 4 kg of soil wouldbe required for every 0.11sq. m. of area.The bags are soaked with water two tothree times and the water is allowed todry. It is now ready for planting. Seedsshould be carefully selected. They can betaken from one’s own kitchen(groundnut, cereals like wheat), orbought from the store. The importantpoint here is how one plans the planting.The Institute recommends ‘chain-planting’, where plants are grown toprovide for small quantities of vegetableat staggered intervals and not a largequantity all at once. Seeds, cuttings orgrafts can be placed in the bag and with

Recycling of Kitchen Waste at Central Kitchen,Mumbai Port Trust

After a training programme on ‘City Farming’ given by the International Instituteof City Farming, Mumbai Port Trust has developed an organic farm on the terraceof it’s central kitchen (which is about 3000 sq ft (279 m2) area). Firstly, the farmwas started to dispose of kitchen organic waste in an eco-friendly way. All kitchenstaff members, after their daily work in the kitchen, tend the garden, which hasabout 275 plants. Besides the eco-friendly disposal of waste, the employees,who are not professional gardeners, experience creative pleasure in a friendlysocial environment. In a span of five months fruits like pomegranate, guava,sugarcane, and a range of vegetables like ladyfinger, tomatoes and radish wereproduced. Many people visit the farm, and the workers take pride in showingthem around the garden. The positive response has helped add to their self-esteem. This can be seen from their enthusiasm and changed attitude. The farmwas awarded the 2nd prize by the National Council of Friends of Trees in theannual show held in February 2003.

the right amount of watering, they beginto take root and flourish. Seeds may beplaced 1.5 to 2 cm below the soil leveland three weeks later, the plant will havefully emerged from the soil. Leaves maybe given foliar sprays and pests shouldbe dealt with, as far as possible, usingnon-toxic, homemade solutions.

Water use in this so-called ‘Doshi System’is also considerably less than inconventional soil farming. Since the plantgrows in sealed bags or other cylindricalbags or containers, considerably lesswater is needed when compared togrowing on fields, where most of thewater evaporates. The system is suitablefor any scale of operation and in any openspace. Dr. Doshi uses these bag systemsto grow a variety of fruits, vegetables andcereals. He has also grown 10,000 sugarcane plants. Both small and large farmerscan use this method, since it is easilyreplicable and depends, very much, onmaterials available in the localenvironment.

Dr. Doshi’s good practices could have asignificant impact on policies relating tofood production. Today, mostgovernments have fallen into the trap ofreallocating all the food production to thecountryside. New policies supportingsuch forms of urban agriculture shouldnow be encouraged. Urban farmingbrings health and other benefits(including recreation and physicalexercise) to city folk. Farms of the kindpromoted by Dr. Doshi can also reducedfood prices. Even if the vegetables andfruits produced are not destined for themarket, their availability to householdsin the cities can help to reduce foodscarcities.

Figure 1. The different layers required in the containers to grow the plants

SPOTLIGHT

The writers are owner ofwww.cityfarming.com

The article provides an updatedinsight on the role that urbanagriculture can play in pursuing the

Millennium Development Goals.Reference is made to urban agriculturein relation to the recent and importantissues affecting the world economy andthe environment, regarding climatechange, soaring food and energy prices.It intends to raise awareness and informdecision makers and planners of thedifferent aspects of urban agriculture,which entails a broad range of activities,related to the food production anddistribution chain, within natural

resources planning and use, includingurban and peri-urban forestry. The paperfurther illustrates ongoing initiatives thatsubstantiate how UPA can, in differentenvironments, play its role as a source ofemployment, income and food which arethe indicators towards poverty reductionand improved food security. Withoutbeing exhaustive, reference is made tomajor key players and stakeholders thatare committed and involved inadvocating and promoting UPA as a keyarea of agriculture policy and sustainabledevelopment strategies. The paperintends to provide the necessary

background that would facilitate furtherinitiatives and recognize UPA as a meansto improve the livelihoods of the urbanpoor.

Introduction

By 2020 the developing countries ofAfrica, Asia, and Latin America will behome to some 75 percent of all urbandwellers, and to eight of the anticipatednine mega-cities with populations inexcess of 20 million. Most cities indeveloping countries have greatdifficulties coping with this developmentand are unable to create sufficient formal

Urban Agriculture:For Sustainable PovertyAlleviation and Food Security

PERSPECTIVE

Excerpt from a report by World Bank


employment opportunities for the poor.They also have increasing problems withthe disposal of urban wastes and wastewater and maintaining air and river waterquality. It is expected that by 2020, 85percent of the poor in Latin America, andabout 40-45 percent of the poor in Africaand Asia will be concentrated in townsand cities. The rapid urbanization goestogether with a rapid increase in urbanpoverty and urban food insecurity.Poverty, hunger and food insecurity havehuman rights implications. Indeed, it isnow widely accepted that poverty shouldnot be seen only as a lack of income, butalso as a deprivation of human rights andthat hunger constitutes a violation of thehuman right to food.

Policy decision and integration of UPAinto development strategies areprerequisites to efficiency and long termsustainability of UPA programs, whichneed to address multi-sectoral and multi-disciplinary issues including crop and

livestock production, aquaculture, agro-forestry in the overall context of propernatural resource management.

Rising food prices, has an ever morenegative impact on the potential accessto adequate food for the poorer sectorsof the urban population. With theurbanization process, urban and peri-urban agriculture has evolved from asimple, traditional and also informalactivity into a commercial andprofessional initiative. UPA has becomea key element in food security strategies.

Urban and peri-urban agriculture is anindustry located within (intra-urban) oron the fringe (peri-urban) of a town, acity or a metropolis, which grows andraises, processes and distributes adiversity of agriculture products, usinglargely human, land and water resources,products and services found in andaround that urban area.

Poverty and food insecurity have been

considered for decades to be ruralproblems. Some analyses have shownhowever, that urban poverty is not onlygrowing rapidly, but has tended to beunderestimated in the past. Figures onlevels of urban poverty for nations or forparticular cities are much lower than theproportion of people living in very poorquality housing, lacking basicinfrastructure or services. Vulnerablegroups in cities often have fewer informalsafety nets (kinship and communitynetworks). Their dependence uponpurchased food is further compoundedby their incapacity to access and usenatural resources to produce their food.Most authors on urban poverty agreethat poverty is clearly becoming moreurban. Urban and peri-urban agriculturecontributes to food security, nutrition andlivelihoods in a combination of ways:

• Providing for family self-consumption, thus contributing tohealthy diet and allowing for saving

Figure 4: Trends in global undernourishment, 2003-05 compared with 1990-92

PERSPECTIVE



on food expenditures;

• Providing a source of income, throughsale of surplus or specialized andintensified commercial orientedproduction systems;

• Improving the supply of local marketswith fresh and micronutrient richfoods at competitive prices; and,

• Ensuring a continuum of tree coverthrough landscape management anduse of agro-forestry systems,hedgerows and woodlots.

UPA already provides a substantialcontribution to the food for the cities inmany countries. Yet, with the rapidgrowth of the urban population and thelow nutritional levels of the urban andperi-urban poor, there is tremendousscope for increasing this source of supply.Benefits of UPA include:

• Non-market access to fresh,

nutritious food for poor consumers,

and income generation (especially for

women);

• Supply of urban food markets, street

food and food processing, providing

additional employment and income;

• Water harvesting, water re-use, andurban wastes re-cycling to providewater, animal feed and fertilizers fordemands of UPA;

• Integrating UPA with urban greening(UG) programs, which can provide

fuel wood for urban residents, reduceurban pollution and temperatures,and offer recreation opportunities toimprove quality of life for all urbanresidents, and in particular for youthand elderly people; and,

• Providing an opportunity forparticipation of urban residents tobenefit from the implementation ofUPA/UG programs, specificallystimulating the involvement ofwomen as complementary activity.

Urban Agriculture to ImproveFood and Nutrition Security ofthe Urban Poor

Until recently poverty was synonymouswith rural conditions, but rapidurbanization, also due to migration fromextreme events (conflict, naturaldisasters...) in many developing countrieshas given birth to a large class of urbanpoor. It is estimated that about one-quarter of the developing world’s poorlive in urban areas, but also that povertyis becoming more urban and that thepoor are urbanizing faster than thepopulation as a whole.

Poverty and food insecurity have beenconsidered for decades to be ruralproblems. Some analyses have shownhowever, that urban poverty is not onlygrowing rapidly, but has tended to beunderestimated in the past. Figures onlevels of urban poverty for nations or forparticular cities are much lower than the

proportion of people living in very poorquality housing, lacking basicinfrastructure or services. Vulnerablegroups in cities often have fewer informalsafety nets (kinship and communitynetworks). Their dependence uponpurchased food is further compoundedby their incapacity to access and usenatural resources to produce their food.Most authors on urban poverty agreethat poverty is clearly becoming moreurban.

Although cities have increasingconcentrations of poor people; for mostpeople, cities represent the best hope ofescaping poverty. Malnutrition in all itsforms is a growing concern in cities. Whilethere are certainly more foods availableyear round and more jobs and socialservices in urban areas, not everyone isable to benefit. A growing number ofurban poor face a daily struggle to feedtheir families. Disadvantaged urbanhouseholds may have to devote anextremely high proportion of theirdisposable income to food, between 54percent and 76 percent in Sub-Saharancapital cities. It is obvious that in thisurban context, the higher the proportionof income spent on food by low socio-economic groups, the more precarioustheir food situation is likely to be,although food budget shares in differentcities may not be directly comparable.

In urban settings, lack of incometranslates more directly into lack of foodthan in a rural setting. In all regions, urbanand peri-urban agriculture is an activityin which the poor are disproportionatelyrepresented. Food production in the cityis in many cases a response of the urbanpoor to inadequate, unreliable andirregular access to food, and the lack ofpurchasing power. Engagement infarming in urban areas has also beenshown to be associated with greaterdietary diversity in most countries.

It is therefore essential that appropriatestrategies be put in place to ensureavailability and affordability of safe andhealthy foods, promoting the productionof such foods in urban and peri-urbanareas thus enhancing livelihoods of actorsalong the value chain. The contributionof urban and peri-urban agriculture tofood security and healthy nutrition for theurban population is probably its mostimportant asset.

PERSPECTIVE


Urban and peri-urban agriculturecontributes to food security, nutrition andlivelihoods in a combination of ways:

• Providing for family self-consumption, thus contributing tohealthy diet and allowing for savingon food expenditures;

• Providing a source of income, throughsale of surplus or specialized andintensified commercial orientedproduction systems;

• Improving the supply of local marketswith fresh and micronutrient richfoods at competitive prices; and,

• Ensuring a continuum of tree coverthrough landscape management anduse of agro-forestry systems,hedgerows and woodlots.

