Strategy to spur the rural economy: Creating value and sustainable livelihood for migrants

Published: July 11, 2020 4:15 AM

As part of the strategy to spur the rural economy, migrants should be encouraged to invest in the medium-term and long-term livelihood options.

The government, through its various interventions specifically through the Prime Minister Garib Kalyan Yojana, MNREGA has provided timely relief to migrants in these difficult times.The government, through its various interventions specifically through the Prime Minister Garib Kalyan Yojana, MNREGA has provided timely relief to migrants in these difficult times.

By GR Chintala

Roti, Kapda and Makan symbolise the essential requirements for a decent living with the absolute basic being food (roti). The question of lives and livelihood is inextricably linked to food. Perhaps, the most disruptive impact of the Covid-19 pandemic has been the forced return of migrants to their native states. It is estimated that at least 10 million (of 60 million) inter-state migrant labourers have returned home. The obvious reason for return migration is lack of earnings and inadequate savings to tide over the lockdown period. Majority of the migrants have returned to states like Uttar Pradesh, Bihar, Jharkhand, Odisha, Madhya Pradesh, Rajasthan from metros like Delhi, Mumbai and other States (Gujarat, Karnataka, Kerala). The government, through its various interventions specifically through the Prime Minister Garib Kalyan Yojana, MNREGA has provided timely relief to migrants in these difficult times.

The PM has also extended the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) till the end of November. The safety net of free rations is perhaps the best way of immediately reaching out. This will not only provide minimum food but also provide the bandwidth to look for alternate livelihood options.

We need to capitalise on this and build a development paradigm which ensures that additional and sustainable livelihoods are created in rural areas, especially in the reverse migration states. As per Periodic Labour Force Survey (PLFS) 2018-19, the average monthly earnings of the self-employed men and women are in the range of Rs 9,100-9,600 and Rs 3,800-4,400, respectively. Quick surveys, though thin on the sample, carried out by some voluntary organisations, indicate an unwillingness to return to cities. These also report that migrants have indicated an income of anywhere between Rs 5,000 – Rs 15,000 per month, depending on the state and size of family as adequate for them to remain in their native place.

Cash transfers might alleviate immediate stress, but longer-term measures are needed. This maybe an opportunity to rethink the whole aspect of migration and reconfigure it in a way that it improves the prospects of migrants and also entail solutions to some of the long vexing issues facing rural areas by using the innate or acquired skills of the migrants who have moved back. For example, the marketing of agriculture and horticulture products and non-farm produce has been an area of concern and calls for new arrangements involving local resources and institutions.

In many parts of the country, FPOs stepped in successfully creating supply chains in the Covid scenario. There are also numerous examples across metros in the way groups of farmers took the initiative to ensure direct delivery of produce to gated communities and societies for products ranging from exotic avocados to perishables like regular fruits and vegetables. The entire logistics chain has been set in motion, but it currently lacks depth and width. Individual enterprise combined with modern communication tools has facilitated outreach. An institutional fillip which builds on this with expertise can generate livelihoods at various levels. Some of the migrants working in the food and vegetable supply chain in big cities can be engaged with FPOs on the marketing side as they have a fair understanding of the nuances of marketing and consumer preferences in urban areas. There are close to 6,000 FPOs in the country and growing. These can be ideal institutions to absorb them gainfully. If this new institutional supply chain gains traction, a variety of jobs around packing, sorting, grading, etc, can be created in rural areas in a much more permanent way. This will help in addressing two challenges—creating employment and reduction in wastage of perishables. Small-sized transport logistics (small vehicles, vans, cold storage vans) also can be gainfully absorbed as drivers. The growing infrastructure of FPOs can be used to become the fulcrum of triggering and shaping value chains in rural areas.

To enable this, various actors will need to rethink their roles and envisage the support needed. Banks will need to ensure credit for these supply chains right from working capital to vehicles, logistics service providers, infrastructure, etc. Organisations like NABARD will need to ensure that the necessary hand-holding happens. Resource centres for FPOs are in fact being envisaged, which can be fast-tracked to provide the much-needed expertise to FPOs on these aspects. There also exists a case for tweaking some of the skilling programmes in a manner that recognises the prior learning and experiences of these migrant workers in various sectors and not necessarily link it with fixed tenure placement based trainings/skilling programmes. For example, a migrant worker who has been engaged in the vegetable supply chain need not have a requirement of a fixed tenure training but can quickly be trained (re-skilled) in terms of FPOs requirement which will give him/her quicker access to find a job locally. So certain tailoring and flexibility of the existing skills programme taking into account this new reality depending on the state can be thought of.

Local institutions and decentralised development needs to be strengthened. They are better equipped to absorb the shocks and disruptions that are created in the supply chain. The Primary Agriculture Credit Societies (PACS) can function at the village level in a multifarious role—aggregator, supplier of credit, forging marketing linkages etc. One of the critical gaps in this scheme of things is these are infrastructure deficient. Our experience shows wherever PACS are well endowed with infrastructure, they have led to positive externalities. We need to strengthen the infrastructure of good PACS.

As part of the strategy to spur the rural economy, migrants should be encouraged to invest in the medium-term and long-term livelihood options.

This will entail demand for credit which banks, financial institutions, SHGs and their networks must fulfil. It may require these agencies to create tailor-made changes in terms of collateral security, repayment terms, customised loan product, the concessional interest rate, which they should be willing to offer. There is a demand for credit provided lending institutions are willing to look beyond the routine trodden path.

A similar case exists in the case of handlooms & handicrafts. The urban consumer is looking to source quality products from weavers and artisans, but options for a real connect are few. Here again, a plethora of employment opportunities exist from packing for delivery to digital marketing—even taking good quality photos for an artisan in many states is a challenge. For this, co-operative societies need to be re-energised, or an alternate structure similar to FPOs needs to be set up quickly. This will require a separate column.

We have already started working on some of the above and NABARD’s forthcoming Foundation Day will see us put forward some concrete plans in this context.

The canvas is huge, and there are immense possibilities to collaborate with other stakeholders in this task. We intend seizing this opportunity to play an important role in ensuring that agriculture and rural development will emerge as powerhouses in the years to come.

The author is Chairman, NABARD. Views are personal

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