Talking Point

Agriculture still is a significant source of livelihood in the countries of South Asian region. The pressure on farm sector has however been increasing due to multiple reasons: lower yield, fragmentation of land holdings, poor irrigation, depletion of ground water, inadequate extension services / supply of inputs, poor post harvest management, lack of value addition at the producers level and a long supply chain involving a number of intermediaries. The resultant woes, unemployment / underemployment, migration to cities in search of a better life.    

There is a strong need to assist the farmers to increase productivity to move up the value chain in stimulating the farm economy and employment demand. Interventions such as, establishing market linkages, providing access to micro credit, creation of irrigation facilities/ rain water harvesting structures, efficient water use through micro-irrigation, managing natural resources efficiently etc. can generate better farm as well as non farm sector yields and change the rural landscape for better.

Dr. Subir Ghosh, who has worked extensively on the management side of agriculture and allied sectors, in his following series of articles, writes to offer sustainable agricultural practices in this context. 

Addressing the gap: It is in this background the integrated microfinance program extended by SIFFS to the sector appears to be noteworthy. The integrated microfinance model of SIFFS incorporating technology development and dissemination, support services for production and repair of marine fishing units, information services including location of fish stock, post harvest infrastructure, alternate livelihood and policy & advocacy needs a special mention towards its possible replication.    

For more information on the subject visit the website  http://www.nabcons.com/ReviewNabcons.pdf    

Services provided by SIFFS:   

SIFFS micro finance programme: By the mid-1990s, a major gap in credit availability had emerged as a combination of factors. Firstly, the banking sector had become less accessible due to the aftermath of the loan write-off scheme and the populist loan melas of the late ‘80s. The service area concept introduced in the late ‘80s also broke the relationships with some of the banks that had supported the societies. Secondly, fishing had undergone a transformation and most fishermen had started using marine plywood boats and out board motors pushing up the loan requirements to above the level for collateral-free loans. Thirdly, in some areas, the poor track record of SIFFS societies had also created difficulties for banks, in loan recovery.     

The district federations, which had the role of facilitating credit flow to the societies, responded by developing revolving funds (based on donor funds) and also put up collateral for getting bank loans for members. All this proved insufficient, especially in Kerala, as the societies were also facing competition from Government sponsored cooperatives, which were liberal with loans and subsidies without enforcing sufficient credit discipline. This led to a decline in the growth of the societies and even an erosion of membership in some areas.     

It is in this context that SIDBI approached SIFFS with its pilot programme in microcredit. SIFFS, which had not considered credit as part of its portfolio of activities, decided to take the plunge. After a slow start in 1997, SIFFS has since 1999, been putting a lot of effort into its microcredit programme and has emerged as a leading MFI in the fisheries sector. Today SIFFS has an outstanding portfolio of INR 86,651,935 in June 2009. The finances for these loans were sourced from SIDBI, SBI, Canara Bank, Indian Overseas Bank, Axis Bank and Cordaid, Netherlands as ECB. At the district and village levels, production loans are sourced from commercial banks. Funds under the SIFFS credit programme are meant for addressing the gap between the demand for credit and its availability from commercial banks.

A combination of variability in catch, technology upgrades, over capitalization, rising costs, aggressive fishing, overcrowding, etc. have made economics of fishing and fishing related occupations uncertain. The overall output remains almost same but the investment and operational costs have gone up considerably. This has resulted in fishermen getting increasingly dependent on loans to finance their expenditures and also using loans as coping mechanism. The key expenditures include: i. capital expenditure towards purchase of boats, launches, nets and engines, etc. ii. running expenses which include boat, net and engine repairs, ice, fuel and goods, etc. and iii. other expenditure involving medical, emergency and other expenditure for family including education.   

Danny Boyle’s, eight Academy Awards winning yet controversial film Slumdog Millionaire, set and filmed in India, gave the country another name derivative – the Slumdog Land. The name tagging apart, the film also carried a deeper symbolism for India, a land of many contradictions.

