A bumper crop can turn out to be a big loss for farmers in the absence of efficient marketing system. Efficiency of agricultural marketing in the country is low as a result of inadequate and improper infrastructure facilities, large number of intermediaries in supply chains and archaic marketing policies. Most of the time farmer is not receiving even 50% of the price paid by consumer for perishables. About 25-30% of perishables produced are wasted due to inefficient handling, transportation and storage conditions. Various measures initiated by governments during the last six decades to protect the interests of farmers and consumers failed to achieve the desirable results.
Ministry of Agriculture has introduced Terminal Markets as a new component under National Horticulture Mission launched in 2005-06 for holistic development of horticulture. Government has ambitious plans of starting terminal markets in Nasik, Mumbai, Chandigarh, Sambalpur, Hyderabad, Visakhapatnam, Tirupati, Hassan, Hubli and other places to address the marketing problems of fruits and vegetables. First terminal market in the country named as Safal Market was started by Mother Dairy Fruit and Vegetable Ltd, a subsidiary of NDDB, in Bengaluru in May 2004 on the request of Government of India.
The objective of proposed terminal markets is to reduce the number of intermediaries in supply chains, improve the marketing efficiency and infrastructure facilities, bring transparency in marketing and to protect the interests of farmers and consumers.
Concept of Terminal Market Complex:
Terminal markets were envisaged to provide all the required facilities and services for marketing under one roof and connecting farmers directly with wholesalers, retailers, processors and exporters. The operation of Terminal Market is based on hub-and-spoke format in which the Terminal Market acting as a hub is connected to many collection centers which act as spokes. The Terminal Markets would be located near cities (consumption centers) and collection centers would be conveniently located at villages’ level (production centers). The catchment area of a collection center depends on convenience needs of farmers like transportation to collection center, operational efficiency and capacity utilization at the center. Terminal Markets would establish backward linkages with farmers through collection centers by forming groups or associations and forward linkages with wholesalers, retailers, cash and carry stores, processors and exporters. It is envisaged to provide world class infrastructure and facilities at terminal markets which include cold storages, temperature controlled warehouses, ripening chambers, facilities for electronic auction, quality testing, packaging, banking and transportation. Revenue for terminal markets would be generated in the form of service charges, rent and license fee. Terminal Markets in the country are envisaged to be built, operate and owned by a private enterprise selected through a competitive bidding process.
Governments’ initiative to encourage private sector participation to set up terminal market complexes is commendable. However, this ambitious initiative should not result into another failure in agricultural marketing. Proper care should be taken in execution and establishment of operations of terminal market complexes. Creation of infrastructure facilities will be the easiest part of the projects and difficulties may be encountered in backward and forward linkages. Comprehensive studies may be undertaken before starting other markets to find the efficiency, viability and potential problems in implementation and operation of existing Safal Market. Studies will help in making suitable amendments in the proposed plans and avoid repeating some of the mistakes, if any, of the existing market. Other terminal markets may be started only if the present market is working according to desired objectives. Terminal markets should not make way for mere replacement of small traders/intermediaries with larger enterprises without achieving the actual purpose for which they were designed. The range or maximum amount of service charges that can be collected by terminal markets has to be specified by governments before starting of bidding process for markets.
Monday, October 20, 2008
Monday, June 30, 2008
Record Food Production of India
Food production inIndia for 2007-08 is estimated to be 227.3 million tonnes according to the Third Advance Estimates. This will be the highest ever food production in India surpassing the earlier record of 217.28 million tonnes during 2006-07.
Production of rice (95.68 MT), wheat (76.78 MT), coarse cereals (39.67 MT), maize (18.54 MT), pulses (15.19 MT) and oilseeds (26.21 MT) were estimated to touch all-time high. Sugarcane production was estimated to be marginally lower than that of 2006-07.
The estimated increase in production comes from the same area under cultivation. The total crop area of the country has remained static at 141 million hectares. The increase in food production can be attributed to favourable weather conditions and policies of the governments. We can expect a reduction in food prices because of this increased production and a ban on export of some of the commodities. Wholesale price index (WPI) of many agricultural commodities has also started declining.
