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Rural Management: Bridging the gap between Policies and Practices in Rural India Kushankur Dey, IRMA Debasish Maitra, IRMA

ConQuest Online March 2010 Edition

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Rural Management: Bridging the gap between Policies and Practices in Rural India Kushankur Dey, IRMA Debasish Maitra, IRMA Abstract:: The meaning of rural poses many challenges to intended audience to define it precisely. Concise understanding of it requires perspective of both management and development. The discourse engages with discursive and diverse communities, which is both “plenitude nitude and endless wealth”. Rural management tries to capture the connotation of rural with a holistic approach of inter inter-disciplinary disciplinary scholarship which, in turn, makes a modest attempt for coupling policies, practices and research. There is reportedly a move mo to extend the space for poor people in rural to mitigate the plights. Still, question remains in the line of impact assessment of policy driven practices. The paper tries to figure out the “missing links” amongst the different perspectives of rural alre already ady discussed in many chapters of rural management. It is a review of these linkages by incorporating few perspectives across the area of management. Keywords:: rural, rural management, rural manager Epitome of the Context… Defining a construct for “rural” is of huge challenge and daunting task for the rural manager in Indian context. The meaning of rural perceived by academia and practitioners does not carry the same connotation as they seem to be. The divide we try to sketch between rural and urban is based ed on consumption pattern, income stream, population density and preoccupation of the people with a number of income generating activities. The result of course is generating endless discourses with no solid statement of “rural”; its rarity and accumulatio accumulation n of knowledge nucleus. Government on behalf of social contract choice always tries to figure out the linkages between social policy and economic growth. On the corollary, practices hardly make a modest attempt to cater the needs of the poor. Needless to ssay, ay, poor and rural are inextricably linked as policy makers often muddle their policies with this convention. For instance, PPP (public-private(public partnership) model conceived by think tanks surprisingly are not making any significant impact on poor on the posterity sterity of global financial crises. The reasons cited by many sociologists and economists show that demand demand-driven driven approach is somehow omitted in the well articulated model of PPP.

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ConQuest, IIM Shillong Consulting Club Therefore, understanding the rural as multidimensional construct is more important imp to a rural manager. Decision-activity-relation relation analysis comes afterwards. So in the subsequent section, attempt is made to envisage the contextual familiarity with a conceptual approach. Facts and figures substantiate the argument whatever is presen presented. Rurality in Rural Markets: Marketing Paradigm… Harish Bijoor (2003) recasts the underpinning of rural: “The definition of rural is largely pastoral. It is ownership oriented and deprivations oriented. The rural home is at times a geographically defined entity. In the beginning everything was rural. And then developed islands of urban within the large rural mass. As urban centers developed near the ports, near the points of business and indeed in areas that showed a great deal of potential to housee the best of facilities that were to grow, the rural hinterland remained a large mass and urban terrain emerged as a subset of this”. From the above preamble of rural market, we can say that diversity and heterogeneity encompass the rural environment. Stu Study dy by Business World (2008) shows that rural market is not as obscure as it appears to be. Corporate alignment with voluntary agencies in propelling the reach with a basket of products (TATA Tea, HUL, ITC, Marico, P&G etc.) is probably a good illustration of Corporate Social Responsibility (CSR). The objective is to provide rural consumers with a choice of shopping experience in consonance with affordability. Packaging and pricing are highly correlated with the burgeoning sales of new product launch (NPD) in i rural area. Achievement for the Industry: Neo Neo-Liberal Perspective… Economic upspring in rural markets has led to the speculation in the business community that rural and urban markets are now increasingly becoming homogeneous. Among many of the scholars who believe in such trend, Baig (1980) long back proposed that strategies from urban markets could be transplanted to rural markets with little or no modifications. He argues that rural and urban are not two separate market segments and marketing of products produ can be similar. However, few argue that such speculation is far from reality1. There is wide disparity between rural and urban markets in terms of standard of living, literacy levels (NCAER, 2003; Bijapurkar, 2003), physical and marketing infrastructur infrastructuree facilities (Sarwade, 2002), social and cultural conditions (Rao, 1992, Jha, 1993). Hence marketing strategies should be different for

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Large portion of the text is adopted from the paper, “Executives’ Representation of Rural Markets”, Sridhar, G., Mishra, Debiprasad, Vaswani, L.K. ibid. (2009), published in IIM-K K conference, Marketing to Rural Consumers. Pp.1-15.

