Science - June 10, 2004

‘Rich’ Indian would rather become teacher than entrepreneur

Small-scale industry could help strengthen the rural economy of West Bengal in India. But the farmers who have a little extra money that could be used to set up a small business outside agriculture do not do this.

A weaving workshop, pottery, or rice mill are all ideas for small-scale industries that could help to strengthen the economy of the state of West Bengal. But setting up a business requires start-up capital, and economist Subrata Dutta found out that it is precisely the richer and better-educated farmers that are not likely to start up a non-agricultural business. Their children also show little interest in entrepreneurial activities.

According to Dutta, well-educated farmers are more likely to seek a government job, for example as a teacher, as this gives income security. In addition, richer farmers consider that they have sufficient opportunities to earn money from their own farms. Dutta also regards culture as an important factor. In some areas risk taking is encouraged by family members, who also lend money to support this activity. In other areas it is the government that is seen as the ‘safe’ employer.

The government could help break this pattern by offering extension and training, says Dutta in his PhD thesis. In this way richer farmers could be encouraged to start non-agrarian businesses, which could improve living standards in rural areas.

Subrata Dutta received his PhD on Wednesday 9 June. His supervisors were Professor Henk Folmer (Economics) and Dr Wim Heijman (Regional Economics).

Joris Tielens