Foreword

The rising unemployment despite high growth in non-farm sector in India is causing concern to
every one. The growth in Agriculture which provides livelihood to about 50 per cent of the work
force in India and 66 percent in Rajasthan is tardy. A very sizeable number has to be moved away
from agriculture for the remaining persons to earn well. Due to continuing high growth rate of
population, annual addition to the work force is over 10 million a year. In Rajasthan, about 8 lakh
livelihoods are needed annually for over the next decade to deal with the problem. Realizing the
enormity and urgency of the task of livelihood promotion, the State Government set up Rajasthan
Mission on Livelihoods in 2004.

In order to understand various facets of livelihood issues across segments, sectors and spatial
regions, RMoL has undertaken 25 rapid assessment studies, held 25 consultations and initiated 4
pilot projects involving stake holders, academics, researchers, Government functionaries and civil
society organizations. The booklets being published now including the present one contain our
learning about complexities of livelihoods in a summarized manner, derived from the field
studies and consultations. These illuminate various facets of livelihoods in the State and would be
helpful in proper understanding of the issue and in developing proper perspective in this regard. I
do hope that all those who are concerned with the problems of livelihoods, particularly the
livelihoods of the poor, unemployed and the under privileged would find these booklets very
useful. Both the content and the views expressed therein represent summation of views expressed
by many persons and we would like to thanks all those who made it possible for us to bring out
these booklets including the State Government, UNDP and BASIX. My colleagues at the RMoL
worked tirelessly for holding consultations and undertaking field studies. Appreciation is due to
them as well.

M.L. Mehta
Deputy Chairman
RMoL

RMoL-BASIX
 Developing Rural Economic Clusters for Livelihood
Promotion

A study on
The Potentials of Developing Rural Economic Hubs in Rajasthan

By
Mr. Dileep Gupta

RMoL-BASIX
Abstract
In almost every Indian States there are large undeveloped regions. Many of those can be
considered as pathetic islands where the rays of development are yet to fall. There are hundreds
of rural towns and thousands of villages situated in such regions where no new investment has
been made at policy and practice levels. Examples of imbalance between rural backwardness and
urban growth can be seen in this regard as cities are growing disproportionately, often at the cost
of the surrounding areas. The deplorable state of most of the rural areas, where about 65% of our
country’s population still exists, is in contrast to modern urban cosmopolitan towns. This
contrasting living status gets aggravated when the population in neglected areas aspires to attain
the comfortable living amenities being enjoyed in the urban towns.
Similarly, Rajasthan has progressed a lot in terms of prosperity but the rural misery is
exemplified by the continuing large number of regular seasonal migration to the urban and
industrial sectors in search of employment. It has been increasing year after year leading to
greater demands on the support systems at destinations.
Setting up Rural Economic Hubs in such areas to provide better socio-economic life may be a
good futuristic vision. Rural Economic Hubs are envisaged as economic nucleus of 20-30 villages
with the basic economic activities carried out in and around the villages of the Hub. These Rural
Economic Hubs with backward and forward linkages, processing, designing, finishing, marketing
related activities of areas specific products and services have a great potential to create a large
number of fresh livelihoods to the youths with enhancing the existing livelihoods in the area in
terms of earning and other returns.
As a part of RMoL-BASIX initiatives and efforts for creating and enhancing livelihood
opportunities in Rajasthan the present study, ‘Developing Rural Economic Hubs in Dungarpur
District in Rajasthan attempts to understand the ground reality of demography, natural resources,
infrastructural facilities and support systems, livelihoods scenario, market dynamics to explore
viabilities of developing rural economic hubs around Sagwada Block in the district with reference
to the specifically identified sectors.

1. Introduction
Rajasthan, with a total geographical area of 3.42 lakh sq. km accounts about 10 percent of the
total area of the country. According to the Census 2001 the population of Rajasthan is over 565
lakh, about 5.50 percent of the national population, with the sex ratio of 921 female per 1000
male including 132.14 lakh of urban (23.38%) and 432.93 lakh (76.62%) of rural population. It
had a density of 165 persons per square km and decadal growth rate of 28.33 percent. The state
population had a decadal growth rate of slightly less than 28.44 percent during 1981-1991. The
total workforce is estimated at 1.39 crores (32.26% of the total population) consisting of 97.86
lakh male and 41.72 lakh female population.
Rajasthan has the highest proportion of Scheduled Caste (SC) population in India (averaging over
17 percent) and a high proportion of Scheduled Tribe (ST) population (12.4 percent). Also, the
State is characterised by a non-nucleated, dispersed pattern of settlement, with diverse
physiographic pattern ranging from desert and semi-arid regions of Western Rajasthan to the
greener belt east of the Aravallis, and the hilly tribal tracts in the Southeast. Set within this
diverse geographical terrain, Rajasthan encompasses a wide range of livelihoods. The State is
home to, on one hand, prosperous “Green Revolution” peasantry in Ganganagar, and, on the other
hand, subsistence farmers in Dungarpur, Churu and Dholpur.
An Overview of Employment in Rajasthan:
Employment data for the decade 1981-1991 indicates that the employment scenario has changed
in terms of growth in non-farm and service sectors, although the sector wise portfolio in terms of

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sources of employment has not diversified significantly in Rajasthan. This is an issue of concern
for the State’s future livelihood strategies, especially as Rajasthan faces precarious conditions of
drought.
Key features of employment in Rajasthan:
 The agricultural sector is still the predominant source of employment.
 The share of agricultural labour has increased from 7.3 percent in 1981 to 10 percent in 1991.
 Employment in agriculture is declining, although growth in non-agricultural employment is
not rapid enough to compensate for this decline.
 Under-employment is widespread especially in the rural agriculture sector and very
significantly in the urban informal sector.
 The industrial base of the labour force is quite thin. The share of labour force in industries
(both household and non-household) is just 7.5 percent, which indicates industrial
backwardness.
 The proportion of casual labour has increased, especially in rural areas.
 The massive increase in the construction sector is largely a result of the spill over of unskilled
workers from relatively less remunerative work in agriculture.
2. Objectives of the Study
Rural Economic Hubs are envisaged as economic nucleus of 20-30 villages in a surrounding.
The basic economic activities are carried out in and around the villages of economic center, but
for backward and forward linkages, processing, designing, finishing, marketing etc. they often
rely on outside support and intermediaries. The intermediaries and infrastructure have a critical
role in the value chain of such hubs or centers of any sub-sector. If some of the critical
intermediary services and/ or infrastructure can be created in and around these, the reliance on
external agencies would diminish, improving the economy of the area.
Further, the possibilities of convergence with different departments and Public Private
Partnership (PPP) could be established for fastened and guaranteed growth of the local economy.
Such an endeavor would also provide opportunities for mass employment within the local area
justifying the creation of more social infrastructure (i.e. educational institutes, hospitals,
professional institutes, entertainments etc)
In this context that Rajasthan Mission on Livelihood (RMoL) explored the possibility of
developing such a Rural Economic Hub in Sagwada Block of Dungarpur district. Hence, the
objective of the Study was to understand the ground realities related with demography, natural
resource, infrastructure facilities and support systems, livelihoods systems, sector wise market
dynamics etc around the Sagwada Block in specifically identified sectors to facilitate the
formulation of interventional strategy to create rural economic hub.

