Why farmers are angry: a ready reckoner -Vivek Kaul
Quick fixes like loan waivers and MSPs don’t solve the basic problem.
On December 2, 2018, PTI published a story on Sanjay Sathe of Nashik district. Sathe had grown 750 kg of onions this season. He was offered a rate of Rs. 1 per kg in the wholesale market when he tried selling them. He finally managed to negotiate a deal where he was paid Rs. 1,064 for 750 kg. In protest, Sathe donated this money to the Prime Minister’s Disaster Relief Fund. Oh, and he had to spend an extra ?54 to send this money through a money order.
I live in Mumbai, a few hours’ drive from Nashik. The supermarket I buy onions from is currently selling them at Rs. 28 per kg. That’s what the consumer in Mumbai pays for a kilogram of onions, while the farmer in Nashik is unable to sell his produce for even Rs. 2 per kg.
Someone somewhere is making a huge profit of 1,900 per cent on this transaction. It is clearly not the farmer. Even if the retail selling price of onions was Rs. 10 per kg, the margins made by the supply chain (or what ensures that the produce of the farmer reaches the end consumer) would be way too high.
This story is at the heart of what is wrong with farming in India. The supply chain makes too much money and the farmers are not getting adequately compensated for what they produce. Dear reader, you might come around and tell me, “But that’s the way the market is currently operating. If it means onions selling at Rs. 1.4 per kg, then so be it.” The trouble with this argument, as I explained earlier, is that someone along the supply chain through which the farmer’s produce is reaching us is making a profit of 1,900 per cent. And that is atrocious. This is not how any market works.
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