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A fair deal for India’s farmers

EducationWorld July 05 | EducationWorld
Though only cursorily reported by the increasingly page three obsessed mainstream media, an important war with far-reaching implications for the future of the Indian economy is being waged in urban wholesale markets for control of the growing volume of agricultural produce flowing into the country’s fast-expanding cities. In early June fruit and vegetable wholesale markets in several cities including Delhi and Bangalore, were closed for several days following a nation-wide strike called by trade associations which dominate the APMC (Agriculture Produce Marketing Commission) yards, to which farmers are obliged to bring or send their agriculture produce for sale through daily auction. The burden of the grievance of the powerful cartels which control these markets is that large FMCG (fast moving consumer goods) companies, particularly multinationals- a handy bogeyman of native traders who since the dawn of independence have refined the crude science of short-changing illiterate farmers into a fine art- are by-passing APMC yards and purchasing farm produce directly from farmers. Moreover they are (horror of horrors) writing contract farming agreements with farmers, guaranteeing the latter assured prices. Though relatively privileged urban citizens tend to regard low food prices as an entitlement, right-thinking people need to reflect upon and seek way and means to rectify the persistently unequal terms of trade between urban and rural India. Curiously, despite the contribution of the agriculture sector to the nation’s GDP (gross domestic product) having shrunk from 50 percent in the 1950s to 27 percent currently, the rural economy still supports 67 percent of the nation’s population. This is an indication that neither urban India nor Indian industry has expanded sufficiently to absorb the surplus population of village India. Worse, prices of rural produce have been consistently suppressed by a ban on exports and official discouragement of the growth and development of a viable domestic food processing industry. The consequence of persistent artificial suppression of prices of agriculture produce is the huge and widening standard of living gap between urban and rural India. It’s not that India’s rural citizens are lazy or inefficient. Indeed India’s Green Revolution of the 1960-70s quadrupled foodgrains production and saved the country from mass starvation. Moreover India is the world’s second largest producer of fruit and vegetables. Unfortunately because of faulty government policies an estimated 20 million tonnes of foodgrains become unfit for human consumption and over 40 percent of the nation’s horticulture produce rots on the ground because of lack of downstream cold storage and food processing industries. The annual damage suffered by farmers for loss of horticulture produce is estimated at a mind-boggling Rs.50,000 crore- a loss which has huge consequences for Indian industry as a whole in terms of reduction of mass purchasing power. Quite obviously the status quo which traditional traders in APMC yards are demanding by raising the bogey of multinationals entering the farm sector, is unacceptable. The national interest demands a radical departure from past practice and organised sector corporates including multinationals, ready, willing and able to invest in a strong rural
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