NGOs :: West Godavari District

Detailed Potential Survey of Non Farm Sector in West Godavari District of Andhra Pradesh

Executive Summary

Background

District Rural Industries Project (DRIP) for creating sustainable employment opportunities in the rural sector was launched by NABARD in 1993-94 on a pilot basis in 5 select districts. Thereafter seeing the success of the experiment, NABARD has been extending the project with a target of covering 100 districts by 2005-06 under the progress. In Phase VII, covering the year 2005-06, 25 districts, have been identified all over India. West Godavari district is one among them. Detailed Potential Survey is the first step in implementation of DRIP. The objective of the survey is to identify and map the existing RNFS activities, to assess the growth potentials which can be harnessed keeping in view the available infrastructure facilities and to suggest measures for developing the non farm sector. DRIP is a participatory approach where banks, NGOs, Govt. Departments and other concerned agencies are the stakeholders and they have to put in their best for achieving the objective.

District Profile

West Godavari District is one of the prosperous and prominent coastal district in the State of Andhra Pradesh. The district has an agrarian economy with more than 80% of the district dependent on agriculture. It is known as the rice bowl of the state. The Godavari river is the lifeline of the district Godavari passing through almost half of the district making the soils of the district fertile. It has highest Literacy rate of 73.53% as compared to the state average of 60.47%.

Potential for development of Rural Non Farm Sector

The district has a good scope for development of non farm sector in the district due to availability of rich resources and good infrastructure. The factors favorable for development of Non Farm Sector in the districts are given below:

Resources

ª The District has a well developed agriculture economy. High rates of agricultural growth facilitate in development of non farm sector enterprises such as agro processing, servicing of farm equipments, trade, manufacturing units etc.

ª The District is one of the major producers of mango in the state. Other horticulture crops of the district are – Citrus, Banana, Guava, Sapota, Cashew nut. The horticulture crops offer vast opportunities for processing industries in rural areas.

ª Fisheries is the second largest economic occupation of this district after agriculture due to the availability of marine, inland and brackish water resources which again offers opportunities in the processing sector.

ª Mineral resources such as ball clay, fire clay, road metal, building stone offer a large scope for industries in the ceramics, construction material etc.

Infrastructure

The District is well connected by Roads and Rail.

It has excellent education facilities with a very high rate of literacy rate in the state.

There is a good banking network with high credit deposit ratios.

Potential Sectors

Agro processing, food processing and agro based industries

The District has rich agricultural resources which offer tremendous opportunities for value addition. The major opportunities in agro processing sector are given in the following paragraphs:

Grain Milling: The District produces 16800 tones of rice offering vast scope for Rice mills and its by product industries. There is scope for setting up of a few mini modern rice mills in large villages of the district. Demand for credit from banking sector is expected from this industry for expansion, modernization of the existing rice mills. Besides modernisation Integrated Rice Processing. Units could be established with integrated production facilities for rice milling, processing of by products such as rive barn, husk etc., particle board manufacturing etc.

By products of rice: In paddy processing, sevcral byproducts are produced such husk and bran. There exist several possibilities for' reprocessing them into higher value added products. Rice barn is a major byproduct of the rice milling accounting for 5% to 8% ofthe weight of the paddy. Rice barn contains 10% to 23% bran oils depending on the different kinds of rice. Edible oil and industrial grade oil can be obtained from crushing rice barn oil. There is a good scope for rice barn oil enterprises. in the small industry segment with a capacity ranging from 10 TPD to 15 TPD

The rice husk is mainly used as fuel for boilers. The industrial use of husk is yet to be tapped. It has potential in building materials, input to produce paper hard board. Husk ash can also be used in glass industry due to its high silicon content.

Rice flakes are made out of inferior quality paddy. Rice flakes are used in various snack food preparations and as breakfast food. Activated Carbon may be manufactured from rice husk which is widely used for absorption of toxic gases and vapours and for purification of air and water.

Fibre Board from Agro Waste: The agro waste produced by paddy and sugarcane could be effectively used for production of fibre Boards from agro waste which has different uses for use to walls, ceiling and panels as Board for advertising and also as packaging material. The units could be set up at Eluru, Tadepalligudem and Tanuku.

