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Measuring the Poverty Level in India

poverty level in IndiaThe measurement of the poverty level in India has been the subject of much debate over the past decade, especially because of the lack of reliable figures and data. This year, following two articles on poverty in India published by the International Monetary Fund and the World Bank, a new debate on poverty in India emerged — the “Great India Poverty Debate 2.0” in reference to the “Great India Poverty Debate 1.0” that existed after the liberalization of India in the 1990s.

Difficulties in Assessing Poverty in India

Since the Indian government has not published any National Sample Survey (NSS) results since 2012, which includes the national statistics regarding poverty in the country, researchers began studies to determine the amount of poverty within India, particularly extreme poverty.

The studies employ different methods to measure the poverty level in India in order to provide more recent estimates. Both studies, the first by Bhalla, Bhasin and Virmani and the second by Roy and van der Weide, arrive at “dramatically different conclusions.” Although each approach has its shortcomings, Ideas for India says the studies “highlight that the real poverty that lies behind the Great Poverty Debate 2.0 is the poverty of data.”

When it comes to assessing poverty in India, despite the lack of official recent statistics on poverty rates, one may consider elements that link to poverty, such as literacy rates or food insecurity, to paint a picture of a country’s overall poverty conditions.

Illiteracy and Food Insecurity as Indicators of Poverty

Indeed, illiteracy is linked to poor financial conditions as poverty often means low-income families are unable to afford quality education for their children. In India, according to 2017-18 data from the National Statistical Office (NSO), the latest literacy rate in India overall stands at about 77.7%. This means the national illiteracy rate stands at 22.3%, which means, in a population of about 1.4 billion people, a significant portion of people cannot read or write. Such a high illiteracy rate correlates to high poverty rates in India.

Regarding food insecurity rates in India, according to the Global Hunger Index (GHI) of 2022, India has regressed by six positions since 2021, ranking 107th out of 121 countries in terms of hunger levels. India scored 29.1, which equates to a “serious” level of hunger. According to data from 2019-2021, 16.3% of India’s population suffers from undernourishment. Furthermore, around 35.5% of Indian children under 5 suffer stunting, a form of malnutrition with detrimental consequences.

End Poverty

End Poverty is an Indian NGO established in 2009 to develop innovative and creative solutions to address poverty in India. Though mandated to work across India, End Poverty currently works in seven Indian states: Rajasthan, Madhya Pradesh, Haryana, Karnataka, Uttar Pradesh, Uttarakhand and Goa.

End Poverty directly supports and empowers the poorest by providing them with opportunities to attain an education, develop skills and secure employment opportunities in order to rise out of poverty. End Poverty has three core programs in place: rural development, dairy development and sustainable agriculture.

The rural development program is important because about 68% of India’s people live in rural areas, according to 2011 data, and poverty is more pronounced in rural areas. The rural development activities include establishing infrastructure and schools, providing opportunities for income generation, strengthening access to education and providing water, hygiene and sanitation services.

Despite the lack of official recent statistics on poverty in India, one can use other indicators, such as the illiteracy rate, to assess the poverty level in India. Moreover, the important work of researchers contributes to a better understanding of the country’s socioeconomic conditions. But, regardless of the precision of statistics, the efforts of organizations help counter poverty by improving the standards of living among the most disadvantaged people.

– Evan Da Costa Marques
Photo: Unsplash

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New Markets Boom in Dharavi

DharaviMumbai’s Dharavi is one of the world’s largest slums and is home to roughly 1 million people since it was established in 1884. Dharavi was initially inhabited by fishermen and later extended to migrant workers from south Mumbai. The slum’s conditions are dire and inhabitants have suffered from the spread of numerous epidemics and diseases due to the lack of sanitation, drinking water, roads and basic healthcare services.

Hidden Markets

Despite its harsh economic and social conditions, Dharavi is close to Mumbai’s two main suburban rail lines, which has made commuting to work easier for workers. Over the years, Dharavi has also developed a large number of thriving small-scale industries that produce embroidered garments, quality leather goods, pottery and plastic. Furthermore, there are estimated to be 5,000 businesses and 15,000 single-room factories located within Dharavi, making it a prime entrepreneurial realm with potential revenue that can total anywhere from $700 million to $1 billion USD a year.

