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Agriculture as Enterprise: An Evolution of Thought and Perspective to Increase Outcomes for India's Farmers

It started with data!
In 2007-08, an evaluation by Catalyst Management Services of a tribal livelihoods initiative for the State Planning Commission of Madhya Pradesh showed that agriculture as a livelihoods option was unproductive and  for small tribal farmers; leaving them without a profitable livelihood option. But it wasn’t because of prices, or barriers to entry. Instead, it was because crucial services and government schemes were not reaching those who needed them most.
According to the data, only 10-12% of small producers were able to access vital extension schemes and a mere 7-8% of other government schemes. The evaluation found that large farms were crowding out the smaller farmers from accessing key subsidies and benefits. So the State Planning Commission posed a challenge: find a way to reach these marginalized tribal farmers in Madhya Pradesh. 

So, we at Vrutti unpacked the situation further – focusing on the whys and hows through data. Through our research, we saw that small farmers focused first on their own subsistence needs, not as an enterprise. Any extension support or knowledge enhancement farmers would receive, was geared towards improving productivity to increase yields, not to improving profitability to make sure their livelihoods were sustainable.
We realized, that in order to have these marginalized farmers have a viable livelihood we needed a revolution, a transformation, of perspective and of practice.  We needed a paradigm innovation to change the way we viewed livelihoods in general and agriculture in specific. For the innovation to reap success we ourselves needed to redraw our mental map, and translate the changed perspectives to all other stakeholders. The elements of this change were:

  • Agriculture to be seen as an enterprise; the farmer, an entrepreneur; and the goal, profitability enhancement, as opposed to productivity enhancement.
  • The focus of engagement moving from the macro – agriculture – to the micro – the farming family
  • Changing our perspective from poverty reduction, to wealth creation
  • An ecosystem approach being recognised that converges the capacity of the communities, the efficiency of the markets, the power of the state and the reach of the facilitator
These elements became the framework around which our innovation, the Agriculture Enterprise Facilitation Centre (AEFC) was founded. We began structuring our strategies and activities.
Central to the success of AEFC was to get the farmers to first think as entrepreneurs, then learn as entrepreneurs and finally perform as entrepreneurs. We began by developing and continually reinforcing a goal of getting a return of ₹50,000 per acre of land in five years, from land that was currently returning ₹4,000-5,000. One Rupee is equivalent to around $60.
A graduated path was drawn. First we aimed for reducing inputs, increasing yields and addressing risks through good practices, resource optimisation and new technologies. Then, we focused on building business planning capacities, and third, mobilising farmer groups at the village, and federating these at the block and district levels into producer companies, and building their capacities on technical, management and governance processes. Finally, we aimed at processing, value addition and marketing of produce, and other activities like storage and seed production to improve the returns from the enterprise.
We are currently covering nearly 20,000 small holder farmers through our own initiative, of which 3,000 are in Chattisgarh, covered under the World Bank Development Marketplace award; and 9,000 in collaboration with other partners. There are many good practices that Vrutti has developed, or adapted from other areas in this initiative. Scaling-up the AEFC model in Chattisgarh, which we look forward to sharing in this space, has offered us a number of lessons, experiences, and challenges. Our effort is to pollinate the seeds of these changes to different areas, through different methods, furthering the revolution, strengthening the evolution.

Pramel Kumar Gupta is the Regional Director of Vrutti, a registered nonprofit organizations that is dedicated to promoting livelihoods of disadvantaged groups by working with communities and development partners. They were awarded the 2013 India Development Marketplace Grant to scale their AEFC model in Chattisgarh. Pramel writes on innovation, data, and supporting India's farmers as they turn into businessmen.


Submitted by Jitesh Kumar Panda on

I agree that it is important to consider farm as enterprise; farmer as enterpreneur which promoting agriculture enterprises.

In doing so, profitability assumes importance than just productivity, which may be one of the ways to enhance profitability.

Submitted by Mahendra khare on


Submitted by guna on

The requirement of electrical power has been increasing due to subdivision of lands between family members leading to larger requirement of electrical power and more ground water exploitation for same cultivable area. I request this may be further explored and any possible solution may be suggested

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