Access to food in urban areas very muchdepends on the ability to generateincome. In this context, governmentsshould recognize the role played by UPAand street food in making food availableto poor families in urban areas and ingenerating income for women. Smallscale UPA activities are known to be veryappealing for women because can bepracticed as a part-time commitmentcombined with other numerous taskrelated to the household and childcare.For example, micro-gardens systems arevery popular since their cultivationsrequire less physical effort as comparedto conventional growing systems. While,women take advantage of the yieldsobtained in household gardens todiversify the family food intake resultingin healthier diets, they also obtain aregular income to sustain other expensesfor food, education or clothingrequirements.

Food Security and Right to Food

Food security exists when all people, atall times, have physical, social andeconomic access to sufficient, safe andnutritious food which meets their dietaryneeds and food preferences for an activeand healthy life. In urban areas, the mainconstraints for the access to food for thehousehold are of economic and physicalnature. Food prices and householdincome are the two economicparameters, while distance, and costs oftransport from and to markets, mayrepresent physical constraints. Urban andperi-urban agriculture can favourably

mitigate these constraints by makingfood and income available at householdlevel. Household food production inurban environments, covering adiversified range of food commodities(essentially fruits and vegetable crops,small livestock, dairy products, eggs,etc),will enrich the family food intake andprovide for a healthier diet according toown culture and food preferences. UPAoffers an advantage because ofproducing locally instead of beingdependent on world prices, which variesaccording to global markets speculation.

virtue of being human. The definitionsof the right to food are similar to thedefinition of food security: Every humanbeing everywhere should have the abilityto produce or purchase safe, sufficientand nutritious food that is culturallyacceptable, for an active, healthy anddignified life. A rights-based approachcomplements food security byrecognizing the existence of legalentitlement of rights holders and of legalobligations of duty bearers towards theformer. It is based on the value of humandignity and makes the individual an agent

This means that UPA is able to guaranteea minimum level of “food selfsufficiency”, especially for the poor withlow purchasing power. While foodsecurity is a technical definition and apolitical goal, the right to food is a humanright that every person should enjoy by

of change in a way that enables him orher to hold governments accountable andto seek redress for violations of his or herrights. The rights-based approach to foodsecurity is also reflected in FAO’s StrategicFramework 2000-2015 which stipulatesthat the Organization is expected to take

PERSPECTIVE


Urban Micro-finance in IndiaWhile 70 percent of India may still be “found in its villages”, India, like the

rest of the world, is increasingly urbanizing. Depending on measurement

criteria, two to three of the ten largest cities in the world can be found in

India, and it is estimated that the country will be more than 40 percent urban

by the year 2030. While the number of rural poor decreased from 25.7 crores

(257 million) to 19.3 crores (193 million) between 1991 and 2001, the number

of urban poor actually increased from 5.2 crores (52 million) to 6.7 crores (67

million). Despite the large numbers of urban poor, most of who have little or

no access to formal financial services, there is relatively little outreach of

microfinance in major urban areas today. Interestingly, the rural focus of

microfinance in India, and much of Asia, is in stark contrast with the

predominantly urban orientation of microfinance in the rest of the world.

While Indian microfinance practitioners have expressed reluctance in the past

to target urban markets due to perceived high levels of client mobility and

weaker social ties, many practitioners in other regions of the world are often

reluctant to penetrate rural areas due to perceived high costs of outreach.

Despite persistent efforts on the part of the global microfinance sector in

knowledge capture and dissemination, there remain some matters on which

regional markets still have much to learn from each other.

Though much of the energy of the Indian microfinance sector to date has

been directed towards the rural poor, some of the pioneers of the sector

have always had a strong focus on urban poverty. SEWA Bank, for example,

was founded in 1974 and has over 1.5 lakhs (150,000) clients, most of them

in urban Ahmedabad. Similarly, Working Women’s Forum has been providing

microfinance and other livelihood services to poor women in Chennai since

1978. Interestingly, both these institutions have been guided by a holistic

approach to combating poverty, steeped in a deep understanding of the myriad

of challenges faced by the urban poor. On comparing the purpose and size

of loan, it is clear that larger loan amounts (> Rs. 20,000) are being used for

productive assets, such as work equipment, livestock, and housing and

infrastructure. The average loan outstanding depends on the purpose for

which the loan is taken as shown below.

into full account “progress made infurther developing a rights-basedapproach to food security” in carrying outits mission of “helping to build a food-secure world for present and futuregenerations”.

Urban Agriculture: Challengesand Lessons Learned

With the urbanization process, urban andperi-urban agriculture has evolved froma simple, traditional and also informalactivity into a commercial andprofessional initiative. UPA has becomea key element in food security strategies.It was officially recognized by the WorldFood Summit in 2002.

Urban and peri-urban agriculture is anindustry located within (intra-urban) oron the fringe (peri-urban) of a town, acity or a metropolis, which grows andraises, processes and distributes adiversity of agriculture products, usinglargely human, land and water resources,products and services found in andaround that urban area.

The phenomenon of urbanization bringssevere challenges to ensuring householdfood security in a context characterizedby high rates of unemployment,increasing development of the informalsector, deteriorating infrastructure,overcrowding and environmentaldegradation.

In addition, cities should respond toincreasing globalization; managing theprocess of decentralization; andproviding basic services to theburgeoning urban poor, whosecontribution to the economy is notusually matched by their access to basicservices. In most cases, urban residentsin developing countries are increasinglyexposed to the daily challenges, such aslack of safe water, inadequate sanitationand lack of environmental safeguards (airpollution, exposure to toxins and waste),and increased poverty and foodinsecurity. In most cities of the developingcountries, urbanization has becomevirtually synonymous with slum growth.The slum population in these countriesalmost doubled in 15 years, reaching 200million in 2005 (UNFPA, 2007).

Tension has been especially high in thegrowing cities which depend ondiminished supplies from rural areas and

PERSPECTIVE

Source: Michael & Susan Dell Foundation and CARE India - 2006, A Promise toPay the Bearer, An Exploration of the Potential for Urban Micro-finance in India.

Loan Type Average Outstanding Amount (in Rs.)

Enterprises:

Work Equipment 30,000

Livestock 33,000

Consumption:

Infrastructure/Housing 27,000

Social Expenses 25,200

Education 14,500

Medical 9,600

Others 3,000

Figure 9: Enterprise Loans Are Much Larger Than Consumption Loans


Excerpt from a report by World BankDated: 30 October 2010

the global food market. With over 50percent of people in the world living inurban environments, urban food securityhas become a huge issue, especially indeveloping countries where infrastructureis poor and general poverty cannotaccommodate increasing food prices.

Calling the worsening of the ‘world foodcrisis’ a serious threat to the realizationof the right to food for all, the UN HumanRights Council adopted by consensus aresolution affirming the importance oftaking into account the right to adequatefood, as recognized in international law.

Indeed, developing responses to manyof the challenges under the frameworkof the right to food would ensure thatthese responses would be better guidedby the needs of the hungry and themalnourished. It would pave the way fortargeting, but also for prioritization,coordination, accountability, andparticipation.

Many rural migrants, seeking betterlivelihoods in cities, have agriculturalbackgrounds and often end up participatingin informal activities, such as urban andperi-urban agriculture (UPA). The UnitedNations Development Programmeestimated in 1996 that 800 million peopleare engaged in urban and peri-urbanagriculture world-wide. Of these, 200million are considered to be marketproducers, employing 150 million peoplefull-time. In African countries 40 percentof urban dwellers are said to be engagedin some sort of agricultural activities.

Important sectors of UPA includehorticulture8, livestock, fodder and milkproduction, aquaculture, and agro-forestry. Urban and peri-urban agricultureis typically informal but wide spread, andoften done under extremely difficultconditions. Urban and peri-urbanagriculture may help to solve some of theproblems of city authorities throughintegrated programs of waste water re-use and organic waste recycling, as wellas through the integration of marketwastes with urban fodder consumption.

What these diverse activities have incommon is proximity to large settlementsof people, thereby creating opportunitiesas well as risks. The opportunities include:

• Access to consumer markets;

• Less need for packaging, storage andtransportation of food;

• Potential agricultural-related jobs andincomes;

• Non-market access to food for poorconsumers;

• Availability of fresh, perishable food;

• Proximity to services, including wastetreatment facilities; and,

• Waste recycling and re-usepossibilities.

The risks include:

• Environmental and health risks frominappropriate agricultural andaquaculture practices; and,

• Increased competition for land, water,energy, and labour.

PERSPECTIVE


Securing Standard Level ofCarbon through Plantation

By Harjeet Singh* and Binaxi Chauhan**

COVER STORY

Delhi has seen rapid urbanizationand modernization of itsinfrastructure in the last decade

such as Mass Transit System (Metro Rail),Highway Development etc. Though,felling of trees is prohibited in Delhi bythe Delhi Preservation of Tree Act, 1994,cutting of trees is often unavoidable fordevelopmental work. Therefore, in orderto compensate the loss of trees felled forvarious reasons, it is important to involveRWAs (Bhagidari scheme) for theplantation of the saplings and increasinggreen spaces which will provide them theopportunities for both passive and activeinteraction. During the pendency of thestudy, it has been noticed thatmaintenance of the parks and plantationis beyond the expectation and members

of the Executive Council of the RWAshave been found to be keen not only inplantation of saplings for beautificationand pollution control, but they haveinvariably expressed interest for theestablishment of herbal gardens. Greenplants play a key role in maintainingecological balance in the biosphere. Apartfrom their unique property of harvestingsolar energy through photosynthesis,they also play a pivotal role in shapingour environment, which includes theirmoderating influence on microclimate,water availability, soil fertility and manyother aspects of our environment.

Introduction

It is, extremely pleasing to learn that theNational Capital Region is blessed with

its legacy rooted deep in the history andculture of the country, and the rulers ofDelhi have always taken adequate careto ensure the quality of its environment.For example, the Sultanate of Delhi, inits regime had made the practice of socialforestry a popular measure to secure theenvironmental balance of the region.Since then the pivotal role played by theforested landscapes in maintainingecological and economic sustenance iswell-known. Ironically, these landscapesare under tremendous pressure now dueto the ever increasing demand for landand other goods and services obtainedfrom such landscape.

Happily enough, since independence,each successive Government of the

A view of the park where the plantationhas been carried-out

Role of Delhi Resident Welfare Associations (RWAs)


COVER STORY

National Capital Territory of Delhi hasbeen trying its best to secure the existingforest cover and tree wealth as well as toensure its further extension to 33 percentof its geographical area, in order to meetthe requirements of the National ForestPolicy, 1988. It is here that the role of anumber of Greening Agencies andcitizens in the endeavour of securingmaximum plantation for the Delhitesbecomes clear. We must remember thatthe greening of Delhi is possible only withsupport of people, particularly theResident Welfare Associations (RWAs),Educational Institutions, NGOs,industries, farmers, Market TradersAssociations, etc.

