Private Sector Engagement in Rural Development
1. Summary:
The talk was divided into two definitive sections: first the private sector engagement in rural development and secondly, the career options in rural management. The different organizations that come under the private sector were discussed along with how the outside view on this sector has changed when it comes to policymaking. The private sectors should be incentivized as they serve as the information aggregators and render post-production services to the farmers. Our role as rural managers is to act as facilitators and implementors of scalable operations. The career divisions a rural manager can follow in the development sector was enunciated as grassroots, national level and international level companies, NGOs and the different functional level work we can do.
1.1 About the speaker:
Krishna Mohan, an alumnus of OUAT and IRMA, currently working as Program Manager, CRS doing recovery and resilience work based in Nepal. He has immersive experience working in grassroots level working with CARE and Voluntary Action Network.
2. Private Sector Engagement in Rural Sector:
2.1 Structure:
Private sectors are those organizations that do not come under the direct control of the state that earns a profit. They contribute to the national economy but are void and government interferences. Micro and Small Industries, manufacturing, trade associations, retailers, aggregators etc. come under this classification. They are not just comprised of big companies and organized partnerships that form this private sector, but small business and unorganized businesses also form part of it viz. grocer, baniya, kirana.
2.2 Inclusion of private sector in accounting for a rural economy:
The rural economy is predominantly thought of to be a farming-based economy, but there are a lot of allied sectors that work hand in hand with farming to fuel the rural economy. This can be divided into three basic divisions: Pre-farming, farming and post-farming.
2.2.1 Pre-Farming: This lot contains the seed producers, farm extension information, fertilizer & pesticide producers, agriculture tools and materials vendors, MFIs and insurance.
2.2.2 Farming: This is comprised of the farmersthe and producers.
2.2.3 Post-farming: This is comprised of wholesalers, retailers, processors, transporters, warehouses.
2.2.4 Infographic:
2.3 Paradigm shift:
The perspective that went along with the private sector in rural areas has changed dynamically over the years, here is a table to show the shift:
2.3.1 Reasons contributing to the paradigm shift:
The changes we see now contrast so much from the past is because of the following reasons: a) Using indirect distribution to village markets, for in the past there had been many cases where government and NGOs in their good work of helping the marginalized have distributed the basic amenities in form of aid, let’s say blankets; so here what happens is the influx of blankets in the region provides the families with the warmth they needed but in the slight of that the local shop of blankets is completely destroyed, so it is a counterproductive act in our part to do so. b) Strengthening supply chain: Let’s say a new variety of rice has been introduced in the farms village as an experiment for a period of 2 years to check the real time sustainability of the said type of rice. But after the experiment results are attained if the villagers are not able to source the type of rice from the shops then there is a gap of a supply chain, this is why the strengthening of the supply chain is a major aspect. c) Educating the private sector on information pertaining to farming and agriculture techniques: prior to the present way of doing business the knowledge transfer and information divulging was done with respect to farmers and producers only, but now private sector businesspersons are also brought into the manifold. As a local shopkeeper is usually the receptacle of the information that a farmer comes for suggestions as the bond of trust is stronger there. These have collectively contributed to the change in the perception of viewing the private sector in rural markets.
2.3.2 Increase engagement with private sectors:
There are various ways by which the private sector engagement can increase in manifolds. a) Incentives for partnerships: The profit and market share can be increased and the risk can be reduced. b) Strike balance in developmental objectives: To find a common ground where all the stakeholders agree. c) Invest in relationship building: To make acquaintances on the ground with the stakeholders and form meaningful partnerships where along with business and a sense of camaraderie is also found. d) Flexibility to changes: The response to any changing environment should be openness not hostility. e) Scalability: The plan and methodology followed must be as such that it can be replicated with an equal amount of success or similar outputs as found in the ground zero. f) Collaboration and Monitoring: The projects underway must be done in collaborations with the local people and entities for better results and the progress must be properly monitored with efficient tools to ensure better standards of final output.