Many of these initiatives are undertaken by women living in the slums, many of whom have taken the lead and become the main breadwinners of their families. In fact, out of the 65,000 rural markets in India, almost 75% are run by women.

Renuka Shinde’s Story

One such example is Renuka Shinde, who was forced to take up the role of the breadwinner after her husband left her and their three sons. Renuka traveled to Kolkata from her home in Dharavi to buy handloom saris to start her small business. At the end of a month’s hard work, Renuka brings home Rs 3,000 or roughly $48 by selling saris and other garments around Mumbai. Renuka makes a profit of Rs12,000 ($200) a month and this tends to increase during Indian festivals such as Diwali and also during wedding seasons.

Pushpalata Chittikindi’s Story

Another example is Pushpalata Chittikindi, who is left to fend for her two sons in the absence of her alcoholic husband. Pushpalata started making metal buckles and sold them piece by piece to nearby factories in the neighborhood. The businesswoman also worked as a cook and cleaner in her spare time. Following the advice of her friends, Pushpalata took a loan to set up her machine but lacked financial knowledge and experience with banks. Pushpalata took the help of a local NGO that gave out small loans to support local women.

With help from the NGO, Pushpalata started making Rs 250, about $4, per day. The businesswoman later pivoted to buying biscuits and snacks from wholesale stores and selling them from her home to nearby school kids. With the money she earned, Pushalata was able to pay off her loans in a year and rented a small store nearby, which she later named after her son, Sagar.

Women in Poverty

The biggest challenge to women looking to follow in the footsteps of Renuka and Pushpalata is access to credit – a first step to overcoming their financial struggles. In India, the poverty rate for women ages 25 to 34 was roughly 12% in 2020 and is said to increase to 14% following the dire effects of the COVID-19 pandemic. On the other hand, Indian men in poverty are roughly 100 men to every 120 women in poverty. The statistics highlight that there is disparity even within the parameters of poverty and that Indian women need support and guidance in their economic endeavors.

Addressing Credit Challenges

Thanks to the Vandana Foundation, an organization that provides low-interest micro-loans to female entrepreneurs in Dharavi, this challenge has become easier to overcome. In addition to the Vandana Foundation, many other NGOs such as the Light of Life Trust, Human Capital For Third Sector and Catalyst For Social Action, also play a big role to support India’s entrepreneurs and inhabitants.

A Take-away from Dharavi

The story of these women stands to show that although we tend to underestimate the power of small-scale local entrepreneurs, they are capable of making a considerable impact. If given the opportunity and starting resources, people have the power to change their financial circumstances and thus their lives, even in slums like Dharavi. There are hidden markets similar to the ones in Dharavi all over the world. By understanding where the opportunities lie and how to best support them, we can help people to help themselves and their communities.

– Samyudha Rajesh
Photo: Flickr

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The Future of India’s Development

Future of India’s DevelopmentCelebrating India’s 75th anniversary of independence from British governance, Prime Minister Modi announced on August 15, 2022, that the country would be working toward becoming a developed nation within the next 25 years. In addition, he promised to lift millions of Indians out of poverty while cracking down on “corruption and nepotism” within the government. With more than 1.4 billion people in India, accomplishing these tasks is a monumental challenge, but one that Modi believes is achievable for the future of India’s development.

Striving for Development

Although there is no single metric that defines a country as developed, ways of assessing development include factors ranging from income per capita to electricity usage. Generally, developed countries will have lower rates of unemployment, higher levels of literacy and industrialization, a diverse economy and high gross national income (GNI). With a GNI of $2,170 in 2021, India holds the status of “lower middle income” according to the World Bank. However, that figure once stood at $440 in 2000, showing a clear upward progression of moving toward the GNI of more developed nations.

India also has a broad network of poverty relief and social welfare programs. One example is the Public Distribution System (PDS), which costs close to 1% of India’s GDP and distributes grain to low-income families, according to the World Bank in 2011. Introduced in 2005, the Mahatma Gandhi National Rural Employment Guarantee Scheme ( MGNREG) aims to provide up to 100 days of paid work per year for impoverished adults in rural areas. Lastly, through the Rashtriya Swasthya Bima Yojana (RSBY) program, India’s impoverished receive health insurance coverage. By 2011, RSBY served more than 70 million Indians, a huge success given the country has very few insurance programs for its labor force.

