Pic: LiveMint
Shreyas Aabhale is a young farmer from Sangamner in Ahmednagar district in Gujarat. This 21-year-old farmer was aghast when he found that he had earned only Rs 6 after selling 53.14 quintals of onions. In frustration, he sent a cheque of Rs 6 to Chief Minister Devendra Fadnavis. A few days later, another farmer, Chandrakant Bhikan Deshmukh, from Andarsul in Yeola tehsil in Maharashtra was able to sell onions at a price of 51 paise per kg. As a mark of protest, he also sent a money order of Rs 216 to Chief Minister Devendra Fadnavis. This is what he had earned after deducting mandi charges, and the transportation cost.
Both of them were probably inspired by Sanjay Sathe from Nashik in Maharashtra who had earlier sent a money order of Rs 1,066 to the Prime Minister’s Disaster Relief Fund. This is all he had earned, after deducting the expenses he had incurred, selling 750 kgs of onions. He received another shock when the Prime Minister’s Office returned the money order he sent, probably unable to accept the contribution in view of the shock waves the news had already created.
As onion prices are tumbling, a real bloodbath is being enacted on the farms. In Lasalgaon mandi, the biggest trading centre for onions in the country, prices had crashed to Rs 100 to Rs 300 per quintal. On an average, farmers were getting not more than 15 per cent of the cost they had incurred in cultivation. Unable to bear the shock, two farmers in Nashik district had reportedly committed suicide.
In Neemuch mandi in Madhya Pradesh, onion prices had crashed to 50 paise per kg. In several other instances, irate farmers had thrown onion on the streets and some had heaped onions on the roadside giving it free to people passing by. The same is the story for garlic. Last year, the farmers of Hadoti, which comprises four districts of Kota, Bundi, Baran and Jhalawar in Rajasthan, shifted to garlic, a lucrative crop. In March when the crop was harvested, a glut in the market saw prices crash to Rs 1 per kg, making it unviable to even transport the crop to the mandi. Newspaper reports say the abysmally low garlic prices forced five farmers to commit suicide in the same belt.
Subsequently, garlic prices crashed in Madhya Pradesh mandis too forcing farmers to dump the produce in frustration. Some even emptied their bags in wells and ponds.
The plight of onion or garlic growers is no exception. A few months earlier, 65 per cent drop in wholesale prices of tomato in Nashik market forced a number of farmers to dump tomatoes on the roads. This pattern of price crash is nothing new. For past three years in a row, reports of angry farmers throwing onion, potato, tomato and other vegetables like peas, cabbage, cauliflower etc on the streets have appeared regularly. In fact, a video of an angry farmer sitting on a roadside and breaking pomegranate in exasperation one after another for not getting a price that covers up his cost of cultivation has already gone viral. It shows how severe and widespread is the malaise of price crash after a bountiful harvest ruining in the process tens of hundreds of farm livelihoods.
What do you expect farmers to do when open market prices fall to considerably less than the Minimum Support Price? In the month of November alone, prices for farmers across the board dropped between 15 to 25 per cent approximately. Even in the case of paddy, where the government steps in to procure surplus paddy at the Minimum Support Price (MSP), prices dropped by 20 per cent. Some studies have shown that out of the 23 agricultural commodities for which the MSP is announced every year, excess production of 21 crops actually lead to an unmanageable surplus as a result of which the prices crashed.
Attracted by higher prices and favourable weather conditions, farmers put in their best to achieve record production. But their excitement is short-lived. Price crash across the country over the last few years, for instance has left farmers in the lurch. While it is perfectly alright to blame the ad hoc export import policy for the failure to find a stable market for exports, the promise of a Market Intervention Scheme (MIS) has failed to rescues loss making farmers. In fact, the assurance of launching Operation Green – on the lines of Operation Flood – aimed at market intervention for the TOP crops – an acronym for tomato, onion and potato -- at time of a price drop still remains on paper. It is time to think that if an effective cooperative system could be evolved for the highly perishable commodity – milk – there is no reason why India cannot envision a similar strategy for other perishables.
In the US, when private markets fail to rescue farmers from a price crash, the US Department of Agriculture (USDA) had time and again moved in to manage the surplus. In 2016, when there was a crash in market prices, the USDA procured 11 million tonnes of cheese worth $20 million from farmers. “This commodity purchase is part of a robust, comprehensive safety net that will help reduce a cheese surplus that is at a 30-year high, while moving high-protein food to the tables of those most in need,” the then Agriculture Secretary Tom Vilsack had said
Earlier too, the USDA purchased 10 million pounds of strawberries, and directed the procurement to schools as well as to the needy. It purchased $6 million of fresh tomatoes in 2011 to help growers faced with oversupply. I wonder why India’s Ministry of Food and Civil Supplies is unable to buy in bulk tomato, onion and potato from farmers in a similar manner. Why can't the perishables be immediately moved to areas which are food insecure? After all, how can one explain food being thrown on streets at a time when 200 million people go to be hungry every night.
Not that US has been able to address the price sump every time a glut takes place but since 2002, the US Farm Bill provides for income support to farmers under what is called ‘price-loss coverage’ system. In 2014, the income support helped peanut growers emerge out of the crisis emanating from a price crash. Unlike the Market Intervention System in India, which is essentially aimed at consumers when food inflation soars, the US has instead put in a strong safety-net mechanism for farmers. #
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