Behind the success of many farmers across 75 countries as varied as the US, India and Yugoslavia is a woman from Chennai. Mallika Srinivasan, India's tractor queen, is CEO and Chairman of TAFE (Tractors and Farm Equipment Limited), the third largest tractor manufacturer in the world.
Under her leadership, the company's revenues grew from Rs 85 crore in 1986 to Rs 9,300 crore today. At the heart of TAFE's strengths has been its research and development team, and its relentless efforts to understand the vagaries of weather, labour, economy and soil that make the life of an Indian farmer so unpredictable.
In a conversation with Sarita Ravindranath ahead of the Union Budget, Mallika Srinivasan voices her concerns about farmers’ problems in India and her industry's expectationns.
India has been in the grip of an agrarian crisis. 3228 farmers ended their lives in 2015 in Maharashtra alone – a scary fact in a country where 54 per cent of the workforce is engaged in farm-related activities. How do you assess the situation on the ground?
There is agrarian discontent in India today and one of the most important issues before the country is rural distress. Farmers’ earnings have come down. The Minimum Support Prices have not gone up in proportion to the incurred cost. Commodity prices in the open market are often lower than MSPs and therefore the farmer wants to sell to a government programme.
In addition to low prices, our acreage per farmer is very small (over 60 percent of farms in India are less than three acres). Labour costs have shot up. Even in normal circumstances, a farmer’s earning is modest. When a crisis comes, the small farmer gets really squeezed out and that's why you're see the spate of suicides. There is discontent, especially in sectors like sugar, where a lot of restructuring is required.
For two years in a row, we’ve had really bad monsoons. There is a threat of the winter rabi crop getting damaged because of untimely rains.
Southern India is a ray of hope this year because the rains have been extraordinarily good. Water in Tanks across the country are low, but if you look at Tamil Nadu, the tanks are brimming. So, the hope for the next six months is that the south will be better
Do you see any signs of hope?
We have seen some things that are encouraging. One is the crop insurance scheme that has been relaunched. One of the big complaints so far about crop insurance has been that the farmer doesn’t really get as much as he loses. This time, there has been more attention paid to the formulation of the scheme.
We do see some encouragement in the form of more number of days of employment under MNREGA. MNREGA is now being understood better as a lever that can be used to give relief in drought areas, etc.
You can use labour to focus efforts on creating sustainable assets on the ground like desilting of tanks, clear roads – basically use it to create the infrastructure for farming. We would like to see more government investment in buying crops. The government must buy and MSP must be linked to a certain quantum of procurement.
What are your expectations from the Budget this year?
We do hope it would be an agricultural and rural focussed budget. The farming distress isn’t just affecting rural-based industries like ours or the fertilizers or seed businesses. It’s affecting us all. It’s hitting consumer growth and sales of consumer durables and goods across the country.
We expect a channelization of efforts to solve problems in farming areas. We expect a significant allocation for irrigation and rural infrastructure.
While there is already a subsidy scheme for mechanization, we expect some changes there. We hope that interest rates for loans for farm mechanisation should come down to match crop loans. The difference in subsidy can be paid directly to the farmer.
Financing is available for mechanisation. There are schemes for farming implements and tools that go with the tractor. But there are rules today that dictate what implements or tools get a subsidy. We need to open that up, and let the farmer choose what tools he wants for his area. Why should we say that only one tool, say rotavators, should get a subsidy? Let the farmer choose the implement of his choice. That will drive technology.
If the farmer needs a fruit picker, he should be able to take the subsidy for the fruit picker. Open it up and leave it to the farmer to decide what tool he needs the subsidy for.
We look forward to investment in food storage. When we have a good year, or when prices are really low, farmers expect the government to buy at the MSP. The government is not able to buy because of two reasons - one is funding, and another is storage. A lot of wastage happens because of lack of storage space or standards at warehouses.
Is there any specific government intervention on the tractor industry you’re looking forward to?
Today we're getting hit when it comes to imports. Imported tractors come in from countries with whom we have free trade agreements. We're at a disadvantage, because imported tractors are coming into the country without any countervailing duty (Duty imposed to counter the negative impact of import subsidies to protect domestic producers).
The imported tractors are coming in at a cost advantage of 12-14 per cent. That needs to change, and that can be done within the Budget too. It gives manufacturers a level playing field with competition from imports.
How does the distress in agriculture affect a company like TAFE?
This is a cyclical industry and there will be ups and downs. Despite the current domestic crisis, we believe that in the medium to long term, this sector has got great prospects both in India and as well as internationally. By 2050, food demand is going to go up significantly. As developing countries grow rapidly, calorie consumption per person is going up.