Program Shortcomings

Unfortunately, India’s development suffers from logistical issues and mismanagement. According to National Sample Survey data from 2004-2005, grain distributed under the PDS reached less than half of the intended recipients. The cause of this problem is “leakage and diversion of grains,” leading experts to suggest cash transfers that directly give families an equivalent value.

Other programs like the MGNREG also struggle with providing benefits, with fewer than 100 days of work being available, particularly in rural areas. Prime Minister Modi addressed these issues during the August 15 celebrations, promising to curb inefficiencies within the government and fight against corruption.

A Vision for India

Modi’s vision for India’s future development also includes achieving “excellence in science and technology” while attaining “food and energy security.” India’s minister of power, R.K. Singh, said on August 5, 2022, that India is ahead of many developed countries in progress toward achieving clean energy.

Furthermore, India’s strong relationship between itself and the United States is touted as a catalyst for growth, with U.S. President Joe Biden stating that the two countries would work together to bring “prosperity and security for our people.”

Transforming India into a developed nation is a massive undertaking, one which will require an incredible mobilization of human and economic resources. With 21.9% of the population living under the national poverty line in 2011, according to the latest available data from the World Bank, substantially reducing this statistic would be a major humanitarian victory. The country’s future 100th anniversary holds massive potential and the opportunity to showcase India’s development.

– Samuel Bowles
Photo: WikiCommons

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Energy solutions to end energy poverty

Ending poverty with energy solutionsThere are 840 million people worldwide without access to electricity. According to The Rockefeller Foundation, 650 million people will still lack access to electricity in 2030. Without electricity, people have limited access to education and healthcare. Having access to power is critical for all aspects of life. Access to electricity means “small businesses of all kinds can expand and connect with outside markets.” It also helps farmers protect their crop value and boost the productivity of local agriculture. Making sure people have access to reliable electricity can help lift families out of poverty. The Rockefeller Foundation has made it its mission to end energy poverty globally.

Solutions

Distributing clean and renewable energy is a big way to end energy poverty. The goal of The Rockefeller Foundation is to “dramatically accelerate the pace of electrification by leveraging the full potential of decentralized renewable energy.” The way to do this is through climate-smart energy systems. By doing this, the populations that are more vulnerable will have access to reliable energy.

Powering the last mile

In 2015, The Rockefeller Foundation launched the Smart Power for Rural Development Initiative in India, Myanmar, and sub-Saharan Africa. The initiative addresses the gap in access to affordable, dependable energy in different communities. “SPRD promotes partnerships around decentralized renewable energy solutions, specifically mini-grid electricity, to ensure that high-quality, reliable energy is provided to all segments of the community.” By providing access to renewable energy, SPRD gives local economies a chance to thrive. Smart Power India has connected 15,000 households and over 8,000 enterprises with electricity. With this initiative, local “renewable energy mini-grid companies” get the support they need. Business revenue has also increased between 35% and 52% since the program started.

While using decentralized mini-grids is a great way to provide electricity access to rural areas, the cost of doing it is increasing. To combat this, Smart Power India uses unique technological solutions, such as standardizing grid technology by using a “grid-in-a-box”, along with using irrigation to help farming communities. Also, with smart meter technology, they can modernize the operations of energy companies. These solutions are cost- and energy-efficient ways of getting the job done.

Smart Power Myanmar intends to bring access to electricity to 10 million people during the next decade. By taking what they have learned through Smart Power India, along with partnering with USAID and The World Bank, their plan is to “accelerate rural electrification access through decentralized solutions.”

Through Smart Power Africa, The Rockefeller Foundation has a three-step plan to expand access to electricity: The production of mini-grids in Sierra Leone, extending the connections with last-mile communities and developing rural mini-grids in Africa.

Final thoughts

Electricity is a huge part of modern society, and without it, it is difficult to thrive. The Rockefeller Foundation is doing all it can to help end energy poverty by providing electricity globally.

