Digging Gold In Rural India

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opportunity/agri-tourism

Digging gold in rural India Agri-tourism m is a Rs R 4,100 crore opportunity. Are you y ready dy to hit the village trail? trail /Vimarsh sh Bajpai Bajp

Sunil Bhosle, farmer, (extreme right) with his family. 48

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F

or Sunil Bhosle, le e, a farmer far f in the Jogwadi village llag ge iin the Baramati taluk of Pune district, a 13 acre ne d piece of land tilled by his entire famiece o ily roun round the year meant an annual income of Rs 60,000-75,000. This was before he was exposed to the benefits of agri-tourism six months ago. Bhosle, with the help of the Agri Tourism Development Organization (ATDO), opened his farms to tourists in June last year, charging each Rs 300-350. He has since welcomed 150 tourists with traditional garlands and authentic Maharashtrian delicacies. The effort translated into an additional income of Rs 15,000, after deducting an equal amount in expenses. He is now constructing two more rooms for tourists. "Agri-tourism has given Bhosle a full-time job,” says Pandurang Taware, Director, Marketing and Sales, ATDO. Taware is the brain behind the launch of a pilot project in agri-tourism in Baramati in 2005. Having spent

around 17 years in the tourism industry, he realized that for marginal farmers, farming alone could not bring the necessary financial benefits. He felt that attracting tourists to rural India could open a new earning stream and help promote village handicraft, food and culture. In the first year of operations, between October 2005 and October 2006, 8,700 tourists visited farms pooled in by villages in Baramati. The influx grew to 17,000 in the second year. Since October 2007, more than 21,000 tourists have taken the rural trail.

Old ways, new ideas Agri-tourism is all about unraveling various facets of village life. This includes opening up farms to tourists from cities and abroad, and letting them spend some time in the lap of nature. Apart from telling them about the various crops and how they are sown and harvested, agri-tourism exposes

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opportunity/agri-tourism tourists to authentic food, handicraft, dress, culture, music and language. Tourists get to indulge in rural activities such as bullock-cart rides, milking cows and goats and picking farm-fresh fruits and vegetable. The activities may vary from village to village, as a country as diverse as India has so many different experiences to offer. Agri-tourism activities can help generate more jobs in rural areas, and thus reduce large-scale migration from villages to cities. Two-thirds of India’s population lives in villages, and agriculture is their mainstay. But unfortunately, unlike IT, agriculture is facing under-investment. So here is a chance to marry the benefits of agriculture with those of tourism. “India has a global edge in its potential to offer unique experiences, particularly linked to rural India, which has tremendous wealth in its rich tradition, lifestyle, culture and wisdom. Unfortunately, tourism in these areas is at a nascent stage and it can therefore absorb much of the necessary expansion in the tourism sector as a whole,” ole,” says Tushar Pandey, Country Head, ad, Strategic Initiatives – Government (SIG), SIG), Yes Bank. The private-sector bank is bullis bullish on the prospects of agri-tourism in n several states, particularly Uttar Pradesh. sh. It is partnering with CII to study the potential of agri-tourism gri-tourism in Uttar Pradesh. h. The study presented to udy is likely to be p the state government soon. The Central Government has a scheme on rural tourism, as part pa of which hich various activities, such as improvement ement of infrastructure, are being conducted ducted in a big way. The ffocus of the scheme resources eme is to tap the reso available under schemes of er different sch the Department of Rural Development De and state governments. nts. Setting up an agri-tourism farm doesn’t cost the earth. It can be developed in a village where farmers are willing to showcase their culture and traditions. All one needs to set up is a decent boarding and lodging facility for tourists. It is important to have a clean place and hygienic food. The spend on travel, food and accommodation is low and so it is easy to scale up the number

of tourists they can receive. “To make arrangements for 12 tourists, for whom you need to build four rooms, costs approximately Rs 5 lakh,” says Taware. (See Table 2: Money Matters)

A Rs 4,100 crore opportunity The tourism sector is one of the major foreign exchange earners for the country. In 2007, 50 lakh tourists visited India, up from 44.5 lakh in 2006. Correspondingly, the e foreign exchange earnings grew 33% to over $12 billion, compared to $9 billion b in 2006. According esticording to es mates, 40.6 0.6 crore domestic tourists ts criss-crossed the length th and breadth of the country. y So, presuming esuming that 10% 1 of the total number of o tourists may consider ider visiting visit various farms across cross the country during the year, cou ear, the number would be close e to stayss 4.1 crore. Each person p for about the bout two days, and a tariff riff is Rs 500 per day. day. Thus Thu us the size siz of the opportunity ortu unity is whopping Rs 4100 aw 100 0 cro ccrore! Agri-tourism is now m growing in a big way. Howgrow ever, it may take some time before it starts to grab a ef major share of the revenue generated from tourism-related activities. “In the initial stage, we expect only a marginal contribution, but in the long-term perspective of 10-12 years, we expect rural tourism to contribute about 7-10% of the total revenue generated from tourism and close to 10-15% of the total jobs in the tourism sector,” says Pandey. There is a huge scope of developing various pockets of agri-tourism in the country, as India is a counFEBRUARY 2008 49