2.4 Role of a Rural Manager:
a) Facilitator: A rural manager is supposed to facilitate the process of finding partners and agreeing upon a common goal.
b) Technical Support provider: Many grassroot level organization slump due to the lack of technical support provider to them, as rural managers, we are duty bound to enable these organizations with all the tools and technical knowhow they require to succeed in their business.
c) Funding: To write proposals, find potential investors and build meaning partnerships with individuals and organization who can support a project monetarily is a huge job and rural managers must be hands on with this aspect.
3. Career options in rural management in Development Sector:
The career options of a rural manager in the development sector can be summarized in the following sub sectors: grassroots, national level and international level companies, organizations and Non-Governmental organizations.
3.1 Organizations & Companies:
3.1.1 Grassroot Organizations:
These organizations are local NGOs working in the field, producer organizations, co-operatives. The benefit of working in these organizations is that they have a very low entry barrier and the scope to learn and work on the field in immense. The work one does directly affect the society and the changes can be seen to materialize. However, the downsides to working in such organizations is that the work environment is very challenging and the scope of peer to peer learning is very limited and only very self-driven and multi-tasking people survive the long haul in these organizations.
3.1.2 National Level Organizations:
These are national level NGOs and companies. With NGOs like BAIF and Pradaan, Co-operatives like Omfed, GCMMF, Government projects: Livelihood missions, Corporate Social Responsibility, Development Consulting like Basix, ACN, Access Development Services, Financial organizations (MFIs, Insurance), Agricultural input companies like local seed and fertilizer companies. These organizations don’t work in the field and rely on survey undertaken or other data to reference ground realities but the benefit in working here is that they have medium entry barriers with good exposure to handling technical and management issues. The work environment in these organizations is conducive to rich peer to peer learning and they offer the chance of working with other national organizations in collaboration.
3.1.3 International Organizations:
These are the cream of the lot featuring international NGOs, companies and organizations. International NGOs like CARE, SAVE which offers fellowship and full-time jobs; freshers and people with experiences less than 3 years these organizations offer fellowships which can be converted to full time jobs after the completion of the fellowships. Full time employment is offered to people with experience spanning over 5–7 years. Then there are Donor Organizations like United States Agency for International Development (USAID), Department for International Development (DFID), United Nations. There are private contractors like WinRock, FinTrac, TechnoServe. And international research institutions like the International Rice Research Institute and International Livestock Research Institute. These organizations of international rapporteur come with their own set of pros and cons, the upsides are that they have exposure to international issues and are part of the policy making from the very inception and they collaborate with other influential international organization and governments. But they have limited field exposure and being huge organizations, they tend to be bureaucratic.
3.2 Functional Areas of a Rural Manager:
a) Program Manager: To manage programs, projects, allocate resources, do primary evaluation.
b) Technical Advisors: agriculture, animal husbandry, health and value chain addition.
c) Business Development: sales, fund mobilization, proposal development.
d) Financial Management: Managing finance in micro and small lending banks.
e) Monitoring, Evaluation, Accountability and Learning: This is an emerging functional division in management; this is essential in keeping track of the efficacy of a project undertaken and provide essential inputs to do better by close supervision and on-site analysis.
4. Critical Reflection of private sector engagement in rural development and career choices for a rural manager:
With the push to include private sector into rural development process there is also privatization and corporatization that one has to take care of; however, in the Indian context land rights are well secured against any corporate grabbing. The government-controlled farmer organizations are not getting ample amount of growth space due to paucity of support in increasing their capacity to be independent and inculcate in them the skill of proper negotiation. The small scale and district level private sectors do not have adequate knowledge and prowess to get funding; they should be supported financially and they should be helped to be mechanized/semi-mechanized as soon as possible so as to avoid making their clients move to sourcing their materials from overseas where the cost of production is quite lower then India, due to mechanization of their production line. And finally, value chain assessment and analysis must be done in a proper manner.
