The Edge Magazine

C K Prahalad about Jaipur rugs

Posted: May 1 2007

Q: Vasant Sathe, when we talk of commercializing democracy or democratizing commerce, particularly in the rural areas, one of the biggest problems of helping farmers has been not getting a proper price for their products. Whatever they produce, the middleman gets the best of it. Is there any way on helping the farmer directly to have value-added production of his own product which will go to the market through what you call commerce. Can something be done?

Prof CKP: Both the examples I gave you - Amul and ITC -are examples of getting better value for what farmers produce. Amul increases the value of milk that they produce. It was a brilliant idea from Sardar Ballab Bhai Patel, it is not new. He said Polson was really pushing them hard and not giving them enough value for milk and it was Sardar's idea to say you organize yourself, create your own milk processing acilities and get better value. So creating that co-operative was a big opportunity. The ITC is doing exactly that. EID Parry is doing exactly that. Today you can go to Jaipur Rugs which takes village distributed rugs and builds a global market for them. There are examples in India having done it, creating opportunities for poor people. The farmer in ITC's Choupal gets 8 per cent more for exactly the same thing he used to produce. Even in regular market, he is not beholden to the middle man. And now ITC is giving them information on what grades of soybean or wheat you should produce. So he can save or the anchorage, he can an increase to 25-30% and have a steady market.