Farmers’ Wellwishers! Cut Down Intermediaries

As reported, the farmers in Maharashtra have demanded that they be paid Rs 18 per litre against the Rs 12 they get now. Pasteurised and packaged milk is sold at Rs 20 per litre in Kolhapur and other cities and at Rs 24 per litre in Mumbai. While pasteurising, packaging and transporting milk certainly cost, but the cooperatives are having a lot of margin making some few, say directors of the cooperatives running it, get the maximum advantages. However, it is farmers who must be the major beneficiaries. In places where the farmers are delivering milk to private collectors as in Bihar, the price paid to the farmers are further low. It is only Rs 9 a litre.

For all the produce, the farmer get similarly the minimal that the traders can manage with. I don’t know what ITC pays to the farmers for the wheat it procures from the farmers for its branded ‘atta’ that is sold almost at Rs 15-18 per kg. May be it is paying better than the petty rural traders, but ethically ITC must pay what it can retaining sufficient margin and not the maximum that it can manage taking advantages of their vulnerability.

Many a times, the mandi such as Azadpur in New Delhi publishes the bulk prices of vegetables and other grocery items in newspapers. I find for every thing it is one third of what I pay as consumer. Can something be done to cut down the cost in supply chain to the advantages to the producer farmers who are really poor? I wonder what the cotton farmers who resort to suicide mostly, are paid against what the exporters get from the clients.

With big business houses such Reliance and Bharati coming in retail business including groceries, the conditions of farmers can improve if they work on a model where they obtain the supplies directly from the farmers creating an efficient supply chain system and pay a fair price for their produce. The big retail outlets may facilitate farmers with some inputs to put in some value addition at the farmers end to enhance better earnings for the farmers thereby.

It must be a case for study by management institutes and government. The gap of price paid to the farmers and that paid by the consumer for the same for the same amount must reduce. Beside other assistance, this one help will certainly give an improved earning from he farmers.

Well-wishers of farmers! Can you do some effective empowering of the farmers in this regard so that the farmers can get the best price, instead of arranging doles to the farmers?

PS: I quote below from the latest issue of Business World:

Reliance Retail plans to build its own supply chain. “We will always buy from the farmer, almost never from the mandi,” says a group official. For example, the leafy vegetables, brinjals, tomatoes and green chillies in the Banjara Hills outlet were sourced directly from farmers in Vantimamdi, Chevella and nearby mandals in Ranga Reddy district of Andhra Pradesh. Already, a few hundred farmers have been hooked on to the Reliance Retail supply chain. In the next five years, that number will grow to millions. Even contract farming — by assisting farmers to procure high-quality seeds, fertilisers and other essential raw materials — is on the cards. By going to the farmer directly, Reliance Retail hopes to dis-intermediate the supply chain and eliminate waste. This means fresher products at lower cost.

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