What makes market-based livelihood generation programmes tick? Or, in all probability: not tick? The Centre had initiated schemes in the past including IRDP (Integrated Rural Development Programme), JRY (Jawahar Rozgar Yojana), SGSY (Swarnajayanti Gram Swarozgar Yojana), SGRY (Sampoorna Gramin Rozgar Yojana), and the National Rural Livelihood Mission (NRLM) — all aimed at poverty alleviation through the provision of sustainable livelihoods linked to the markets in lesser or greater measure.

These well-intentioned schemes were meant to provide an integrated package of financial and technical assistance to the rural poor who, by engaging in income-generation activities, would be able to improve their income levels and standard of living.

The reality turned out to be otherwise, which is what we realised after having studied a livelihood generation programme run by a non-profit organisation and government in Nubra valley and Pengong regions of Ladakh. The programme intended to generate market-based livelihoods for the rural poor by forming self-help groups (SHGs) of ten women each who would contribute ₹5,000 towards raw material purchase and production activities.

These women were given production training and productive assets to produce apricot and sea buckthorn jams, juices, oil and woollen clothes. Ladakh is known for its Pashmina wool sheep, apricots and sea buckthorn (also known as Leh berry) forests. One thought that the SHGs producing items from such precious and high demand natural resources would have no trouble selling their wares for profit. However, our study told a different story.

We found that the SHG members were unable to take advantage of the livelihood intervention mainly because they didn’t know how to sell their produce in markets. They were left with a huge inventory pile-up, much of which was past expiry date. The money put in by the SHG members towards the working capital was locked up beyond any hope of recovery. The poor villagers were left poorer as a result.

This example epitomises what ails the market-based livelihood programmes in India and other neighbouring nations. The main issue is market separation or the lack of market linkages owing to spatial separation (physical distance between producers and consumers), temporal separations (time difference between production and consumption), information separation (asymmetric information between producers and consumers related to market and product conditions), and financial separation (lack of financing for making products available to consumers). Livelihood interventions conceptualised, designed and implemented without solving the market linkage issues are likely to fail.

Unfortunately, development sector interventions do not include the market orientation principle in their programme design. As a result, they meet with limited success in best-case scenarios. The world’s most successful and market-based livelihood generation programme was founded seven decades ago by Dr Verghese Kurien, known today as AMUL.

It was conceptualised and implemented keeping the market orientation principle in mind. The poor milk producers represented by thousands of village-level milk cooperative societies were successfully linked to the markets by the apex level marketing organisation called Gujarat Cooperative Milk Marketing Federation.

Considerations related to market demand estimation, customer taste and preference, product variety and market linkages were neglected in the Leh project and implemented in the case of AMUL.

The writers teach at IRMA, Anand

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