Thursday, April 7, 2016

Market Linkages for Farmers

                                                       Vijay Uppal

The farming sector has been in the news of late for all wrong reasons. In many areas in the country, the sector has been reeling under a massive scarcity of water. Above all these, the farmers across the country are not able to generate enough revenue out of their produce.

The stunning facts are as follows:-

Approx. price
(at which farmer sells)
Approx. Price
(at which you buy)
Rs. 4-8/- per kg.
Rs. 15-20/- per kg.
Rs. 8-12/- per kg.
Rs. 25-35/- per kg.
Rs. 30-40/- per kg.
Rs. 100-125/- per kg.
Rs. 15-20/- per kg.
Rs. 50-60/- per kg.
Rs. 18-25/- per ltr.
Rs. 40-45/- per ltr.

Shocked? But this is true.

A farmer who produces vegetables, fruits, milk, etc. and toils in the field for hours in extreme weather conditions is getting only ¼ or 1/5 of the price at which you are buying in cities as a consumer.

Who is making the money and why the farmers are being exploited?

It is the middle man / Aadhti who is making the real money. The common farmer is unlike the AMUL scenario where farmer co-operative societies are very well organized (thanks to the pioneering efforts of Mr. Verghese Kurien). The farmers do not have the capacity to hold the vegetables, fruits, milk stocks (because of the perishable nature of these products) in order to fetch the right price. Whenever, the farmer sees that the shelf life of his produce is getting over, he under prices his product and sells it to the greedy middle man. This middle man is always on the look-out for an opportunity to exploit the farmer during such a situation.

In fact, it has been seen that the middle men create a cartel through which they buy the fruits and vegetables and other farm produce at a very low price from the farmer.

What are the solutions?

The solutions (to this growing disparity of income of the farmer) are as follows:-

1.     Farmers producing same variety of vegetable and fruits should form small groups / co-operatives of 50 to 100 farmers each in every region and collectively negotiate the fair price of their farm produce with the middle man /  aadhti.

2.     The institutional buying can be directly linked to the farmers or farming community. e.g. in Delhi / N.C.R the requirement of baby corn in 5 star / 3 star hotels is approx. 1000kgs per day. The consumption can be met easily by a group of farmers sitting in Uttarakhand. The only catch is that these farmers in Uttarakhand need to be collectively represented by any of the NGOs or a transparent Marketing Agency.

This type of a scheme, if introduced properly can eliminate the process of farmer going through multiple middlemen and only one agency with reasonable margin can take care of marketing the farm produce of farmers from Uttarakhand or Western UP.

The way to go forward is to encourage a group of farmers to produce high yield value added vegetables and fruits like Olive, Yellow/red Capsicum, Cherry tomato, Broccoli and Mushroom.
3.     At a later stage, this agency can install a mini food processing plant to semi process vegetables (at the farms) like Baby corn, Yellow/red Capsicum, Cherry tomato, Broccoli and Mushroom etc. Also, the farmers collectively can invest in refrigerated vans in order to ensure smooth transportation of highly perishable products to far off places.

4.     Another solution is that with the Ayurveda products gaining in demand and brands like Patanjali becoming household names, it makes sense to grow herbs, medicinal plants like Jatamasi, Neem, Haldi, Tulsi, Gilohi, Aloevera etc. Also, the aromatic plants can be grown whose market price is beyond the farmers’ expectations.

Yes, people are noticing disparity in farmers’ income, but the way to go forward is to explore and implement the above solutions in the right manner.

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