DARE.CO.

IN
opportunity/agri-tourism

Digging gold in rural India

Agri-tourism
m is a Rs
R 4,100
F
or Sunil Bhosle,le
e, a farmer
far
f in the
Jogwadi villagege iin the Baramati
llag
crore opportunity. Are you
y taluk of Punene ddistrict, a 13 acre
ready
dy to hit the village trail?
trail piece of land tilled by his entire fam-
iece o
ily roun
round the year meant an annual
/Vimarsh
sh Bajpai
Bajp 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 Devel-
opment 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 expens-
es. He is now constructing two more
rooms for tourists.
"Agri-tourism has given Bhosle
a full-time job,” says Pandurang Ta-
ware, Director, Marketing and Sales,
ATDO. Taware is the brain behind the
Sunil Bhosle, farmer, (extreme right) with launch of a pilot project in agri-tour-
his family. ism in Baramati in 2005. Having spent
around 17 years in the tourism indus-
try, he realized that for marginal farm-
ers, 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, be-
tween 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 Oc-
tober 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 in-
cludes opening up farms to tourists
from cities and abroad, and letting
them spend some time in the lap of na-
ture. Apart from telling them about the
various crops and how they are sown
and harvested, agri-tourism exposes

48 FEBRUARY 2008
 DARE.CO.IN
opportunity/agri-tourism
tourists to authentic food, handicraft, of tourists they can receive.
dress, culture, music and language. “To make arrangements
Tourists get to indulge in rural activi- for 12 tourists, for whom you
ties such as bullock-cart rides, milking need to build four rooms,
cows and goats and picking farm-fresh costs approximately Rs 5
fruits and vegetable. The activities may lakh,” says Taware. (See Ta-
vary from village to village, as a country ble 2: Money Matters)
as diverse as India has so many differ-
ent experiences to offer. A Rs 4,100 crore
Agri-tourism activities can help opportunity
generate more jobs in rural areas, and The tourism sector is one of
thus reduce large-scale migration from the major foreign exchange
villages to cities. Two-thirds of India’s earners for the country. In
population lives in villages, and agri- 2007, 50 lakh tourists visited
culture is their mainstay. But unfortu- India, up from 44.5 lakh in
nately, unlike IT, agriculture is facing 2006. Correspondingly, the e
under-investment. So here is a chance foreign exchange earnings
to marry the benefits of agriculture grew 33% to over $12 bil-
with those of tourism. lion, compared to $9 billion b
“India has a global edge in its poten- in 2006. According
cording to es esti-
tial to offer unique experiences, partic- mates, 40.6 0.6 crore domestic
ularly linked to rural India, which has tourists ts criss-crossed the
tremendous wealth in its rich tradition, lengthth and breadth of the
lifestyle, culture and wisdom. Unfor- country. y
tunately, tourism in these areas is at a So, presuming
esuming that 10% 1
nascent stage and it can therefore ab- of the total number of o tour-
sorb much of the necessary expansion ists may consider ider visiting
visit
in the tourism sector as a whole,”
ole,” says various farms across cross the
Tushar Pandey, Country Head, ad, Strate- country during the year,
cou ear, the
gic Initiatives – Government (SIG),
SIG), Yes number would be close e to
Bank. The private-sector bank is bullis
bullish 4.1 crore. Each person
p stayss
on the prospects of agri-tourism in n sev- for about
bout two days, and a the
eral states, particularly Uttar Pradesh.
sh. It tariff
riff is Rs 500 per day.
day. Thus
Thuus
is partnering with CII to study the po- the size
siz of the opportunity
ortu unity is
tential of agri-tourism
gri-tourism in Uttar Pradesh.h. awwhopping Rs 4100 100 ccrore!
0 cro
The study
udy is likely to be ppresented to Agri-tourism m is now
the state government soon. growing in a big way. How-
grow
The Central Government has a ever, it may take some time
scheme on rural tourism, as part pa of before
ef it starts to grab a
which
hich various activities, such as im- major share of the revenue
provement
ement of infrastructure, are be- generated from tourism-re-
ing conducted
ducted in a big way. The ffocus lated activities. “In the initial
of the scheme resources
eme is to tap the reso stage, we expect only a mar-
available under schemes of
er different sch ginal contribution, but in
the Department of Rural Development
De the long-term perspective of
and state governments. nts. 10-12 years, we expect rural
Setting up an agri-tourism farm tourism to contribute about
doesn’t cost the earth. It can be de- 7-10% of the total revenue
veloped in a village where farmers are generated from tourism and
willing to showcase their culture and close to 10-15% of the total
traditions. All one needs to set up is a jobs in the tourism sector,”
decent boarding and lodging facility for says Pandey.
tourists. It is important to have a clean There is a huge scope of
place and hygienic food. The spend on developing various pock-
travel, food and accommodation is low ets of agri-tourism in the
and so it is easy to scale up the number country, as India is a coun-