We are indebted to the farmer for his efforts in increasing the production and making our lives easier.
Production of rice (95.68 MT), wheat (76.78 MT), coarse cereals (39.67 MT), maize (18.54 MT), pulses (15.19 MT) and oilseeds (26.21 MT) were estimated to touch all-time high. Sugarcane production was estimated to be marginally lower than that of 2006-07.
The estimated increase in production comes from the same area under cultivation. The total crop area of the country has remained static at 141 million hectares. The increase in food production can be attributed to favourable weather conditions and policies of the governments. We can expect a reduction in food prices because of this increased production and a ban on export of some of the commodities. Wholesale price index (WPI) of many agricultural commodities has also started declining.
We are indebted to the farmer for his efforts in increasing the production and making our lives easier.
Wednesday, February 6, 2008
Lobby for Taxing Farmers
(In response to the article published in The Economic Times on 9 January, 2008…though a bit late)
Associated Chambers of Commerce and Industry in India (ASSOCHAM) is planning to raise the issue of introducing income tax for farmers with finance ministry. This is based on the survey conducted by our great industry body ASSOCHAM. Surprisingly, the participants/respondents in the survey are 300 CEOs. The results of the survey indicate that about 80% of the CEOs (respondents) are in favor of bringing the farmers under the tax net. It is also reported that the industry body will highlight the results of the survey during their pre-budget consultations with the Ministry of Finance.
We need to appreciate the efforts of ASSOCHAM and the CEOs participated in the survey for their ‘concern on the revenues of government’.
Unfortunately, Government of India’s published reports indicate that at least 1.5 lakh farmers have committed suicide from 1997 to 2006 in the country. These suicides are reportedly higher in ‘richer, prosperous and industrialized’ states. NSSO survey on indebtedness of farmers during January to December 2003 reported that 43.42 million (48.6%) farmer households are indebted. Another report of NSSO reported that average expenses and receipts for cultivation per farmer household, during July 02 - June 03 for which the data is available, was Rs.20,315 and Rs.8,791 respectively. This means an average income of Rs.11,524 per annum which turns out to be Rs.960 per month per household. This income may be less than your ‘pocket-money’. This income will not increase significantly even if we assume that farmers are involved in other activities for income generation in villages.
Imagine a household (family of a farmer) managing all his needs and of his family in less than Rs.1000 per month. These average figures are for one agriculture year. If we consider the situation over the years the income may turns out to be negative (loss) in some years due to droughts, floods, crop loss due to pest and insect attack or price fall. Farmer has to save the income earned in one year to protect his family, if possible, against the possible crop loss in the subsequent year. We have insurance guarantee for many things in the country but not for agriculture. Government has introduced insurance against rainfall, recently, which is dependent more on political conditions rather than rainfall conditions. My father is still waiting for the rainfall insurance for the year 2003. Agriculture is one of the toughest and riskiest professions where farmer has to play with nature and unethical market forces.
Our great industry association and CEOs want to impose income tax on these farmers. Great concern!!! What prevented these CEOs and ASSOCHAM from raising the issue of farmers’ suicides with government if they are really concerned? How many of these CEOs and businessmen who earn lakhs and crores are paying the tax honestly? How many hi-tech companies are paying the salaries honestly without diverting the salary in the name of bonus to avoid income tax?
What was the logic of involving only CEOs as respondents in the survey? Why not farmers and others? That too the sample size of the survey was only 300. How representative is the sample?
When more than 1.5 lakh farmers committed suicide in the last few years what action did the association and CEOs took apart from conducting surveys for agri-business companies? What moral right do they have to ask farmers to pay tax? At least, let them clarify who the farmer is in this country. Is it Amitab Bachhan or Deve Gowda or a poor man who has dependent on agriculture for his livelihood? In fact, businessmen, politicians and people like Amitab are evading the tax by showing their income in the name of agriculture and these are the real culprits.