An analysis of the 9 districts reveals thatbetween 2003 and 2005 data, 5 districtshave recorded higher forest cover withNew Delhi showing the largest increaseof about 1.5 sq. km, and South WestDelhi recording a rise of nearly 1.4 sq.km. Other districts which have done wellare North West Delhi, North Delhi andWest Delhi. This is on account of the factthat Delhi Government has been planting

more than 1 million trees every year since2002. In the districts of Central Delhi,due to lack of availability of land the treecover has not increased, but in theremaining 3 districts of East Delhi, NorthEast Delhi and South Delhi the increase

has been very marginal. The Delhi

Government has noted these

phenomena, and all-out efforts will be

made to concentrate on these three

districts for more intensive tree

plantation.

Trees have had a special place in our lives

since times immemorial and this ethos has

found expression in our religion, creative

arts, and Ayurveda. These are regarded

an essence of the life support system of

nature that sustains all life forms on the

earth, being essential for the conservation

of the soil and water resources. On the

contrary, deforestation results in soil

erosion, which in its wake results in

severe ecological imbalances.

As per the State of Forest Report, 2003of the Forest Survey of India, Dehradun,the National Capital Territory has 288 sq

km as Tree Cover and Forest, against thetotal geographical area of 1,483 sq km.This represents 18.07 percent of the total

geographical area of Delhi. The Forest

Cover and Tree Cover in the NCR are

represented by 170.17 sq km and 98 sq

km, respectively. The territory seems

overwhelmingly green from above.

However, this green cover is not

uniformly distributed. Of the nine districts

recognized in the NCT, the New Delhi,

South and South-West Districts possess

much more greener areas than the

others.

Role of RWAs in Tree Plantation

As many as 45 RWAs have been selected

in 9 districts of NCT of Delhi for the

assessment of tree plantation/tree cover

and their role for proper maintenance.

The plantation acts as a carbon sink by

removing the carbon and storing it as

cellulose in their trunk, branches, leaves

and roots while releasing oxygen back

into the air. District-wise details on the

status of RWAs under the study areas are

as follow.

Early spring; young leaves of Lagerstroemia indica in the flowering stage


The North-west district where 5 differentRWAs were contacted comprises colonieshaving university teachers (Vaishali),school teachers (Sarswati Vihar andGhalib apartment) mixed or office goingpersons. It has been noted that theinhabitants are deeply conscious aboutthe environment of their colonies as wellas security and except for the NagloiVistar Vikas Samiti which represents anunapproved colony, the participation ofthe members is either 50 percent or morewhich is really creditable.

It was noticed that maintenance of theparks and plantation is also beyondexpectation and the members of theExecutive Council of the RWAs have beenfound to be keen not only in plantationof saplings for beautification andpollution control, but they have invariablyexpressed interest for aromatic andmedicinal plants which they hope will beable to provide, in due course of time,some sort of herbal medicines which willbe of use to the residents Ghalibapartment and Vaishali.

Vaishali Welfare Association has donecreditable work by actively pursuing itsaims and objectives through upkeep ofplantation established in the parks, roadsplantation and proper maintenance. Theyounger generation, senior citizens andwomen actively participated in the treeplantations and their maintenanceactivities. It is worthy of praise.

In the South district, which represents

some of Delhi’s most posh colonies, fourRWAs were visited. Here the interactionand the participation of the members inthe activities of the RWA is invariablyabove 50 percent. This augurs well forthe proper functioning of the welfareassociations in the colony anddevelopment of fellow-feelings as wellas mutual concern.

The park at the Sarita Vihar RWA is wellmaintained both in respect of avenueplantation and from the pollution controlpoint of view. The avenues and the roadsalso give a picture of being maintainedproperly but there is a lot which deserveto be done in the form of regular visits ofthe officials of the departments like DDA,MCD, Horticulture coupled withinteraction with the members of the

Young leaves of Lagerstroemia indica with Cassia fistula

A view of plantation in the Sarita Vihar New Delhi

COVER STORY


executive councils of the RWAs tomaintain this for future also.

Similarly, the members of the KalkajiBhagidari Coordination Committeelocated at Nehru Enclave maintain theirpark and plantation to a level beyondexpectation and the members of RWAshave been found to be very keen inplantation for beautification. All in all, themembers of this RWA have displayed anexcellent level of enthusiasm towardstheir assistance in the execution ofvarious colonies/maintenance of treeplantation.

The Chitrakoot colony has established 3beautiful parks and an assemblage ofcopiously populated trees which alongwith those in the avenues belong to notless than 30 species. Several of these areof medicinal value and some others havebeen planted keeping in mind theirmythological significance and day-to-dayutility. On account of the fact that severalemployees of the MCD residing in thiscolony, its maintenance is in an excellentstate and several senior citizens, womenand young boys and girls can be seenvisiting the parks. Their assured safetygoes to the credit of the Executive Councilof the RWA whose members areextremely vigilant in this regard.

Total 145 trees and shrubs species havebeen planted in the surveyed RWAs suchas Cassia fistula, Withania somnifera,Terminalia arjuna, Nycanthes arbor-tristis,

Callistemon viminalis, Lagerstroemiaindica, Carissa carundus Polyalthialongifolia, B. variegata, Cassia fistula,Delonix regia, Parkinsonia aculeate,Albizia lebbeck Pithecellobium dulce,Azadiaracta indica, Roystonia regia,Polyalthia longifolia, Mimusops elengi,Putranjiva roxburghii, Holopteleaintegrifolia, Polyalthia longifolia,Mangifera indica, Azadirachta indica,Ficus religiosa and Alstonia scholaris etc.The performance of the planted specieshas been found to be satisfactory bothin terms of growth and development.

Green plants play a key role inmaintaining ecological balance in thebiosphere. Apart from their uniqueproperty of harvesting solar energythrough photosynthesis, they also playpivotal role in shaping our environment,which includes their moderating influenceon microclimate, water availability, soilfertility and many other aspects of ourenvironment. The plantation of trees hasnot only resulted in pollution control butalso in the beautification in the park andthe colony. The people are careful andconscious about the environment and

A view of the avenue and roadside plantation maintained by the Kalkaji, New Delhi Colony RWA

A view of Lagerstroemis indica at initial stage

The plantation oftrees has not only

resulted in pollutioncontrol but also in thebeautification in thepark and the colony.

The people arecareful and conscious

about theenvironment and

need for under takingplantation site

COVER STORY


COVER STORY

need for under taking plantation site. Theplantation has been carried out throughselection of saplings but also forbeautification and pollution control. Themembers have invariably taken interestin the selection of the rare species of suchornamentals shrubs which remain in theflowering state through-out the year.

In totality, these RWAs are doing laudablework for which they have earnedappreciation, both from the residentmembers and the general public. Thecriterion for the selection of species wouldnaturally be based more upon theornamental appearance, easy availabilityof planting materials, capability toprovide shade, flowering period etc. Toimprove greenery in the surveyed RWAs,plantation of various tree species hasbeen taken up all round the perimeter.

A Look at the Future

Grand plans are in the making for thefuture of Delhi, particularly with respectto sustaining the initiatives towardsgreening Delhi. Delhi Governmentintends to expand Delhi’s forest cover.

This will be realized through concertedand Planned Afforestation Programme innew areas like parks/establishment ofherbal gardens, road side plantation etc,and densification as well as qualityimprovement of the existing green cover.One of the thrust areas will be to revivethe lost biodiversity. Needless to say thiscommitment would call for united andsustained efforts from not just theGovernment but also various civil societygroups like Resident Welfare Societies(RWAs).

Since 2005, more than 2.5 million trees

have been planted or freely distributed

by the Govt. of Delhi and are confident

that the tree cover of Delhi has surpassed

around 400 sq. km or about 20 percent

of the total geographical area of Delhi.

Besides this, 9 new city forests were

created covering nearly 250 hectares of

land, and 14 existing City Forests were

intensively planted. Also more than 5 lakh

saplings were distributed through 1650

eco-club schools, 1900 RWAs and more

than 400 CNG/Petrol Stations/Mother

Dairy Booths. As a result, the Department

is satisfied that the increase in the green

cover of Delhi is on the rise and all efforts

are being made to increase the

percentage of the forest coverage. In this

direction, the Cabinet had taken a major

decision to undertake greening of nearly

15,000 gardens and parks in Delhi

through the PPP initiative so that these

green areas serve as sinks for carbon

emissions from several sources in Delhi.

The Department will create new city

forests, green the waste lands in Aya

Nagar, intensify the plantation in existing

city forests, densify the ridge, and

undertake large scale plantations

alongside the several drains of the city.

Participation means, a dynamic groupprocess, where in each and everymember of the assembly contributes,shares or is influenced by the exchangeof ideas and activities towards problemsolving and decision-making. From sucha point of view, participation of peopleinvolves and amongst other things, looksfor the voluntary cooperation, sparingtheir time, energy and money on specificprogrammes, and adopts therecommended resource developmentmeasures as well as the managementpractices. For the benefit of the groupitself and achievement of sustained basis

of development, the concept ofBhagidari, has thus enunciated analtogether new philosophy of living in thecolonies. Through this the people havenot only started cooperation with eachother for the improvement of theenvironment of their premises, mutualrespect and brotherhood, and alsodeveloped the sense of cohesion. This isfollowed by confidence to deal with thevarious problems particularly that ofsecurity, maintenance of the parks, roads,plantation, and soliciting the services ofvarious agencies like the MCD, DDA,Department of Horticulture, CPWD,PWD, Department of health, sanitation,as well as the Electricity, etc. All in all,this has made a remarkable dent in thelife of the people since now they canexpect improved services such as thedeposition of the House Tax, Electricityand Water Charges, Sanitation andSecurity, as per their own approach andefficiency. The great upliftment andimpetus provided by the DelhiAdministration, through the Bhagidariprogramme, and taking the RWAs intoconfidence, has played a very importantrole in this context. The two awards ofRs. 1 Lakh and Rs. 50 Lakh, each year tothe RWAs which have been judged thebest and runner up has also created asense of healthy competition andmotivation since each tries to achievesomething better than the other, e.g. atthe WP Pocket Pitampura, the RWAs hasbagged the first prize.

It is, therefore, fully borne out that thefuture of RWAs is bright and they aregoing to bring about a qualitative changethrough afforestation in the environmentof the colonies, both at the emotional andnatural levels.

Acknowledgments: The authorsgratefully acknowledge with deep andrespectful gratitude the consistentguidance and encouragement providedby Prof. G.S. Paliwal, senior consultant,Agricultural Finance Corporation, NewDelhi. The authors would also like toconvey thank to R.K. Sharma, ProjectOfficer, AFCL, Mumbai for puttingencouraging words from time to time.

