Farmers lose out

FEW would be surprised by the revelation that farmers in India get only about one-third of the final selling price of fruits and vegetables. Many would put the figure even lower than what a Reserve Bank of India (RBI) research paper indicates. Wholesalers and retailers pocket almost two-thirds of what consumers pay. For the three principal crops, the study puts the farmers’ share at 33 per cent for tomato, 36 per cent for onion and 37 per cent for potato. The stark anomaly is attributed to the lack of an efficient supply chain and marketing system. The perishable nature of the crops, shortage of storage facilities and the large number of intermediaries are persistent bottlenecks. The bust-and-boom cycle symbolises the structural inefficiencies. Farmers resort to distress sale and even dump crops in anger when prices drop far below production costs. In the lean season, when the prices shoot up, they do not benefit much.

In contrast, egg suppliers get 75 per cent of the final price. For poultry meat, farmers and aggregators receive for 56 per cent of retail price. For cereal and dairy products, farmers receive around 70 per cent. Studies over the years have advocated more investment in research and development, irrigation and logistics. The RBI paper suggests reforms in marketing of vegetable and fruit crops, and their necessity cannot be overstated; it is imperative to create more storage facilities. A pragmatic outlook is the way forward. The authorities must take note of the farmers’ concerns — the push for private mandis, for instance, remains a contentious issue — and build consensus on systemic changes.

It must no longer be business as usual. Tying demands such as assured price in political knots is to no one’s advantage. Work out bipartisan arrangements based on the simple logic that the farmer must not lose out.