– Ariel Dowdy
Photo: Unsplash

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Fighting Poverty in Fashion: Brands That Give Back

Fighting Poverty in Fashion, Brands That Give BackWorking conditions in the fashion industry are often less than ideal. Despite providing job opportunities for workers in impoverished countries, many of these employees make 42% to 55% under a living wage. When fighting poverty in fashion, improving workers’ rights is paramount to helping better the industry. Donations through third-party charities are a common way organizations have provided their support for changing the fashion industry. However, this charitable work is often criticized for its lack of actual change seen by the workers. As such, three companies have found a more productive way to help increase transparency, sustainability and worker’s rights. In an effort to change the fashion industry, Lucy and Yak, Girlfriend Collective and ABLE  have all shown creative solutions and fast success as clothing corporations in developing countries around the world.

Lucy and Yak

Lucy and Yak started in New Zealand. Chris Tenwick and Lucy Greenwood began their journey traveling the world, creating tobacco pouches, which they sold to travelers visiting the country. The couple headed back to the U.K., where they sold vintage clothing and homemade overalls out of their van, named Yak. They traveled to China, India and Thailand looking for a production company and landed on three tailors in Rajasthan, India. In Rajasthan, nearly 15% of the population lives below the poverty line. One of the biggest components of GDP growth for Rajasthan is industry, making Lucy and Yak’s choice of location a profitable and impactful one.

Since 2018, the team of three grew into 50, opening job opportunities for many. A new, climate-controlled and ethically sustainable factory stands to produce Lucy and Yak products in the rural region of Rajasthan. With this factory, the company can provide compensation higher than the minimum wage for the area and support their workers’ individual needs. Greenwood and Tenwick often visit the team in India as oversight for production and to catch up with their old friends from the van days. Overall, when fighting poverty in fashion, Lucky and Yak pave the way for a standard of ethical production.

Girlfriend Collective

Girlfriend Collective is an activewear company based out of Seattle, Washington. Bottles, cotton industry scraps, recycled nylon and polyester all make up Girlfriend Collective’s clothes. The company currently sources its recycled materials from Taiwan and its core production comes from Hanoi, Vietnam. The Hanoi factory in the Phu Tho province is an area dedicated to sustainable poverty reduction. It is also an SA8000-certified facility, meaning the factory is held to a sustainable and ethical standard of fair wages and safe worker’s conditions.

Moreover, Girlfriend Collective supplies its workers with free lunch and dinner, guided exercise breaks and health checkups every six months at the factory. Worldwide, Girlfriend Collective has been acknowledged for its success. The Universal Declaration of Human Rights and the International Labour Organization have applauded Girlfriend Collective for its efforts. Thus, with its mission to ensure health and safety for its employees, Girlfriend Collective has made its mark in fighting poverty in fashion.

ABLE

ABLE is a women-owned fashion company that dedicates itself to the advancement of women worldwide. Its international employment program began in Ethiopia with the production of scarves. Since 2019, the company has expanded similar programs in Mexico, India and Brazil. One of the company’s overall goals is to educate its consumers on wage inequities. Around the world, 98% of people making clothing cannot make a living wage. Women comprise 75% of this figure. ABLE has also solidified its own evaluation system called Accountable. With this system, ABLE can hold itself accountable and continue making a positive impact on its company.

The Future for Fighting Poverty in Fashion

In efforts to alleviate poverty around the world, these three companies are taking the lead. Their oversight has impacted impoverished communities in Vietnam, Ethiopia and India in a new and positive light. Overall, by ensuring living wages, safe working conditions and women empowerment, Lucy and Yak, Girlfriend and ABLE are helping to fight poverty in fashion.

– Julia Fadanelli
Photo: Flickr

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3D Printing Homes: the Future of Housing?

3D printed homesAn important part of fighting global poverty is providing people a safe place to live. 3D printed homes offers a new solution, as this new method allows for fast and cheap mass-production of affordable housing.

What is the Current Demand for Affordable Housing?

Before the pandemic, approximately 2% of the world’s population was classified as homeless. In addition, over 20% of the world’s population lacked adequate housing. Demographic trends point to an acceleration in population growth worldwide, coupled with the decline of average household size, the global need for affordable housing is increasing rapidly.

