By N.N. Sachitanand
Nourishing the Planet reader N.N.Sachitanand recently wrote this article about the challenges of falling wholesale prices for Indian farmers. The author highlights three areas for increased investment to protect small-scale farmers against price fluctuations and improve their livelihoods. Increasing the availability of storage facilities especially for fresh produce, investing in transportation infrastructure, and focusing on value-added products can help raise incomes of small-scale farmers who comprise the majority of agriculturists in India.
If Tata Motors had to sell the Nano at Rs.10 lakhs one month and Rs.10 thousand in the subsequent month, what would Mr. Ratan Tata do ? Most probably he would close down production of the Nano. Unfortunately, the Indian farmer does not have the luxury of stopping cultivation when wholesale prices for the crop that he brings to the market collapse to less than the transport cost from the farm to the market. That is because by the time the crop is harvested it is too late. And, if he does not sow for the next harvest, he will have no income and his family will starve.
There’s a need to improve storage facilities, invest in transportation, and promote value-added products for Indian farmers. (Photo credit: Bernard Pollack)
Time and again, the Indian famer has been plagued by this dilemma: “damned if he sows and damned if he doesn’t”. He rides a roller coaster ride of pricing, with no controls over the coaster. At least the grain farmer has some sort of cushion in the Minimum Support Price offered by the government. For farmers of perishable produce – fruits and vegetables – it is a story of either making a killing or being financially killed. Some months ago onions were fetching the prices of silver; now they are bringing tears to the eyes of the grower. Yesterday tomatoes were ruling at Rs.30 per kilo in Karnataka; today farmers are dumping them on the roadside at the mandis (markets).
Unlike in industry, where the factors of production can be controlled, agriculture is a different ball game where variables like atmospheric moisture, temperature, intensity and duration of sunshine etc. are totally out of the farmer’s control. He has to sow and reap as per seasonal dictates. Sure, the farmer can create his own micro-climate using greenhouses but the cost is prohibitive and in a price-sensitive market like ours, he will find it almost impossible to recover his costs. We want more agricultural production to meet the rising demands of an increasingly better – off humongous population. But how will agriculture be able to attract the necessary additional investment if the returns on investment are so uncertain and volatile?
With respect to agriculture, while our planners and researchers have done a lot of work on improving productivity, little attention has been paid to stabilizing and enhancing returns. This has kept the small farmers, who form the majority of agriculturists in India, on the fringe of poverty. Industrialists club together to form informal cartels, the so-called “associations,” to control aggregate output commensurate with demand and thus prevent steep price dips. The farming community, because of its widespread and disaggregated nature, cannot do likewise. This is particularly true of the “fruit and vegetable” farmers, whose produce is rapidly perishable and cannot be withheld for long from the market.