Events & Issues

New Delhi, 4 January 2024   

Inter-State Trade

FARMERS TO GAIN VIA COOP

By Dr. S. S. Chhina

(Senior Fellow, Institute of Social Sciences, N Delhi) 

The words of an English bureaucrat, M L Darling in the beginning of the twentieth century that “Indian farmer is born in debt lives in debt and dies in death” are still relevant even today. He tried to mitigate this problem by evolving and spreading Cooperative Credit societies. But the debt went on thriving rather than depleting. About 74 per cent of farmers in India are having their holding of less than 2.5 acres and 93 per cent are having less than 10 acres. 

According to farm experts, holdings less than 10 acres are not economical. And thus, it’s not worthwhile for these small farmers alone to think of inter-state or foreign trade. Rather, it’s possible only through Farm cooperatives. Serious thought by policy makers must be given to evaluate if Dairy cooperatives can be a viable successful model for the marginalised farmers, why is it not being tried for other products? 

State governments need to do more, be different to be successful. Punjab could be an example. It seeks to take the lead. Recently, it called a meeting of officials of Marketing Boards of various states to promote inter-state trade within the country for the remunerative price of produce to farmers as well as supply of quality products at affordable price to the people. It is prudent and need of the hour. The project can be helpful to enhance the farmers’ income. The already tested and successful model of Dairy cooperatives can be a basis to turn it into practice. 

The state has experienced and realised 9% of Dairy contribution in the state Gross Domestic Product whereas this proportion is only 5% at the national level. The total contribution of agriculture in Punjab’s GSDP (gross state domestic product) is 19 % where 9% of dairy is a significant quantum. The dairy cooperatives have made the village-based dairy farmer a shareholder in the export business of dairy products, which was never possible by a single farmer, irrespective of the size of his farm. 

Apparently, 140 crores of population living in different states is the biggest market for the world, where 17.6 per cent of the world population is residing, and every country is interested to sell its products and services in India. But India, where still 60 per cent of the population is dependent on farming, must be self-sufficient at least in its farm needs. 

India is the largest producer, largest consumer but largest importer of pulses, where it is importing pulses worth 1.5 lakh crores of rupees annually. Similarly, the country is importing edible oils worth one lakh crore of rupees. The agricultural policy of India must focus on being self-sufficient in these two types of farm products. It needs a helpful marketing policy for these two products. 

There are specific reasons for Punjab to lead it. Punjab is the state that contributes maximum to turn the country as food exporter from its position of food importing country. India has been exporting rice to several countries for many years. The farm exports suggest the diversification of crops to raise the levels of employment and income where a major force in farming is underemployed. The per household farm loan is maximum in India. As the state has a variety of Agro climatic regions, it is capable of producing variety of crops, including pulses and oilseeds. 

Though the government has announced the MSP for 23 crops it has undertaken to procure only wheat and paddy, being the main food crops. Otherwise also, it is not easy to procure each and every crop. Punjab has 80 lakh acres under paddy cultivation, but experts suggest reducing it to half. It is possible only with the assured marketing and remunerative prices as well as the insurance of minimum income. And this is easily possible through cooperatives. 

The inter-state trade of farm products is not possible for a farmer. The traders are already doing it. But the farmer has no share in it. Punjab contributes almost 85 per cent in the export of Basmati. The traders are enjoying big profits, but the farmer has no share in such profits. It is imperative to adopt an alternative which assures a share to the farmer in the farm trade. There are fluctuations in agricultural production leading to the rise and fall in prices. This volatility might be affecting the consumers as well as the producer, the farmer. But it never affects the trader of farm products. The rise and fall in prices have no effect on the trader. He continues to enjoy the perpetual profits. 

It has been observed that in certain cases, retail prices of vegetables and fruits are four times higher than the harvested crops. Again, the farmer has no share in it. The situation in Indian farming requires creation of a share of the farmer and that can be done only by cooperative marketing societies based on crops like Basmati, vegetables, fruits and oil seeds etc. These societies may function on the pattern of Dairy cooperatives. 

A big role of the patronisation of the Government is to protect the farmer in the harvesting season and to protect the consumer in the off-season as is being done for wheat and paddy. The Government procures wheat and paddy at the harvest time so that the farmers may not be exploited by the trader and similarly the consumer should be protected in the off-season so that he may not be exploited. This can be done for all the crops through cooperatives with the support of the government. 

India is far behind in processing of agro-products which can also boost farm income. The farmers can easily have their shares in these products again through cooperative processing plants. It was done in Dairy cooperatives, where the dairy farmer remains the shareholder in the profits earned by the export of dairy products. It has been observed that cooperatives have by and large failed in India. But these must succeed and be adopted on the basis of farm products. And there should be no further delay.---INFA 

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