FOOD PRICES INFLATION-ABSENCE OF "WILL" TO CONTROL!

There was a time when Indian farmers were mercilessly being exploited by the so called middlemen and the rural money lenders and with the yield of crops being one of the lowest in the world farmers seem to have destined to be poor perennially! Lot changed with the arrival of Green Revolution which saw tremendous increase in land productivity and the policy of the government in arranging for the purchase of the crops at minimum support prices provided significant relief to the growers. While this is true with respect to food grains, the growers of fruits and vegetables could not share this development as no government was bold enough to provide support, especially for marketing the highly perishable crops, leading to perpetual wastage and shortage of these protective foods in the country. Naturally such a condition is ripe for middlemen to exploit them making killing profits through market manipulation and high interest money lending. Agricultural Producing Marketing Centers under the surveillance of the government was intended to ensure fair price to the growers through transparent deals. Unfortunately these Centers are not fulfilling the purpose for which they were set up and instead they have become the cause for run away food inflation in the country presently being witnessed. Here is a commentary on this saga of Indian horticultural produce growers vis-a-vis APMC.   

"The APMC law is nearly 50 years old. Almost  each state has one; it seeks to regulate the trade in agricultural commodities. The idea was to protect the interest of farmers and ensure trading becomes orderly. The Act resulted in creation of regulated markets, also called mandis; there are 7,246 of these. The average area served by a regulated market is 450 sq km. These mandis control almost the entire wholesale trade in agri goods. How these operate have a huge bearing on the retail prices of fruit, vegetables and other produce. A close look at the functioning of mandis suggests these neither protect the interests of farmers or orderly trade. "The auction is rigged, shortages are created and there is no transparency in the way traders extract commission. How else will you explain that onion prices, Rs 100 a kilo prior to the recent Assembly elections, started falling just after the elections," says a trader at Delhi's Azadpur mandi. A farmer in Uttar Pradesh's Hapur learnt the functioning of a mandi the hard way. He approached one mandi with nearly 50 kg of cucumber. Upon arrival, he was greeted by a group of traders who did an instant auction and decided a price far below the market one.  Having travelled quite a distance, there was no way he could take his produce back. "The actual farmer got a pittance for his produce but the trader sold the entire stuff at a huge premium to the retailer," says the farmer. "The process of auction at mandis is a sham. The same system has been followed since Independence. What is most bizarre is that the actual producer does not get to know the price at which he is selling till the auction is over and the auction winner reveals the final price," says Brahm Yadav, former chairman of the Delhi Agricultural Marketing Board that controls Azadpur mandi, one of the largest in the country. He adds hoarding and creating artificial shortages by not allowing an auction platform for commodities in demand for a few days, thereby creating price shocks, is a norm. He asks why there is no electronic auction and no effective system of communicating wholesale rates to consumers on a daily basis".

The above revelation is a sad commentary on the state of affairs in the country vis-a-vis growers of fruits and vegetables. With the arrival of foreign retailing giants in the country for which government bent backwards to accommodate them, the APMC Act in many states is scheduled to be axed, giving a free hand to the retailers to approach directly the growers for buying their needs of fresh produce. Some where on the way government seems to have forgotten that these players with deep pockets can arm twist the producers to surrender their produce at cheap prices. They just seem to be technology and money driven version of the traditional pre-harvest contractors of yesteryear who exploited the growers to the hilt! Governments, both at the State and Central levels have failed horticultural producers in a big way and a new breed of super producers have emerged who are taking a cue from imported fruits such as Apple to hike their prices to match those of imported ones! The result is that these protective foods have become some thing beyond the reach of most people in the country. Though NDDB was mandated to organize the fruit and vegetable growers into viable cooperatives and set up a mechanism to ensure remunerative prices, nothing much happened during the last two decades. If sugar cane growers can be organized as it has been done successfully in the past, there is no reason same cannot be repeated with horticultural produce growers. Obviously the necessary will is lacking to do this and a few super growers are taking advantage of the situation to inflate the prices as they deem fit!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com