View of the A3 Block park at Janakpuri

The writers are *Project Officer,Agricultural Finance Corporation Ltd,Mumbai **Research Associate, ICAR,New Delhi


SPECIAL STORY

Woman is half of the sky, halfof the earth, half of the bloodand half of the soul of the

society. No one can deny this fact,because women are indeed a pivotaround whom the family, society and thehumanity moves. The thrift and the creditof women not only change the socio-economic, political, cultural,philosophical, etc., activities of the peoplebut also determine and direct theproduction process of agriculture,industry and service sectors of theeconomy of a country and act as a crucialdeterminant of economic development

of a family, a nation and the world. Thethrift and the credit of women also affectupon the production function,employment, income, consumption,savings, investment, and influence theuse of land, labour, capital, organizationand technology, and also affect theinternal and external trade and balanceof payments of a country. Hence, womenself-help groups were introduced on theconcept of thrift and credit.

Statement of the Problem

The will, the power and the efforts ofwomen in the economy are not fully

utilized for the programmes of self-helpgroups (SHG). The schemes of self-helpgroups had not reached the poorestwomen in rural areas, especially poorwomen who were not in a position tosave. The self-help group – bank linkageprogramme was slow and expensive todevelop the objectives of SHG. Thewomen are in vicious circle of povertyand they are also in the grip of socio-economic, political, cultural,congestional, demographical, spacial,medical, environmental, andphilosophical problems. Scheduled castes,scheduled tribes, weaker sections and

Impact of Women Self-Help Groupsin The Economic Development ofAndhra Pradesh – A StudyBy Prof. Gurajala Sudarshan*


SPECIAL STORY

small and marginal farmers had notgained from self-help groups. A largenumber of the rural poor continued toremain outside the fold of formal bankingsystem owing to their inability to offersmall security for getting the loans.

The problem of mass over dues and wilful

defaulters’ arised due to wrong

identification and recommendation of

beneficiaries by block and panchayat

level officers. The transaction and service

cost was very high. Group formation and

group cohesiveness were weak. Credit

risk was high due to the irregular income

of the poor strata. The credit utilization

of the members of SHGs are diverted for

unproductive purposes which in turn led

to dwindling of repayments and

mounting of over dues and outstanding

of the loans. Some of the self-help groups

were charging higher rate of interest than

advertised for the rural poor and hence,

the rural poor were exploited by self help

groups and by the intermediaries.

The self-help group – bank linkageprogramme had not been of great benefitto commercial banks and RRBs as well asSHG members because of credit riskwhich arose at all the levels oftransaction. The activities of SHGs hadnot increased the employment, income,man-days of work, empowerment, socialstatus, work independence, basic skills,financial knowledge, saving habits, healthcare, sanitary conditions, and education,

etc., of women members. Theexploitation of ground water foragriculture by large farmers andfarmhouse owners with successful bore-wells followed the intensive and theextensive cultivation and caused damageto the economy of the poor and the weakfarmers, and created an artificial droughtin the villages and forced the poor andweak farmers to become defaulters in theself-help groups.

Thus, many problems were noticed fromthe functions of self-help groups becausethe taste and preference of the membershad been changing over the years. Thisapproach in recent times received widepublicity and popularity. It is in thiscontext we study various issues relatedto the Impact of Women Self-HelpGroups in the Economic Development ofAndhra Pradesh.

Objectives

The specific objectives of the study areas follow:

1. To investigate into the organizationalstructure of Self-Help Groups with aview to examining its strength andweakness in achieving the designedgoals.

2. To study the methods and proceduresthat are employed in the mobilizationof savings, borrowings andgovernment assistance.

3. To enquire into the method of credit

deployment and investigate into thecauses for outstandings and overduesin the rural areas.

4. To examine the strategies evolved forthe recovery of loans.

5. To evaluate the socio-economic statusof the members of Self–Help Groupsin the pre-membership situation andin the post-membership situation inorder to study the impact of WomenSelf-Help Groups in the economicdevelopment of rural areas.

6. To derive the policy implicationswhich may emerge from the studyand to suggest policy measures tostrengthen the functions of Self-HelpGroups.

Hypotheses of the Study

The following hypotheses are tested inthe study:

1. Whether or not the aim oforganizational structure of Self-HelpGroups have achieved the desired goals.

2. Whether or not the methods andprocedures that employed in themobilization of savings, borrowingsand government assistance are thecauses for the success of Self-HelpGroups in the rural areas.

3. Whether or not the methods of creditdeployment and the strategiesevolved for the recovery of loans,outstandings and overdues areproperly managed for the success ofSelf-Help Groups.

4. Whether or not the socio-economicconditions of members of Self-HelpGroups in the post-membershipsituation is greater than the socio-economic status of members of Self-Help Groups in the pre-membershipsituation.

5. Whether or not the women Self-HelpGroups reduced the poverty andunemployment of the members byusing the concept of thrift and credit.

Methodology/Research Design ofthe Study

For the purpose of study, the state ofAndhra Pradesh is selected. AndhraPradesh State consists of three regions,namely Coastal Andhra region,Rayalaseema region and the Telanganaregion. These three regions are composed


SPECIAL STORY

of 9 districts in Coastal Andhra, 4 districtsin Rayalaseema and 10 districts inTelangana region and are inhabited by7.57 crores of population of which maleconstitutes 3.82 crores and femaleconstitutes 3.75 crores as per the censusof 2001. Three regions of the state had

not contained the same geographical

features. So, different regions are selected.

A sample of two districts in Coastal Andhra

region, one district in Rayalaseema region

and two districts in Telangana region are

selected on the basis of proportionate

sampling which covers 21.73 percent of

the districts of the state. In each selected

district one Tahasil/Taluq was selected on

the purposive sampling basis.

In each selected Tahasil/Taluq, a sampleof two villages which possess SHGs areselected on the purposive sampling basis.In each selected village, the Women SelfHelp Groups which had formulated andorganized by the government and whichhad bank–linkages activities are selectedfor the purposes of study. In each selectedvillage, 200 women who are themembers of Self-Help Groups areselected on the basis of proportionatesampling which covers a total of sampleof 2000 women members. Besides, bankslinkage activities – deployment of credit,

recovery of loans, overdues, outstandingsof loans, subsidy or revolving fund in theselected villages, are studied during theperiod from 1992 to 2010. Thus, fivedistricts, five Tahasils/Taluqs, ten villagesand 2000 women members and bank-linkage activities in the selected villagesare studied.

Collection of Data

The study is based on both primary andsecondary data. The secondary data arecollected from the office records andfiles of the selected village GramaPanchayats, Tahasil offices and Districtoffices of the respondents. Thesecondary data are also collected fromthe works of unpublished Ph.D. theses,M. Phil. Dissertations, research journals,books, census data, etc. The primarydata are collected through a structuredquestionnaire and by holding interviewswith various categories of respondentsfor the development of womenmembers of SHGs. Besides, the primarydata are collected through observationmethod which is related to theobjectives of the study.

Limitation of the Study

Since the main objective of the presentstudy is to assess the impact of women

self-help groups in the economicdevelopment of rural areas, the studydoes not examine the cost-benefitanalysis of the respondents. In thepresent study, the data are collected fromthe secondary source, especially from theoffice records and files of the Tahasiloffices and Grampanchayat offices. Thesecondary data had serious limitationsand no uniformity. One of the limitationsof the primary data was that allrespondents were not maintained theproper information on the impact offactors involved in the study.

Findings

The socio-economic, political, cultural,philosophical, etc., activities of the personwill determine the development of theperson. The active participation ofmembers in SHG is completelydetermined by socio-political and culturalas well as economic factors. The naturalenvironments within which a communitysurvives and prospers has a profoundeffect upon the organization andinstitution. They are evolved by thecommunity to meet their needs. Hence,analysis of socio-economic backgroundof the respondents is imperative.

The younger generation is thriving to


develop the women self help groups andcontributing to the development of socio-economic, political, cultural, andphilosophical, etc., activities of the peoplein the country side. It remembers the lifecycle theory which says that the taste andpreference of the people, employment,income, consumption, savings,investment and production are high inthe young age and all these factorsdecrease in the later stages of age. Thescheduled castes, scheduled tribes,widows and divorced women are out ofthe purview of women self help groupsand forward castes and backward casteswomen are availing the benefits ofwomen self help groups.

The advancement of loan is availed bylittle educated and illiterate women. Therespondents who are doing labour workand the respondents who had agricultureand labour work are joined in women selfhelp groups for financial needs. Familyplanning is not followed in the rural areasas most of the respondents had the familysize of more than four members and theydid not listen to the proposal of familyplanning in the study areas.

The scheduled castes and scheduledtribes possess the irrigated dry land, wetland, unirrigated dry land that had veryless value than the value of irrigated dryland, wet land, unirrigated dry land ofthe forward castes and back ward castes.Forty three percent of respondents didnot possess annual income from theirrigated dry land while twenty fivepercent did not contain the annualincome from wet land, and ninetypercent income of scheduled castes andscheduled tribes is lower than the annualincome of forward castes and backwardcastes. More than seventy four percentof respondents do not possess she-buffalos, cows, sheeps or goats which areessential for the maintenance of ruraleconomy. The income from she-buffalosand sheep and goats are more for allcastes particularly of respondents had noannual income from unirrigated dry land.Most of the respondents do not possespucca houses and are living in semi puccahouses, and some of the respondents arealso living in rented houses.

A higher number of respondents borrowedthe private loans from friends, relatives, andmoney lenders besides the loans from co-operative banks, commercial banks and

regional rural banks. A lesser amount ofprivate loan is available to scheduled castesand scheduled tribes, while a higheramount of private loan is available forforward castes and backward castes. Alarge number of the respondents borrowedthe loan more than twenty five thousandrupees that denotes that debt burden isincreasing trend at the ascending order.Thirty percent of loans are used for thedevelopment of agriculture and fortypercent are utilized for business andlivestock. The investment of scheduledcastes and scheduled tribes for themaintenance of business and livestock isinsignificant. Sixty percent of respondentshad taken the loans above thirty percentrate of interest per annum and it infers thata large number of respondents are payingat higher rate of interest per annum.

A few respondents availed thegovernment programmes such as foodfor work, family planning, old agepensions, Indira Kranthi Pathakam, dairyprogrammes ,etc., which shows thatgovernment is doing something for thewelfare of the people in the rural areas.The employees of the government,particularly the village developmentofficers are informed more about theobjectives of women self help groupsthan the non-governmentalorganizations, neighbours and microfinance institutions. Backward castes andforward castes had more knowledge andmore benefits from governmentprogrammes than the knowledge andbenefits of scheduled tribes andscheduled castes.

There are many politics in getting the loanand the subsidy to the members.

Sometimes, the weak leader of the groupdid not convey the need of the membersto the bank officials to get theadvancement of loan and the subsidywhich indicates that lack of leadership willalso influence the negative impact ingetting the loan and the subsidy. Mostof the forward castes and backwardcastes are aware of women self helpgroups than those of the scheduled castesand scheduled tribes. The neighbours,sarpanches, N.G.Os, micro-financeinstitutions, TV and radio did not informand encourage the governmentorganized women self help groups and alittle information is informed by villagedevelopment officer. Ninety percent ofthe respondents did not know theobjectives of the women self help groupsand they did not satisfy the services frommandal development officers, villagedevelopment officers and sarpanch of thevillages.

