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This approach may work better than the conventional Indian government solution subsidies. As it has in so many years past, India declared a focus on agriculture in 2011, announcing a 3% interest subsidy to farmers and a target of extending $105 billion in credit. Finance Minister Pranab Mukherjee promised, again, to reverse the damage caused by lagging investment in rural infrastructure and reform the archaic regulations and subsidies that contribute to water scarcity, distorted prices and overuse of toxic chemicals and fertilizer. Yet in the past, such efforts have done little to improve rural markets, in part because of rampant corruption and inefficiency.
In the absence of better policies, hyperlocal, market-based solutions can still have a big impact. Gulabchand Singh, 52, a vegetable farmer in Yusufpur, Bihar, stands inside one of them a low-cost greenhouse covered in layers of polyethylene rather than glass. "In the poly house, you can see the flowering happening," he says, and the seedlings started there are hardier because they're not exposed to the cold when they're young and fragile. Outside, he shows off his eggplant purple-tinged stalks, heavy and luxuriant with fruit and the remains of four tomato plants, which yielded 40 kg of tomatoes with the help of some bamboo stakes. Singh says these and a few other changes have increased his income to about $13 a day, compared with $9 a few years ago from the same hectare. He has even started selling seedlings to his neighbors. "For a little bit of land, I've gotten a lot of benefit."
Singh is one of 5,000 farmers in Bihar whose vegetables are sold in the state capital, Patna, by a three-year-old start-up called Samriddhi. Founded by Kaushalendra Kumar, an idealistic M.B.A. from Bihar, with a $133,000 bank loan from Punjab National Bank, Samriddhi trains farmers in its network to increase their productivity and pays them about the same as they would get in their village wholesale market. Its business model is straightforward: take the existing, unwieldy supply chain in which vegetables move through layers of middlemen and improve it. Samriddhi buys directly from farmers, reducing travel time and waste, and carefully sorts and grades its produce.
"The most important thing was to find the right kind of produce for the right customer," says Anuj Kumar, Samriddhi's head of operations in Bihar. The best produce is sold to picky housewives at 40 ice-cooled carts, while grade-B vegetables go to bulk buyers. The farmers get a premium for quality, but Samriddhi can still earn a good margin. It expects to break even this year and has a goal of raising farmers' incomes 50% over the next five years. "It's going to benefit us also, because once the farmers start getting better prices, they'll be in a position to produce vegetables in a better way," Kumar says.
If it all sounds strikingly similar to what Walmart is doing, that's no coincidence. Big or small, any company working in rural India must deal with the same challenges: piecemeal landholdings, inadequate roads, no water or electricity for cold storage and a lack of training in even the most basic techniques of modern farming. Training is the low-hanging fruit. So the advice that Walmart's agronomists give farmers in Punjab is the same as what they would get from a tiny start-up the soil testing, the stakes, the polyethylene greenhouses. "You don't need a breakthrough in technology to double your output," says Mukesh Madhukar, head of merchandising for Walmart's Direct Farm program.
Even companies involved in high-tech agriculture realize they won't have a market in India unless farmers' incomes and basic skills change first. Bayer CropScience, for example, is a partner in the demonstration farm set up by Walmart on the land of Mohammed Nazir Khan in Malerkotla. Bayer hopes Khan will be a regular buyer of its newest pesticides, but for now, it is showing Khan how to correctly dose and document the chemicals he already uses on his bitter gourd. Many tribal farmers in Orissa have never used hybrid seeds, which means they are a tantalizing virgin market for DuPont. But they can't afford them unless their incomes rise, so DuPont and the state government have joined together to train 25,000 of them in crop-management techniques to increase their yields without overusing toxic chemicals. It's a shift from the days when agribusiness and biotechnology companies in India may still be criticized for pushing chemicals and genetically modified seeds without regard for their environmental consequences.
But increasingly, multinationals realize the benefits of aligning their economic interests with those of Indian farmers. For example, compensation for Walmart's agronomists is tied to the increase in incomes of the farmers they work with. If Walmart can build a national supply chain, it will try to reach the Indian consumers who are already in the habit of shopping for fruits and vegetables every day. Of the 190 million tons of produce Indians consume every year, 95% is bought from street vendors. Walmart would like to get those customers into their stores, where they might pick up a few other things as well.
For their part, the beekeepers of Muzaffarpur have found a partner in Bihar's largest milk cooperative, which will start selling branded lychee honey in several thousand outlets this year. A handful of gourmet retailers in Mumbai and Delhi have already started selling "single flora" specialty honey, and their customers pay a premium for the subtle pleasures extracted from the lychee blossoms.
Samriddhi, too, has big ambitions for the vegetable farmers of Bihar. Kumar believes they will serve as an alternative model to industrialization. Bihar is in the heart of the Gangetic Plain and enjoys extraordinarily fertile soil, Kumar notes, so why not make the most of it? He hopes that Bihar can join the Indian economic miracle through its farms. Who needs shopping malls, call centers or car factories? "Bihar has tremendous potential in agriculture," Kumar says. "But it needs to be tapped."
The farmers' lives are changing as well. Gulabchand Singh's 12-year-old son has slicked-back hair and wears jeans, not his father's plain cotton dhoti and kurta. When they go to the market together, he sometimes asks for a soft drink or chocolate luxuries his father has no use for. But Singh's hopes have been altered more profoundly than his son's tastes. A few years ago, the greatest ambition of any farmer in Bihar would have been for his son to get out of farming. The bounty inside the poly house has changed that. "I want only that he should do better than me," Singh says. "If he wants to stay on the farm, that's fine. But he should think bigger. I want him to build on what I've done here."