Fruit processing: Mango is one of the major fruits produced in the district. Jangareddigudem area is. famous for Totapuri variety. A wide va_iety of fruits such as Cashew citrus. banana.guava, sap.toa, cashew are also produced in the district offering a wide scope for setting up of fruit processing units in Jangareddigudem, Bhimavaram, Chintalpudie, Tadepalliglldcm and Tanuku mandals of the district.

The potential sectors under fruit processing activity are given below:

Fruit	Type of ecterprises
Mango	Mango jelly, Mango Pulp, Canned Mango Slices in syrup
Others	Canning of fruits, Citrus juice, citrus peel candy, Fruit cheese, Fruit squash and syrup,fruit toffee, Jam, Jelly and Marmalade

Cashew Processing: Cashew is grown in 42,464 acres in the district with production of 22,931 MT or Cashew. Cashew processing is (me of the high growth sector activity in the district in view or availability of plenty of .resources. It is an employment intensive sector. The following processing industries have potential in the district:

Cashew Apple Juice Roasted and salted Cashew nuts

Cashew nut dec0rticator

Cashew Nut shell liquid

Palmyra Processing: Palmyra grows naturally in almost all the rnandals in the district. Tanuku,

Peravali, Iragavaram, Undrajavaram, Attili and Nidadavole mandals in the district offers good scope for the. following activities

Canning of Palmyra Tender Kernels Palmyra Kernel Preserve

Extraction of Palmyra fibre (used for high Palmyra brooms

quality brushes, acoustic board, household Fibre brushes,Palm gur

brooms, cushions) etc.

Maize processing: Maize is grown in Pedavegi, Chintalpudi, T Narsapuram, K. Kota, Peravali mandals in the district offering scope for maize milling activity. At present all the maize is going in to poultry feed. This can however be processed in to corn oil, starch and corn flakes etc. There is a scope for establishment of micro enterprises in production of corn flakes, pop corn.

Jaggery units: Sugarcane is grown in Tanuku, Tadepalligudem, Chagallu, Tallapudi,

Nidadavole, Gopalapuram, Jangareddigudem, Bhimadole offering scope for Jaggery units in the area. Jaggery making activity is concentrated in Tanuku and Nidadavole mandals. There is good scope for speciality, products such as chemical free jaggery.

Coconut processing: The district produces 219 million nuts every year. The coconut processing industries that can be established in the district are Desiccated coconut, Active carbon from coconut shells, Coconut cream, coconut shell powder and tetra packing of tender coconut water.

Coir: Most of the coconut husk is being wasted as fuel in power plants. What ever coir is made is being supplied to mattress industry. It can create huge gainful employment in the district in the following activities.

Curled coir Motorized traditional ratts

Defibreing units Rubberised coir manufacturing

Coir pith processing

Fisheries and prawn processing: The district has rich marine, brackish water and freshwater resources. There is potential for the following industries in this sector

Fish Meal and Oil. Processing and Canning of Fish.

Fresh Water Prawn Culture. Processing and Canning of Prawns.

Citroen from Prawn Waste. Fish Feed Pellets.

Poultry Feed from Prawn Waste. prawn Fed Pellets.

Fish pickles , Fish Oil

Banana based opportunities: Banana is grown in 8405 hectares in the district. The stems banana after harvest of bunches are being discarded with out any use. Banana fibre can be extracted from this waste. The fibre could be used for production of hand bags, decorative items and hand made paper. Technology for hand made paper is available with KYIC and National Institute of Hand Made Paper, Jaipur. Bontha variety of banana grown in the district is suitable for banana chips. Banana chips have a good market in the restaurants, railway stations, canteens etc.

Banana fibre can be used for making coarse woven fabrics such as hessian, sacks, ropes. twigs. sandbags, kit bags etc. Banana fibre can be blended with wool and cotton for making blankets carpets etc.

Milk products: The District produces around 12 lakh liters of milk/day which can be used in production of condensed dried milk. There is scope for various milk products such as Paneer, Khoa , sweets etc. Casein can be extracted from milk which has a while use as a nutritional supplement in Coffee whiteners, bakery, instant breakfast and beverages, cheese products and pharmaceuticals. The acid casein is used as coatings for paper and board, adhesive for wood, paints,cement, textile sizing, synthetic fibres, horticultural spread, leather tanning etc.

