Digging Gold In Rural India

Agri-tourism is a Rs 4,100 crore opportunity. Are you ready to hit the village trail?

For Sunil Bhosle, a farmer in the Jogwadi village in the Baramati taluk of Pune district, a 13 acre piece of land tilled by his entire family 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 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,” says Tushar Pandey, Country Head, Strategic Initiatives – Government (SIG), Yes Bank. The private-sector bank is bullish on the prospects of agri-tourism in several states, particularly Uttar Pradesh. It is partnering with CII to study the potential of agri-tourism in Uttar Pradesh. The study is likely to be presented to the state government soon.

The Central Government has a scheme on rural tourism, as part of which various activities, such as improvement of infrastructure, are being conducted in a big way. The focus of the scheme is to tap the resources available under different schemes of the Department of Rural Development and state governments.

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.

Destimates
Number of foreign tourists who visited India in 2007	50 lakh
Number of domestic  tourists in 2007	40.6 crore
Total number of tourists in 2007	41.1 crore
Say, 10% of tourists are game for agritourism	4.11 crore
Tariff from one tourist  for a day	500 Rs
Say, each tourist stays for	2 days
Earning from each tourist	1,000 Rs
Estimated size of opportunity	4,100 Rs crore

“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 foreign exchange earnings grew 33% to over $12 billion, compared to $9 billion in 2006. According to estimates, 40.6 crore domestic tourists criss-crossed the length and breadth of the country.

DAmoney matters
Number of foreign tourists who visited India in 2007	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
104 days/year	500 Rs
Gross earnings	5,20,000 Rs
Expenses
Monthly spend on food,  electricity etc	15,000 Rs
Annual spend on food,  electricity etc	1,80,000 Rs
Loan repayment of Rs 5 lakh	1,50,000 Rs
Total spend	3,30,000 Rs
Net Earnings per year	1,74,000 Rs

So, presuming that 10% of the total number of tourists may consider visiting various farms across the country during the year, the number would be close to 4.1 crore. Each person stays for about two days, and the tariff is Rs 500 per day. Thus the size of the opportunity is a whopping Rs 4100 crore!

Agri-tourism is now growing in a big way. However, it may take some time before it starts to grab a 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 country 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 Pandurang Taware, Director, Marketing and Sales, Agri Tourism Development Organization

 Look before you leap

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 developed 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 box ready.