Farmers Always at Loss

Be it Shining India of NDA or the Rs 60,000 crore loan waiver credited to Sonia, marginal farmers, and more so, the landless labouring people in rural India remain deprived and helpless, and so angry too. Those claiming to govern are not able to do something that can make their life a little better and without the worry to go hungry to bed.

Ashok was narrating of a change in village cultivation this year. Almost all the farmers have grown mustard on a portion of their land among the Rabi crops. Perhaps, it was to have cooking oil for their use and then sell the excess amount. Mustard certainly fetches a better price than one by wheat or other Rabi crops. But then as the inflation increased to 7%, one of the first steps that the government took in panic was to reduce the custom duty on imported cooking oil to zero. The prices of cooking oil might go down by Rs 3-4 a litre and create an impression of decreasing prices that the government wants at large. But the price of mustard seeds crashed down drastically up to Rs 6-10 per kg spoiling the dreams of the farmers abruptly. The same happened to soybean too. No one in the government can appreciate the agonies of the farmers. Will the farmers continue with mustard seeds and soybeans next season?

Every time farmers and horticulturists are ready to sell, the traders play the same trick- be it sugarcanes, vegetables, or seasonal fruits. Hoardings and unscrupulous manipulations of the intermediaries decide the price of the farmer’s produce and provide the maximum benefits to the traders and deprivation to the farmers. Farmers are neither united enough nor economically strong enough to do something against these antifarmer communities or cartels. The government and politicians sympathize with the farmers but don’t take any punitive actions against the traders. It is because the traders’ associations collect money from its members and pass on to the politicians that the farmers can’t do in absence of any strong association.

In good old days, it used to happen with paddy and wheat too. However, that being the major crops, the prices have stabilized to a certain extent.

With untimely rain, the traders raise the retail prices blaming it to the loss of crop by the farmers. But hardly any profit of the enhanced price goes to the farmers. The intermediaries and petty retailers get the maximum cut of the higher prices that a consumer is made to pay under many pretexts.

Organized retail companies were to cut down the intermediaries, and directly procure from the farmers. But the strong unity of the petty retail traders and intermediaries with their political clouts are trying to see that it does not happen. Unfortunately, the governments are with traders and intermediaries.

It is for the country and its leadership to decide how can it make the farmers happy. Should it by paying the best price to the farmers for what they produce? Or should it be by assisting the mill owners as in case of sugar or textile sectors in creating a situation whereby they don’t pay even the agreed price? Should the government and politicians be happy or if so at all, for how long by declaring huge loan waivers to project their pro-farmers image and get votes instead of changing the damaging system?

As a management student, we learnt that the leading OEMs (original equipment manufacturers) in manufacturing sector such as Tata Motors or BHEL assist their vendors in every possible ways to produce the desired quality parts going in OE at the least cost; the organized retail sector must work with the same working philosophy with the farmers and all other accessories manufacturers, pay the best price so that it can sell to its consumers at the lowest price. The prosperity to the farmers will be the prosperity for the organized retail sector too. ITC claims to do that for all its procurements for its food products through e- Choupal. HUL has announced its plan to procure the raw vegetables directly from the farmers for its Kissan and Knorr brand products.

It is unfortunate that the country takes pride in being called the second largest exporter of cotton. Our textile sector has not grown fast enough to add value, to create employment, and to export the finished textiles or ready garments to get the maximum margin as the other countries including Pakistan are doing. And the economists and politicians are calling it a free economy. And the worst to suffer are farmers who grow cotton. Is it because of the government negligence or lack of encouragement to the textile industry?

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