Today’s
Indian Express carries an interesting article on the rural landscape of India,
bringing to the fore a superbly balanced presentation of the farm gate prices issue:
should farmers be able to sell as per their choice, and not just through the
APMC-demarcated regulated market yards
and auctions. This raises many questions, as we shall see. But first, the
article in question:
APMCs were originally
established with a view to prevent exploitation of farmers by intermediaries,
who compelled them to dispose of their produce at the farmgate at very low
prices. By mandating all farm produce to be brought to regulated market yards
and sold through auctions, the APMC mechanism was meant to ensure fair prices
to farmers. But in many cases, these bodies have themselves become dens for
cartelisation by traders, who control prices and charge hefty commission fees
on produce transactions.
An extreme case that surfaced recently was of Devidas
Maruti Parbhane. This farmer from Vadgaon Rasai, a village in Pune district’s
Shirur taluka, supplied one tonne of onions early this month at the local
market yard under the Pune APMC’s jurisdiction. The price he got — a little
more than Rs 1.5 per kg — was itself very low. But adding insult to injury was
the various “cuts” imposed on top of this.
A scrutiny of Parbhane’s patti (trade slip) by The Indian
Express revealed his total revenues from the sale of one tonne of onions at Rs
1,523.20. The total cuts even on this meagre amount added up to Rs 1,522.20.
That included commission fees of Rs 91.30, hamali or labour charges of Rs 59,
bharai or filling-in-bags charges of Rs 18.55, tolai or loading charges of Rs
33.30, and transport charges of Rs 1,320 (as the kutcha patti issued in Shirur
was billed for delivery at Pune). Parbhane, at the end of it, was left with a
net earning of Re 1: “When after the auction, the trader handed me a Re 1 coin, I was flabbergasted.
Maybe, he should not have taken the trouble to pay me even that!”
Traders, however,
dismiss these as one-off incidents, while claiming that delisting of F&V
would ultimately hurt even farmers. “The produce brought by farmers is not
uniform, which is what processors want. The APMCs are tuned to handle variety.
Here, we have 50-55 varieties of vegetables and 25-30 varieties of fruits
arriving on a daily basis. Such variety will disappear once delisting happens.
Moreover, instead of a centralised marketplace, you’ll have small and medium vehicles
carrying farm produce and creating traffic mayhem in Mumbai,” warned Rajendra
Shelke, a leading onion and potato commission agent at the Vashi APMC.
Besides, the APMC
system guarantees that the farmer is paid for his produce, which wouldn’t be the
case if he were to sell directly? “The proposed reform looks good on paper, but
it will only spell doom for the farmer and end up completely destroying the
agrarian economy,” he added.
Sanjay Pansare, who
represents traders at the Vashi APMC’s fruit market, justified the high
commission rates on grounds that the goods being handled here were perishable
and prone to quality deterioration. Only around a quarter of the produce
brought to the market is eventually of the best quality; the rest falls between
medium and bad. The losses borne by b on this count have to, therefore, be made
up through higher commission fees. Since 2002, the Maharashtra government has
been issuing marketing licenses to various entities for procuring directly from
the farmgate. Besides, 34 private markets have been allowed to be set up. But
despite this, an estimated 75 per cent of annual arrivals of F&V in the
state still take place in APMCs. The proportions are lower at 46 per cent for
cotton and 25-30 per cent in oilseeds and foodgrains.
The
good part of the article is for the first time in my reading at least, has
someone tried to place the other side – the benefits from traders to farmers;
for too long, we have been treated to articles that focus on the low farm gate
prices prevalent in India. Such an approach suffers from one major disadvantage:
the bulk of purchasing happens through these regulated markets; these are an
intermediary reality that cannot be wished away; they form an ecosystem within
the economy, have large dependencies of families as well as business connected
to them.
Any
change process can only be successful when both sides of the coin are taken
care of; the concerns of the traders need to be met head-on and dealt with, as,
regardless of the question of compensation to farmers, they currently fulfil a
market function. This is where a slow and planned change can bear results – as
seen in the example above, wherein the procurement for cotton and oilseeds,
foodgrains are at much lower percentages. Full marks to the Maharashtra state
Government for crafting a graded transition to the newer system!
It
is heartening to see Maharashtra and Delhi take the first tentative steps
towards making a fair and balanced system for all; this is something needs to
be taken forward in all states. Therein lies the major issue- it nationwide
implementation. Sadly, I have not come across more coverage, or at least
focused and concerted coverage in the media on this vital aspect. While Foreign
Policy, Political brouhaha, Make In India etc find coverage and deep, informed,
threadbare analysis – this is all but absent in this matter. As a net result,
sporadic articles spring up in the media, and the public remains mute,
unconcerned and uncaring regarding this matter. While the other initiatives
will impact Urban India immediately, and Rural India through the trickle down
effect over time – this will have a much faster and potent impact, given that more
than 2/3rd of India is Rural...
This
is a systemic change, deep and layered; it does not have the dramatic, esoteric
and visual impact of Make In India, or
Digital India or the other steps of the Government; and yet, it is equally, and
in some ways more effective in ensuring the development of our nation; it is
also something that the internet generation, social media, mainstream media and
Urban India just do not have an interest in, which is truly sad. Frankly, this state of affairs is a brutal indictment
of Urban India
The
shocking example above exposes the state of affairs – that the farmer is not getting
anywhere near enough; other data and proof in the for of articles can be
provided; let us take Onions as an example. How much do we pay in retail? 20/-
a Kg – 30/- a Kg? At times, 40/- a Kg? How much of this should the farmer take
home? Prices to farmers have even gone as low as 20 Paisa a Kg. We hear a massive
hue and cry when prices shoot up – so why are the people and the media silent
now? Why is there total silence on such a vital matter? Because it doesn’t
impact Urban India?
The bumper harvest this year, however, has left farmers
in tears with reports suggesting that prices have fallen to an all-time-low of
Rs. 30 paise per kg at Madhya Pradesh's mandi in Neemuch district. “There has
been surplus onion production across the country this time, and the demand is
relatively low. The farmers are badly hit as they spend at least Rs. 12 per kg
in the entire process of producing the crop, excluding their labour cost,” said
Rajender Sharma, member of Azadpur, Agriculture Produce Market Committee
(APMC).
In Delhi, which primarily relies on these two States
among a few others for onions, the situation is equally grim. At the Azadpur
Mandi, the kitchen essential is being sold at Rs. 7.86 per kilo on an average. The
best-quality onions are being sold at a wholesale rate of Rs. 10.5 per kg,
whereas the poor-quality and the smaller ones are being bought by traders at
Rs. 4.5 per kilo. The retail prices in the city range between Rs. 18 per kilo
and Rs. 20 per kilo.
http://www.thehindu.com/news/cities/Delhi/onion-prices-hit-a-new-low/article8481601.ece
- April 16, 2016...
Did we read much of this in the Media? And do note the difference between
retail and wholesale prices; and ask yourselves some questions on tis state of
affairs. Also do ask yourself is it fair that these matters take backstage to the
much more visual steps that directly impact Urban India – and also ask yourself
how can we change the state of affairs?
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