Food demand can be met only two means. One, your arable land has to increase and two, your productivity has to improve. If arable land increases, or if you want your yield per product to go up, mechanisation will play an important role.
In India, our yields are still lower than the world averages for most crops. We see the Indian market as a growing one. Some of our products are getting very well accepted in the international market. We’re today exporting to almost 75 countries or so. Despite international markets also being down, our exports have grown – this in spite of the challenges we’ve had with various currencies being devalued.
Our focus has been products and product technology, where we've done well. That has been driving our export growth and that will also drive our domestic growth. We expect growth to happen in the second half of 2016-17 after the next monsoon because of our products and the growth in technology.
Today we're in a good position because of our investments in R&D and technology. We're in a position to meet emission standards around the world and that has helped us get good traction. Our sensitivity to the environment and new legislations have made the difference.
What are the new products from TAFE?
We've come out with an orchard picker, which no one else has released in India yet. There's a lot of interest in that from mango and coconut farms where the trees are shorter - We haven't got one for the full height yet. You can operate the machine. Move it around the tree. The fruit is plucked and collected in a basket. It's a job that can be done by one person without any physical strain.
You're known to be a businesswoman with an ear to the ground. A Forbes report mentions how you always makes it a point to stop at tea shops and get into conversations with people. What are the changes you see among farmers?
People have tremendous access to information now. Product lifecycles are getting shorter. People want newer technologies to come in. They want mechanisation that will make farm work easier.
We are dealing with a tool of production and they are looking for benefits in terms of yield and operation costs. They want less of drudgery.
Labour is getting scarce. Increased labour cost is here to stay. This leads to changing equations and the changes are favourable to mechanisation.
We run a training programme to enable women to drive the machines. They slog it out in the field and we have to think of ways to ease their menial work.
The use of mobile technology and communication is fantastic. It's changing the way farmers reach out and the way we reach out to them. We have a little portal where farmers can ask questions to experts.
While there is a demand for technology, it has to be cost effective because our farms are small. So, we are having to be super innovative to get them the technology they want.
That's why I made the point that farmers should be allowed to choose the implements that they need a subsidy for. We have to give them relevant technology at a very cost effective price.
You’re largely seen as a woman leader in a sector dominated by men. But is that the correct perception? Do you see a lot of women workers in the field that you’re in?
There are plenty of women doing farm work – There always have been. Even banks have introduced loans specifically for women farmers. Like they say, women are better at repaying their loans. The percentage of women in the manufacturing industry is not high, but it's growing.
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At TAFE, we are very open to hiring more women. If you're ambitious enough to want to be seen as an international company, you've got to use your talent pool. 50 per cent of your talent pool is women. I think diversity of workforce is going to be very important in the coming years, and I’m not talking just in terms of gender alone. How you use diversity to bring about innovation and excellence would be the challenge.
I see more women in engineering, R&D, marketing, IT and finance. But I’m not seeing too many of them in the sales field.
Are there specific steps TAFE takes to promote sustainable farming?
We approach all our products - be it the rotavator or fruit picker - with sustainability in mind. For instance, we ask how a product can help soil conservation. We try to bring in features that will give farmer benefits in terms of sustainability.
I believe we've to return to the farmers what we've got from them. We put a significant amount of our CSR budget into skill development, adaptive research, and propogation of sustainable farming techniques.
We do adaptive research for better yields - we've worked with rice and citrus crops. Now we're doing organic rice, fruits and vegetables, and we then pass on the technology we develop to farmers.
We practice organic farming at tea estates – We’re the largest producer of tea in the Nilgiris. A substantial portion of our tea goes to the export market.
You once said that business can operate well only in the context of educated and healthy people. What drives you to philanthropy?
My father was a very silent philanthropist. He believed the left hand shouldn't know what the right hand did. That culture was built in me. We’ve chosen to work in areas of health and education. I remember something my father told me: When you work with children, you’re creating a future.
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You’ve mentioned Aditya Birla as one of your mentors. How did he influence you as a professional?
When I met him, I was just a youngster, coming to business. He had asked me to lunch once – I think he was curious about this young woman trying to do new things. And I then got a few opportunities to interact with him. He took it upon himself to teach me some very solid business principles. Some of those early learnings gave me a directionally good approach.
For instance, he taught me to lay emphasis on asset utilization. I remember he asked of one of our plants: Do you work the plant 24/7? I said, ‘No! We work six days through shifts’.
He said this is a very asset-heavy business and you should be doing this 24/7. Even today, we follow that advice.
So, I learned the asset utilization principle from him. It keeps the business strong, especially in a cyclical industry like ours.
First published on sify.com in 2016
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