A large number of respondents expressedthat more expenditure is incurring for gettingthe loan and the subsidy for all the castes,and there are two types of losses to theborrower. That is, they have to pay transportcharges and they lose their daily wage onthe travelling day, and most of therespondents spent above one thousand fortransport expenditure for getting the loanand the subsidy and their for transportingcharges, because most of the villages wereabove 20 km from the headquarters. Afterdeducting the expenditure for transport anddaily wage, the amount of loan receivedbecomes lessened and the repaymentcapacity will reduce.

Savings of scheduled castes andscheduled tribes are low which infers thatthe participation of scheduled castes andscheduled tribes in SHG is limited andthey don’t gain from the schemes of thewomen self-help groups. Eighty sevenpercent of the members had taken theprivate loans to save. In SHG particularthe scheduled castes and scheduled tribeshad taken private loans to save in SHG.Seventy percent of the respondents savedbelow Rs 1000 per month in SHG.

A large number of respondents expressedthat the group leaders are not actingaccording to the needs of the membersand they had no satisfaction to the wayof group leader and most of the groupleaders did not know the objectives andfunctions of women of self-helps group.

The advancement of loanis availed by little

educated and illiteratewomen. The respondents

who are doing labourwork and the

respondents who hadagriculture and labour

work are joined inwomen self help groups

for financial needs

SPECIAL STORY


The group leaders had little educationand were involved in politics, inefficient,not discharged the duties of group leaderand continued for many years andweakened and lessened the functions ofwomen self help groups. The groupleader is not conducting any regularmeeting for mobilization of savings, forgetting the loan and the subsidy. Themembers expressed that they have vexedwith the functions of group leaders,village development officials and mandaldevelopment officials for getting the loanand the subsidy.

The study infers that seventy-one percentof respondents are doing agriculturebefore joining the women self helpgroups and they expressed that they areworking below twenty five days a monthbefore joining the women self helpgroups. The number of working days ofscheduled castes and scheduled tribes are

low in a month before joining the womenself help groups. Eighty-eight percent ofrespondents expressed that the numberof working days after joining the womenself help groups increased abnormally forall castes, particularly the numberworking days of scheduled castes andscheduled tribes are increasedsignificantly.

The study indicates that the impact ofwomen self help groups for theimprovement of women belong to thepoor is satisfactory and functioning ofwomen self help groups reduced the debtburden in the rural areas. Ninety-fourpercent of the respondents expressedthat they had no experience with thewomen self help groups in the village andthey had no experience with the bankofficials in getting the loan and thesubsidy. Most of the members of SHGare at the mercy of the group leaders and

the government officials. This reveals thatthe impact of women self-help groups inthe rural area has not changed the socio-economic, political, cultural, philosophicalattitude of the respondents.

Eighty-three percent of the respondentswanted that the loan should be enhancedabove Rs 30,000 which denotes that lessamount of loan is not sufficient todevelop their business, to maintain oflivestock, to maintain of service, todevelop agriculture and to personal needsin regard to the rising prices.

The study reveals that the women selfhelp groups helped the elections anddiscussed politics in the group meetingfor all types of elections and vitaldecisions of politics are discussed in themeeting to elect a particular leader. Sixty-seven percent of the respondentsexpressed that rate of interest is notviable to the members of SHG and somemembers also expressed that the rate ofinterest is equal to the rate of interest ofmoney lenders which reveals that thescheme of pavala vaddi or low rate ofinterest scheme of Andhra Pradeshgovernment is insignificant in practice.Sixty percent of respondents said thatthey did not avail of subsidy and theyexpressed that it is a cumbersome processto get a subsidy.

The above study concludes thatestablishment of banks in the villagesbecomes necessary in order to reduce thetransport cost, wage cost, personal cost,etc., for getting the loan and the subsidy,and for the repayment of loan. Villagebanks also inspire the savings which inturn strengthen the deposits, investment,production, employment, income,consumption of people, and influencesthe saving habits of members of SHGs inthe rural areas. For efficient function ofwomen self help groups, elections will beconducted every three or five years toselect a group leader in a democratic waywith a minimum qualification. Theamount of loan should be increased inresponse to the rising prices of goods andservices.

*The writer is Prof. Department ofEconomics, Kakatiya University, Warangal– 506009. A.P. He can be reached atdr.sgurajala@ gmail.com)

SPECIAL STORY


INVESTIGATION

There is a growing interest inmicrofinance as one of theavenues to enable low income

population to access financial services.India with a population of around 300

million poor people has emerged as alarge potential opportunity for themicrofinance sector. With only 48 percentof the population accessing financialservices, expanding the microfinance

sector is also important from theperspective of financial inclusion (WorldBank, 2008). Since 2004, the ReserveBank of India (RBI) has emphasizedfinancial inclusion as an important goal.

Profit V/S Problems:A Study of Micro FinanceInstitutions in IndiaBy Dr Arjun Singh Sirari* Mr Narendra Singh Bohra**

The Indian Micro Finance Sector is one of the growing segments of the Indian capital market. Theseinstitutions are subject of discussion in every newspaper; sometimes these organizations are criticizedas their regress recovery module, their interest rate as well as for the issue of profitability. Thisresearch article is an attempt to focus on the profit that microfinance institutions are generatingand correlating their profitability with the profitability of banks, and at the same time focusing onthe challenges that micro finance companies are facing in the present scenario.


INVESTIGATION

With the growth of the sector both interms of size, scope and number ofparticipants, there is however now a needfor developing a more formal regulatorystructure. First, regulation is needed toenable a number of large microfinanceinstitutions (MFIs) to offer savingsservices, so as to address a majorshortcoming of the sector. The largestMFIs in the country, which cumulativelyaccount for 80 percent of the sector interms of portfolio outstanding, are non-banking finance companies (NBFCs), whoare unable to accept savings deposits(Ghate, 2007). In order to do so, NBFCsneed to obtain investment grade ratingfrom a credit rating institution, which isdifficult for the MFIs. As a result, mostof the growth in microfinance in Indiahas been concentrated on provision ofloans or “micro credit”.

Microfinance institutions in India are alsofacing lots of challenges, the Governmentof Andhra Pradesh imposes a substantialamount of fine for the regress recoverymodule, in Uttarakhand companies likeKGFS is facing recovery problems. Is thisa problem of improper regulatory frameor microfinance institutions are doingtheir business in economic profitorientations model, if this is the reasonsthen what about the future ofmicrofinance institutions in India. Theseall are the issues discussed in this researcharticle.

Objectives of the Article

1. To explore the profitability ofmicrofinance institutions in India.

2. To highlight the problems faced bymicrofinance in institutions in India

Methodology of Research

This research article is based onsecondary data, and the analysis ofvarious article published in variousnewspapers. The data has been collectedthrough different journal, magazinesand research papers.

This research article is divided in two sections,Section-01 highlighting the profitability ofmicrofinance institutions and comparing thatwith the profitability of two major banks inIndia, Section-02 recognizing and analyzingthe problems that microfinance institutionsare facing in India.

Regulatory Framework forMicrofinance Institutions in India

Improper and unavailability of supportiveregulatory framework is one of theproblems of the microfinance sector inIndia, Government of India is unable toformulate right direction for the operationtill date, this is one of the reasons bywhich microfinance institutions aredepicting fluctuation in growth andfacing problems in operation. Followingis the existed regulatory framework formicrofinance institutions in India.

• The Reserve Bank of India Act 1934establishes the central bank (BankingRegulatory Authority of India). It is ofinterest to the question of theregulation of micro-finance in thatunder a 1977 Amendment it containsprovisions for the establishment andoperations of non-banking financecompanies (Chapter 3-B, Sections 45-I). The non-banking institutions can bea company, a corporation or a co-operative society. A non-bankingfinancial company (NBFC) is a non-banking institution and takes deposits.NBFCs are registered under this Act(Second Schedule).

• The Banking Regulation Act 1949covers “banking companies”. It doesnot apply to primary agriculture creditsocieties, co-operative land mortgagebanks and any other cooperativesociety. It is not directly relevant tomicro-finance, other than the factthat it coves local area banks andcommercial banks, which areinvolved in linkage operations. TheBanking Regulation Act provides thebasis for the licensing of local areabanks and mutual benefit societies.

• The companies Act 1956 providesthe basis for the incorporation ofLocal Area Banks, Non-Bank FinanceCompanies, not-for-profit “Section25 Companies” and Nidhis underSection 620.

Microfinanceinstitutions in India are

also facing lots ofchallenges, the

Government of AndhraPradesh imposes a

substantial amount offine for the regressrecovery module, in

Uttarakhandcompanies like KGFS is

facing recoveryproblems


• Co-operative Societies Act of1904; Mutually Aided Co-operative Societies Act in 1995(Andhra Pradesh) SocietiesRegistration Act of 1860 andIndian Trusts Act -1882.

• Enterprises registered under theSocieties registration or Indian TrustsActs are semi-formal institutionsengaged in micro-finance. The Actsdo not provide a basis for any ofregulation so far. There is a taxproblem in that societies and trustscannot engage in profit makingactivities, including financial services.

• Co-operative Societies Act of 1904covers co-operative, SEWA Bank isregistered as a co-operative society,under this act but is regulated by theRBI from which it obtained a bankinglicense.

• With the post liberalization era,market-oriented approach to ruralfinance advocated a new form of co-operative societies act. AndhraPradesh enacted the mutually aidedCo-operative Societies Act in 1995,

allowing the formation of co-operatives largely immune fromGovernment intervention. Threeother States subsequently enactedsimilar legislation (Bihar, MadhyaPradesh and Jammu & Kashmir). TheMulti-State Co-operatives SocietiesBill Act 2002 is operative currentlyand it replaces the MCS Act, 1984.

SECTION – 01

Micro Finance as a ProfitableBusiness Segment in India

We all are aware with the IPO success ofSKS Micro Finance Company, after thatit is a burning topic of discussion, thatmicro finance is profitable business inIndia or it’s a fund that is provided forthe welfare of those people who areunable to access the services of banksbecause banks product are beyond thereach of their financial capability, if yesthen how these micro finance companiesare generating such revenue.