3. Methodology
The study was exploratory in nature. It analyzed the primary and secondary data, apart from
reviewing various academic studies conducted, reports and articles published in the national
newspaper and magazines around this or similar the issues, to substantiate the findings and
recommendations. A reconnaissance survey also was undertaken to get broader ideas about the
areas to be explored. Based on the findings of that survey certain sectors were short-listed for in-
depth study.
The study commenced first by obtaining data at the State level followed by discussion at the
Collectorate. In-depth discussions with the concerned officers of the department like DRDA,
DIC, Agriculture, Livestock, Mining and minerals, Mandi, Tribal welfare, etc were made in this
course afterwards. Based on the insights and data availed from these departments and discussion
with the BDO-Sagwada, Sagwada Block was divided into four regions- South, North, East and

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West for the field survey. In each region, existing nodal village markets were identified. These
village markets were in villages Oberi (S), Verda (W), Bhilora (E) and Parwa which are situated
in the south, west, east and north sides of the Sagwada Block respectively.
In each of these nodal villages many focused group discussions (FGDs) were carried out with
Panchayat Sarpanchs, Sachivs, farmers, traders and experienced elderly villagers regarding the
issues and potentials of the specific sectors. Two or three villages and/or hamlets around the
nodal village were also visited to verify the data and insights gained from the FGDs. To
understand the situation, discussions were also held with farmers and traders in Banswara district
and various industrialists in neighbouring Gujarat state. In addition to these, discussions in the
same manner were also held with entrepreneurs of concerned sectors, traders, Mandi officials and
police officials at the Rajasthan-Gujarat border.
4. The Profile of Dungarpur District
Dungarpur is situated in the southern plateau of Aravali ranges. The district shares its boundaries
with Udaipur district in north, Banswara district in the east and Gujarat state in the south and west
directions. The Som and Mahi rivers demarcate and separate Dungarpur district from Udaipur
and Banswara districts respectively. The district headquarter is 568 kilometers from Jaipur, 108
Km from Banswara, 105 KM from Udaipur and 180 Km from Ahmedabad.

As per 2001 census, the total population of the district is 11,07,037, i.e, about 2% of the total
population of the State. The decennial growth of population is 26.5 percent during1991-2001
observing a reduction of 1.42 percent from 28 percent decennial growth during 1991-2001. The
density of population of the district is 294 per square km and the sex ratio is 1027. The urban
population of the district is only 80143 while rural population is 1026894. The district has about
93 percent rural population as compared to 77 percent rural population in the State. The district
has a large percentage of ST population at 65.2 per cent of the total population while the SC
population is about 4.2 percent. The other castes are Patidar, Rajput, Vohra, Kumhar etc. which
are about 30 per cent of the total district population in a combined form. Patidar is a dominating
caste in the district.
As per the agro climatic classification the district falls under Central plateau and Hills region.
Most part of the district is rocky and undulating hilly terrain. Southern part of Sagwada block is
flat, rich agriculture land. Soil of the area is alluvial brown. The average rainfall is 728 mm. The
tribal lives in widely dispersed villages. The population of some villages resides on hillsides or
isolated hillocks. Compact villages can be seen in only the low-lying area. Majority of such
villages are in Sagwada block

The literacy rate of the district is 48.32 as per 2001 census, showing an increase by 18 percent as
against 30.55 as per 1991 census. The male literacy is 66.19 percent while female literacy is
31.22 percent.
As per 2001 census the percentage of working, marginal and non-working population is 24.63,
23.75 and 51.62 respectively. The main occupation of working population is agriculture and the
economy of district is dependent on subsistence agriculture.
As per land records, the total geographical area of the district is 385592 hectares. Of which
186784 hectares (about 50%) is cultivable and 134786 hectares is uncultivable. In the district 61
percent of the land is held by 22 percent of the landowners, 22 percent of the land is held by 21
percent of the landowners and the balance 57 percent of the landowners holds only 16 percent of
the land.

4.1. Agriculture 

RMoL-BASIX
Agriculture is the main livelihood source of the people of the district. More than 80% the district
population is engaged in agriculture and related works. The net area sown is about 33 per cent of
the total geographical area. With minimal irrigation facilities most the agriculture is rain fed and
the majority of the farmers follow largely step agriculture practices on hill locks. The situation of
agriculture as per 1995-96 census is as below in Table 1;

  Table 1: Land holding pattern

Land Holdings No. of households % HH Area (Ha.) % of total land
< 1 ha. 78771 57 31317 16
1 - 2 ha. 29604 21 42597 22
2 - 4 ha. 22453 16 61648 32
4 - 10 ha. 7907 06 43420 23
>10 ha. 507 0.4 11842 06
Total 139242 100 190824 100

The Table 1 indicates that about 57 per cent of the agriculture land holders are marginal farmers
with 0-1 hectare land. The total land area with marginal farmers is a mere 16 percent of the total
agriculture land.

The major crops grown in the district are wheat, maize, and paddy. Urad, Moong and pigeon pea
are the main pulses grown while ginger and turmeric are also grown in large quantities in some of
the areas. Various lentils & oil seeds are also grown. Despite this, vegetable and oil requirement
of the district are met from the neighboring state of Gujarat Poor irrigation facility, out dated
technology, ignorance of improved seeds & fertilizers, poor organization of agriculture activities
and resultant low returns combine to give low crop productivity.

