Math of Markets : Rs.2 for Raw and Rs.399 For processed

Approximately since four decades, farm gate prices across the globe have remained static. Adjusting for the inflation rate, the price farmers received for most of the agricultural commodities has more or less remained frozen.

Math of Markets : Rs.2 for Raw and Rs.399 For processed

While farmers were dumping potatoes on the streets and even cold storage owners were finding it difficult to dispose off stored potatoes. Some popular brands, carrying not more than 50 grams of potato chips are priced at Rs 20 per pack. In other words, a kilo of potato, which even in the best of times would fetch a farmer not more than Rs 5 to 7 per kg, but when processed into chips each kg of potato is being sold at Rs 400.

In the case of Tomatoes also, the price in Chhattisgarh has remained at Rs 2 per kg for farmers for most of the season. Their selling prices in New Delhi, Mumbai and Chandigarh is between Rs 18-25 per kg in retail. If searching for the prices of tomato Sauce in online stores like Amazon or Flipkart, A kg of tomato sauce is available for Rs 399. According to industry data, about 5.6 kg of tomatoes are required to produce 1 kg of tomato sauce. Even a kilo of puree costs Rs 68. While the economics may not hold true, it is all basically the trick of cost accounting that inflates the prices of processed foods. This is how a bad food value chain has been operating.

Approximately since four decades, farm gate prices across the globe have remained static. Adjusting for the inflation rate, the price farmers received for most of the agricultural commodities has more or less remained frozen.
Internationally too, the food value chain is equally shocking, If you see how $ 1 worth of bananas grown in Ecuador is distributed through the supply chain. Supermarkets walk away with 40 per cent of the margin, the primary producer- the grower in Ecuador-gets only 0.02 per cent of the final retail price. For dairy products, an American farmer gets only 11 cents out of every dollar worth of milk that is sold in the market. No wonder, hundreds of dairy farms has shut down in America, England and Europe in the past few years. Milk prices are expected to decline in the months to come. The underlying message being crystal clear 'Get Big or Get Out'.





Farmers get only 4.5% from all food sales in England.Professor Tim Lang, who has been working on food and agriculture said, About 100 years back, for every dollar worth of produce sold, a farmer would get 70 cents as his net return.
Farmer's share in every dollar worth of agricultural commodity sold in the market has now been squeezed to approx 4 per cent. This dramatic fall in farmer's net income has shockingly come at a time when Supermarkets have generally replaced the layers of middlemen who were accused of fleecing farmers. In fact, the steep fall in farmer's income has happened in a period when supermarkets have grown in proportion. But in reality the fact is that with the growth of Supermarkets the number of middlemen has equally grown. The only difference being that multi-brand retail acts as an umbrella for a new battery of middlemen like Quality controller, certification agent, processor, designer etc.
Approximately since four decades, farm gate prices across the globe have remained static. Adjusting for the inflation rate, the price farmers received for most of the agricultural commodities has more or less remained frozen.
According to a study conducted by UNCTAD, the prices that farmers received between 1985 and 2005, has not changed. In India, the real income of farmers grew by only 0.44 per cent between 2011 and 2016, says a study by Niti Aayog. In other words, farm incomes remains same. This is true even in America. In an article, Mike Callicrate writes in his blog: "The price of a bushel of corn was $3.58 (equal to 25.40 kg) on Dec 2, 1974. In January of 2018, a bushel of corn sold for $3.56, down two cents from 44 years ago. The farmer who planted his first field of corn in 1974 can expect the same prices for his corn when he retires also. All this while, the prices of seed, land, equipment, fertilizer, and fuel have grown exponentially.
In India, the stressed environment on the farm is clearly visible. While farmer's suicides are being reported every day from one part of the country or the other, the shocking fact is that suicide rate is higher in irrigated areas as compared to the dry lands
With prices historically remaining low, it is certainly the end of road for farmers. But still, I admire their perseverance that They haven't given up and still hoping against hope. Hoping that sooner or later the government will accept their demands for higher prices and set in a market mechanism that will bring "Acche Din". Not realizing that the prevailing agrarian distress in the country is part of a global economic design to keep food prices low. Farmers are being deliberately kept impoverished to keep economic reforms viable. The result is that farming has turned into a highly stressful operation. In the United States, several states have brought in laws to help fight mental stress in agriculture.
In India, the stressed environment on the farm is clearly visible. While farmer's suicides are being reported every day from one part of the country or the other, the shocking fact is that suicide rate is higher in irrigated areas as compared to the dry lands, This is an indication that more risks are associated with intensive cultivation. The more the credit, the more is the probability of a farmer being pushed into a spiral of indebtedness. As Jaswant Singh, a small farmer in Punjab said: "This is no life. Living under debt for the entire lifespan is a curse."

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