The dominance of market in agricultural sector is only bad for the farmer

Posted 17-Feb-2012
Vol 3 Issue 7

In early-January there were reports of potato farmers in Punjab throwing their produce onto the streets. This was because, despite a bumper harvest, farmers were not getting an appropriate or adequate price for their crop.

The market was, in fact, offering them far less than the cost of growing the potatoes. Input costs worked out to around Rs 5 per kg, said the farmers; they were being offered Re 0.50-1 per kg.

There was another report, this time from Guntur in Andhra Pradesh, that angry chilli farmers were getting Rs 2,000/qtl less that year for their common chilli varieties. In 2010, they were being offered Rs 7,000/qtl; this year the maximum they were being given was Rs 5,000/qtl.

These are not new or isolated stories. They happen with fair regularity, every harvest time. This time it was potatoes and chillies. Other times it has been tomatoes, onions, sugarcane…

All these stories have a common link -- the market. The reports from Punjab also talked about farmers complaining that there were not enough cold storage facilities where they could have preserved their harvest in the hope of better times ahead.

The tragedy of the Punjab and Guntur farmers (indeed, of farmers all across the country) raises several basic questions and concerns that relate not just to the farmers individually but to the larger picture of agriculture infrastructure and the marginalisation of farmers in India.

December 2011 saw strong nationwide protests over the UPA government’s proposed decision to allow 51% FDI in retail. As a result, the government had to retract (‘keep in abeyance’ may be a better term) its proposal.

Among the major concerns raised in that protest was how majority FDI would harm farmers. Barely any attention was paid to the plight of Punjab’s potato farmers or the chilly farmers of Guntur, by political parties, the media, civil society or retail traders.

Although the FDI issue definitely needed to be protested, we must sift the chaff from the grain and accept that political parties and retail trader associations are shooting from the farmers’ shoulders.

Swadeshi trade or local traders are not the holiest of the holy, and their concern was not for the farmer but for themselves as became particularly obvious in this most recent tragedy of the potato farmers.

Despite the fact that the desperate farmers were forced to sell their potatoes at Re 1 a kg, consumers in Dehra Dun (and I am sure everywhere else) are buying potatoes at the minimum rate of Rs 7-8 per kg.

The lopsided equation between farmers and traders -- yes, the swadeshi trader -- is old, well-known, unjust, and tragic. But it continues to this day. Nowhere do we hear of trader associations or organisations suffering a guilty conscience over it; nor do we see the government and political parties overly worried and ready to take concrete steps to rectify the inequity.

Then there is the other question of limited cold storage facilities.

Although a serious concern, the problem is not that there is a shortage of cold storage facilities but why or how it has become essential to have cold storage in the first place.

Cold storage facilities are primarily trading facilities that emerged from the Green Revolution and the concept of corporate agriculture. It is symptomatic of the market’s dominance over agriculture and over farmers.

Cold storage is a reflection and consequence of the government’s subservient mentality towards national/international agro chemical companies and their philosophy of globalisation and the free market.

Thus, government policies and programmes parrot “production, production, production”, unmindful of the question as to whether so much production is actually necessary, or even whether the farmer and the community have the capacity to absorb and distribute the produce or not. According to the government, the farmer is no longer expected to produce for self and community but for the entire country, even other countries.

Cold storage facilities do not belong to the farmer, certainly not to the small subsistence farmer. These are owned by governments, big companies or big traders dealing in agro produce.

And so, just as was stated in the FDI protest, it is argued that cold storage facilities are for the benefit of farmers, and that farmers need them. The truth is that cold storage is not used by farmers as much as it is by marketers who take advantage of the helpless farmer by buying produce at throwaway prices during a bumper harvest and stocking or hoarding it.

Cold storage is systemic to market machinations that played a key role in the global food crisis of 2008, leading ultimately to the present ongoing global economic crisis.

And so it is that the owners of cold storage facilities, agro chemical national and transnational corporations, and their “obedient masters” -- governments -- have only one mantra that they utter ad infinitum: “increase production, increase production, increase production”.

But increasing production has not helped stave off hunger; it has not brought down costs for the consumer; it has not made the farmers’ lives any easier. On the contrary, raising production certainly benefits the market. By increasing production the small farmer is looted and the consumer too is taken for an easy ride.

Take the case of the chilli farmers of Guntur. In 2010, farmers got Rs 7,000 per qtl for the common chilly variety (one farmer in Khamam commanded Rs 10,300/qtl for his special Badiga variety!).

As a result, chilli acreage in the district went up from 65,000 ha in 2010 to 88,000 ha in 2011. That’s when the market moved in for the kill! Cash crop, or corporate agriculture, is nothing but market engineering!

The same story is repeated every time. The caucus of agro chemical companies, agro traders, agro research institutions and governments engineer a situation to incite or lure farmers into growing certain cash crops, fruits or vegetables. Then when the farmers are successfully lured, the caucus ditches them by the wayside.

Farmers fall into this trap every time, in the hope of making quick money. They move from one mono crop to another, from one dream to another, to a nightmare, because they have been manoeuvred not to think or take decisions for themselves. They are cajoled and cheated into giving up their local and traditional forms of holistic agriculture.

What else can the desperate, trapped farmers do? Although we may still refer to farmers as ‘annadata’, in reality they are treated as though they belong to the lowest rung of society.

Farmers no longer enjoy rights over farming and decision-making. That is increasingly the prerogative of the market and its ‘pushers’ in government. They are the ones telling the farmer to ‘grow more potatoes’, ‘grow more tomatoes’. And the farmers oblige.

This season, agro traders, cold storage owners (not forgetting, the potato chip makers) would have bought tonnes and tonnes of potatoes at Re 1 per kg, if not less. As a result, potato acreage in Punjab next year is likely to decrease.

Which is when the marketers, under the pretext of low production, will make a killing off the consumer. If the price of potatoes next year, at this time, is high, it won’t be the farmers who will benefit or get a remunerative price; the market will simply offload this year’s stocks being held in cold storage!

As long as the market continues to dominate agriculture, the plight of the farmer will remain a sorry one. That is the principle and logic of the market.

(Biju Negi is a writer, sustainable agriculture consultant and member of Beej Bachao Andolan) - Infochange News & Features