4.2. Live stock

Live stock rearing plays a very important role in the present economy of Dungarpur district.
According to 2003 cattle census the District has 417378 cows and bulls, 215991 buffaloes,
124158 sheep, 375028 goats. With the total cattle population at 1141709, it is higher than the
human population. The animal population, except for sheep, is on the rise. Buffaloes have shown
greater increase in number than others animals during 1997-2003.

The cattle of the area are of the short stature Malvi breed where as buffaloes and goats are of non-
descriptive Desi breed. About 80 per cent of the cattle are considered to be of poor quality and
hence return from this sector is very low.

There are 35 hospitals, 13 dispensaries and 131 artificial insemination centers, 12 sub centers and
71 integrated cattle development sub centers in the district.

4.3. Forest
The District has 61,241 hectares of forest land. Mahua and mango trees are plentiful while gum,
puwar, karang, dhaturi, safed musli, honey, bichhukanta, mahuwa, anwala, bahera, ratanjot etc
also can be found. The forests have largely disappeared from the plains due to indiscriminate
felling of trees. Only mahua trees are found in the agricultural fields. Almost pure khankra (Buteo
monosperma) associated with Kanjeri (Holoptelia integrigolia), Kadam (Mitragoina Parivifolia),
gurar ( Albizia procers) are found along the 'nullah'  and in villages while in 'nullahs' having
rocky boulders, arjun (Terminalia arujna) is found

4.4. Water Resources

RMoL-BASIX
There are three perennial rivers passing through the district- Ralom, Som and Maron. The District
has one medium irrigation project, 51 irrigation tanks and 900 village tanks to store rainwater. In
the district about 12870 MCFT water can be stored out of which at present 3846 mcft water is
being stored in the irrigation tanks and 6102 mfct in the Som Kamla Amba Dam.

4.5. Minerals   
Contribution of minerals resource is also significant to some extent in the economy of the
District. The main mineral resource of the district are soapstone, floride, serpentine, Green
marble, granite and masonry stone.
4.6. Industries
There are two medium industries in the district- employing about 4000 people. The number of
small registered industries is 2600 with about 7892 employees. The number of registered
factories in the district is 47.
4.7. Education
There are 3 Colleges, 2 Sanskrit Colleges and one Teacher Training College, 129
Secondary/Senior Secondary Schools, 389 Middle schools, 968 Primary Schools, 1035 Rajeev
Gandhi Pathshala and two ITI’s.

4.8. Medical and Health    

There are two Hospitals, 7 Community Health Centre, 42 Primary Health Centre and 302 Sub-
Centers in the district. Thus the district has four Primary Health Centers and 27 Sub Centres for
one lac population.

Use of pesticides and chemical fertilizer is low in the district. The tribal households typically
keep 2-3 heads of animal and thus use their waste compost in their field. There are agriculture
lands that have never used chemical fertilizer.

The Government has three RIICO industrial areas in Dungarpur district- One each in Dungarpur,
Sagwada and Bicchiwada – the status of the industrial area in Dungarpur and Sagwada are
pathetic. In Dungarpur Industrial area only about 20 units are working even though the records of
DIC show that about 85 of 87 plots have been allotted. The situation is just as bad in Sagwada.
About 8 units seem to be working whereas the records show that 38 of the 54 plots had been
allotted as of 31st March 2004. Most of the units are closed down due to lack of sufficient fund or
because it was not viable to run the business.
5. Profile of Sagwada Block
As per the Census 2001, Sagwada Block with a population of 2.87 lakh accounts for 26 percent of
the total population of the district. Of these, about 49 percent is male and 51 per cent is female.
Of the total population, nearly 87 per cent reside in the rural area and the balance 13 per cent in
the urban area. The ST category account for 54 per cent of the population and 5 percent belong to
the SC category. The Block’s literacy percentage at 52.12 per cent is far better than the district
average of 48.32 per cent. The Block occupies 79955 hectares or 21 per cent of the district area.
The population density is 263 as against 294 of the district. It has only 7 per cent of the
forestland of the district.

The normal rainfall of the area is 72.9 centimeter, which is the 2 nd highest rainfall district of the
State. Power supply is not a problem except during agriculture seasons.

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Sagwara is the biggest gold jewelry centre in the district. One reason could be the frequent travel
of the local, especially the Bhoras to the Middle East. The textile city of Ahmedabad is just four
hours by road and Kota city is eight hours by road from Sagwada town.

5.1. Agriculture
The primary livelihood for the majority of Sagwada households is agriculture. It is the main
occupation of the tribal and Patidar community. The topography of the western area of Sagwara
Block mainly consists of small hill-locks. The area is largely undulating and has scattered
inhabitants. This means that the land holding of a farmer consists of part of a slope of a hill and
part of the valley at the bottom of the hill. The slope of the hill is agriculturally not very
productive whereas the valley has fertile, rich soil.
The agricultural land is comparatively fertile and flat in the southern part of Sagwada Block that
is the area near Mahi river back water and Lodisar irrigation tank catchments area in Oberi. The
soil in the valley and flat lands is very rich in nutrients. The soil in these two areas is considered
good for many agricultural crops. Yet, there are very little attempt made regarding soil and water
conservation. Whatever soil and water conservation measures are attempted here are done on
individual basis which can be said inadequate. The Lodisar irrigation tank built in 1958 having
catchments of 315 square kilometers seems to be the only major successful State initiative in the
area.
The majority of landholdings in Sagwada Block in Dungarpur district are small, in the range of 1-
6 bighas as they have been divided over generation. Since land holdings are small, the use of
tractor and other farms equipments are scarce. Backward and forward linkages for supporting
agriculture is also inadequate in the Block in various regards while the outlets for seeds,
pesticides and fertilizers, irrigation equipments etc are few.

Agriculture practices in Sagwada Block are based on rains mainly for irrigation of crops. The
main Kharif crops are maize, paddy and urad while wheat and gram are grown in the Rabi
farming season. The Moran river passes through the villages of Sagwara Block making the area
relatively fertile, irrigated and hence secured in terms of yields as its water is used by farmers for
irrigation purposes.

5.2. Mineral resource

Though Dungarpur district is rich in mineral resource, its Sagwada Block is not endowed with
any minerals in significant quantity (refer mineral deposit map of the department of Mining and
Minerals). Mining of fluorite was being carried out near village Patra till a few years ago that was
closed-down due to labour disputes leaving about 1500 persons unemployed.

