Losses Flow Downward

Vishal Wagh wasn’t upset about the losses inc­urred during the strike when supply of vegetables and milk was blocked from Nashik to Mumbai and other markets. That loss was less than what farmers have incurred over the past decades, he says matter-­of-factly. Counted among the relatively better-off ones, Wagh took market risks into account before deciding to grow capsicum on his 15-acre farm, limiting tomatoes to just one acre. “There is really no way to predict and plan for losses,” he says. “The losses since my grandfather’s time run into crores if we count all the unseasonal rains, hailstorms and bouts of crashing prices. Before this strike, capsicum was selling for Rs 12-18 per kg, while we would have spent at least Rs 10. Now the rate is Rs 30, but it would have doubled by the time you get it.”

Capsicum and tomato are getting good price, but onion has crashed. The Mumbai retailer is selling it at Rs 20 per kg, but onion farmer Dharma Deore says, “We need to get at least Rs 1,500 per quintal (Rs 15 per kg), but are getting less than Rs 500—half the cost of production. Things have been deteriorating over the past year and a half. Government authorities do not plan for procurement, MSP (minimum support price) or control of export-import when they get an idea of how much crop is expected. We are sitting with our produce, hoping for better rates. But fresh produce will come in a month or two and pull the prices further down. The stocks may get spoilt and we will have to just throw it away.”

The challenge is an old one. Perishables cannot be stored and there aren’t any processing units for dehydrating or making puree. Wastage during transport is pegged by farmers and traders at as high as 20 per cent in some cases. By the time the produce reaches the taluka APMC (Agricultural Produce Market Committee) and deals are struck with the commission agent and the trader, add another Rs 10 per kg. The trader then transports the produce to big markets in the metros.

“If we purchase at Rs 20, we may end up selling the produce at anything between Rs 10 to Rs 30, depending on demand and ­supply. That is the risk we incur,” says Nilesh Ghuge, a Nashik-based tra­der who sends the produce he buys from farmers to Gujarat and Raj­asthan. “Nowadays everyone knows prices all over the ­region. There’s little we can do when there is a shortage. I am a farmer’s son too, so I understand their concerns.” He claims he offered to buy from farmers on strike, “to help them out as they would have lost money”.

Hoping for good returns after a year of losses, farmers often end up planting more of the same crop, resulting in a glut. This happened in the case of toor dal in Maharashtra. Removal of commission agents too hasn’t helped the farmer much. “It’s been a year or so since traders started buying directly from farmers, but that hasn’t improved the situation,” says Ghuge. Explaining the possible reason, Ashok Valunj, an onion-potato trader and former director of APMC, says, “It isn’t easy for small farmers to take their produce to the major markets. Mumbai gets its supplies from at least 150 km away—Nashik, Baramati or Satara. Traders purchase from talukas and sell it here, adding labour and transport costs to the price. When wholesalers collect and then pass it on to retailers, their margins are added. People have to consume what they consume, so it is difficult to control prices during shortage.”

Kisan Gujar, a Nashik-based activist from the All India Kisan Sabha, blames NAFED (National Agricultural Coo­perative Marketing Federation) for not taking responsibility of procuring or regulating the traders. “Commission agents are gone, but not the farmers’ dep­endence on traders,” says Gujar. “Small ­farmers worry that the major APMCs will get produce from everywhere and they have no wherewithal to compete. That’s why they can’t hold on to their stock and end up selling cheap.”

The capsicum—on which Wagh spent Rs 10 per kg and earned Rs 20—costs Rs 60 per kg at a vegetable stall in suburban Mumbai. “In this whole chain, we inv­est all the input costs, take the most risk of losses and get the smallest portion of the profit. How is this fair?” Wagh asks.

By Prachi Pinglay-Plumber in Nashik