Wednesday, January 16, 2019

Decoding the farmer’s problems : gap between agriculture farm & retail store

Farmers are fighting for loan waiver, minimum support price, high payout for their produce. If we remember the period of 20-25 back. We find that most of edible things available at local grocery shops, were in the raw form produced by the farmers. End consumer used to buy wheat and after cleaning he used get this wheat process into wheat flour from his local flour mill. Consumption of Jaggery and raw sugar was high in comparison to refined sugar. Most of spices were available in raw form in local grocery shops. Now the situation has changed we find that most of edible items are in processed form. We find very few items in raw form direct from farmers field.

There are two major points, first point that farmers have opportunity to grape some part of the market of processed products and another point that farmers are paying more by purchasing the processed items as 98% farmers are Net buyers of agriculture commodities. Besides this we find a lot of imported processed items in our grocery shops, it means either we don’t have raw items to process and market or out food processing industry is not able to full fill the local demand. Here we are not discussing about precious / costly or occasional items. We are discussing just regular items which we use every day.

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Decoding the farmer’s problems : gap between agriculture farm & retail store
India Produce 80-90 Million MT wheat 40-45 Million MT is processed into the wheat flour. Demand of wheat flour is increasing. Farmers are trying to sell their produce in local market as raw. In another case for example pulses. Demand of clean and graded pulses is increasing in market. People don’t have to time clean and grade it. But farmers are selling the raw uncleaned ungraded pulses to local market. End customer goes for cleaned and graded pulses. Even farmers himself purchase clean and graded pulses. 

There huge opportunity for farmers in local market for process and sell their items. Farmers is missing this opportunity. Due to uncleaned and ungraded quality imported processed food makes spaces in Indian market and east share in demand and create competition. Indian produce 22 MT pulses, and import around 5 Million MT pulses. Imported pulses are in ready to use condition. It is completely cleaned and graded. Indian garlic is not getting the enough price in local market, but Chinese Garlic is creating space after a lot of transportation cost from Chinese agriculture farm to Indian kitchen.

This gap can be of three form, Quality, Quantity and Consumable / sellable form. Farmer can supply good quality product by cleaning and grading, farmers can produce the desired quantity as per demand of local market and in third gap farmers can process the agriculture commodity in consumable form. Farmers should be encouraged for selling of clean and graded commodity. Farmers should explore the local market and they should identify and process what they can sell in local market. 

Consistent quantity and quality are two major issues. IF farmers and govt can work on these issues then farmers can get good share of profit which is going to big industries and exporting countries. Profit share of regular items like Daal (lentil), Dalia (wheat), Aaata (flour), Pickle, Jaggery and other can be go directly to farmer’s pocket.