5.3. Education
On the education front, the number of schools seems to be adequate. Also, the number of private
English and Hindi medium schools is on the increase in recent years. Apart from the government
educational institutes, private English and Hindi medium schools have also cropped-up at many
places in the Block. At present, Sagwada town boasts of four English medium schools with an
estimated strength of about 3000 students. Two of these schools are up to standard 10 th and other
two are up to 8th Std. These Schools are the branches of network schools of Banswara and
Udaipur.
The situation of higher education in the Block is not better in terms of number of institutions and
quality of education. There are only two collages in the district – one is in Dungarpur and other is
in Sagwada. But students, mainly male, do not get the subject of their choice and so prefer to go
to Udaipur or Gujarat for higher study.

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5.4. Dairy
Dairy sector is not very developed in Sagwada Block even though there is a good number of the
Patidar households who are about 27 per cent of the total population. Unlike other places Patidars
of Sagwada do not go for commercial dairy. They keep livestock for domestic requirements of
milk and milk products. As the buffaloes and cows are country breeds, they do not yield much
milk. The milk produced is either consumed at household level or is processed to make ghee,
again for household consumption. Many people of this area have milk and milk product as part of
the daily dietary intake.

The tribal households in Sagwada Block are engaged in agricultural practices and keep goats but
sell them off whenever they need money.

5.5. Migration
Multi level migration from Sagwada Block has emerged as a major trend for earning better
incomes and livelihoods. The majority of the households, mainly of the Bhora, Jain, Patidar,
Darzi Kumhar and tribal castes and communities have at least one member of the family working
somewhere in the Middle-east, mainly Kuwait, Mumbai or Ahmedabad.
Regarding the migration from Sagwada to the Middle-East migrants are mainly involved in jobs
of drivers, mechanics or semi skilled workers in construction related sectors. The all 40 Kumhar
households of village Patra, has at least one family member migrated to Kuwait for construction
related works. In Mumbai, they are engaged in jobs related with tea stalls, petty jobs and labour
works. Similarly, many households have at least one member working in Gujarat for either in on-
farm works or constructions related works. The Brahmins and Patidars are mostly involved in
small scale business with tea stalls, eating joint etc. while others work as labourers. It is estimated
that there are 50 thousand persons of Sagwada Block who have migrated to the Middle East,
Mumbai or Ahmedabad. While adding to the number of temporary migrants this number goes up
at a larger scale.

5.6. Services
Essential Civic amenities such as drinking water supply system, schools, veterinary, post offices
hospitals, police stations, hospitals and administrative departments exist in Sagwada Block while
economic activities revolve around providing for the essential needs of the inhabitants of the area.
These consist of shops of essentials commodities, household articles and furniture, hosieries,
garments, cosmetics vegetables and fruits vending etc. The private service available includes STD
and PCO booths, mobile service providers, tea stalls, small eating joints, banking and insurance,
computer training center, bi-cycle and motorcycle repair, tailoring, barber and liquor shops.
Private medical practitioners are also available in the nodal villages.

The Government hospital doctors of Udaipur and even Sagwada are considered professionally
better as compared to doctors in Modasa (Gujarat) but the support and infrastructural facilities in
Udaipur and Sagwada is inadequate and the attitude of the local hospital staff is said to be very
condescending and abrasive.
5.7. Textile
The Sagwada market gets most of its textile materials, cloths and readymade garments mainly
from nearby Gujarat and Madhya Pradesh (Indore) centers. The Sagwada Block has a large
number of people engaged in tailoring and stitching works. Almost all villages have few
households involving both male and female members in tailoring and stitching works of clothes.
Meanwhile, bigger villages have a larger number of households involved in tailoring and

RMoL-BASIX
stitching jobs. Involving many such persons in terms of employment one garment-manufacturing
unit is functioning in the industrial area of Sagwada.

5.8. Dependence on Gujarat

A major reason for the slow development of Dungarpur district, of Sagwara and Simalwada
Blocks in particular, is the convenience of having two or three well-developed towns of Gujarat
easily accessible from the area. These towns in Gujarat can be reached by road within 3-4 hours.
Most of the surplus produce from the district is collected by local traders and sent to traders and
mills in Ahmedabad, Modasa, Dahod and Himmat Nagar in Gujrat. Most of the grains are sent
back to these areas in Rajasthan with value addition after processing in mills and factories. In day
to day life most of the essential needs are also procured from those towns.
In addition to these, the nearby Gujrat towns are also the preferred destinations for higher
education of the youth of Sagwada Block. Big scale purchasing by most of the better off villagers
of the Sagwara Block are done in Himatnagar and Ahmedabad markets.

5.9. Issues and Potentials:

There are certain issues regarding setting-up rural business hubs in Dungarpur district which need
to be understood properly to bring fruitful conclusions in order to resolve obstacles in constraints
hindering in any proceedings this direction. But, also, there are potentials as well which can be
reviewed and used to achieve the goals to set up such rural business hubs in the district. These are
described below:
I. Agriculture (Rice, wheat, Pulses): The southern belt of Sagwada Block, basically the region
with the availability of water by the Lodisar Tank and the Mahi back water, is very well endowed
with rich soil, flat land and can be well irrigated by these two good sources of water. The farmers
in this area, with three crops farming in year, have better agriculture production in comparison to
the other regions of Dungarpur. If the monsoon is good the farmers go in for a crop rotation of
paddy, wheat and pulses (Tur, Moong etc). If the monsoon is weak, then the farming practices are
limited to the farming of maize, wheat and pulses.

But by no stretch of imagination can the small farmer of the area be considered well-off. Most of
the farmers cultivate small land holding, up to 1 to 2 acres. Even though the land records show a
much bigger ownerships. This is because the sons, who are already married and staying
separately from their father as individual family, are cultivating agricultural land while
technically the ownership is still in the name of the father.

Specific Issues in Agriculture

I.1. Land Holding- As the farmers are dependent on small land holdings, it is not cost effective
for them to source input requirements from outside the villages or nearby towns. This means that
they would have to pay higher costs to get what they need from the local shopkeepers who buy it
in bulk from Ahmedabad and Himatnager. The farmers are also bound to buy whatever the
shopkeepers have in their stocks. There is no question of them to go anywhere else for better
quality or lower prices.