Figure of Table 01 is not sporting the factthat “Micro Finance Companies are non-profitable companies”. As per the figure

MFI is having tremendous growth interms of return on assets and return onequity. SBI which is the largest bank ofIndia, is shown to be having a return onassets 0.95 percent in 2005 and 0.88percent on 2009 it is very less ascompared to the largest micro financeinstitution, SKS Micro Finance Ltd, for thiscompany ROA on 2005 was 2.82 percentand on 2009 it was 4.94 percent thegrowth of 100 percent (approximately).It is almost same with case return onequity (ROE), for SBI it was 18.33percentin 2005 and 14.55 percent in 2009, andfor SKS it was 27.09 percent in 2005 and21.56 percent in 2009. It has beenobserved by the study that the impact ofglobal crisis has also minor impact on theperformance of MFI in India

SECTION – 02

Problems Faced by Micro FinanceInstitutions in India

With incremental profitability, there is lotof challenges faced by micro financeinstitutions in India. Following are someof the problems faced such institutionsin India in the recent times.

Perceived High Risk of MicroEntrepreneurship and SmallBusinesses: Micro entrepreneurs usuallyhave no collaterals to offer tomicrofinance providers against loans,they usually lack an alternate source ofincome, and have little, if any, formaleducation or training in the area of theirbusiness. As a result, commercial banksattribute a high credit risk to microentrepreneurs and steer clear of thissector.

High Costs Involved in SmallTransactions/Micro Lending: The smallsize of micro enterprises increases thetransaction cost for MFIs because theycannot process loans in bulk (unless goodmanagement information systems are inplace). This denies MFIs the benefit ofeconomies of scale; hence, they areforced to cover their costs through highinterest rates on loans.

Lack of Debt and Equity Funds forMFIs to Pass on to the Poor: Capitalavailability for microfinance is hardly aproblem owing to the rapid growth in themicrofinance sector, which has beenfuelled by attention from the media anddevelopment agencies. Even though

AML Microfinance 2005 2006 2007 2008 2009

Return on assets 2.95% 1.67% 1.43% 5.33% 4.31%

Return on equity 51.44% 32.13% 17.85% 55.52% 40.07%

Bandhan Microfinance 2005 2006 2007 2008 2009

Return on assets 1.01% 9.02% 4.96% 8.50% 3.56%

Return on equity 31.43% 130.82% 61.25% 125.28% 39.13%

Mimo Microfinance 2005 2006 2007 2008 2009

Return on assets NA NA -12.83% 0.29% 1.37%

Return on Equity NA NA -39.23% 1.62% 8.19%

SKS Microfinance 2005 2006 2007 2008 2009

Return on assets 2.82% 0.78% 1.96% 3.60% 4.94%

Return on equity 27.09% 4.11% 11.71% 18.01% 21.56%

Spandana Microfinance 2005 2006 2007 2008 2009

Return on assets 4.72% 0.74% 4.23% 6.74% 9.01%

Return on equity 80.20% 21.77% 53.02% 49.18% 55.95%

STATE BANK OF INDIA 2005 2006 2007 2008 2009

Return on assets 0.95% 0.85% 0.88% 1.00% 0.88%

Return on equity 18.33% 16.00% 16.78% 16.78% 14.55%

HDFC Bank 2005 2006 2007 2008 2009

Return on assets 1.42% 1.41% 1.40% 1.42% 1.42%

Return on equity 16.16% 19.48% 19.70% 16.46% 17.77%

Source: Website of respective institutions (calculated)

Table 01: ROA & ROE of MFI in India

INVESTIGATION


there are plenty of financing optionsavailable for MFIs, there is an emergingshortage of money because of the currentfinancial crisis across the globe. Anotherreason for this shortfall is the lack ofawareness of funding sources by MFImanagers.

Difficulty in Measuring the Social

Performance of MFIs: Microfinance is

delivering the economic returns its

proponents promised, but there are only

a handful of tools available that measure

the social return of loan programs for the

poor. To add to the problem, the tools

use proxies to estimate the amount of

poverty and social change surrounding

micro entrepreneurs. This makes the

gathering of funds a challenge because

donors may question the actual impact

made my microfinance.

Mixing Charity with Business: Sincecredit without strict discipline is nothingbut charity (Professor Yunus), ifmicrofinance providers fail to protectthemselves against loan delinquency,they will, in effect, prioritize socialobjectives at the expense of financialsustainability. Improper delinquencymanagement is a result of inadequateimplementation of corporate governanceprinciples, and formal as well as semi-formal microfinance providers oftensuffer from this. As a result, loosercontrols over microfinance deals will leadto higher default rates. Read more aboutthe difficulty in mixing charity withbusiness.

Lack of Customized Solutions for thePoor: Inappropriate targeting of poorhouseholds by microfinance programs isa common problem because MFIs fail tounderstand the varied needs of microentrepreneurs. MFIs must spend time inthe field with their clients and his/herbusiness, and then use this research todevelop customized microfinance toolsfor each micro entrepreneur.

Lack of Microfinance Training forHuman Resource in MicrofinanceInstitutions: Working in themicrofinance sector is a different ballgame compared to the traditionalfinancial sector. For instance,microfinance officers and volunteers needto talk a different language, build lastingrelationships with individual microentrepreneurs, understand the unique

needs of the poor, evaluate theborrower’s sustainability, and grasp thecultural nuances of the borrower’scommunities. Of course, all this needs tobe done by large financial firms as well,but the needs and characteristics of thetwo markets are very different. It’s nosurprise microfinance providers needspecial training to ensure they avoidproblems such as intimidating or under-serving clients.

Poor Distribution System ofMicrofinance Institutions and Lack ofInformation About MicrofinanceInvestment Opportunities: Firstly,microfinance providers may becomplacent with their client base incertain cities and feel no economic need(ignoring the social need to eradicatepoverty) to spread out their distributionsystem to cater to the poorest ofhouseholds. Secondly, microentrepreneurs are sprawled over largegeographical areas, often in remoteplaces, which often makes theminaccessible to MFIs. This is a slightproblem because even though there areover 10,000 MFIs around the world, theymay not know about the existence andneeds of certain micro entrepreneurs.

Dual mission of MicrofinanceInstitutions to be financiallySustainable as well as Development

Oriented: Microfinance providers tendto forget their main objective is socialdevelopment and not profit creation. Theprinciple of ‘one micro entrepreneur –one micro loan’ is overlooked by profit-hungry MFIs who end up targeting thesame individual for many loans and causemultiple borrowing (also known as creditpollution). This is a major problembecause at the end of the day, thatindividual gets burdened by mountinginterest payments and is pushed deeperinto the folds of poverty. Poor governanceon the side of MFIs as well as the microentrepreneur is to blame for this.

Conclusion

Profit is the focus of any business but hereis a discussion that “Are our businesshouses fulfilling the objectives ofestablishment” and other side problemsare always in the way of success andsuccessful adjustments of problemscreate a wealthy business. We cantherefore see that these problems shouldnot be impossible to solve. In otherwords, despite these problems, theprospects of microfinance are quitebright.

The writers are *Principal, GovernmentCollege Satpuli Pauri ** Asistant ProfessorGEU Dehradun, Uttarakhand

INVESTIGATION


OVERVIEW

This article discusses the growth andtransformation of microfinanceorganizations (MFO) in India.

Issues that have triggered transformationinclude size, diversity, sustainability,focus, and taxation. Transformationexperiences in India are few. To move tothe mainstream, non-governmentalorganizations (NGOs) choose from threepopular forms of organizations: non-banking finance companies (NBFCs);banks; and, cooperatives. It appears thatthere is no ideal path for spin-off.Regulatory changes are needed to allowMFOs to graduate to other legal formsas they grow organically. NGOs must bepermitted to invest in the equity ofMFOs, as is the case in Bolivia and Africa.Norms for setting up MFOs under current

legal forms should not be eased.Regulations should ensure that they helpgenuine MFOs and not othersmasquerading as MFOs.

Microfinance in India started in the early1980s with small efforts at forminginformal self-help groups (SHG) to provideaccess to much-needed savings and creditservices. From this small beginning, themicrofinance sector has grownsignificantly in the past decades. Nationalbodies like the Small IndustriesDevelopment Bank of India (SIDBI) andthe National Bank for Agriculture and RuralDevelopment (NABARD) are devotingsignificant time and financial resources tomicrofinance. This points to the growingimportance of the sector. The strength ofthe microfinance organizations (MFOs) in

India is in the diversity of approaches andforms that have evolved over time. Inaddition to the home-grown models ofSHGs and mutually aided cooperativesocieties (MACS), the country has learnedfrom other microfinance experimentsacross the world, particularly those inBangladesh, Indonesia, Thailand, andBolivia, in terms of delivery ofmicrofinancial services. Indianorganizations could also learn from thetransformation experiences of thesemicrofinance initiatives. This paperexamines transformation in the Indiancontext.

Understanding Microfinance

Robinson (2001) defines microfinance as“small-scale financial services—primarily

The Transformation of TheMicrofinance Sector in India:Experiences, Options and FutureBy M.S. Sriram* Rajesh S. Upadhyayula**


OVERVIEW

credit and savings—provided to peoplewho farm, fish or herd” and adds that it“refers to all types of financial servicesprovided to low-income households andenterprises.”

In India, microfinance is generallyunderstood but not clearly defined. Forinstance, if an SHG gives a loan for aneconomic activity, it is seen asmicrofinance. But if a commercial bankgives a similar loan, it is unlikely that itwould be treated as microfinance.

In the Indian context there are somevalue attributes of microfinance:

1. Microfinance is an activity undertakenby the alternate sector (NGOs).Therefore, a loan given by a marketintermediary to a small borrower is notseen as microfinance. However whenan NGO gives a similar loan it istreated as microfinance. It is assumedthat microfinance is given with alaudable intention and has institutionaland nonexploitative connotations.Therefore, we define microfinance notby form but by the intent of the lender.

2. Second, microfinance is somethingdone predominantly with the poor.Banks usually do not qualify to beMFOs because they do notpredominantly cater to the poor.However, there is ambivalence aboutthe regional rural banks (RRBs) andthe new local area banks (LABs).

3. Third, microfinance grows out ofdevelopmental roots. This can betermed the “alternative commercialsector.” MFOs classified under thishead are promoted by the alternativesector and target the poor. Howeverthese MFOs need not necessarily bedevelopmental in incorporation.There are MFOs that are offshootsof NGOs and are run commercially.There are commercial MFOspromoted by people who havedevelopmental credentials. We donot find commercial organizationshaving microfinance business.”

4. Last, the Reserve Bank of India (RBI)has defined microfinance byspecifying criteria for exemptingMFOs from its registration guidelines.This definition is limited to not-for-profit companies and only two MFOsin India qualify to be classified asmicrofinance companies.

Microfinance in India

In India, microfinance is done byorganizations having diverse orientations,as shown in Figure 1.

Societies (SIFFS) started as a supportorganization for fishermen, providingtechnical and marketing support. It thenarranged for loans to its members

NGOs in India perform a range ofdevelopmental activities; microfinanceusually is a sub-component. Some ofthese NGOs organize groups and linkthem to an existing provider of financialservices. In some cases NGOs have a“revolving fund” that is used for lending.But in either of these cases, microfinanceis not a core activity for these NGOs. Anexample is the Aga Khan Rural SupportProgramme India (AKRSP-I). For AKRSP-I, the microfinance component isincidental to its work in natural resourcemanagement. Examples like MYRADAand the Self-Employed Women’s

Association (SEWA) fall in the samecategory. However, as their microfinanceportfolios grew, both organizationsdecided to form separate entities formicrofinance. MYRADA set up an MFOcalled Sanghamitra Rural FinancialServices (SRFS), while SEWA set up theSEWA Cooperative Bank.

