Dr Mandeep Azad and Dr Kawardeep
During 1995-2010, over 250,000 poor farmers in India committed suicide, according to national statistics, mainly attributed to their inability to pay debts incurred on agricultural inputs. While India’s soils are said to be failing due to continuous use of chemical inputs, small farmers, desperate to improve productivity, increase the doses of expensive fertilizers and pesticides and end up falling further into debt. Curiously, the desperate situation of farmers remains unmitigated by the demand for fruits, vegetables and grains in urban India where increasing incomes have allowed organized food retail chains. The markets have commission agents, permissible under the APMC, who fix the day’s rate for vegetables and grains according to the quantities available for the day and the demand for particular produce. The system has given rise to exploitation and extortion, with farmers forced to pay commissions to the agent and are often at his mercy because of credit they may have taken from him.”Farmers take loans from the agents and have no option but to take whatever the agents give them
Across the world middle man stands in the way of food security and poverty alleviation .In India, most government initiatives to regulate the middlemen have met with little success: the state agricultural produce marketing committee (AMPC) Acts were introduced during 1960 to guarantee farmers fair prices for their produce by licensing middlemen, but the addition of more intermediaries soon defeated the purpose, forcing farmers to wait months to be paid, usually unfair sums of money. The AMPC acts allow so many middlemen that they have actually institutionalized commercial agents and traders in the sale of agricultural produce and enabled a system whereby small farmers are exploited mercilessly by the agents.
Middlemen are also the fundamental cause of food inflation. Since they hoard both perishable and non-perishable commodities, they create artificial shortages across all food categories like fruit, vegetables, cereals, oilseeds and pulses. The shortages, fuel food inflation and prices shoot up, hurting both rural and urban consumers. There have been efforts in both Asia and Africa to thwart the exploitative role of middleman, bring the producer closer to the end buyer and find a way of changing the subsistence prices realized by primary producer. The first of these have been the effort to bring information about market conditions. In Uganda where more than half of the farmers did not have access to market information, providing information about all the players in the marketing chain allowed bean farmers to make choices and improve their profits.
In India ITC’s E-Chaupal,a virtual market place providing market information about crops was similar effort which got overtaken by the revolution in mobile telephones. In Tamil Nadu farmers have been connected through mobile network which provides daily prices of 130 commodities directly to farmers. Although farmers are now better able to know about commodity prices, still they remain hamstrung and dependent on middlemen by all other factors.
There is another theory that suggests, aren’t middlemen part of the value chain and aren’t they providing essential services in collecting and transporting goods further up the supply chain. Cooperatives clearly can increase the market power of farmers in both buying inputs and selling outputs collectively. But if the cooperatives also has to provide the transportation and other services previously provided by middlemen, costs to the farmer also go up and the net benefit is less obvious. There is also the issue of the extra time involved if individual farmers are responsible for delivering their product to a central collection point. In rural economy, the farmer uses land and his labour power and the middleman provides money to facilitate production. Without middleman`s credit, over 80 per cent farmers would not be able to buy seed and fertilizer. They will not even be able to prepare their fields for sowing if the middleman does not provide money for the diesel. That is how ground realities define the role of the middleman and make him an essential part of the crop cycle.
The bane of Indian agriculture and a large part of the cause for rural food insecurity, particularly that of small farmers is the middleman .Although twenty percent of India’s GDP come from agriculture and almost 75 percent of population is directly or indirectly involved in agriculture, very little of this money ever reaches the smallholder farmers, who constitute 83 percent of Indian farmers. Agriculture for the small farmer is fraught with risks. Inclement weather can destroy a harvest, causing the farmer’s labor and investment to be reduced to unmanageable debt. For most farmers in India every cropping season is a gamble since there is no insurance cover and if weather cooperates there is no guarantee of selling price will cover the cost of production.
In circumstances like this middleman comes in the picture without assuming any risk of standing crop and generates maximum profit. It is estimated that at most twenty percent of the final purchase price of vegetables go to the farmers and rising market price are almost never reflected in the price paid to producers. The vulnerability of farmers to middleman is due to several factors. These include distance from market and cost of transportation. If such is available lack of credit and insurance, lack of storage facilities and ability to hold on to produce, debt burdens and therefore compelled to make immediate sale.
Cooperatives and grower’s associations can help eliminate the middleman by raising the quality of inputs accessible to the farmer and improving linkages between the farmer and improving linkages could also promote investment in natural resources and access to new technologies Although small farmers would benefit the most from such marketing arrangements, they are less likely to be included in these groups because they are often unable to meet the required quantity and quality standards. On the other hand a properly regulated system of middlemen has the potential to improve agricultural situations and the profitability of farms. They could for instance be made to function as agents of technology transfer and value addition to primary produce, dividing profits fairly between farmers and themselves. So far however, government seems to have abetted the misdeeds of middlemen rather than make them accountable to farmers whose produce they buy.
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