FEBRUARY 2008 49
 DARE.CO.IN
opportunity/agri-tourism
How and when did the idea of starting an agri-tourism project come about?
During our market survey in 2005, we found that 73% of the people in urban India had no rela-
tives in villages. So we thought that this segment could be our prospective tourists or guests. I
mooted the idea to the villagers in Baramati, my hometown. Around 40 farmers came together
to start this project on their farms. We then started calling tourists to the farm. The number
of tourists increased to 25 by October 2005. This was when we registered the Agri Tourism
Development Corporation. The current area under the project is 110 acres, which belongs to
Agricultural Development Trust.
How did you spread awareness about the project? ct?
We did road-shows in Pune and Mumbai on bullock ock carts to spread awareness about the project.
First we got tourists from Mumbai and Pune to spend the day at the farm. When the tourists ar-
rive, we extend a traditional welcome, withh marigold garlands an
and saffron. Then we take them
PANDURANG TAWARE, to the farm for breakfast. After which, we take them around for sig
sightseeing. Also, we tell them
DIRECTOR, MARKETING AND SALES, about sowing methods and g
harvesting methods, ie, give them som
some basic knowledge about
AGRI TOURISM DEVELOPMENT ORGANIZATION agriculture. We told villages to prepare and sell souvenirs to tourists. to For this, we set up a
souvenir shop. It was important to make thee stay of tourists safe and hygienic.
hygienic Also, to provide
hen understand the nuances of th
them clean rooms and toilets. We started holding one-day seminars for farmers to help then the business .
What is the minimum area and capital required to start a small mall agri-touri
agri-tourism project? What is the return on inv estm
tmen
investment?
Most farmers in our country are marginal farmers with less than han 2-5 acres of land of holdings. Wee are asking those ffarmers mers tto come
forward and start agri-tourism activities.
To make arrangements for 12 tourists, for which we are asking them to build four rooms.
To construct, say, a 180 sq ft room for 3 tourists. This will cost approximately Rs 5 lakh if we co consider a ratee of o Rs 4400 per sq ft and keep
Rs 300 per sq ft for furnishing. Today there are a lot of bankss in the cooperative sector that are will willingg too givee lo
loans to farmers. The Pune
District Cooperative Bank is the first bank in the country to offer er loans for agri-tourism. There is nno elect ctricit in villages for about 12
electricity
hours, so we also give loans for generators. So the total cost may come to aro around Rs 575,000. Soo Rs 5 lak lakh can come as loan while the
farmer can put in about Rs 75,000.
ceive tourists for
According to our experience, we receive fo 104 days out of 365 days. Say te ristss visi
ten tourists visit a farm each day for 104 days, and each
20,000. The expenses aare about Rs 15,0000 per mo
pays Rs 500. This works out to Rs 5,20,000. month thh ie, Rs
R 1,80,000 per year. Now deduct annual loan
payment of Rs 1,50,000 per year. So thehe net income of a farmer is Rs 1,74,000 a yeayear. This iss aadditional income for the farmer only from the
ts and vegetables, handicraft, etc
land. Tourists also buy food grain, fruits lts in some additional earnings.
etc. This results
Is there any government clearance needed eeded to set up a project like thi this??
We have told the farmer that for every acre, e, he can take 2-3 tourists. So forr five acres,
ac he can take 10-12 tourists. When this is the scale for
a project, it does not require any clearance from the government.
go But w hen to
when ttourism activity will overrule agricultural activity, then it will
red as a tourism project.
be considered pro se, the project would requ
In this case, quire clearances
require l related to tourism projects. If one were to do it in a
rcial manner, it would be treated
commercial tr ourism project and the
as a tourism he necessary
ne clearances have to come from the tourism department.
Howw has the state government sup supported thee proje
project?
his project was actually a pilot project.
This project It was a new
ew id
idea even for the Maharashtra government. The government has taken steps and
as included this in the tourism policy 22006. The government has supported us unequivocally. It felt that since this is a pilot project, let
has
armers first see the pros and cons ffor 2-3 years. Under the tourism policy of the Maharashtra, the government is planning to launch a
the farmers
alled Mahabhrman. This will give a marketing platform to all those involved in agri-tourism.
brand called

try of extreme diversity. “There is a agri-tourism. It is important to develop

DARE/estimates
ates
Number of foreign tourists
who visited India in 2007
Number of domestic
tourists in 2007
Total number of tourists in 2007
Say, 10% of tourists are
game for agritourism
Tariff from one tourist
for a day
Say, each tourist stays for
Earning from each tourist
Estimated size
of opportunity
saying in India that with every 12
miles you cross, the water changes,
50 lakh the culture changes and the food
habits change. So at every 12 miles
40.6 crore there can be an agri-tourism project!”
41.1 crore says Taware.
4.11 crore Look before you leap
Here are a few things you have to keep
500 Rs in mind before taking the plunge.
2 days Community exercise: An agri-tour-
1,000 Rs ism project is less about money and
more about the rural experience. There-
4,100 Rs crore fore, a farm house in the outskirts of any
city can never meet the basic need of
agri-tourism as a community exercise,
which should involve every section of a
village society. A big challenge is to con-
vince 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 attract-
ing 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 devel-

