There is a move by the Fadnavis Government to remove the APMC and allow the farmers to sell directly to the end customer. The MSM says this will increase inflation – because of the TRADER’S STRIKE and the internet media says that the farmer’s income will go up 300 to 400%.
The truth obviously lies somewhere in between. The trader was doing the following functions:
- going to the farmer and buying the vegetables
- taking responsibility for the transport (from the mandi to the urban centers)
- storing from farm to the retail shop chain
- making it available to the retailer in lots of his requirement
Of course he was incurring interest costs, fuel costs, rent, labor and of course he had a MARGIN.
Now the government cannot wish away all the costs. They can ONLY wish away the margins. Suppose one trader was buying vegetables at Rs. 5 and selling it at Rs. 30, our great journos will talk about the EXHORBITANT margins for the trader. They keep forgetting that perhaps there was Rs. 15 of costs while doing the transaction. Then there was the occasional theft, accident, decay..against which the small trader had no insurance. If there was insurance available it was very very expensive and claims never reached the farmer.
Now the farmer will come with his produce to the place of sale. Given Indian conditions, he will have to take a bus – and the bus will not allow him to carry more than 20kgs MAXIMUM. What does he do with the balance produce?
What about the touts who will ask him for bribes on the way? some uniformed and some ununiformed? who will pay or negotiate with them? These days if they see value, they start at 5k.
Will the farmer have the energy to do this every day or who will attend to his farm?
So do read this article (see the link below) – and do ponder about
- you can eliminate the wholesaler, but cannot eliminate wholesale related functions
- prima facie farmer and consumer will benefit, but it will not be so simple
- 1000 farmers coming from Nasik to mumbai to sell the same veggies looks difficult !!
- solutions are different..they will emerge..
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