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ConQuest, IIM Shillong Consulting Club both urban and rural markets (Das and Sen, 1991; Rao, 1992; Jha, 1993, Velayudhan, 2002). Therefore, rurality in rural markets arkets is a construct as it captures different realities in the eyes of the beholders. Plights of the Poor remain Untouched: Setting Developmental Agenda… Rural economy is not uprising in reality. Is poverty declining at a faster rate? Poverty line is taking ng its own reckoning measure. Instead of 2400 Kcal requirement comes down to 1800 Kcal and per capita income comes near to rupees 500. What is the impact of health, education and services are not fully reflections of new poverty line. SGRY, NREGS, RSETIS are a really worth programmes to remove the plights of poor! Wage structure is not as rosy as being predicted. FCI-Adani’s Adani’s Grain silos will mitigate the abject of poverty; it confounds with confusion. NABARD’s refinancing role is making hardly any impact on m marketing arketing infrastructure for better disposal of produce. Farmers are under the clutches of interlocking arrangement, the question remains unuttered, and emergence of inclusive capitalism may have adverse impact on land productivity, food security and price stability. Minimal or controllable employment will tend to make a transition from rural to urban or its circularity of “dual “dual-economy” economy” approach. “Changes in class and social relations that come about with the transition to a corporate system of food provisioning” oning” (Gopalakrishnan and Sreenivasa, 2009) considers a “system of provision” where producers or farmers are not any better class rather oppressed mass of the deprived system. Forecasting for Better Price: Simulating a Better Deal… Financial market either rural or urban is always unpredictable and every time brings in new challenges. As a result of integration of national economy with the world economy the domestic market has become more volatile with more peaks and valleys. When it is united with natural calamity like drought then the situation becomes worse than ever. Today’s appalling increase of food prices is an obvious indication. Finally, the negative impacts of such cumulative felony or climatic change lash out the appetite of producers viz. farmers farmers.. The time is ripe to reengineer the market which can distribute the affirmative effects across participants viz. producers, traders and exporters. Therefore, we need new regulations, in a way a structured coordination of regulators, say, SEC/SEBI (capita (capitall market regulator) or CFTC/FMC (commodity market regulator) at national and international level to make sure that problems in single sectors are spotted in good time and their adverse consequences kept under control. It further warrants the conducting of right research towards such development. It tells us that smoothed value is always safer than actual realized value of anything, say security or agricultural produce. Correcting errors helps to make us more precise that what is estimated or predicted may not n

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ConQuest, IIM Shillong Consulting Club always reflect the true or actual result. The bias is always within us, amongst us and obvious occurrence of chance is unavoidable.

What Should Rural Manager Teach Lessons? Propositions… P1: Considering the regional differences with uneven distribution of natural resources across the country, a proper demand-supply supply match amongst the output, price or income, input, credit and other issues should be achieved through mutually trusted, interwoven skills of the entities, namely, the government at policy leve level,l, industry as implementing agencies and academia at research and development level. P2: Information and technology induced development should also take into account of social perspective for economic growth and thus, should achieve sustainability. P3: Risk management would act as catalyst for revitalising the certainty factor amidst of uncertainties of price, yield, income and credit also.

P4: Risk management with transformation from deskilling to skilled employment in agriculture, better return for thee farmers should address the price policy with production incentives, remunerative prices, price risk protection and consumer’s protection through adequate implementation of minimum support price (MSP) programme adopting public-privatepublic partnership (PPP) model, del, thus, can redefine the marketing issues and frontier in Indian agriculture. Eying at Macro: Coupling Policies, Practices and Research… Now the time is ripe to take an indulgent view on the present policy scenario of rural economy in the context of Government, ernment, Industry and Academia. Today agriculture in the rural canvas is facing conflicting pressures from different points. Though a rise in productivity has well been achieved in certain commodities but still the problem of food security and poverty at village v level is matter of concern. Trade liberalisation through signing ‘Agreement on Agriculture’ (AOA) treaty made the situation more complex. Today price fluctuation is one of the most sought after discussions due to linkages of domestic food prices wi with th international markets. Coping with price fluctuations would require mechanisms that ought to be compatible with all the entities. India needed to import wheat although it declared of having enough buffer stocks to meet the domestic demand. The existence of minimum support price has served the role of providing price signals and ensuring price stability to help farmers take production decision effectively. Huge subsidies are