Milk chilling units and milk transport tankers ;have good potential in the district.

Food Processing: Food processing is a sunrise sector. Ministry of Food Processing. Government of India is offering several incentives and schemes for promoting this industry. Government of Andhra Pradesh has also come out with a separate policy for development of this sector.

Bakery products Meat Pickles

Garam masala powder Noodles making

Groundnut chikki Papad making

Instant gravy mixes Vermicelli

Iodised salt

Ice Factories: Ice Block unit having lot of potential in the District because of flourishing fisheries sector. For preserving these products ice is required. There is a scope for more ice factories in the district.

Cold Storages: More than 30% of fruits and vegetables produced are lost due to shortage of post harvest storage facilities, poor handling etc. There are three cold storages in the district at T.P.Gudem, Chintalapudi and D.Tirumala with a total capacity of 15000 metric tones. There is scope for establishment of few more cold storages in the District.

Refrigerated Vans/Trucks: Most of the agriculture and horticulture products of the district are marketed outside the district. The marine products are transported to Kolkata in Ice packed Trucks. The refrigerated vans/trucks would minimize the wastage during transportation. There is good scope for at least 10 to 12 refrigerated vans to operate in the District.

Textile Products:

The garment sector is a high growth sector offering scope for establishment of enterprises in the ready made garment segment. The segment has a large number of products such as knitted cloth, vests and undergarment, hosiery, cotton knit wear, hosiery, readymade fashion garments, school bags, uniforms etc.

There are a large number of lace artisans in the District. Lace works have to be combined with ready made garment sector to increase the market opportunities.

Mineral based Industries:

The mineral based industries have potential in the district are – Fly Ash Bricks, Stone crushing, Stone cutting and polishing, Ceramic tiles. With the commissioning of the Indira Sagar Reservoir (Polavaram) project, the stone crushing industry is going to get a good demand for its products. However, environmental aspects of the stone industry have to be kept in view.

Chemical based industries:

These are demand based industries. The following industries in this sector have scope in the District:

Adhesive for plywood Dyes

Air freshener Bottles and bottle caps

Camphor tablets Cement paints

Carboxy Methyl Starch Chlorine tablets

Disinfectant fluids Cleaning powder

Dry distempers Dyeing and bleaching

Mosquito coil / mats Shampoo / Herbal shampoo

Naphthalene balls Office gum paste

Scouring powder Petroleum jelly

Wax candles Phenyl

Agarbathis Zinc Sulphate.

Mechanical and engineering based industries:

These industries proved supporting services the agriculture and industrial sector. The product lines which can be promoted in the district are given below:

Aluminum hangers Buckets and drums making

Aluminum untensils Copper coated MS wire

Fishing hooks Metallic buttons

General Engineering workshops Fabrication works

Agriculture implements and tractor accessories Rolling shuntters

Steel almirahs and furniture Shock absorbers and other auto components

Paper and Paper based products

The following industries in this category have potential for establishment in the district:

Corrugated boxes

Vermicompost

The important of vermin compost, which is eco friendly has increased in recent years as it is a chemical – free manure. The district being a predomninantly agricultural economy, there is a vast scope for units manufacturing this eco-friendly manure.

Agri Clinics and Agri Business Centres:

With the diversification and modernisation of agricultural practices, the extension services for agriculture need augmentation from the private sector. The district has a rich agricultural base offering scope for setting up of agri clinics and agri business centers by the Agricultural Graduates. The agri business centers may offer various services such as:

Soil, water quality, inputs testing laboratories.
Plant protection service centre
Agro service centre – Farm machinery
Vermicompost units
Horticulture clinic and business center
Private veterinary clinic with small dirty unit.
Eco hatchery for carp seed production and extension services.
Setting up of information technology kiosks for access to various agriculture related portals.
Rural marketing dealership of farm inputs and outputs.