The UN estimates—with ‘medium growth’—the world’s population will reach over 11 billion people by the end of this century. Furthermore, environmental instances have displaced millions of people around the world, make it harder to live in some places. The need for affordable housing is clear, however, new 3D printing homes could be the answer to producing quality affordable housing around the world.

What does 3D Printed Housing Offer?

Compared to traditional housing methods, 3D printing is faster and cheaper. Moreover, 3D printing offers environmental benefits. By limiting construction and waste the method is carbon neutral or even negative. With millions of people living in poorly constructed homes made with scrap metal and dirt floors, 3D printed homes promise a safer and better-quality living environment. Living in slum housing can not only make it harder to succeed in school or at work, but the dangerous living conditions can present physical health risks.

3D printed homes are made to last. 3D printing creates a hybrid concrete mortar that hardens while printing. As a result, the tool can mass-produce ‘housing kits’ with the structures needed to build a home.

Current 3D Printing Examples

In the city of Chennai, India, the country is seeing its first 3D printed homes thanks to NGO Tvasta. “Traditional construction is tedious and time-consuming. People are increasingly getting left out as affordability is limited, or settling for low-quality homes,” said Adithya Jain, the company’s CEO. They built the first house in five days. Additionally, they used 30% less of the budget than planned and produced less environmental waste in the process.

In El Salvador, an American company ICON has successfully replaced slums with 3D-printed housing. They have designed a 350-square foot home which was assembled in approximately two days. “Something that sounds like science fiction is real… This is meant to be long-term sustainable housing,” said Jason Ballard the co-founder of ICON.

3D Printing’s Promising Future

As the demand for affordable housing continues to increase, there will be a need to invest in technology that allows us to keep up with the demand, giving everyone the opportunity to live in safe and quality housing. 3D printed homes have the potential to help end global poverty and the worldwide housing crisis.

– Alex Muckenfuss
Photo: Flickr

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Women Are the Face of the Farmers’ Movement in India

women farmers' movement in IndiaIndia is experiencing one of the largest and longest-lasting protest movements in world history. It has seen continuous protests for about seven months, most prominently in New Delhi, the capital city. Hundreds of thousands of protestors have gathered to support the movement, in which farmers demand the repeal of three agricultural laws passed by India’s government in September 2020. Women, many of them farmers, are leading these protests.

The Farm Laws

The three laws passed are known as the Farm Laws. They allow for the privatization of agricultural markets. While the government stated that the Farm Laws would “give expanded market access and provide greater flexibility to farmers,” protestors say the laws will push small farmers into poverty by curtailing produce prices and favoring large corporations.

Women’s Role in Agriculture

Women are prominent in the farmers’ movement protest scene for multiple reasons. The laws can affect both their work as farmers and their family lives as spouses to farmers. According to India’s National Council of Applied Economic Research, women account for more than 42% of India’s agricultural labor force but own only 2% of farmland.

In 2019, more than 10,000 agricultural sector workers in India committed suicide, partially due to financial hardships. Widowed women were left to provide for themselves and were often unable to gain rights to their husbands’ farmland due to gender-biased inheritance traditions.

Women’s Role in the Protests

The farmers’ protests and women’s role in them have received mixed reactions from the public and the government. S.A. Bobde, the Chief Justice of India, asked, “Why are women and elders kept in the protest?” Bobde asked advocates to encourage women to stop showing up at protest sites. However, women responded to his remarks by yelling “no” into microphones and continuing to protest.

Jasbir Kaur, a 74-year old farmer, told Time Magazine, “Why should we go back? This is not just the men’s protest. We toil in the fields alongside the men. Who are we — if not farmers?” On Christmas Eve, protestor Amra Ram, the vice president of the All India Kisan Sabha, acknowledged the work and importance of women in the farmers’ movement in India.“Women farmers are fighting the battle at the threshold, and we are here to follow them,” he said.

Global Response

Despite governmental dismay toward the protestors, there is support for the Indian farmers’ movement across the globe. Solidarity protests have been held in Great Britain, the U.S. and Canada. Furthermore, women celebrities such as singer Rihanna, climate activist Greta Thunberg and author Meena Harris have used their Twitter platforms to stand in solidarity with the Indian activists.

“We ALL should be outraged by India’s internet shutdowns and paramilitary violence against farmer protesters,” Harris tweeted in February.

