Don’t let exploitative market forces run wild: The Tribune India


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Devinder sharma

Food and agriculture specialist

At a time when wholesale price inflation was the highest in three decades, the news is dire on the agricultural front. Within a week, three farmers burned their standing crops or harvested produce at three different locations across the country. The crops are different, but the reason for the fire is the same: the inability to get a fair price that covers the real costs that the farmers incurred for its cultivation.

On December 11, an angry Chakalu Venkateswarlu, from Kurnool district in Andhra Pradesh, set fire to 25 bags of onions (each weighing 50 kg) that he had brought to the yard at the Kurnool farmer’s market. , when he has found the best price offered. for him, it was Rs 500 per quintal (Rs 5 per kg). Realizing that such a low price did not even cover his production, transportation and mandi costs, the frustrated farmer preferred to sprinkle gasoline on his produce and set it on fire.

Four days later, another farmer in Dhone Mandal in Andhra Pradesh set his 3-acre banana plantation on fire when wholesale market prices fell by Rs 2-3 per kg. Mallikarjuna claims he spent around Rs 5 lakh growing bananas, but when prices fell so low by the time of the third harvest he felt defeated. All he had earned by marketing his harvest did not exceed Rs 1.5 lakh. In exasperation, he therefore had no choice but to burn the plantation.

In Madhya Pradesh, a few days later, an enraged Shankar Sirfira, a farmer from Deoli, burned 160 kg of garlic he had brought to the courtyard of the Mandsaur market. In the video clip which went viral on social media, he was heard to say he spent Rs 2.5 lakh to grow garlic, but all he got in the market was Rs 1 lakh . It didn’t even cover the cost of the culture. He said all he wanted from the government was to ensure a fair price for farmers.

The three painful incidents I have highlighted above may seem isolated but reflect the deeper agrarian distress that prevails. There are tens of thousands of farmers growing the same crops and receiving the same fierce blow from the markets but whose despair, dismay and despair go unrecorded. When prices collapse, economists attribute it to the supply-demand imbalance but fail to see the human suffering it causes. Not only in India but also around the world, market volatility has destroyed livelihoods and increasingly forced farmers to abandon farming, sell their land and migrate to cities in search of jobs. subordinates.

It is nothing less than chaos. Take the case of America, where producer prices have been falling steadily for 150 years, gradually pushing farmers out of agriculture. With hollow concern prevailing in the countryside, not only farm suicides have increased, but mental distress has also increased. In the United States alone, from where we have borrowed failed market reforms in agriculture, as many as 915,725 farm workers and their families are being treated for depression at migrant health centers that have been set up. place all over the country. This is happening at a time when barely 1.5% of the American population remains in agriculture today. While there may be complex reasons behind the mental health issues that farmers and farm workers face, fluctuating commodity prices still lead the way.

But for political planners and the media, especially business journalists, chaos only occurs when stock indices plunge, when stock markets end at a lower level. This is how the economic concept is cast. While a dominant part of the big economists bemoan the fall of the stock markets, they spare no effort to accommodate the low agricultural prices which eventually lead to increased agricultural debt, pushing more and more farmers to migrate to urban centers. .

No wonder, the daggers are already against any possible attempt to provide farmers with guaranteed income through statutory sanctity for the Minimum Support Price (MSP) for 23 crops whose prices are announced each year. Some senior economists, who themselves receive a guaranteed inflation-linked salary each month, are the ones who talk about the virtues of free markets for farmers, which they believe would lead to price discovery. Although I spoke earlier in these columns of how markets for highly commercial products like chocolate and coffee have left millions of primary cocoa bean and coffee producers in Africa and Latin America to live in the Poverty, the case of banana value chains reducing farmers’ incomes is no less revealing. A study shows that for every euro of purchases made by European consumers, banana producers in Latin America, from which the fruits are imported, receive only 5 to 9% of the final price.

It is the primary producers who play the most arduous role, who work the hardest, and yet their share of income in agricultural value chains is the lowest, not even covering the cost of production. And let’s not forget. For the three commercially important crops – coffee beans, bananas and cocoa beans – there is no MSP, nor APMC mandis that we can point our finger at. It is the large multinationals operating in a competitive environment that actually prosper by sucking wealth from farmers. Imagine, if the global agricultural chains had given the example by guaranteeing a minimum economic price covering the cost of production plus a reasonable share of the profits, agriculture too would have been a profitable business.

Instead of relying on exploitative market forces, as international evidence has conclusively demonstrated, now is the time for India to usher in a new round of ingenious agricultural reforms that begin by ensuring first of all a vital income for farmers. Securing economically viable livelihoods for 50 percent of the country’s population is the way to bridge the great economic divide.

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