Service Activities

The agriculture prosperity of the district offers potential for various enterprises in the Service sector. There would be a large number of service activities which can come up in the district some of the indicative activities are given below:

Electrical Motor rewinding units Rural tourism activities at

Computer servicing centers Two wheelers and Auto repairing

D.T.P and Computer Job works Welding and General Engineering works

Battery reconditioning TV,Tape recorder servicing repairing centres

Gas stoves repairing centre Refrigeration and Air coolers units

Computers repairing centre Pumpsets Repairing / Servicing

Perupalem Beach (Near Narasapuram), Bowdha Aramamlu at Jeelakara Gudem near Kamavarapukota, Dwaraka Tirumala are prominent to this places in West Godavari District. There places of importance of Tourism officer scope for various service sector enterprises.

Potential areas identified by Small Industries Service Institute, GOI

RESOURCE BASE INDUSTRIES:

Agro based industries

Cooperative societies in the District covering various non farm industries in the district. How ever, most of them are in dormant state. District Industries Centre and Eluru DCCB may initiate steps to make them functional societies for boosting employment and production in the sector/

Based on the resource available in the area the following clusters have a scope development:

Palm fibre in Koyyalagudem, Jangaredygudem, Polavaram and Nallajerla Mandals

Fibre extracted from the leaf stalk of plamira tree is commanding good market. This activity is practiced by poor families in the referred 4 mandals. The present process of extraction of fibre is by beating the leaf stalk with wooden clubs. KVK, Kaluvacharla has come out with a fibre extraction machine. By using the machine productivity can be increased from the present 2 kg to 10 Kg / day per person. The fibre is being procured by an exporter from Nallajerla. By involving these business men the cluster can be developed.

Making jaggery is extensively done in Nidadavole and Tanuku mandals. Well established market is existing for jaggery at Tanuku. However, the producers use various chemicals to improve that looks and quality of the finished product. Because of increase in health awareness among consumers. Demand for chemical free jaggery is picking up. The local jaggery makers are enterprising and willing to go for making chemical free jaggery and cater to the niche market.

The mandals of Nallajerla, Deverapalli and Kovvuru are located on Eluru – Rajahmundry highway. The milk farmers cooperatives in this region are working and supplying fresh milk to Krishna District Milk Union. Milk from these areas in high in fat and SNF. This milk is suitable for making milk products such as paneer and khoya. The products are also having good market locally and in near by towns.

Banana fibre extraction and making of articles in Kovvuru and Chagallu mandals.

In Kovvuru and chagallu mandals banana is grown in more tha 2500 acres. After harvest of the fruit bunches the stems are cut and thrown on the road sides. This waste can be put to productive use by extracting fibre from stems. The fibre is having good demand for making hand made paper, decorative items, bags etc. KVK, Kaluvacharla which is under ICAR has developed a defibring maching and providing training to women in making items with the fibre. They are also providing market linkages. NABARD has sanctioned one REDP in Kovvuru mandal for 3 SHG groups and it was received well by the women groups. The women groups can take up this activity for gainful employment.

Coconut is naturally grown in Narasapuram, Palacole and Mogaltur mandals. But the coconut husk is put to use in a limited way. Few coir extraction units are existing in the area and they are supplying to mattress industries located at Hyderabad. After intervention of DRDA few women groups have taken up coir rope making by using rats supplied under subsidy. These women are getting good returns and are willing to make door mats and other coir products. Required training can be provided by DRDA or under REDPs of NABARD. Good market is available for these products.

There are 10 Agricultural market yards at Eluru, Bhimavaram, Tadepalligudem, Palacole, Akiveedu, Tanuku, Attili, Chintalapudi, Gopalapuram, Jangareddigudem in the District. There are seven weekly cattle markets at Tanuku, Undi, Hanuman Junction, Palacole , Jangareddygudem, Penugonda and Tadepalligudem for purchase and sale of cattle.

There are no organized market facilities available to market the fruits produced with in the district. The fruit crops are disposed off in the flowering stage itself to contractors by the growers. The fruits are marketed in the states of Orissa, West Bengal, Uttar Pradesh and TamilNadu. There are eight Fruit and Vegetable Growers Cooperative Societies at Attili, Akiveedu, Sidhantham, Palacole, Yelamanchili, Ravipadu, Tallapudi and Eluru. However, majority of the societies are not functioning. DRDA has established DWCRA bazaars in the district for providing market support to the products of rural women. These bazaars should be developed into self-supporting systems handing over the complete management responsibilities to the women gourps. Support may be extended by various developmental agencies such as SIDBI,NABARD,DRDA,DIC etc. to the entrepreneurs in the traditional sector of RNFS such as handloom and handicrafts to participate in the various district level, state level and national level exhibition with their products.

