Page 286 - DMGT509_RURAL MARKETING

Unit 15: Marketing of Agricultural Produce

Notes
Did u know? The employment potential of all these enterprises is significant. The share of
women employment is more than 50 per cent.

15.2 Policy Implications

Since melas are recognised as an effective channel for marketing of rural industry products, they
need to be strengthened not only by increasing the frequency but also by organising them in
several locations. Further, they need to be extended to different sectors as is done by Government
of AP with regard to Chief Ministers Empowerment of Youth (CMEY), TARUNI (Exhibition/
stall of women entrepreneurs) and Farmers Market.
The government introduced the Khadi and Village Industries Commission (Amendment) Bill,
2005, in the Lok Sabha on August 22. Piloted by the Union Minister for Small-Scale Industries,
Mahavir Prasad, the Bill seeks to alter the definition of “village industry” by raising its fixed
income cut off level from 15,000 to 1 lakh. Besides the change in definition, it has several
provisions relating to the administration of the KVIC, as the country’s largest rural development
support agency.
While the proposed Bill, when legislated, is likely to change the administrative structure as also
the opportunities available to rural industries, it is also necessary to discuss the Bill in the
context of the overall SME policy in the country.
The core issue relates to rural industry development in the context of the country’s development
imperatives. The rural industrialisation programme in India has a dual character: First, its
political sensitivity in relation to its links with the ‘Freedom Movement’. Second, from the point
of view of employment generation and balanced regional development, rural industry is the
only sub-sector that offers the maximum spread.

Though, in theory, the relevance of rural industry has come down, its functional relevance
continues. The functional relevance of rural industries needs to be discussed in terms of their
present role in the economy. Hence, we can redefine rural industries based on what they actually
do. The broad features of a rural industrial enterprise are their location in a rural setting with a
limited market and linkages; abundant labour availability but scarcity of capital; and focus on
local skills and relatively low-technology. Based on these criteria, India’s rural industries cover
its significant informal sector. The term informal sector covers both the micro base of
entrepreneurship, which spontaneously emerges, as also, a micro sector that has been deliberately
created as an appendage of large capital. Viewed from this angle, an array of economic activities
falling under the rubric ‘rural crafts’, such as handlooms and handicrafts, can form the compass
of rural industries.
The craft based products are also commodities exchanged in the market. They perform two
roles-exchange value and use value. The exchange value of a craft product arises out of its design
and appearance; and ethnic origin. For example, batik produced in Indonesia may be inferior to
Indian handlooms. But they attract a premium in the Indian market because of its particular
ethnic origin. Both India and Indonesia turn out bamboo handicrafts. However, such handicrafts
produced in China attract a much larger premium in the European market. China’s advantage
lies in the peculiar design and look of their products. For example, handicrafts are meant not
exclusively for exchange value; their use value is also important.

Therefore, a craft product with greater use value as well as exchange value attracts a premium in
the international market, though all handicrafts have at least a limited market share, based
exclusively on their ethnic origin.

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