At the next level, we find NGOs helpingthe poor in economic activities. Theirpurpose is developmental. They seemicrofinance as an activity that feeds intoeconomic activities. For instance, theSouth Indian Federation of Fishermen’s

Figure 1. Defining the microfinance egg


through banks. When the arrangementwas not effective, it started providingloans itself.

At the third level, we have organizationswith microfinance at the core. They havedevelopmental roots, but are diverse intheir operational details, orientation, andform of incorporation. This paper focuseson organizations that have microfinanceat the core. It also examines NGOs thathave created new MFOs to deal with thespecialized function of microfinance. Itdeals with issues of transformation ofthese organizations, moving from adevelopmental root to a commercialsprout.

Issues that Trigger Transformation

We examine five significant issues thattrigger the transformation of NGOs intoMFOs.

Size: The most significant issue thattriggers a transformation is growth. Thisaffects the promoters as well as theproviders of microfinance.

With organizations like MYRADA andSIFFS that promoted credit groups, bankswere unwilling to provide loans at thepace at which microfinance customersneeded them. It was not easy forMYRADA or SIFFS to deal with theattitudes of people manning theseorganizations. In several instances it wasan enthusiastic bank manager who madethe difference; but this was notinstitutionalized. In such situations, NGOstend to get into action by opening amicrofinance division or by setting up aseparate MFO. The origins of severalIndian MFOs are rooted in the failure ofbanks to meet the needs of the poor.

Diversity: Another trigger fortransformation is the diversity of financialservices that an MFO wants to offer. Inmost cases, NGOs start with credit butsoon realize the need to provide othersupport services. While MFOs havereduced their own lending risks throughgroup guarantees and addressed theissue of willful default, they have notbeen able to grapple with the situationwhere the underlying economic activityfails and the borrower faces a genuineproblem. This can be tackled with acombination of savings and riskmitigation products. But, MFOs realizethat the NGO format is not suited to carry

out these activities, owing to stringentregulations. They necessarily have to lookat transformation options.

Sustainability: Sustainability is closelylinked to growth. Beyond a certain level,MFOs have to seek external funds forkeeping the credit activity going. WhenMFOs seek funds from financialinstitutions, issues like ownershipstructure and capital adequacy becomecritical. For an MFO to survive in the longrun, it has to transform itself into aninstitution with transparent systems andaccountability. In most cases thepromoters of MFOs do not have sufficientcapital to invest and therefore the mainconstraint is that they are dealing with“other people’s money.” NGOs have noclear-cut ownership structure, and makingpeople liable under this format is aproblem. If they wish to be sustainable,the only option is to deal with mainstreaminstitutions (Rhyne, 2001).

Focus: NGOs need to maintain focus ontheir original mandate. Undertakingmicrofinance is transaction intensive andrequires distinct orientation and skills. ForNGOs, there is always a conflict betweenmicrofinance, which earns returns and istherefore “commercial,” and otheractivities that are “developmental.” This

is one reason for NGOs to spin off theirmicrofinance activities. The entity thatemerges to carry out microfinance shouldbe understood by the mainstream andtherefore it should have an appropriateinstitutional form.

Taxation: When an NGO carries outcommercial activities (microfinance) ona large scale, it could lose its “tax free”status, and this might jeopardize otheractivities. Even grants may becometaxable. This is a major concern for NGO-MFOs. This also triggers a search for analternative where microfinance could bekept isolated.

Transformation of Institutions

The transformation process in India is stillat a nascent stage. Microfinance has notgrown to the size that warrants a full-scale study on the transformationprocesses. There are a large number ofsmall initiatives being carried out atvarious places. The estimated number ofmicrofinance institutions that haverequested finances from SIDBI; havecontracted rating agencies like M-Cril,Planet Finance, and CRISIL for rating; orare MACS promoted by the Co-operativeDevelopment Foundation (CDF) areindicated in Table 1.

Note. From SFMC Database, M-Cril Database, C-Gap Rating Fund Database, and CDF Annual Report.a. From Sinha, S. (2001). (This is one of the estimates.)

Legal Status Estimated Important InstitutionsNumber

Not-for-Profit Company 2 IASC, Sanghamithra

For-Profit Company (NBFC) 6 Samruddhi, SHARE Microfin, CFTS,Sarvodaya Nano Finance, Kosh,Asmitha

Local Area Banks 1 KBS Lab, Andhra Pradesh

Cooperatives:Coop Society 6 AMCCS, JMSSM, Bhuttico, VYCCU,

ICNW, Pushtikar, Samiti

Cooperative bank 1 SEWA Bank

Mutually Aided 250 SWDMACTS, Sneha MACS,Cooperative Society PWDMACS, APDSFLMACS, Share

India MACS and others includingmens’ and womens’ thrift co-opspromoted by CDF—All in AndhraPradesh

Public Society/Trusta 400 Assist, SKS, RASS, ASA, FWWB, GDS,Outreach, RGVN, SIFFS, WWF, VWS,YCO.

Estimated Number 666

Table 1: Estimated number of MFI under different organizational forms

OVERVIEW


The figures are only indicative. Thenumber of public societies and trusts islikely to be an underestimate, whereasthe figures for other forms are morerealistic. We discuss the transformationoptions under each regulatory category.

Option 1: In Good Company

If we treat setting up “for-profitcompanies” to mean transformation, notmuch has happened in the field. Weexamine a few examples oftransformation from the limitedexperiences that the Indian microfinancesector has had. Let us look at instancesof MFOs that have registered as NBFCs.Here, there are two approaches: onetaken by Share and Cashpor Financial andTechnical Services (CFTS), and the otherby BASIX.

Share and CFTS are similar in orientationand focus. Both are inspired by Grameenand focus on reaching the poorest. Shareoperated as a public society for a longtime before setting up a NBFC. CFTSstarted as an NBFC and is still trying tograpple with the norms applicable toNBFCs. When Share set up an NBFC, ittransferred a portion of grants receivedfrom C-Gap to poor customers andencouraged them to reinvest those grants

as equity in the new NBFC. This ensuredadequate capital for Share to start anNBFC. This was similar to the Bolivianapproach.

However, an important difference is that

it was possible for the Bolivian NGO to

invest in an FFP (a similar arrangement

was with K-Rep, Kenya). In the case of

Share, it had to transfer all the clients to

a new legal entity, slowly and gradually

winding down the operations in the NGO

and transferring the clients to the NBFC

branch by branch (Sriram, 2001). This

posed some problems for Share. First,

being governed by the prudential norms,

an NBFC is prohibited from accepting

savings till it gets an investment grade

rating. Even if Share gets the rating, its

flexibility of offering savings services to

clients will be very restricted. Share found

an innovative solution where it also

promoted a cooperative (Share India

MACS) to collect savings. This

cooperative in turn would lend to the

NBFC. But this has limitations, as both

entities are incorporated under different

laws and have different governance

structures.

In the case of CFTS, the incorporationitself was a process of transformation.

Cashpor is an NGO operating in multiplecountries. When CFTS set up itsoperations in India, it was registered as acompany. However, unlike Share it didnot have prior operations in India as anNGO. It was, therefore, difficult to raisethe start-up capital. Local laws make itdifficult for small internationalinvestments to come in the form of equityin the financial sector. For a long time,CFTS did not have adequate domesticcapital to be registered as an NBFC. CFTShad to go through the process of raisingcapital, by finding donor money thatcould go to the clients and then be re-invested in the company to reach a sizethat gained economies of scale andrecognition. The Activists for SocialAlternatives is another organization thatfollows the Grameen model and is tryingto transform itself as a company. It isattempting an innovative route offorming private mutual benefit trusts ofclients. The trusts would seek donorgrants and in turn hold equity in theNBFC. However, the scheme has yet totake a concrete shape.

The path followed by BASIX wasdifferent. BASIX had a design that lookedat mainstreaming microfinance right frominception. The structuring of BASIX wascomplicated. BASIX sought a mix ofdevelopmental and commercial fundingfor its operations and had a separatevehicle through which the operatingentity was adequately capitalized. Thisinvolved setting up a holding companythat had large external borrowings fromdonor organizations. The holdingcompany was heavily leveraged. As theformality of getting clearances for settingup an NBFC was going on, BASIX carriedon its operations for a year through anexisting NGO-Indian Grameen Services.BASIX represents a mix of developmentalcapital flowing in on the promise ofsustainability and commercial capitalflowing in from the developmentalwindows of large financial institutions.

The writers are * faculty member at theCentre for Management in Agricultureat the Indian Institute of Management,Ahmedabad (IIMA). Email:[email protected], ** doctoralstudent in the Economics Area at theIndian Institute of Management,Ahmedabad).

Share and CFTS are similar in orientation and focus.Both are inspired by Grameen and focus on reachingthe poorest. Share operated as a public society for a

long time before setting up a NBFC

OVERVIEW


BOOK REVIEW

In the 1980s, Nigel Lawson was a keymember of Margaret Thatcher’sgovernment. He rose to become

chancellor of the exchequer in 1983 andserved in that capacity during the heydayof British neo-conservatism beforequitting in 1989. Of late, Lord Lawsonhas taken on a new job – debunking whathe calls the “secular religion” of our age,climate change.

In this mildly-titled 2008 book, recentlylaunched in India with a new forewordand an update at the end, Lawson flaysthe ‘church of climate change’ – my words,not his. He uses every weapon he can.

So Lawson begins by trying to show howthe science of manmade global warming– climate change is a ‘loaded’ term herefuses to use – is far from ‘settled’ andthat no ‘significant’ warming has takenplace yet as a result of the steady build-up of carbon dioxide in the atmosphere.He concedes that temperatures may risein the future, but quickly adds that itsharmful effects have been overstated bythe establishment. Indeed, Lawson talksabout the benefits a spot of warmingwould bring, especially to the coldcountries of Europe and elsewhere.Finally, the journalistturnedpolitician –who incidentally found conditions in hiswell-equipped southern France home‘perfectly tolerable’ during Europe’s killerheat of 2003 – reasons that even if weassume the world is getting hotter dueto the human use of fossil fuels,drastically cutting down carbon emissionsisn’t an option because that would beboth “economically damaging andpolitically unattainable”.

In a nutshell, Lawson argues that it makesperfect economic sense for the world tocontinue to use fossil fuels as these arethe cheapest available forms of energy.It will cost less, he says, to adapt to global

warming than to spend billions on cuttingcarbon emissions.

