Dynamic bazaar

The write up intends to give to our readers - a sense of how infrastructure, communications, distribution reach, products and consumer behaviour, have impacted the rural India, over last four decades. It is about the ideas that are relevant today and successfully managing marketing to the vast populace of 740 million people.
Dynamic bazaar

The initiatives by the Government in the early 1960’s like establishing large sized Agricultural Mandis managed by the Marketing Committees, in North India, were early steps in building infrastructure in rural towns. Indeed today, this infrastructure has grown into establishment of Cotton Ginning mills, Rice Shellers, and Oil extraction plants. Agro inputs and machinery distribution outlets have mushroomed in and around the Mandi. Such development has happened in most Mandis in Punjab, Haryana, and Rajasthan.

Abhoar borders Rajasthan, near Sriganganagar & Hanumangarh towns, and closer to Fazilka that stares at the Pakistani landscape. It is a rich cotton and wheat Mandi, even though now fruits such as Keenu & Grapes, have found many growers in the region. In 1968, the roads hardly existed, and today their condition is not much improved, except that cars and auto rickshaws crawl in & out of the narrow lanes, adjacent to residential houses. The residents’ trade in commodities, vegetables, own provision stores, have shops that stock lubricants, hardware, spares, building materials and sanitary items, fertilizers and pesticides. And there are many tractor agencies. Hotels, schools and colleges have sprung up, as have shops stocking FMCG, beverages and durables. Cyber and mobile recharge outlets are visible, as is the administrative infrastructure. The spurious and the genuine products co- exist, as they have done for decades. The continuing challenge, as often said, is to place the right product, at the right price, visible and affordable, to the right customer, at the right time. Sounds easy! Not when 4,43,000 villages stare at you from the map.

A local resident, an LIC agent, was our contact in Abhoar. He surprised us by stating that he had won an award for selling LIC Insurance Policies over Rs 1 Crore, in 1968! Today LIC sells over 55% of its policies in Rural India. SBI, which was the only visible Bank back then, is today accompanied by almost all PSU Banks that have opened Rural Branches.

Shell, now Bharat Petroleum, had a fuel outlet in Abhoar, and their owner, helped us in meeting few Pesticide dealers, who might be interested in distributing and selling products that we had on offer. Large Wholesalers of Pesticides demanded hefty discounts and very low price, and credit. They stocked products from Multinationals such as Bayer, Ciba Giegy, & Shell. They dealt with FCI and ICI in distribution of Urea. Few stocked seeds, which were mostly sold loose, and not certified. ‘Kapas’ and Narma,’ in the area, were grown from local seed varieties that had shown good yields in the past.

Other dealers were large Retailers and ‘Kaccha’ or ‘Pucca’ Artiyas’ or Commission Agents. They were, and still are, linked with farmer households for generations, each having a loyal base anywhere from 2000 to 10000 farmers, or more. They finance farmers, for almost everything that they need. From purchase of land, to buying agro inputs, to guaranteeing Tractor & Machinery collaterals, funding marriages, partitions, education, travel and illnesses. The Artiyas’ hold jewellry of the farmer’s family, as mortgage and also his land, and the crop he grows, as hard barter.

The distributor, an Artiya, whom we finally appointed in Abhoar, had in those days, a turnover of around Rs 1 crore in money lending and bartering transactions per day! And the owner had an old Ford car!. Today he owns a Swift from Maruti. The reasons, we decided to appoint a Commission Agent as our distributor, were that firstly, he was a large retailer, secondly, had a huge farmer customer base, thirdly, sold products on credit and at high prices, and finally, had immense influence in the market among dealers. The nail in the deal was that he would buy from us in cash!

He gave us then, a “Sagan cheque” of Rs 11000 and thus made our visit to Abhoar worth every gram of soot that we ingested on the way into the town. The Agro Input market in Abhoar, today, is well over a few hundred Crores ; and the farmers in the region, very much aware, of how they should manage their crops. Selection of a distributor in rural India is much like a marriage; to be entered into and nurtured with care.

The operations of the distributor, whom we appointed, way back 40 years ago, have expanded with his family spreading their wings into Cotton Ginning, Petrol Pumps and Fertilizer business. Our public sector banks and their Micro Financing initiatives today, have yet to establish a parallel and an efficient value chain that the Artiya’s of the old, succeeded in building, through trust and tradition. When Companies today, search for a network in rural towns, they learn to give the Artiya’s, their much deserved preference, as a fulcrum for redistribution of products, and as a meeting point for talking to farmers.

As I end this initial column, I recollect, that my father and I, left Abhoar for Malout Mandi, 35 kms away, aboard a Punjab Roadways bus. Taxis were hardly there if at all. My father managed a seat inside the bus while I was persuaded by the passengers to share their destiny on its roof! So, with hair flying in air conditioned comfort, in the month of May 1968, we chugged down the pot -holed and scarcely metaled road to Malout. The journey into the hinterland had begun! My engagement with the diversity and uncertainty of Rural India, over 40 long years, has given me belief, that these times, will open many exciting and new opportunities for those of us in the Industry who do not mind walking that extra mile on a “Road less travelled”.

(Author: Chander Sabharwal, senior professor of rural marketing)

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The Changing Face of Rural India