State Government has established Rythu Bazars in strategic locations to provide direct interface between the farmers and consumers, eliminating the intermediaries in trade. Rythu Bazars operate outside the purview of Agricutlure market committees and are managed by Estate Officers under the control of Joint Collectors. Rythu Bazars are located on Government lands identified by District Collectors. The Rythu bazaars have adequate arrangement for supply of drinking water, toilet facilities, arrangements for parking of vehicles , arrangements for removal of garbage and cleaning the market by local body, facilities for storage of unsold produce weighing scales etc.

All essential commodities such as vegetables, fruits, rice, oils, pulses, tamarind, dry chillies and onions are sold in these bazaars. These bazaars ensure remunerative prices to the farmers and proved fresh vegetables to consumers at reasonable rates fixed everyday. It also facilities immediate realization of the proceeds to the farmers. The price fixation for the products is done through a committee of farmers and the Estate Officer. Rythu Bazars have been expected to generate sufficient income for maintenance through auctin of parking space, canteen etc. The Joint Collector is responsible for the effective functioning of the Bazaars in the District.

To sustain regular supply of vegetables the Horticulture Department had identified growers and trained them in vegetable farming. Good seed material, technical and other inputs are being arranged by the department.

Market infrastsructure has been provided in all the Rythu bazaars with the funds of Agriculture market committees. Semi permanent structures have been provided to the farmers to provide adequate protection against sun/rain to the producers and the users alike. Keeping in view the response of farmers and consumers,permanent Rythu Bazars have been planned in future.

Periodic markets, known as rural haats (santhelu in the local parlance), form a prominent feature in rural marketing system. They provide an opportunity to rural people of several villages to sell their farm and non farm products and also to meet the items of daily necessities. The rural haats are mostly held in open spaces. There is a need to provide minimum infrastructure facilities to the rural haats such as raised platforms with semi permanent roofing, sanitary arrangements, compound wall etc. A few rural haats in the district (such as Dwarka Tiruamala) may be chosen to provide the above infrastructure arrangements.

Revival of Handloom Sector: The handloom sector in the district requires urgent attention. The sector is starved of working capital with the credit lines of most of the Primary Weavers Service Cooperative Societies getting choked. The Revival Package worked out by State Government to make these societies eligible for fresh finance needs to be implemented. There is a need for product diversification into high quality products and market orientation among the weavers. A Revival Strategy may be worked out for the sector by the Department of Handlooms and Textiles, Government of Andhra Pradesh and the Weavers Service Centre, Government of India.

Revival of Industrial Cooperative Societies: There are 58 Industrial Cooperative Societies in the District covering various non farm industries in the district. However, most of them are in a dormant state. District Industries Centre and Eluru DCCB may initiate steps to make them functional societies for boosting employment and production in the sector.

The District Rural Industries Project has to be a coordinated effort of all the agencies in the district. District Industries Centre, Khadi and Village Industries Board, Khadi and Village Industries Commission, District Rural Development Agency, the District Administration, Banks, Non Governmental Organizations etc., have to implement the programme in a coordinated manner synergizing their efforts and resource available with them. The industry specific associations (Rice, Ceramic Industry, Lace products) have to be associated for development of the specific industries. The project would be successful only if the project is owned by all the stakeholders considered as ‘their own project’ and not as the project of ‘some other agency’.

There are twenty reputed NGOs which are working in the field of education, adult literacy, social mobilization, sanitation, vocational training etc. The names of these NGOs are given below.

Most of the NGOs in the district are involved in the works relating to education, literacy, social welfare etc. Only few NGOs are involved in promotion of micro enterprises. Enterpreneruship development areas in the district. ACTION, KRDS and SAMSKAR are organizing rural women into groups for taking up thrift and economic activities. ACTION and KRDS have been extending loans to farmers for agriculture operations. These organizations are supported by German Technical Corporation.