I.2. Market Price- Since the price of the farmers’ produce is decided by the external market
dynamics, the margin on the produce is always below the expectation of farmers. The traders,
based on demand-supply situation, decide the market rates leaving no space for farmers to get
desired price even if the yield is poor making average production as high to put them in loss at the
end of harvesting.

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I.3. Marketing- The other major uncertainty faced by farmers is of the marketing system of the
produce. If they have purchased required inputs on loan or if taken loans, then the rate of pay
back would have been decided in advance. This transaction obviously would be in the seller’s
favor since the shopkeepers (buyers) have better information base as compared to the small
farmers in a remote village. Even if he has purchased all his inputs with his own money, he still
has to sell in the local area. Going outside the area with their meager quantity, in search of better
price is fraught with uncertainties.
The data given to DDM, NABARD by the Agriculture department shows a production of 5068
tons of paddy, while the data in Sagwada Teshil records office shows that paddy was grown in
6217 hectares out of which 4082 hectares of paddy was declared as damaged due to excess
rainfall. Assuming that paddy was produced on 2135 hectares land at a very conservative average
of 25 quintal per hectare (discussions with farmers groups in a more than a dozen villages in the
region indicates an average productivity of 30 quintals / hectare while the Agri-department of
State calculates on the bases of 35 quintals per hectare), the production translates to 5338 tons.
On the other hand information obtained from two Mandi in Gujarat indicate that paddy equivalent
to 4500 tons have reached these Mandis and, apart from this, many mills in Dahood, Himatnagar,
Modasa, Ahmedabad source paddy directly from the traders without registering the sale in the
Mandi.

I.4. Lack of Processing Units - One of the biggest factors causing a negative effect on the
economy of the area is the lack of processing units within reasonable distance in the whole
district.
The current agricultural marketing scenario in Sagwara Block area is typical of most areas and
villages in India that are remote or poorly developed. The shopkeeper and traders freely trade
most of the agriculture produce. Their earnings come from exploiting a big group of small and
marginal farmers of the district. The poor marketing system in this regard create negative
situation for the farmers. The following points can be viewed in this concern:
(a) The inability of the small farmer to transport his meager quantity to the market at a
viable cost.
(b) The farmer’s lack of contact or ignorance of the identity of the purchaser.
(c) The farmers need for immediate cash for his produce.

The actual crop data and realistic estimates of produce requirement and rates, the impetus to the
growth of farmer, is not available to the farmers. This situation favors the traders who take
advantage of the season situations. Most of the farmers are caught in the debt trap of local
shopkeeper and money lender.

The middleman traders do not make any investments to develop the sector in particular. Their
investments are mainly to increase their capacity to hold stock or to transport the stock.
Moreover, as the commissions are charged on volumes, they have no commitment to quality or
building infrastructure and they are not motivated to improve the product or innovate. The
seasonality of crops works to their benefit as they can manipulate prices.

I.5. Indifference of the Agricultural marketing department - Another hurdle in the marketing
chain is the absolute indifference of the Agricultural Marketing Department. Agriculture Produce
Marketing Committees were setup to regulate the marketing of agricultural produce and to ensure
that farmers get the right price for their produce. But over the years they have become another
layer for the farmer to negotiate.

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It does provide physical space in the form of ‘mandis’ or markets but it is not really a marketing
agency. The APMC levies a cess on agricultural commodities that are sold by the farmer. The
buyer too has to pay the commission agent a levy of 1.6 per cent of the value of the purchase, of
which 1 per cent is the market fee and 0.6 per cent is the maintenance fee.

I.6. Logistic Related Problems- The APMC route creates an immense logistics problem to the
small farmers. The producers have to come to the market first. Freight rates are high and steadily
on the rise. Freight costs plus the other related expenses forms a significant component of the
total expense incurred by the producer to transport his produce to the mandi or to the location of
the purchaser. It is possible to bypass the APMC if the farmers or traders have contacts with the
processing units.

I.7. Lack of Transparency- The worst part of the marketing process is the lack of transparency
in the auction system. Ironically, though the agents have no commitments to ensure quality, they
are quick to take any advantage out of it. As the farmers have no prior knowledge of the mandi
prices prevailing for the day, they are not in position to negotiate for better prices since they
cannot afford to take his produce back to the village.

I.8. Shaky Supplies: At the farmer’s end, the middlemen’s commissions eat into the farmer’s
margin as they are denied good prices for their produce during the peak demand seasons. On the
other hand, the processing units pay a high price during the off-season. The retailers and
processors are also badly affected in this scenario as they have to contend with non-standard
products, variable rates and erratic supply. As the entire market is in the stranglehold of the
middlemen and commission agents, there is no control over the prices.
For agricultural produce processors, production becomes unviable beyond the cost limits for raw
material. Agricultural produce processing companies find it difficult to run their plants during the
agricultural off-seasons as the cost of raw material makes their operation unviable. As price
fluctuations make costing very difficult, the processors have to compute production cost on the
basis of average annual price, usually on the higher side.

I.9. Marketing intrigues: There is one more twist in the marketing maze. The godfathers in the
process are not the middlemen but the local petty traders who also are the input suppliers. They
play the role of farm financier and control over the financial situations of the farmers deciding the
season based rates. What is grown depends not on what the processing units and consumer want
but the input that the farmer can get on credit from the dealer or the inputs he can afford from the
local shopkeeper.
At present, given the meager returns, the farmers have no choice but to depend on the conditional
financial supports of the moneylenders to grow their next crops. Since, in many villages, the
moneylenders are also the petty traders; the farmers are forced, by circumstances, to sell their
produce to the shopkeepers or moneylenders at conditions set by them. Under such conditions,
farmers are not in position to negotiate better prices for their produce or object to the improper
weighing system of the purchaser.
The farmers have no idea if the inputs and efforts will be rewarded or not. Their insecurities and
complications are innumerable, ranging from having small land holdings, ignorance of marketing
data and network, inadequate financial buffers to name a few.

I.10. Hurdles to the technology development: The long line of middlemen creates a chain
reaction that effects technology development in agriculture. In order to opt for advanced

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technology the grower requires assured markets and better returns. The presence of middlemen
depresses the farmer’s margins and makes better technology unaffordable.