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ConQuest, IIM Shillong Consulting Club given on Urea to guarantee equal distribution of fertilizers at farmers’ level. On O the other hand, agriculture universities identify farmers’ problem from only production and protection point of view. Being a third player viz., Industry puts in efforts toward profit maximization through efficient business operations. Industries eye for procuring raw materials at lowest possible cost. Commodity exchange deals with speculators, arbitrageurs. How many farmers in the epitome of hedgers participate in future market is questionable. So, it manifests the absence of coco integration and coordination ion mechanisms amongst Government, Industry and Academia. So any framework should suggest that goal should be set based on suitability of three entities. Then the problem should be identified at community level after proper discussion with the interest and target groups. Any policy which is of no interest to all the market players is destined to fail. At every step of policy making and implementation, a control system should be in function through proper feedback mechanism. In most of the cases every entity indulges in maximizing their own interest without understanding the overall collective gain. Government looks for only power game; academics only endeavor to do ‘good’ research rather than ‘right’ research to ensure the fund from the donors and industry sstrives trives to make profit. In a response to this lacuna framework inquires about involvement of all the parties. The responses to feedback should come from all three entities to avoid of being biased to only one.

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References: •

Baig, M.A. (1980). “G “Guidelines uidelines for Urban and Rural Marketing”, Indian Journal of Marketing, Vol-10, 10, No.5, pp pp-3-8.

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Bijapurkar, Rama (2003), We Are Like That Only: Understanding the Logic of Consumer India. Penguin. India.

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____________Business World (2008), “Uncommon Brew”, October Issue (Oct 31)

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Das, Mukund and Sen, Somnath (1991), “Commercial Aspects: The Rural Way”, A&M.

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_____________Financial Express (2002), “Direct Foray into Rural Market”.

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Gopalakrishnan, Shankar and Sreenivasa, Priya (2009). “Corporate Retail: Dangerous Dangerou Implications for India’s Economy”, Economic and Political Weekly (EPW), Vol. 44 (32), p.48-55.

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Harish Bijoor (2003, 2005). "Creating Brand Strategies for Rural India", The Deccan Herald.

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Jha, Mithileswar (1993). “Rural Marketing: Some Conceptual Issues”, Rural Scan, Vol. 1(2)

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Kashyap, Pradeep and Raut, Siddhartha (2007). The Rural Marketing Book. Bizantra. Bizantra New Delhi.

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Kumar, Ganesh, Gulati, Ashok, Cummings, Ralph (2007). “Foodgrains Policy and Management in India: Responding to today’s Challenges and Opportunities”, Oppor PP Series, Mumbai: IGIDR.

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Mishra, Srijit (2007). “Risks, Farmers’ Suicide and Agrarian Crisis in India: Is There A Way Out”, WP series,, Mumbai: Indira Gandhi Institute of Development Research (IGIDR).

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National Council for Applied Economic Resear Research ch (NCAER, 2003),”India Market Demographics Report”. ”.

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Rao, S.L. (1992), “Rural Marketing Revisited” The Economic Times.

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Sarwade, S.K. (2002). Rural Marketing in India India, Anjali Publication.

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Sengupta, Subrata (2005). Brand Positioning: Strategies for Competitive Advantage (Second Edition). Tata McGraw Hill Hill. New Delhi.

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Sridhar, G., Mishra, Debiprasad, Vaswani, L.K. (2009). “Executives’ Representation of Rural Markets”, Marketing to Rural Consumer Consumer. IIM-Kozhikode Kozhikode Compendium Pp.1-15. Pp.1

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Velayudhan, Sanal K. (2002). Rural Marketing- Targeting the non-urban urban Consumer. Sage Publication,, New Delhi.

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