Open farmers' markets

Better deal for consumers

In the midst of the food inflation period, especially during the time onion prices had shot through the roof, one wondered as to what is the way vegetable prices can be maintained at a reasonable level all through the year. This question assumes importance in the light of the exploitation of farmers as well as the consumers at the hands of the middlemen. 

When onion prices had touched Rs 70/kg in August, a study by Nabard had shown that while farmers were paid Rs 8/kg in the month of April-May, while the traders had made a killing by creating an artificial scarcity. The consumers paid as high as Rs 70/kg for onions in August, and two months later in October the prices had crossed Rs 100/kg.  A newspaper report has computed that the wholesale and retail trade had profiteered by at least Rs 8,000-crore by keeping the prices high in the past 4 months. 

Not only onions, prices of all vegetables had remained on an upswing. No vegetable, except for potatoes, were available for less than Rs 40/kg. Even in case of leafy vegetables, prices had jumped by close to 200 per cent. Interestingly, even in the organised retail chains – like Reliance Fresh, Easy Day, Metro, Big Bazaar – the prices had remained almost at the same level as the open market. These organised retail chains were supposed to remove the array of middlemen and thereby provide vegetables and fruits much cheaper to the consumers. It didn’t work.

Even at the time when open market price of onions was around Rs 100/kg in the open market, prices in the wholesale were around Rs 55/Kg, which means the retail traders had also been making a fast buck. While it is known that the unorganised retail chain too had exploited the situation to sell onions at high prices, I don’t understand why didn’t the organised retail chains sell it at Rs 60/kg or so. If Reliance Fresh, Big Bazaar and the likes had made available onions at Rs 60/kg we would have seen an uncontrollable rush before these shops. There would have been long queues of buyers. 

It is therefore very clear that organised retail is not the answer to food mismanagement. Neither the farmers nor the consumers stand to benefit. The only beneficiaries are the organised retail chains, which have replaced the arhtiyas and the hawkers. They certainly have made huge profits. This shows that the big fish is no different from the smaller fish. Nor do I see much hope in corporate giants like Mahindra & Mahindra who have announced with much fanfare a proposal to diversify from its manufacturing activities. The auto-to-airspace giant now proposes to become a middleman. It plans to kickoff with branded apples – sourced from Kinnaur in Himachal Pradesh – and sell them at its proposed 15 outlets in Hyderabad for a premium of about 10 per cent or so. Fake dream

Expecting the agri-business industry to provide good quality fruits and vegetables at affordable prices will remain a fake dream. Nowhere in the world has the agri-business industry succeeded in doing so. But there is a new renaissance in food delivery, quality of produce and economics that is slowly but steadily taking roots. Enhancing the livelihoods of local producers, and meeting the consumers’ aspiration, food markets are now becoming very popular across the globe. 

Even in America, the growth in farmers’ markets has been phenomenal. From just 370 farmers’ markets that existed in 1970, there were more than 7,000 in 2010. The US Department of Agriculture estimates that in 2007, more than 136,000 farmers were selling food directly to consumers. In Australia, farmer markets too have grown rapidly. Starting from 1999, there are 150 farmers markets in Australia today. As per a survey the farmers’ markets in the province of Victoria alone has registered sales of over $ 2 million every week. 

Farmers’ markets provides farmers and consumers a suitable environment to interact, and that enables farmers to meet the specific needs of the discerning consumers. It enables greater consumption of fresh and healthy fruits and vegetables, and in the bargain reduces the carbon footprint. Since consumers are now becoming increasingly aware of the damage chemical pesticides and fertilizers do to health and immunity systems, the demand for organic food is growing. Moreover, since farmers sell directly to consumers on a regular basis, it eliminates middlemen thereby providing stable prices. 

The concept is certainly not new. It was launched in Punjab as Apni Mandi a few decades back, but has never received the impetus and investments required. In Andhra Pradesh the farmers’ markets are called Raytu Bazaars. In metros like New Delhi, Mumbai, Chennai and Kolkata the weekly bazaars that have been operating for years now stem from the same idea. But because these weekly bazaars have not been provided any permanent space, with adequate infrastructure and sanitation, they have failed to emerge as an alternate marketing hub. These weekly markets are held in open spaces available which are often unhygienic and dirty. 

Farmers market can change the food culture. All it needs is a shift in policy emphasis, with a nationwide thrust on encouraging farmers to sell directly to consumers.