I.11. Poha: Like all other grains, the rice flakes (poha) is also bought by the local traders on
credit. The payments are made after the sale of the produce, normally after one month or one and
half months. All the poha is brought from Indore or Gujarat by the main traders and they retail to
the restaurants for consumption. Even though Poha making process is very simple and the
estimated requirement exceeds 10 tons a day within Sagwara Block, there is no Poha making unit
within the district.

II. Horticulture: The promotional activities of horticulture are also done by the Department of
Agriculture. Since the status of agriculture promotion itself is in deplorable in Sagwara Block, it
is not logical to expect anything better in the case of horticulture development. The quality of
soil, climatic conditions and availability of water favor large-scale promotion of horticulture
plantation does not seem easily possible. Yet, hardly any attempts are visible to exploit these
favourable conditions. The vegetables and fruits are all procured from across the Gujarat border
especially the area around Dungarpur, where the area is very undulating that can be promoted to
take up horticulture plantation.

The demand for horticultural produces is increasing due to change in the food habits and the high
nutritional value of the produce. Emphasis is being given for value addition and export of
horticultural products. The impacts of horticulture production have brought prosperity in arid and
semi-arid regions. Horticulture is fast assuming the position of a vibrant commercial venture.

III. Dairy: The State has a particularly elaborate system to promote dairy sector. At the regional
level, concerned Department is headed by a Deputy Director and at the district level by the
Assistant Director livestock. There are 37 veterinary hospitals, 13 dispensaries and 133 sub-
center and AI centers reporting to the Assistant Director in Dungarpur District. Of these 8
hospitals, 3 veterinary dispensaries and 35 sub centers and AI centers are in Sagwara Block.
Green fodder like licrne (Rajka), Jowar, Bajra, Guar etc are available in plenty in Sagwada Block,
mainly during the rainy season. Dry fodder is also available in plenty throughout the year but
there is no cattle feed plant in the district but cattle feed is made available from the Banswara
dairy union for its member. It is brought from the plants managed by RCDF within the State.

III.1. Local Breed- The livestock in the area are local breed with very poor milk production. The
breeds have not been upgraded and almost all villagers free-graze the animals.

III.2. Artificial Insemination- Dungarpur district was covered under intensive cattle breeding
program “Gopal” launched during 1990-91. Under this program literate village youth (Gopal)
were trained in artificial insemination for a period of four months and then allowed to establish
themselves independently in their villages. A stipend of Rs.600 and Rs.400 per month was paid to
them during the 1st and 2nd year respectively. There are two chilling cum processing plants
(Government and Private) that collect around 15 thousands liters of milk every day. The
government milk union does not have an office there and there are not many active milk routes in
the area.

III.3. Veterinary Doctors- According to the records of the Animal Husbandry Department, as of
31st March 2005 there were 33 posts for Veterinary Doctors and of which only 15 posts, less than
half of the posts or 45.50 per cent, were filled up. Most of the doctors recruited had got
themselves transferred to a place of their choice through their bureaucratic or political patronage

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after joining duty. As of Nov 30th 2006, only 11 posts, 33 percent of the total number of posts
were filled.

III.4. Veterinary Hospitals- The overall management situation of the veterinary hospitals in
Sagwada Block is very poor. The doctors appointed in these hospitals, who all are working with
additional charges, make only one visit in a week. All such hospitals and related centers are in a
very run-down condition. The centers visited, those that were open, were swept clean (all centers
have a peon!) but they were devoid of any medicines stock. According to the V.A and LSA at
Oberi and Jogpur, they take care of all treatments and dispense medicines from the medical stores
but the presence of doctors is not sure. Thus, the needy villagers visit these hospitals very rarely.
In any case, given the condition of the available transport facilities and perceived value of the
animals, it does not make any sense to them to bring the animal to the centre by making high
expenses. Since the milk outputs of the animals are meager, the farmers do not see it worthwhile
to invest in expensive feeding or care.

According to Dr. Ajay Golaye and Mr.Davji Patidar, LSA of village Jogpur, the villagers of the
surrounding areas purchase buffaloes of good breed from Gujarat for better milk production
though the animals do not sustain this level of output beyond 5-6 months period. So they start
blaming the environment and weather situations for reduction in milk outputs. The fact that
environment does not change, over every 25 km radius or by changing the state border, is
overlooked by the locals and the LSA.

III.5. Attempts for Betterment of the Sector - Any attempt to rectify this situation would
require a well-designed and committed intervention right from the grass roots to processing of the
produce. This would have to address the following issues:
a. Breed up-gradation in a phased manner,
b. Systematic awareness building among the farmers,
c. Establishments of effective, affordable animal health service systems,
d. Better milk collection system, and
e. Quality processing and marketing of the product.

IV. Readymade Garments: The impact of education and of the changing lifestyle is every where
and it is also reflected in the local areas of Dungarpur district. The fashion is brought in the
locality among people either through personal contacts with the outside cities or by media. The
present generation males prefer to wear pant and shirts instead of dhoti and kurta while the
females prefer salwar and suit to sarees and blouses or traditional langhas. This trend has been
making more space for a growing demand for readymade garments in the area. At present this
demand is met by garment supplies from Ahmedabad or Indore cities.

6. Key Findings and Suggestions:

The analysis and reviews of the existing livelihood scenario, potentials of the manpower and
market situations based on the study the following points highlight the major findings
subsequently followed by a number of suggestion regarding setting-up rural business hubs in the
district to meet future livelihood needs of the growing manpower:

6.1. Agriculture Produce Marketing Committees should be setup and make effective in the district
to regulate the marketing of agricultural produces ensuring that the farmers get right prices for
their produces. Unfortunately, these have become another layer for the farmers about negotiation
over the years. The additional handling needs at the APMC mandi level to reduce damages and
wastage of the produce. It is possible to bypass the APMC if the farmers or traders have good
links with the processing units.

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6.2. Since the majority of the farmers, with no good education, have small land holding, a good
reliable system is required to pass timely information to them regarding weather conditions,
market demands, productivity enhancement methods and technology developments, impending
pest attacks and preventive control methods and medicines, suitability of a particular produce for
the area etc. Farmers need to be educated on the commercial aspects of agriculture as the sector is
becoming more market-oriented at present.