India’s foreign affairs ministry accused foreign celebrities of being dangerously “sensational” after Rihanna’s tweet reading “why aren’t we talking about this?! #FarmersProtest” increased anger toward India’s government officials.

History of Women in Protests

A large female presence is not new in Indian protest scenes. In the 1960s and 1970s, women activists stood up against gender violence and the economic exploitation of women. Their efforts drew the attention of the United Nations, which called for the reassessment of social conditions for women in India. That led to the founding of the Committee for the Status of Women in India (CSWI) in 1974.

More recently, in 2012, protests following the gang rape of Jyoti Pandey demanded public safety reform for women. India passed the Criminal Law Amendment Act in 2013 to address concerns about sexual violence.

In India, women protestors have historically been persistent in demanding reform. Women are propelling the farmers’ movement in India, one of the largest protests in history. However, the Indian government has yet to repeal the Farm Laws as protestors demand.

– Sarah Eichstadt
Photo: Flickr

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Self-Sufficient Energy Production in Odanthurai

Self-sufficient Energy Production in OdanthuraiOdanthurai, a small village in Tamil Nadu, India, is the first in its region to incorporate wind, solar and biogas energy into its community. India is running out of the resources normally used to receive electricity. Since imports are expensive, using solar energy will boost the economy in the long term. Using solar energy will also help many villages, such as Odanthurai, to gain access to clean electricity. Self-sufficient energy production in Odanthurai will help many villagers gain access to clean electricity and, as a result, alleviate poverty.

Why Odanthurai Converted to Self Sufficiency Energy

When farmer Kasiviswanathan Shanmugam was elected council president of Odanthurai, he became invested in the development of the community and village as a whole. Shanmugam fought for access to cleaner water, as well as better sanitation and roads. He then began realizing that implementing these additions, such as the installations of street lights, drinking water plants and filtering points, was increasing the village’s electricity bills. In an India Climate Dialogue interview, Shanmugam admitted that “the electricity bill was only INR 2,000 (USD $30) when I joined, and it increased to INR 150,000 (USD $2,220) in just two years.”

Shanmugam realized that change was necessary in order to sustain Odanthurai without causing extensive electricity bills. In the long run, clean energy would allow for a reduction in power bills. Electricity bills were making up 60% of the council’s expenses. This was a hindrance that prevented them from implementing any other developmental changes. Shanmugam began looking into alternative means of energy.

Implementing Clean Energy in Odanthurai

The first change Shanmugam made in Odanthurai was to replace the electricity-run water pump with a biomass gasifier. The resulting cost showed a reduction from the previous cost by almost 70%. This was a significant cutback from the state of the village’s electricity beforehand. Additionally, Shanmugam established two solar lights in Odanthurai. This was a step toward renewable energy that saved the village a total of 5000 INR.

The success of biogas and solar energy bolstered interest in exploring alternatives for electricity. Eventually, the council bought a windmill. The resulting energy that the windmill created was enough to sell to the state as well as pay off the local villages’ bank loans. Shanmugam’s statement on the self-sufficient energy production that he helped to effectuate was simply, “[The village councils] in India should take steps to address development on their own. If this can be done in Odanthurai, it can be done anywhere in India.”

Clean Energy’s Role in Poverty Reduction

While clean energy such as biogas, solar and wind energy is important for the environment, it also has a strong link to poverty reduction. The cost of installing electricity in the village was infringing on their budget for developmental changes. Using clean energy, which reduces power bills, can help alleviate poverty by allowing impoverished communities to focus on other necessary improvements such as hygiene and education.

According to a 2015 report by Synapse Energy, harnessing renewable energy allowed the state of California to save more than $15 million in the first six months. This can be similarly applied to other regions in the world, as the long-term costs are proven to significantly decline over time. As a result, villages can focus on areas that need further development without spending a majority of their budget on electricity bills.

Organizations Providing Assistance

While Shanmugam and the village council were able to implement self-sufficient energy production in Odanthurai, other activists and organizations are also taking action toward advocating for clean energy. Solar Electric Light Fund (SELF) is a non-governmental organization that provides solar energy to underprivileged regions around the world. SELF points out that 14% of the global population lacks energy access, which is a whopping 0.9 billion people. Since 1996, SELF has conducted its projects in about 25 countries around the world. Some of their notable projects include providing excess energy from solar vaccine refrigerators to power medical equipment. It also has been improving online learning in South America and powering telemedicine in the Amazon rainforest.