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opportunity/agri-tourism How and when did the idea of starting an agri-tourism project come about? During our market survey in 2005, we found that 73% of the people in urban India had no relatives in villages. So we thought that this segment could be our prospective tourists or guests. I mooted the idea to the villagers in Baramati, my hometown. Around 40 farmers came together to start this project on their farms. We then started calling tourists to the farm. The number of tourists increased to 25 by October 2005. This was when we registered the Agri Tourism Development Corporation. The current area under the project is 110 acres, which belongs to Agricultural Development Trust.

ct? How did you spread awareness about the project? ock carts to spread awareness about the project. We did road-shows in Pune and Mumbai on bullock First we got tourists from Mumbai and Pune to spend the day at the farm. When the tourists arrive, we extend a traditional welcome, withh marigold garlands an and saffron. Then we take them to the farm for breakfast. After which, we take them around for sig sightseeing. Also, we tell them PANDURANG TAWARE, g methods, ie, give them som about sowing methods and harvesting some basic knowledge about DIRECTOR, MARKETING AND SALES, to For this, we set up a AGRI TOURISM DEVELOPMENT ORGANIZATION agriculture. We told villages to prepare and sell souvenirs to tourists. hygienic Also, to provide souvenir shop. It was important to make thee stay of tourists safe and hygienic. hen understand the nuances of th them clean rooms and toilets. We started holding one-day seminars for farmers to help then the business . mall agri-touri estm tmen What is the minimum area and capital required to start a small agri-tourism project? What is the return on inv investment? han 2-5 acres of land of holdings. Wee are asking those ffarmers mers tto come Most farmers in our country are marginal farmers with less than forward and start agri-tourism activities. To make arrangements for 12 tourists, for which we are asking them to build four rooms. o Rs 4400 per sq ft and keep To construct, say, a 180 sq ft room for 3 tourists. This will cost approximately Rs 5 lakh if we co consider a ratee of Rs 300 per sq ft for furnishing. Today there are a lot of bankss in the cooperative sector that are will willingg too givee lo loans to farmers. The Pune er loans for agri-tourism. There is nno elect ctricit in villages for about 12 District Cooperative Bank is the first bank in the country to offer electricity hours, so we also give loans for generators. So the total cost may come to aro around Rs 575,000. Soo Rs 5 lak lakh can come as loan while the farmer can put in about Rs 75,000. ceive tourists for fo 104 days out of 365 days. Say te ristss visi According to our experience, we receive ten tourists visit a farm each day for 104 days, and each 20,000. The expenses aare about Rs 15,0000 per mo thh ie, Rs R 1,80,000 per year. Now deduct annual loan pays Rs 500. This works out to Rs 5,20,000. month he net income of a farmer is Rs 1,74,000 a yea payment of Rs 1,50,000 per year. So the year. This iss aadditional income for the farmer only from the ts and vegetables, handicraft, etc lts in some additional earnings. land. Tourists also buy food grain, fruits etc. This results eeded to set up a project like thi Is there any government clearance needed this?? e, he can take 2-3 tourists. So forr five acres, ac he can take 10-12 tourists. When this is the scale for We have told the farmer that for every acre, go hen to ttourism activity will overrule agricultural activity, then it will a project, it does not require any clearance from the government. But w when red as a tourism project. pro se, the project would requ quire clearances l be considered In this case, require related to tourism projects. If one were to do it in a rcial manner, it would be treated tr ourism project and the he necessary ne commercial as a tourism clearances have to come from the tourism department. w has the state government sup How supported thee proje project? his project was actually a pilot project. project It was a new ew id This idea even for the Maharashtra government. The government has taken steps and as included this in the tourism policy 22006. The government has supported us unequivocally. It felt that since this is a pilot project, let has armers first see the pros and cons ffor 2-3 years. Under the tourism policy of the Maharashtra, the government is planning to launch a the farmers alled Mahabhrman. This will give a marketing platform to all those involved in agri-tourism. brand called

Total number of tourists in 2007

41.1 crore

try of extreme diversity. “There is a saying in India that with every 12 miles you cross, the water changes, the culture changes and the food habits change. So at every 12 miles there can be an agri-tourism project!” says Taware.