6.3. There is an urgent need to design and facilitate region-specific strategies to increase yields,
access to agricultural credits, diversification into agriculture related activities such as horticulture,
post-harvest processing and integrate with the market etc.

6.4. One of the main drivers for agricultural growth could be the corporate involvements,
particularly in post harvest initiatives. The liberalization of our economy has resulted in the
increase of the middle-class in the country that demands better services and products. These
corporate units have started looking at all aspects of this value chain from research and
developments to distribution of seeds; fertilizers and pesticides to improve irrigation systems;
latest technologies to market information and credit facilities; contract farming, processing,
setting up cold storages and warehouses, transportation, export, and retailing of the produces etc.
It might open a new door for better returns to the farmers.

6.5. Consumers find organized retailing, which is growing very rapidly, very comfortable and
convenient mode of shopping. Corporate involvement in contract farming, retailing and exports
has tremendous potential to improve the returns to the farmer. A system where the farmers can
supply directly their produce to the processing units or sell to the retailer would be effective if
promoted strategically.

6.6. The quality of soil, climatic conditions and availability of water favor large-scale promotion
of horticulture plantation in the district. Emphasis is being given on value addition and export of
horticultural products as promoting horticulture on large scale would also create scopes for
further processing and packaging works and to market these outside the area. Development of
better post-harvest handling and marketing of horticulture commodities, collection and
dissemination of market-related information, enhancing financial assistance to professional
organizations are necessary for the development of horticulture.

6.7. The State has an elaborate system to promote the dairy sector. It is necessary to focus on the
productivity of milk and cost of production without compromising on quality standards. This
requires a systematic awareness program that has to enhance the farmer’s knowledge and
confidence.

6.8. The bulging human population and improving per capita income is expected to boost demand
for livestock products growth substantially. Health care, veterinary drugs, feed and post-harvest
technology may be feasibly undertaken by the private sector with some degree of intervention.
Distribution of livestock wealth among the farm households may be more equitable than the land.

6.9. The role and responsibility of the Animal Husbandry Department is in need of a
fundamental re-engineering.

6.10. Rice mills could be promoted in the local areas. Since paddy season lasts for only about one
and half months, the same mills could do grading and polishing of wheat as the equipment and
infrastructure required is the same.

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6.11. It is possible to start Poha (rice flakes) production in Dungarpur district, particularly in and
around the Sagwada Block area. With the development of this industry, with the good quality
paddy the inferior types of paddy also can be utilized that provide better total returns to the
entrepreneurs and persons related with them. The added advantage of it would be the local
availability of a by-product, for the dairy farmers, and the paddy husk for brick makers.

6.12. The State should promote irrigation with the subsidized schemes for drip irrigation, sprinkle
systems as well as regulations and by introducing penalties for over use and wasting irrigation
water in the direction of water resource conservation.

6.13. The annual rainfall being adequate and soil being fertile a lot can be achieved by
implementing appropriate soil and water retention measures at local level rather than investing in
larger structures.

6.14. There is need to promote the use bio-fertilizer as supplementary, renewable and non-
polluting sources of nutrients as well as an effective way of keeping the soil fertile. The cost of
cultivation is held within the reach of the average farmer under IPNS since the crop requirements
is partly met from low cost organic sources like farmyard manure, green manures, legumes and
bio-fertilizer.

6.15. The garment industry has vast potential to encourage the growth of other ancillary services
and provide direct employment to thousands of the local population.

7. Policy Refinements and Promotional Measures

The Indian farmer is one of India’s biggest strength. But to nurture this strength it is necessary to
frame or modify policies in tune with the changing environment and market situations. It is
necessary to focus on and develop policies that strengthen domestic demand at the same time
boost exports to benefit the Indian farmers.

7.1. Water: A crucial pre-condition for all development initiative is a much desired reform in the
existing water policy. Saving water is a major concern in today’s environmental scenario and in
the present mindset of people it can be done only with such reforms. The key elements of water
policy reforms should consider promotion of the recycling systems by water using industry and
creation of price incentives for saving water and its long term logical use.

Lack of availability of water in the farming sectors has been one of the major constraints which
are likely to be remained unless not made available through some sustainable irrigation projects
in near future. Also, an utmost care in management is necessary to utilize the available water
resource judiciously and economically by various means such as conservation, creation of
reclamation and storage capacity for sustainable make a suitable environment food security. All
these must happen in the light of political, social and environmental concerns prevailing in the
country.

Well defined policies in terms of availability and use of water would also facilitate industries to
have a clear-cut strategy of this concern. As of now there are too many regulatory bodies which
create chaotic situations and hinder if any proactive action is to be taken on the part of any
industries.

7.2. Agriculture: Agriculture is the base of the Indian economy. Progress in agriculture provided
the base in the form of meeting country’s needs of food and other agricultural commodities. The

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challenges faced by agriculture sector can be tackled only when we focus on the betterment of
financial status and provide suitable services to them. Moreover, there is need to create an
enabling environment for industries to invest in post-harvest technologies and processes to
support the agriculture production.

In order to safeguard the interests of farmers it is essential to have minimum uniform regulations
for all forms of contracts between the farmers and industries. It is also necessary to review all the
existing rules and regulations that govern Farmer-Corporate relationships.

7.3. Corporate-Agriculturalist Interface: One of the main drivers for agriculture growth could
be the corporate involvement in post harvest initiatives. Corporate involvement in contract
farming, retailing and exports has tremendous potential to improve the returns to the farmer. Yet
it must be borne in mind that the majority of small farmers are illiterate. This given situation is
not going to be changed overnight.
Since corporate involvement has already taken roots in various livelihood related sectors in
different forms, it is necessary to formulate guidelines that would promote the level of food
processing in India with the involvement of corporate units. Few vital elements of the existing
policies need to be addressed to eliminate the existing while few more would be needed to
safeguard the interest of the small farmers.

To start with, the government should modify the existing tax policies, provide incentives for
private investment in refrigeration, packaging, cold chains, etc. Formulating a legal system to
enforce commitment from farmers as well as the Corporates on contract and add some positive
ness in this direction. In short the government has to create an enabling environment for
consolidation by the Corporates. At the same time it has to have mechanisms in place to ensure
that the farmer’s interests are not compromised.