Lawson accuses the climateestablishment of coating a grain of truthwith a load of rubbish, but he too couldbe accused of slant and cherry-pickingfacts. For instance, he contends that nowarming has taken place since 1998. Justdays ago – Wednesday, January 19 to beexact – the World MeteorologicalOrganization settled that debate, saying2010 was the warmest year on record.Before the 2010 record, it could howeverbe argued using certain data-sets that1998 was the warmest year. Even so,climate scientists look at trends ratherthan singleyear records. And the trend isclear – from 2001 to 2010, globaltemperatures averaged 0.43 degrees Cabove the 1961-90 average. This was byfar the w a r m e s t decade on record.

Lawson cites just one study when hecontends that the net ice mass ofGreenland is, in fact, increasing. Everyrecent study, including satellite data fromGRACE, the Gravity Recovery and ClimateExperiment mission, and Nasa’s ICESat orthe Ice, Cloud and land Elevation Satellitepoint to significant loss of ice in the 2000s.In fact, most of Lawson’s conclusions canbe similarly challenged.

But the one point that Lawson rightlymakes is on alarmism. Climate study isan extremely complex science, butactivists often tend to oversimplify andarrive at inaccurate conclusions. In thelong term, this can only damage thecredibility of the whole climate-changeissue. Purely as a challenge to themainstream view, Lawson’s book shouldbe welcomed – even though he doesn’thave enough gunpowder to mount aserious onslaught.

Off The ShelfWho says there’s global warming?

By Amit Bhattacharya

Book : An Appeal To Reason:A Cool Look At GlobalWarming

Authors : Nigel Lawson

Publishers : Harper Litmus

Pages : 166

Price : Rs 299

The Review as Published in Times of India


BOOK REVIEW

The first line grabs attention: “If businesses managed theirmoney as carelessly as they manage their people, mostwould be bankrupt.” And yet, to most companies, it is

profits, not people that matter. Few companies know how tonurture and retain talent. Surprised? Perhaps, but it may beappropriate to pay attention as this comes from Bill Conaty,General Electric’s senior HR vice-president and Ram Charan,an adviser to multinational companies. Conaty has workedalongside legendary CEOs such as Jack Welch and Jeff. Oftenseen as the modern face of HR, Welch said of Conaty: “Theguy is spectacular. He has enormous trust at every level. Theunion guys respect him as much as the senior managers.”

Written in an easy, conversational style, “The Talent Masters”offers apt examples to illustrate the points it makes. Apple’sfounder, the legendary Steve Jobs, for instance. A fine, if toughact to follow. The runaway success of Apple’s iPod suggested itwas the bestselling MP3 player ever. How did that happen?Simple. Jobs spent four hours a week, 50 weeks a year, for 12years, brainstorming with software, hardware and designexperts to come up with the most brilliant ideas.

There is sound advice for companies serious about nurturingtalent. An all-employee global database can help zero in onthe right person for the right job. Identifying tomorrow’s leadersis important too. For that, an enlightened CEO is a must. Next,have work values. At Hindustan Lever, for example, it ischaracter that matters, wherein an individual puts his company’sneeds before his own. Also, build trust. But that is easier saidthan done. And that’s where strong human resourcemanagement matters.

Examples of well-known brands such as GE, P&G, Novartis andHindustan Unilever underline the fact that money is just acommodity; it is talent that gives a company the edge. At GE,when someone from the top management quits, the companydoesn’t go to pieces. There is no leadership vacuum – even fora day – because the company already has someone trained,ready to take over. And when newcomer Omar Ishrak tookover GE’s ultrasound business, he received all the help heneeded. That helped. From a $130m business, which was losingmoney, it grew to $300m within three years of Ishrak takingover.

The book crucially also advises companies against ignoring thejuniors. At Hindustan Lever, it’s not uncommon for the CEO tovisit young sales managers out in the field. Similarly, the CEOof P&G spends about 40% of his time with his people.Finally,make leadership changes, if needed. Goodyear’s old

Here’s How To Get TheX Factor

Shobha John

Book : The Talent Masters

Authors : Bill Conaty and Ram Charan

Publishers : Random House

Pages : 320

Price : Rs 699

hierarchical structure prevented people from speaking out. Butthis, say the authors, “is tantamount to suicide.” The companymade the req u i re d changes and they helped greatly.

The Review as Published in Times of India


According to a report submitted by theoffice of the Agriculture Minister,

despite the delay in advance of themonsoon, India is expected to get morerains this season than was predictedearlier by the weather office. In an updateto the monsoon forecast of the IndiaMeteorological Department (IMD), rainsin the June-September period will be 102per cent of the long-period average.

“It will be 102 per cent,” AgricultureSecretary P K Basu told reporters whenasked about the quantum of rainfall thecountry would receive this season. InApril, IMD had said the country would

Agri Secy Predicts More Rains This Monsoon


receive only 98 percent of the long periodaverage (LPA). LPA, at 89 cm, is the meanrainfall received by the country over aperiod of 50 years.

India had received 11 per cent less rain

than normal in the June 1-23 period,

even as the southwest monsoon, which

had been virtually stationary in the past

week, showed signs of advancing

northwards.

The weather office said the countryreceived 97.4 mm rainfall for the June1-23 period, against the normal levels of109.6 mm. However, weather scientists

have said there is no need for alarm, asthere is still hope for improvement inrainfall across the country.

The southwest monsoon, which is nearly10 days behind its normal schedule overNorth India, is expected to strengthenwith the formation of a low-pressure areain the Bay of Bengal. Since their onset onMay 31, monsoon rains have made astaggered progress and stopped in theirtracks due to cyclone ‘Phet’, delayingtheir advance by at least 10 days to thebreadbasket northern region, as well asthe central and northwestern parts of thecountry, which mainly grow oilseeds.

India is 5th inGlobal Citrus Fruit

Annual Output

According to the latest statistics, Indiais ranked fifth in the global citrus

fruit annual output, stated a researchreport by TD the market publishers.Citrus fruits occupy 10% of the total areaunder all fruit crops in India. It also hasthe third position after mango andbanana in the fruit production in India.

According to the research firm, “However,the Indian citrus processing industry has ahuge potential for development. North-East India is the native place of many citrusspecies. It is of particular interest becauseof its high content of vitamin C andrefreshing juice.”

Out of the different types of citrus fruitswhich are grown in India, orange, sweetorange and lime are of commercialimportance.

AGRI NEWS

India is expected to witness record riceoutput. Production may go to 100

million tonnes in the year ending June2011 compared to 89.3 million tonnesa year ago, stated Mr Vijay Sethia,president of All India Rice Exporters’Association.

The Central government has so farallocated nearly Rs 79.14 crore for

spices production in the country, statedMr KV Thomas, minister of state foragriculture, consumer affairs, foods andpublic distribution.

Mr Thomas, said, “Under two importantcentrally sponsored schemes, namelyNational Horticulture Mission(NHM) andHorticulture Mission for North East and

Himalayan states, the agriculture ministryaims to boost spices quality andproductivity.”

The official data claims that theagriculture ministry has spent nearly RS93.78 crore in 2007-8, Rs 11.79 crore in2008-09 and Rs 88.51 crore in 2009-10.Moreover, the ministry has also taken upa holistic approach for the developmentof horticulture crops.

Rs 79 cr Allocated By Centre ForSpices Production’

A report by the agriculture minister saidthat the rice output was at 99.2 milliontonnes in the year ended June 30,2009.The Indian farmers had planted 27.1million hectares of rice as of August 13,as compared with 25.1 million hectaresa year ago.

India is All Set To Register Record RiceHarvest

41Financing Agriculture 41Financing Agriculture

The Government of India is in no moodto uplift the ban on the export of

onions. The government has also stoppedthe sales of subsidised onions in thenational capital region with the prices ofonion getting lower.

“Though the price of the onion haseased...but we have not reached the

Export Ban Lift on Onion Not Soonstage to restart export of the vegetable...we are not in any hurry. Only previouscontracted onions are importednow...there is no need for furthershipment of the vegetable as thedomestic supply of the crop has increasednow,” said, K V Thomas, Food Minister.

The ban on the export of onion is

AGRI NEWS

The Customized Farmers Training isone of the innovative interventions

under Rashtriya Krishi Vikas Yojna(RKVY). Agricultural FinanceCorporation Limited has been awardedthe task of implementation of aboveproject in 820 Blocks of U.P.

The mission of the project is to increasefarm productivity, profitability andsustainability of farm system andefficient use of natural resources andagriculture inputs.

To achieve the mission following tasksare being conducted:-

1.Providing customized farmers trainingas per need of farmers at villagecluster level;

2.Providing online information onweather parameters, demand anduse of agricultural inputs and marketintelligence;

3.Quick alert system for benefit ofstakeholders and for management ofcrop production support system, yieldassessment, shortfall in productionetc.

The farmers of the State are being

benefited at large with the scope of thetasks of this project.

During one of the monitoring visits ofcustomized farmers training in Nand Khasvillage of Chirgaon Block of JhansiDistrict, Shri Laxmi Narayan one of thefarmers has narrated the problem ofwhite powder type fungus attack on thecrop of the matar (pea) in his village. Thiscaused a 30-40% loss in production tothe farmers of the village.

Shri Laxmi Narayan has also around 6 ha.of land under matar cultivation and hiscrop is also under same fungus attack.To experience the problem personally theundersigned, Block and District Inchargeof the project visited the field of ShriLaxmi Narayan and it was found that crophas come up very fine and a good numberof matar pod is also visible in the cropbut almost 10 to 15% crops were alsounder same fungus attack.

As per provisions of the project, a quickadvice was sought over telephoneconstituted from the expert panel underthe project. After listening to the problemthoroughly, expert panel has suggestedto mix 6 ml. of Kaliksan or Kerathen

medicine in 10 litres of water and spraythe solution in the field of matar so thatfurther fungus attack can be stopped.

Shri Laxmi Narayan was very muchamazed to get the solution of hisproblem so quickly and he applied themedicine as suggested by the expertand saved his crop from further fungusattack. He has also suggested the useof medicine to his fellow farmers, whowere also suffering from the samefungus attack.

Later on, in the larger interest of the matargrowing farmers under quick alert systemof the project, a SMS was flashed to themobile phones of farmers recommendingthis treatment and ways of its use to stopthe fungus attack on the matar crop,which has been very much appreciatedby the farmers of the area.

At last, due to timely steps taken to stopfurther spread of fungus attack, farmersare getting good production/price oftheir produce.

D S VaidyaCluster Coordinator, CFT & ICT Project,AFCL, BDLO, Jhansi

Impact of Customized Farmers Training and Extension and onlineAgriculture monitoring through application of ICT at Block Level

imposed by the government sinceJanuary as the prices of onion werespiralling out of control. During the crisisperiod when the cost of onion washovering at Rs 70-85 per kg in thenational capital, the government hadallowed for the import of the vegetablefrom the neighbouring countries.

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