Say, 10% of tourists are game for agritourism

4.11 crore

Look before you leap

Tariff from one tourist for a day

500 Rs

DARE/estimates ates Number of foreign tourists who visited India in 2007 Number of domestic tourists in 2007

Say, each tourist stays for

50 lakh 40.6 crore

2 days

Earning from each tourist

1,000 Rs

Estimated size of opportunity

4,100 Rs crore

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Here are a few things you have to keep in mind before taking the plunge. Community exercise: An agri-tourism project is less about money and more about the rural experience. Therefore, a farm house in the outskirts of any city can never meet the basic need of

agri-tourism. It is important to develop agri-tourism as a community exercise, which should involve every section of a village society. A big challenge is to convince most people in the ecosystem to play the role of a good host. Location: The location of a village would play an important role in attracting tourists. Proximity to a big city can be a big positive because most tourists would prefer to spend less time on the road and more time in the village. Marketing: Getting a village ready to welcome guests is not all, if tourists don’t get attracted to the site. Suitable marketing strategies need to be devel-

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opportunity/agri-tourism Yes Bank is partnering CII for a study on the prospects of agri-tourism in parts of Uttar Pradesh. What does the study aims to achieve? Agriculture and allied activities remain the single largest contributors to India’s GDP and represent the means of livelihood for about two-thirds of the workforce in the country. With Uttar Pradesh being a predominantly agrarian economy, it also represents a substantial segment of India’s agrarian population. The accelerated growth of this sector will support inclusive economic growth, and sustainable development reflects positively on the progress in the state and the nation as a whole. ourist While opening up a whole array of unexplored tourist dation of destinations in Uttar Pradesh, the basic foundation ral econo agri-tourism lies in community welfare, rural economTUSHAR PANDEY elopment ic growth and social equity. It supports development COUNTRY HEAD, STRATEGIC INITIATIVES - GOVERNMENT oup in both agriculture and tourism and our SIG group (SI-G), YES BANK ion has proposed this as a rural employment generation ublica mechanism for the state. The publication also brings ble opportunities opportuniti for the to focus potential regions in Uttar Pradesh where considerable estment potential. development of agri-tourism exist and highlights the investment What is the bank’s view on the growth of rural andd agri tourism in the co country? rnment (SIG) division has consiste Yes Bank’s strategic initiatives and advisory – government consistentative and effective mechanism for ly been advocating rural and agri-tourism as an innovative driving growth in the rural economy, and has identified itt as a crucial contributor for ent, employment employm and inclusive growth, wealth distribution, sustainable development, rative appr income generation. We foresee a positive outcome of a collaborative approach advoc a cooperative/cluster structure that involves all stakeholders and advocate he driving force for success. where entrepreneurial sprit is the w g-term In the initial stage we expect a marginal contribution whereas in the long-term ect rural tourism to contribu % of perspective of 10-12 years, we expect contribute about 7-10% ourism and close to 10-15% of the total jobs obs bs in the total revenue generated from tourism the tourism sector.

DARE/money matters ACCOMODATION Number of rooms needed to accommodate 12 tourists

4

Size of one room

180 sq ft

Cost of constructing one room

400 Rs/sq ft

Cost of furnishing one room

300 Rs/sq ft

Total cost of one room

1,26,000 Rs

Total cost of four rooms

5,04,000 Rs

EARNINGS Say, 10 tourists visit the village for 104 days/year Each tourist pays earnings Gross ear

500 Rs 5,20,000 Rs

EXPENSES EX Monthly spend on food, electricity etc

15,000 Rs

food, Annual spend on fo od, electricity ectricity etc

1,80,000 Rs

Loan repayment epay ent of Rs 5 lakh

1,50,000 Rs

Total spendd Net EEarnings arnin per year

3,30,000 Rs 1,74,000 Rs

artnership can help promote promote Do you believe that public-private partnership sm? agri-tourism? pment in the rural sec antly eembedded within hin th he ppurview Development sector is significantly the his pers and domain of the government. It is from this perspective that Yes Bank has been steadily advocating the publ public private partner partnership (PPP) approach to facilitate the bridging of the urban-rural urbane. For rural tourism, we believe divide. that a collaborative strategy built on the foundation of PPP principles will enable thee penetration of benefits to all stak stakeholders and facilitate a win-win situaw tion. Based on this, the SI-G division within the bank executes this by working in close collaboration with the gover government and key stakeholders. SI-G has been t compelling governments through thought leadership initiatives, knowledge dvisory and knowledge knowl publications, advisory partnerships to recognize their role as wth in the ru facilitators of growth rural economy. oped such as road-shows on a bullock cart! Internet could be the best bet to advertise an agri-tourism unit. Accommodation: Providing clean and well-furnished dwelling units for tourists is very important. Some of them could be allergic to dust and pollens and would prefer to stay in a hygienic environment. This could be an uphill task.

Doctor on call: Although most tourists are advised to take precautions while moving around in a village but as a host, you have to be prepared for any untoward incident that might happen. Having a village doctor on call could help. If nothing, keep a first-aid DAR E box ready. FEBRUARY 2008 51