50 FEBRUARY 2008
 DARE.CO.IN
opportunity/agri-tourism
Yes Bank is partnering CII for a study on the DARE/money matters
prospects of agri-tourism in parts of Uttar
ACCOMODATION
Pradesh. What does the study aims to achieve?
Agriculture and allied activities remain the single Number of rooms needed to
largest contributors to India’s GDP and represent accommodate 12 tourists 4
the means of livelihood for about two-thirds of the Size of one room 180 sq ft
workforce in the country. With Uttar Pradesh being a Cost of constructing one room 400 Rs/sq ft
predominantly agrarian economy, it also represents
a substantial segment of India’s agrarian population. Cost of furnishing one room 300 Rs/sq ft
The accelerated growth of this sector will support Total cost of one room 1,26,000 Rs
inclusive economic growth, and sustainable develop- Total cost of four rooms 5,04,000 Rs
ment reflects positively on the progress in the state
and the nation as a whole. EARNINGS
ourist
While opening up a whole array of unexplored tourist Say, 10 tourists visit the village for 104 days/year
dation of
destinations in Uttar Pradesh, the basic foundation
Each tourist pays 500 Rs
TUSHAR PANDEY ral econo
agri-tourism lies in community welfare, rural econom-
COUNTRY HEAD, STRATEGIC elopment
ic growth and social equity. It supports development earnings
Gross ear 5,20,000 Rs
INITIATIVES - GOVERNMENT oup
in both agriculture and tourism and our SIG group
(SI-G), YES BANK has proposed this as a rural employment generation ion EXPENSES
EX
ublica
mechanism for the state. The publication also brings Monthly spend on food,
to focus potential regions in Uttar Pradesh where considerableble opportunities
opportuniti for the electricity etc 15,000 Rs
estment potential.
development of agri-tourism exist and highlights the investment food,
Annual spend on fo od,
electricity
ectricity etc 1,80,000 Rs
What is the bank’s view on the growth of rural andd agri tourism in the co country?
rnment (SIG) division has consiste
Yes Bank’s strategic initiatives and advisory – government consistent- Loan repayment
epay ent of Rs 5 lakh 1,50,000 Rs
ative and effective mechanism for
ly been advocating rural and agri-tourism as an innovative Total spendd 3,30,000 Rs
driving growth in the rural economy, and has identified itt as a crucial contributor for
ent, employment
inclusive growth, wealth distribution, sustainable development, employm and Net EEarnings
arnin per year 1,74,000 Rs
rative appr
income generation. We foresee a positive outcome of a collaborative approach
advoc a cooperative/cluster structure
that involves all stakeholders and advocate
he driving force for success.
where entrepreneurial sprit is the
In the initial stage we expect a marginal contribution whereas
w g-term
in the long-term
ect rural tourism to contribu
perspective of 10-12 years, we expect contribute about 7-10%% of
ourism and close to 10-15% of the total jobs
the total revenue generated from tourism obs
bs in
the tourism sector.
artnership can help promote
Do you believe that public-private partnership promote
sm?
agri-tourism?
pment in the rural sec
Development antly eembedded within
sector is significantly hin th
he ppurview
the
and domain of the government. It is from this his pers
perspective that Yes Bank has
been steadily advocating the publ
public private partner
partnership (PPP) approach to
facilitate the bridging of the urban-rural
urban- e. For rural tourism, we believe
divide.
that a collaborative strategy built on the foundation of PPP principles will enable
thee penetration of benefits to all stak
stakeholders and facilitate a win-win situa-
w
tion. Based on this, the SI-G division within the bank executes this by working
in close collaboration with the gover
government and key stakeholders. SI-G has been
t
compelling governments through thought leadership initiatives, knowledge
dvisory and knowledge
publications, advisory knowl partnerships to recognize their role as
wth in the ru
facilitators of growth rural economy.

oped such as road-shows on a bullock Doctor on call: Although

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 pol-
lens and would prefer to stay in a hy-
gienic environment. This could be an
uphill task.
most tourists are advised to
take precautions while mov-
ing 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. DAR E

FEBRUARY 2008 51