Self-sufficient energy production in Odanthurai acts as a powerful example to the rest of the world. Clean energy has the power to change the world and alleviate poverty. It is time for other communities and countries to look toward self-sufficient energy options and see how they can improve the lives of their people.

– Esha Kelkar
Photo: Unsplash

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TechnoServe Bolsters India’s Economy with Coffee

TechnoServe Bolsters India’s Economy with CoffeeThe coffee industry continues to flourish as the product dominates markets in most parts of the world. Due to its popularity, coffee holds its economic value well, providing sustainable income to those in the industry. India produces a portion of this commodity. However, some regions lack the infrastructure necessary for the industry to prosper. One nonprofit called TechnoServe bolsters India’s economy with coffee.

Andhra Pradesh

TechnoServe provides an avenue through which the farmers of Andhra Pradesh, a town in India, can grow coffee more efficiently. This region of India is a nontraditional growing region. Coffee production in India originated from a desire to prevent further felling of trees for cultivation. The coffee industry provided a means of employment for the locals who live in the region. While this region has viable production capabilities, small land sizes and poor agricultural practices limit the yield potential. TechnoServe works alongside these farmers to solve these problems and assist in expanding the market potential.

Coffee was introduced to Andhra Pradesh, India, in the ’60s by the Andhra Pradesh Forest Department (APFD) to end the slash and burn agriculture that dominated the region. Ideally, by introducing a new type of cultivation, fewer trees would be cut and burned. The APFD hopes this will protect the forest and encourage sustainable communities within the region. This area specializes in Araku Coffee — globally recognized for its high quality and popularity. The Specialty Coffee Association rated Araku Coffee as a world-renowned coffee with an 88-90 out of 100. Even with the coffee’s success in the global market, many farmers still struggle to experience individual economic stability.

Impact of TechnoServe

One aspect of coffee cultivation TechnoServe hopes to address is the picking of coffee cherries. Unlike a typical harvest, coffee cherries ripen at different rates, making it imperative for farmers to pick only the individual ripe fruit. This labor-intensive task requires focused knowledge of coffee ripening and the skills to recognize when the coffee is ready to be harvested. When farmers pick underripe fruit, it lessens the overall quality of the coffee produced. Because this is a nontraditional growing region, many farmers in Andhra Pradesh, India, do not have access to the knowledge necessary to improve these practices. TechnoServe’s assistance has provided these farmers with training and knowledge to bolster economic potential.

One result of TechnoServe’s influence is that farmers no longer need to rely on village middlemen for economic stability. Due to a lack of consistent income, some farmers ended up indebted to middlemen who were sought out to help families do things such as send their children to school. This debt trap limited the potential of many who found themselves incapable of digging themselves out.

Another aspect of TechnoServe’s training program is the involvement of the whole family. Palika, a farmer from Andhra Pradesh, India, explains how — when he wanted to expand his business and learn new coffee cultivation techniques — his wife also learned. Learning together built a partnership between the two with a common goal as they moved up the value chain.

Importance of TechnoServe

India’s coffee market, historically, remains export-oriented. However, with the increasing popularity and usage of small-scale farmers, facilitating these exports prevents farmers from maintaining a decent profit. Some farmers lose at least 10% of the production potential to local traders. TechnoServe hopes to end these losses by utilizing farmer producer organizations (FPOs) to take the product to market.

Utilizing the FPO market for coffee sales will improve the economic potential for farmers like Palika who hope to make their businesses profitable. Through the transformation of cultivation practices in Andhra Pradesh, India, Technoserve bolsters India’s economy and continues to instill hope for the future of Araku’s coffee industry.

– Kate Lucht
Photo: Flickr

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Deglobalization During COVID-19

Deglobalization Amid COVID-19COVID-19 has disrupted trade markets throughout the world. Due to this, many are speculating that the world is in a state of “deglobalization.” Deglobalization is a term that holds two meanings. One propagates the idea that local manufacturers are in danger of foreign competition. The other describes “periods of history when economic trade and investment were in decline.” Moments of deglobalization include World War I, World War II and the 2008 financial crisis in the U.S. Both events led to economic downturns in many other countries, which led to periods of distrust toward globalization.