Satyam Group of Industries has established the above Foundation which mainly works in 140 villages in the District in the areas of health care, adult education and literacy, water , environment and sanitation , livelihoods, vocational training. It has organized training programmes for the youth in construction sills, masonary, carpentry, plumbing & electrical w3orks training and operation of heavy earth equipment. It also arranges placements for the trainees. Satellite Training Institute near Bhimavaram is now operational.

The trust is established and run by Shri Kavuri Sambasiva Rao, the Local Member of Parliament. The trust is training selected candidates both for employment and starting their enterprises. Bank linkage is also being attempted for the trained candidates. The training modules cover computer training, cell phone repairs, TV/ Audio mechanism , mechanical workshop training etc.

APITCO is a premier Technical Consultancy Oraganisation promoted jointly by All India Financial Institutions (IDBI, IFCI,ICICI), State Industry Development Corporations (APIDC, APSFC, APSSIDC) and Commercial Banks (Andhra bank, Indian Bank, State Bank of India and Syndicate bank). It offers a wide range of consultancy services to the industry segment in project identification, project counseling, market assessment, project feasibility studies, skill development training programmes for entrepreneurs etc. It is situtated at Hyderabad but has posted one project coordinator at Eluru. Some of the major programmes implemented in the district are given below.

Rice milling being a mojor industry in the district there are many industrial associations in the District such as Palakol Rice Millers Association, West Godavari Rice Millers Association, Bhimavaram, Akiveedu Rice Millers Association, Tanuku Taluka Rice Millers Association, Eluru Rice Millers Association etc. There is also an association of Ceramic Industry enterprises in the District.

a) In order to enhance the flow of credit to small enterprises within the SSI Sector, RBI has issued instructions that under the priority sector, out of the total credit to SSI sector, 40% should go to the units with investment in plant and machinery up to Rs.5 lakh, 20% to the units with investments between Rs. 5 to 25 lakh and 40% to the units with investments beyond Rs.25 lakh.

b) No margin money for loans upto Rs.25,000 and 15 to 25% margin money for loans beyond Rs.25,000.

The significant initiatives taken by NABARD for promotion of RNFS are listed below:

a) Rationalisation of refinance schemes into 5 categories and simplification of procedures there under. (a) Composite Loan Scheme (b) Integrated Loan Scheme (c) SRWTO Scheme (d) Prior Sanction Scheme (e) Soft Loan Assistance for Margin Money (upto 20% of the project outlay) and financing bank will get 100% interest free refinance from NABARD. Banks can charge service charge of 3% p.a. To borrowers.

b) Thrust on promotional programmes such as training of entrepreneurs and bankers, skill building, technology upgradation, marketing assistance, cluster development, district rural industries project (DRIP).

d) Credit Card Scheme:- Different Credit Card Schemes have been put into vogue for facilitating easy access of credit to entrepreneurs engaged in Non Farm Sector activity. Laghu Udyami Credit Card Scheme formulated by IBA and implemented by the banks take care of the working capital and investment on tools etc., of artisans/Handloom weavers registered with Handicraft/Handloom Department. The normal card limit is Rs.2 Lakhs. NABARD has introduced Swarojgar Credit Card Scheme for small borrowers engaged in non-farm sector activity. On the basis of model scheme prepared by NABARD, each bank has framed their own scheme. The normal credit limit of the card which may comprise the components of working capital and/or term loan and small portion of consumption loan is Rs.25,000. However, the Bank has the discretion to issue card of higher limit depending upon the merit of the case.

NABARD is preparing district specific Potential Linked Credit Plans (PLP) assessing the potential for various economic activities, including Rural Non Farm Sector, considering the availability of infrastructure, support services, inputs, market linkages etc. The infrastructural gaps, if any, are identified in the PLPs for appropriate action by the government departments. The PLPs are intended as a resource document for the bankers to prepare their Service area plans.

Schemes of Financial and subsidy assistance available to women entrepreneurs are given below:

e) Mother Unit, Common Service Centre, MAHIMA (Marketing assistance Scheme) ARAWIND (for group entrepreneurship) and REDPs of NABARD.

The major requirements to be fulfilled by RNFS units with regard to licensing and registration are indicated below: