Before I post anything, I need to announce my intentions as a born again blogger. I started posting a while back on otemporaomores, moved to Zoo Station, posted sporadically and went cold. But much has happened since then and at the urging of the Last Surviving Malayalee Intellectual, I’ve decided to start blogging again. Plus9180 – which, to the area-code challenged, is what you punch in to reach Bangalore, my home – is going to be a distillation of my short-lived previous blog. Apart from posts on my views on Indian politics, the developmental sector, off-the-record statements that politicians I meet often make and the Indian media, there will be links to, excerpts from and plagiarism of literature, cinema, my own writing and restaurant menus.
Today’s Economic Times carries a piece on two big players in the Indian retail market, Kellog’s and Reliance, and their procurement strategies. While this is clearly an early trend – Rs 2,700 for a quintal of wheat, about three times the minimum support price is not a consistently sustainable number by any standards – it points to the other side of the rural procurement debate. About six months ago, when I spent time talking to farmers in a particularly well-irrigated taluk in north Karnataka (rice, bananas and sugarcane), every single farmer was of the opinion that Reliance Retail coming to them to directly source bananas or rice would kill the ‘efficiency’ of the government-regulated procurement system and would cut every agro trader at the district APMC yard out of the picture. But it was evident back then that most of the farmers I spoke to had been coached to say this to some degree – a month ago, I met a Congress leader who said almost exactly the same thing. But there are a couple of indicators which suggest otherwise: For instance, in Madhya Pradesh alone, Kellog’s, which has a first mover advantage, buys 95% of the wheat harvest (3% goes to the APMC yards and the rest to local buyers) and the ET report (which, typically, doesn’t quote wheat producers) suggests that the farmers (obviously) prefer the higher rates to the official minimum support price. Additionally, the BBC, in a recent report on India and Pakistan, illustrated an interesting relationship between the retail store Spinach and tomato farmers in Maharashtra, where, apart from buying directly at higher-than-APMC rates, the stores’ experts worked with farmers to ensure maximum yield, further strengthening the argument that direct access to farmers combined with knowledge-transfer, not only works better, but is indeed preferred by the farmers (I can’t find the link to the story on the BBC site, but will update this post when I do).
Aptly enough, the ET report comes at a time when traders across the country have decided to ’shut down’ 144 APMC yards across the country to protest the recent amendment to the Agriculture Produce Marketing Commitee Act, which allows for private sector players to buy directly from farmers. A few months ago, the Congress leader I spoke to said there would be the ‘inevitable uprising’ of traders when the amendment came into force – opposition-speak for a Congress-sponsored strike. While it is perfectly justified for the traders to go on strike against a move that will most certainly deprive them of a livelihood, I think the solution lies with the absorption of these traders into the private sector procurement process. Much like ICICI Bank co-opted local moneylenders into their rural banking scheme, it would serve the buyer, trader and farmer well if this process were adopted in farm produce acquisitions.
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