Deglobalization in India

India has experienced more than 50,000 deaths due to COVID-19. In addition, India has many unreported COVID-19 cases due to poor surveillance infrastructure. The country has also experienced a rise in unemployment, destructive floods and a falling GDP. India has seen the world’s second-highest virus infections and there is still uncertainty about when the country can go back to normal. However, the government’s new trade policies are predicted to help India’s economy bounce back. India’s Ministry of Commerce and Industry expressed, “A key driver for India to achieve the USD 5 trillion mark in an expedited time frame would be boosting exports, both merchandise and services.” Reaching this goal would improve domestic manufacturing and service sectors through the addition of efficient infrastructure funded by the government.

However, President Mobi’s movement of taking agriculture sales into the free market has caused massive disruption. India’s agriculture is the largest employer in the country. The government has been controlling wholesale markets, securing food buyers and setting price guarantees. This globalized approach will cut guarantees set by the Indian government and force farmers to go further into debt to secure stability in a competitive field. Farmers who have entered the free market before the bills reported high rates of debt and suicide attempts. Reform to create an open market that doesn’t favor farmers is deeply controversial in India.

Nepal and Trade Restrictions

Just like India, Nepal is looking to reunite with the global market. Nepal’s unemployment rate is reaching 40% on a federal level. The informal sector employs most employed Nepalis, who gain income through unregulated markets and illegal services. An estimated 500,000 people enter the country for work while only 200,000 actually find work. The Federation of Nepalese Chambers of Commerce and Industry has a plan to reduce trade deficits caused by the pandemic by 50% and help Nepalese manufacturers through government-funded projects. President of the federation Shekhar Golchha, claims that “If the vision paper is implemented honestly, there will be an investment of $150 billion in the upcoming decade. Of the total investment, around $108 billion will come from the private sector.”

Trade with China has also been an issue for Nepal internationally. In February, Chinese traders created a blockade restricting 2,000 containers loaded with clothes, shoes, cosmetics, electronics and industrial raw materials. As China holds itself to be the “factory of the world,” it has deeply affected smaller countries. During the blockade dispute, Nepal found itself in violation of the “One China” law. A month later, Prime Minister KP Sharma Oli created the Make in Nepal-Swadeshi campaign. The prime minister intends for this campaign to start taking underemployment out of international hands.

The Philippines and its Relationship with China

The Philippines has been hit very hard by COVID-19 just as the country was beginning to recover. International trade in the Philippines has continuously declined since the beginning of the lockdowns and the overall trade income is 20.2% lower than in 2019. However, aid from foreign countries, such as China, has helped the Philippines during this time of need. On January 16, 2021, Chinese Foreign Minister Wang Yi pledged to donate 500,000 vaccines to the Philippines. Wang has also approved an infrastructure agreement to fund $400 million to the Filipino government for bridge infrastructure and $940 million for a railroad cargo project.

The Philippines has historically been lagging behind other East Asian nations in manufacturing export. Graft, low autocracy and overarching oligarchs controlling agriculture production and property contribute to holding the country back. During the Plaza Accord in 1985, these factors led to the Philippines losing out on a significant wave of Japanese investments. By the 2000s, the country’s GDP became stagnant. Sec. Carlito Galvez Jr., the chief implementer of the National Task Force (NTF) against COVID-19, reflects that the pandemic has shown how vulnerable the Philippines is to the lack of international help, stating, “For 2023, we envision for self-sufficiency and readiness for the pandemic and other disasters with the modernization and integration of our healthcare system.”

As 2021 continues, nations are deglobalizing for one reason or another, and shifting international relationships will determine the future of foreign affairs. While developing countries need economic assistance, international support has been seen to complicate domestic production in certain sectors by allowing foreign influence to dominate industries. Deglobalisation can bring a new form of globalized affairs and political leaders should rethink their investment in free markets, looking more into domestic action to keep citizens off the poverty line.

– Matthew Martinez
Photo: Flickr