It is to be mentioned that the aggregate measures of support (AMS) offered to farmers in our country is negative. This means that farmers are cross-subsidizing consumers. This trend is not seen in any other sector. These CEOs demand the government to provide tax incentives for export if the Dollar value is falling to maintain their profits. When farmers are cross-subsidizing and committing suicides what prevented these CEOs from raising the issue with government? At least let them pay the right price for the farmers’ produce and stop exploitation.
Why our government is not holding any pre-budget consultations with farmers’ groups? Why only with industry bodies? Even god cannot save the poor farmers from the bias of government and the so called ‘CEOs’.
Thank you CEOs for your concern.
Associated Chambers of Commerce and Industry in India (ASSOCHAM) is planning to raise the issue of introducing income tax for farmers with finance ministry. This is based on the survey conducted by our great industry body ASSOCHAM. Surprisingly, the participants/respondents in the survey are 300 CEOs. The results of the survey indicate that about 80% of the CEOs (respondents) are in favor of bringing the farmers under the tax net. It is also reported that the industry body will highlight the results of the survey during their pre-budget consultations with the Ministry of Finance.
We need to appreciate the efforts of ASSOCHAM and the CEOs participated in the survey for their ‘concern on the revenues of government’.
Unfortunately, Government of India’s published reports indicate that at least 1.5 lakh farmers have committed suicide from 1997 to 2006 in the country. These suicides are reportedly higher in ‘richer, prosperous and industrialized’ states. NSSO survey on indebtedness of farmers during January to December 2003 reported that 43.42 million (48.6%) farmer households are indebted. Another report of NSSO reported that average expenses and receipts for cultivation per farmer household, during July 02 - June 03 for which the data is available, was Rs.20,315 and Rs.8,791 respectively. This means an average income of Rs.11,524 per annum which turns out to be Rs.960 per month per household. This income may be less than your ‘pocket-money’. This income will not increase significantly even if we assume that farmers are involved in other activities for income generation in villages.
Imagine a household (family of a farmer) managing all his needs and of his family in less than Rs.1000 per month. These average figures are for one agriculture year. If we consider the situation over the years the income may turns out to be negative (loss) in some years due to droughts, floods, crop loss due to pest and insect attack or price fall. Farmer has to save the income earned in one year to protect his family, if possible, against the possible crop loss in the subsequent year. We have insurance guarantee for many things in the country but not for agriculture. Government has introduced insurance against rainfall, recently, which is dependent more on political conditions rather than rainfall conditions. My father is still waiting for the rainfall insurance for the year 2003. Agriculture is one of the toughest and riskiest professions where farmer has to play with nature and unethical market forces.
Our great industry association and CEOs want to impose income tax on these farmers. Great concern!!! What prevented these CEOs and ASSOCHAM from raising the issue of farmers’ suicides with government if they are really concerned? How many of these CEOs and businessmen who earn lakhs and crores are paying the tax honestly? How many hi-tech companies are paying the salaries honestly without diverting the salary in the name of bonus to avoid income tax?
What was the logic of involving only CEOs as respondents in the survey? Why not farmers and others? That too the sample size of the survey was only 300. How representative is the sample?
When more than 1.5 lakh farmers committed suicide in the last few years what action did the association and CEOs took apart from conducting surveys for agri-business companies? What moral right do they have to ask farmers to pay tax? At least, let them clarify who the farmer is in this country. Is it Amitab Bachhan or Deve Gowda or a poor man who has dependent on agriculture for his livelihood? In fact, businessmen, politicians and people like Amitab are evading the tax by showing their income in the name of agriculture and these are the real culprits.
It is to be mentioned that the aggregate measures of support (AMS) offered to farmers in our country is negative. This means that farmers are cross-subsidizing consumers. This trend is not seen in any other sector. These CEOs demand the government to provide tax incentives for export if the Dollar value is falling to maintain their profits. When farmers are cross-subsidizing and committing suicides what prevented these CEOs from raising the issue with government? At least let them pay the right price for the farmers’ produce and stop exploitation.
Why our government is not holding any pre-budget consultations with farmers’ groups? Why only with industry bodies? Even god cannot save the poor farmers from the bias of government and the so called ‘CEOs’.
Thank you CEOs for your concern.