The policies need to provide scope for healthy and profitable relationships between farmers and
the corporate sector that facilitate
(a) A farmer to grow such a variety of produce that the corporate, buyers and customers
need and yet hedge against price risks,
(b) A corporate buyer to choose a particular farmer(s) to grow such varieties of crops that
best suits the Corporate’s customers.

7.4. Export of Agricultural Products: In order to boost-up exports of agro-products, the

Government provides various incentives through Commodity Boards and Council for
infrastructure development, quality control, market development and promotion, packaging, etc.
But, since the farmers or entrepreneurs are not sufficiently informed and exposed to these they
are unable to proceed to take advantages of such schemes and policies. Thus, the Government has
to develop innovative methods for information dissemination etc.

8. Roles of Business Development Services (BDS) on Livelihood Promotion in Rajasthan

The BDSs is a wide range of services used by entrepreneurs to help them efficiently operate and
grow their businesses with the broader purpose of contributing to economic growth, employment
generation and poverty alleviation. Different types of BDSs, mainly market access, input supply,
technology and product development, training and technical assistance, infrastructure, policy and
advocacy and finance are essential to create desired atmosphere in the state if livelihoods through
businesses is to be enhanced. This can be achieved only by establishing suitable delivery
mechanisms of BDS. In this regard, there are the four kinds of actors which play specific role
which are micro and small enterprises (MSEs) in concerned with the BDS market, the BDS

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providers, the BDS facilitators as well as supply side of markets and the donors from the
government and non-government sector. These factors in a combined and balanced form provide
funding and financial support to BDS market development agencies, primarily the BDS
facilitators or BDS projects.

The BDS is only one means to these ends and that improving MSEs performance requires many
more ingredients. Underlying vision for BDS is a well-functioning market with a diverse array of
high-quality services that meet the needs of a large proportion of MSEs affordably. The BDS can
be viewed in two broader aspects as follows:

8.1. BDS for the Agriculture and Allied Sectors

In terms of providing BDSs in the agriculture and allied sectors the focus should be particularly
on cash crops – fruits, vegetables and medicinal plants. The BDS providers should help the
farmers in resolving problems related with irrigation, fertilizers and pest management for the
production to take place.

At the production front the know-how related to technology and harvesting methods needs to be
provided at the earnest to the target farmers, producers and other concerned groups. The post-
harvesting services would primarily include grading and packaging in the most professional
manner. Effective transportation would also need to be provided to take the products to the
market in the shortest possible time.

The marketing linkages in terms desired crops to be produce according to the market demand and
the right time frame for these would also need to be provided by the BDS suppliers. Securing
storage facilities would also be needed as another important component of the BDS development.
In the same manner the community storage facility is necessary for grains and seeds.

The processing units at the field level should be established so the cost of transportation can be
reduced effectively with timely processing of the specific produces. Special marketing agents can
play a major role in this regard as the farmers themselves cannot be the producers as well as
marketers at the same time. Moreover, an effective BDS should bring many competitors in the
market to foster competition resulting as better incentives for farmers and producers.

Also, an effective database system and MIS inputs will be adding values in the efforts made in
the direction of providing BDSs in agriculture and allied sectors. In the same way, creating a
strong base regarding the human resource related services should also be provided to make
available specialists who can further develop the area specific required manpower. These
specialists will have the capacity to provide high quality knowledge and market input.

But, all these efforts would not be appropriate unless there are markets for these services. So, the
sector specific markets need to be created to bring better outcomes from the BDSs. Correct
identification of services and development of efficient delivery mechanisms and payment systems
should also be the part of the BDS package.

8.2. BDS for the Non-Agricultural Sector

The BDS for the Non-Agricultural Sector needs to be made on five different fronts – packaging,
taste, delivery system, financial provision and marketing linkages. Mobilizing Corporates to
upgrade the products is one area which needs to be a proper attention.

The NGOs may function well in this direction, particularly by running the schemes through
SHGs. Initially, NGOs can do well in terms of the capacity building, training and sensitization of

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concerned people at the local level. It would also be imperative to generate profits for the work to
be viable and sustainable. Strict monitoring and evaluation guidelines also should be developed in
this concern. The value addition of the products by establishing linkages with agriculture related
activities can also be a viable idea.

The textile sectors, as an important emerging sector in Indian economy provide direct and indirect
employment to millions of peoples. But certain lacunae also exist in the areas of finance,
marketing and skills development in this sector. To overcome from these, the quality, design,
durability and prices of the textile products should be assured. Market related BDSs regarding
knowledge, technology and finance also have to be provided. Also, some kind of a consortium
should develop at two parallel levels – one at the local level where the artisans would work from
home and the other at the institutional level where NGOs and facilitators can come together.
Linkages with national and international clubs and agencies will have to be looked into. To avail
loans from the bank 15-20 SHGs can come together to form cooperative societies.

With a combination of the area research, situation analysis, exploring potentials in terms of rural
business hubs and by making policy and market specific efforts in line to BDSs the Sagwada
Block of Dungarpur district can be developed as rural business development center. It may
enhance livelihoods in the area as well as increase employability of the existing sectors.

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Composition of RMoL:
Sl. No. Name & Designation
1. Hon’ble Chief Minister Chairman
2. Shri M.L.Mehta, IAS (Retd.) , Ex-Chief Dy. Chairman
Secretary, Rajasthan
3. Dr N S Hegde, Chairman, BAIF, Pune Member
4. Dr Tushaar Shah, International Water Member
Management Institute
5. Shri V K Ladia, CMD, Shree Rajasthan Syntex Member
Ltd. Dungarpur
6. Shri Rajiv Jain, Managing Director, M/s Member
Sambhav Gems, Jaipur
7. Shri Dilip Baid, Chairman, Federation of Member
Rajasthan Handicrafts Exporters Association
8. Shri Brij Mohan, ED (Retd.), SIDBI, Lucknow Member
9. Shri Vikram Golecha, Ex. Chairman, CII, Member
Rajasthan Chapter
10. Shri Arun Goyal, Director, Academy of Member
Business Studies, New Delhi
11. Shri Ravi Srivastva, Professor, Center for Member
Regional Development Studies, Jawaharlal
Nehru University, New Delhi
12. Shri Vijay Mahajan, Chairman, BASIX Principal Advisor
13. Shri D P Bagchi, Former Secretary, SSI, GoI Principal Advisor
14. Shri Apurva Kumar, ED, Hotel Clarks Amer, Member
Jaipur

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