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SUB OPTIMAL PRICES FOR FARMERS

 markets #agriculture

Sub Optimal Prices for Farmers
Dinesh K Kapila
The farmers are agitating about the low prices of mustard and potatoes. I am getting multiple views. One medium size farmer from UP, Eastern UP, says he and fellow farmers prices got optimal prices for the vegetable crop and sugarcane.
Now as regards the MSP for grains, PSF ( Price Stabilisation fund) for vegetables like onions, potatoes etc. I am checking but it seems the Govt didn’t allocate funds in the last budget and this year’s budget under PSF. This was envisaged to be a safety net for the fall in prices, glut and predatory practices by unscrupulous traders. And what about the EMarkets. How are they faring. I at least have feedback which suggests it’s not really functioning the way it was envisaged.
Are such markets ensuring better prices for farmers ( real farmers ), not traders or middlemen in this regard ?

The IT oriented administrators tried to create a grand narrative, pardon the expression, by talking of emarkets. This is quite evident. And the Govt has not allocated any paise under PSF. The schene which was understood to be quite optimal as per feedback was stopped suddenly.
This is one view.
Continuing with the thought on Markets and Agriculture Prices. The Minimum support price is feasible . Mr SS Johl himself criticised when the NCF( Swaminathan Commission ) suggested over and above 50% after all costs factored in. However, we have to see the state finances also. Punjab is now a nearly bankrupt state fiscally. Hence, a practical and feasible alternative is best solution. The Bhawantar Scheme of MP is a good blend of state and market - driven solution.
The traders did game the system and caused problems and concerns. The price points are also a concern.
But the traders will be there. It’s our model. But we should have our own regulatory system. We must introduce this or any other mode and give it a fair trial - it can be initiated in a few states and then conclusions made after consistent monitoring and evaluation. My thought is there is this one option - Bhawantar Scheme. As referred to, it may not be the best. But it would be better if we effectively regulate the traders and commission agents who play up emotions,this is certainly possible unless the Govt and political figures are not sold out to them. Or give in to pressure.
The other aspect is regulation to ensure reduction in monopolies and cartelisation. And an effective local level dispute resolution. These will have to come if we open up the markets.and allow start ups more play., Many start ups plan the chain from supply of inputs to tie ups with processors. Its a good concept but what would be the gain to the farmer as the start up still operates within the same operating ecosystem. This requires careful planning and regulation. Ideally, formal groups of farmers have to evolve to build economies of scale. And own grading units too. .   
And effective groups of farmers are a must, FPOs / FPCs are the way as also JLGs. FPCs are largely experimental as of now. Cooperatives are a rational measure but the farmers have to own them, not by departmental fiat. This would be a major measure plus of course a measure of zonal planning. 
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