Wednesday, January 9, 2008
Everybody Loves Inequality
"If our civilization is destroyed, it will not be by barbarians from below. Our barbarians come from above." ---Henry Demarest Lloyd (1847-1903)
Inequality- is it designed by god or manmade or a result of evolution?
Inequality is universal whether you like it or hate it. Everybody will be subjected to certain type and degree of inequality in his/her lifetime. Inequality may be of social, racial, political, income, gender or other type.
One can find inequality in temples also where only the rich and so called ‘higher caste’ people are allowed nearer to the deity. This is a common phenomenon even in some famous temples of India- the largest democratic country whose constitution provides all types of equality and non-discrimination of any form – on paper. It is heartening to find some ‘highly educated’ people supporting these practices by saying that the poor will steal high value diamonds and gold ornaments, if allowed near the deity.
Leave apart the society. One can find inequality in family’s also. Siblings trying to dominate over one another and feeling of superiority is a common phenomenon.
This inequality which is universal is not by default; it may be by design. This design may be to maintain balance among different species in an ecosystem. Also, we can find imbalances within any species resulting into the domination of stronger over weaker and thus surviving. This is explained by the famous concept of Survival of the fittest.
Inequality also starts with nature in terms of differences in the availability of resources among different regions. These differences in availability of natural resources translate into other types of inequalities. One can easily find the answer by comparing a dry region with one having good rainfall or water resources.
Inequality can be explained in terms of hierarchy-of-order. A country trying to dominate over others and maintain inequality; a state trying to dominate over others within a country; a region trying to dominate over others within a state which finally ends up in the domination of one individual over others in a family.
It’s better not to speak of income inequality which is increasing with globalization and economic growth. Rural-urban divide is also rising in all fronts with rapid urbanization and globalization. It has become fashion for policy makers and also corporates to talk of rural problems without any concrete efforts to solve them.
I feel this inequality is the design of god which human being has loved and nurtured with the help of nature. It has become universal only with the support of human being. It seems that human being loves to maintain inequality with the purpose of having higher status or superiority over his/her fellow beings.
"Nature still obstinately refuses to co-operate by making the rich people innately superior to the poor people." --Sidney and Beatrice Webb (1923)
Inequality- is it designed by god or manmade or a result of evolution?
Inequality is universal whether you like it or hate it. Everybody will be subjected to certain type and degree of inequality in his/her lifetime. Inequality may be of social, racial, political, income, gender or other type.
One can find inequality in temples also where only the rich and so called ‘higher caste’ people are allowed nearer to the deity. This is a common phenomenon even in some famous temples of India- the largest democratic country whose constitution provides all types of equality and non-discrimination of any form – on paper. It is heartening to find some ‘highly educated’ people supporting these practices by saying that the poor will steal high value diamonds and gold ornaments, if allowed near the deity.
Leave apart the society. One can find inequality in family’s also. Siblings trying to dominate over one another and feeling of superiority is a common phenomenon.
This inequality which is universal is not by default; it may be by design. This design may be to maintain balance among different species in an ecosystem. Also, we can find imbalances within any species resulting into the domination of stronger over weaker and thus surviving. This is explained by the famous concept of Survival of the fittest.
Inequality also starts with nature in terms of differences in the availability of resources among different regions. These differences in availability of natural resources translate into other types of inequalities. One can easily find the answer by comparing a dry region with one having good rainfall or water resources.
Inequality can be explained in terms of hierarchy-of-order. A country trying to dominate over others and maintain inequality; a state trying to dominate over others within a country; a region trying to dominate over others within a state which finally ends up in the domination of one individual over others in a family.
It’s better not to speak of income inequality which is increasing with globalization and economic growth. Rural-urban divide is also rising in all fronts with rapid urbanization and globalization. It has become fashion for policy makers and also corporates to talk of rural problems without any concrete efforts to solve them.
I feel this inequality is the design of god which human being has loved and nurtured with the help of nature. It has become universal only with the support of human being. It seems that human being loves to maintain inequality with the purpose of having higher status or superiority over his/her fellow beings.
"Nature still obstinately refuses to co-operate by making the rich people innately superior to the poor people." --Sidney and Beatrice Webb (1923)
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