Agri Business Ventures: Potentialities of an Alternate Form of Entrepreneurship in Kerala

Abstract

The development debate of Kerala has received global attention because of its uniqueness. The state enjoys the status of cent per cent literate state in the country with literacy rate (89.81 per cent) equal to the literacy rate of the USA. Life expectancy also stood above the all India level. Male life expectancy rose to 68 years in 1991 from 46 years in 1961 while female literacy improved from 50 years in 1961 to 68 years in 1991. (Details relating to 2001 census are not yet available). The improvements in health care are further reflected in the favourable infant mortality rate and birth rate. Infant mortality rate improved to 22 in 1991 compared to 120 in 1961, the percentage change being 81.66. On the other hand, the all India figures remain above 100 even today. While this is the glorified past, the per capita income of the state continues to be low. This paradox between high HDI and low per capita income is well qualified as the "Kerala Model". Different hypotheses have been formulated by the scholars for these state of affairs and also identified the determinants, the major being, huge unemployment, low agricultural income, low agricultural prices, shifts in cropping pattern without proper linkages, low infrastructure, weak state finance, lack of industrial base and resources and so on. This state of affairs cannot be continued for long especially in the era of reforms and openness because survival is the need of the hour. Survival requires appropriate strategies and the state in recent years is formulating suitable prescriptions for her different sectors including agriculture. The recent WTO agreements set agriculture towards export led growth. The strategy of export led growth necessitates commercialization of agriculture with suitable and appropriate linkages with processing and marketing. Because of the direct accessibility to processing, the relation between commercialization of agriculture and the availability of each crop is significant. Among the Indian states, Kerala is the leading state with about 80 per cent area of gross cropped area under plantation/cash crops. This underlines the scope of Kerala agriculture for commercialization thus paving way for the development of agribusiness ventures which is primarily explored in this paper. The potentials of agri-business ventures from various angles and the scope of these ventures arise as an alternative solution for: mounting unemployment in the state, utilising agriculture and allied resources, expanding agro-based industries, utilising institutional credit potential, feasible ventures under decentralization, feasible ventures under poverty alleviation programmes. A quick survey conducted by the author revealed that out of this 11979 project proposals, only 599 proposals belong to the category of agri-business ventures. Further assessment also revealed that more than 80 per cent proposals were mere initiations. For instance, out of 11979 proposals garment making activity was undertaken by 1213 entrepreneurs. A similar example is the starting of telephone booths and reprographic facilities. These trends explain the absence of innovative approach towards the selection of the projects. Considering the resource potential, the author makes a moderate assumption that five agri-business ventures can be started in each panchayat of the state (989), with an average investment of Rs.2 lakh. The arithmetic explains that about 5000 ventures can be initiated every year in the state so that the average capital investment per annum will be Rs.100 crore exclusively from agri-business ventures. An additional advantage of agri-business ventures is that they give value addition for agri-based products thus making them export oriented. In the era of reforms this directional change is inevitable also.