Make farmers shareholders in Corporate India; Convert sugarcane outstanding into equity

Economic news across different platforms is dominated by stock market giving elaborate details about how investors are getting richer, riding on the 'India growth story'. While companies across different sectors have seen impressive growth in their valuations, there is no dearth of the stocks which are directly related with agriculture in specific and rural economy in general. 

Balram Chini, Chambal Fertilizer, NFL, Rashtriya Chemicals, Paradeep Phosphate, DCM Shriram,UPL, Deepak Nitrite, Gujarat State Fertilizer are among scores of companies which are agricultural driven.  Retail investors would have made immense gains from valuations of these companies. 

But since the stock market, despite gaining popularity among retail investors, has largely remained an urban phenomenon. Even the mutual funds have not really tapped an untapped rural markets. Consequently, farmers and over 60 per cent of population has been excluded from the growth story at least of the market. This is certainly not inclusive growth, to say the least. 

What can be done, then? 

For starters, all the listed companies in sugar and ethanol, should convert their sugarcane outstanding, running into thousands of crores of rupees,  into equity with a choice to cane growers to opt for it or not. With increasing investor education even in rural areas, farmers can be useful partners of Corporate India, rather than an adversarial positioning, often peddled in some quarters. 

Conversion of debt into equity has often been resorted to by banks. With a refinement in the Company Law rules, conversion of sugarcane debt into equity should be explored immediately. It will help both the sugar companies and growers. 

Besides, companies like Tata Consumer, ITC , Escorts, Mahindras , HUL, should give preferential allotment to farmers who are their principal stakeholders. By the way, Tata Consumer, which is aggressive in their pulses, spices, coffee businesses, is offering rights issues. Why not give rights to pulses and coffee growers. Government should be happy to change enabling laws, if required. 

Making 60 per cent of the population, stakeholders, would go a long way in building a new brand equity of corporate India. Government should be a facilitator in the initiative.