As India surges forward in taking big strides of development, there are millions of slumdogs, aspiring to become millionaires all over the country in their own entrepreneurial ways. The making of new India thus needs a thoughtful blend of big ticket macro development as well as the inclusive growth of micro-small-mid sized enterprises for a sustainable growth trajectory.

25th Feb 2009: Time to move once again. I bade goodbye to folks at MicroSave and Bhaskar and headed for the airport. Kingfisher … back to Delhi. However, Kingfisher was delayed by an hour and a half. The attractive food box was passed around by the ‘red riding hoods’ once again but this time my thought was on the next leg of the journey, from Delhi to Trivandrum. It would be a touch-and-go situation I realized. Although the pilot had asked us long back to ‘sit in the upright position’ for the approach to Delhi, a glimpse out of the window indicated ‘Delhi door hai’ i. The plane kept on circling in the overcrowded sky waiting for its turn to land 1. Finally when it did land and I followed the process of waiting for the transit bus and travelling from Terminal 1 to 1A lugging my belongings including the checked in baggage, the Air India Trivandrum flight had just departed! Kingfisher’s airport staff could offer no solutions at this hour of need, especially when the hassle was caused by delay on their part. Their booking office in terminal 1A reminded me of railway reservation counters of yester-years with a crowd to impatient people jostling around in front of the window and the ‘hand picked cherry’ behind the counter all at sea.

I was in a quandary, because I was now in grave danger of missing my presentation slot at the Seminar the next day at 11.15 am. It would be a great tactical blunder from the business point of view to have my speaking slot rescheduled! I wondered what could be done. The Air India counter nearby caught my attention. No crowds jostled around in from of it. I approached the counter and told the middle-aged gentleman my plight. “I have to be in Trivandrum by 9 am tomorrow”, I requested. Could he help?  Like a confident father quietly reassuring a nervous son before a crucial exam, he asked me not to worry.

“Take the 8 pm Air India flight to Mumbai” he said. “Then, take the flight to Trivandrum at 5.30 tomorrow. You will reach by 9 am, well in time for your seminar”. “Besides”, he added with a hint of sarcasm, “you can be assured that there will be no delay”.  “Shall I book the tickets”? He asked, sensing my relief. “Do you accept credit cards?” I asked tentatively. There had to be a catch somewhere, I thought. “Yes of course”, he said.  I asked him how much the total fare would cost and within seconds he gave me the amount. I could have used my credit card to cut short my agony, but decided to get in touch with Manish, the Administration Manager at MicroSave in Lucknow. I gave him the story and also the proposed next steps. He assured me that he would do the bookings at his end and send over the relevant reference numbers.

I parked myself in front of the Air India counter, fearful that the Air India folks might suddenly decide to pack up and call it a day. Mercifully no such thing happened and within fifteen minutes, someone from Manish’s office SMS-ed me the relevant PNR details of my booking. The e-ticket was also in my email, she confirmed. I stuck out my cell phone through the Air India window. The gentleman at the counter noted the number and within a minute I had the print out of my e-ticket from Delhi to Mumbai and from Mumbai to Trivandrum. I thanked the gentleman profusely and entered the terminal once again. It was only 6.30 pm. I still had time to kill before the 8 pm flight. I decided to go for a well earned coffee. Later, still having time to kill, I checked my e mails using the excellent wireless connectivity inside the terminal. I marveled at the no frills, no nonsense service of Air India. Real service, like real beauty is not skin deep, I realized. It came from deep within, from the confidence arising out of a solid network of facilities and years of relevant experience and maturity. By now the 8 pm Mumbai flight was ready for checking-in. “Jai Ho!” Air India, I said to myself and proceed towards the check in counter.

Later that night, having reached the departure lounge of the Mumbai airport I settled down with my laptop and wireless internet connectivity to while away the few hours before the counters opened for the early morning Trivandrum flight. There were many others like me.  

To be continued …

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i Dilli door hai: A phrase literally meaning ‘Delhi is still far away’. This phrase was originally attributed to a complacent emperor of Delhi who, in spite of repeated warnings, failed to respond timely to external threats, finally losing in battle to the invaders.

1 Much like the earlier mentioned software hovering in the sky, waiting for the hardware to be in place!