Cooperatives the best option to enhance Farm Income - Dr. S.S.Chhina
Indian Agriculture is burdened with 60 percent of population but contributing only 14 percent in the Gross Domestic product of the country, vindicated the contention that population engaged in Agriculture is facing the problem of underemployment resulting into low Income in this occupation and big gap between farm and non-farm Income. The vow of Prime Minister Mr. Narinder Modi to double the farm Income within 5 years is a laudable and it should be bolstered, but it is more important to watch the efficacy of the gladiators employed to accomplish this big target. Land is the most crucial factor for agricultural production for which the supply is inelastic and invariable. Ostensibly the yield of crops can be enhanced to some extent as the law of Diminihing Marginal Returns is more applicable in agriculture, where the yield has already reached at its saturation point. There remain, the other options to escalate the Income of farming households.
While analysing the overall agriculture situation the model of dairy cooperatives already a tested model looks much prudent. In this model a milk seller in the village, after receiving the value of his milk still remains a shareholder in profit, earned by Cooperative Federation at the District, State and National level. Even he is the shareholder in profits earned by export of dairy products that may never be possible by a single farmer. Apart from earning of profits, the model is a big succour to protect the farmer from the monopolistic tendencies of the private companies and dealers of dairy products in the area. The implementation and encouragement to this model was provided by the prescriptives of the Government. But why such a patronage to this most appropriate model is not provided to other agricultural products is inscrutable and inexplicable.
The often quoted quotation of poverty amidst plenty is given in reference to agricultural business, that when there is more of production, there would be glut in the market and prices would fell down and instead the farmer may become rich, his economic position remains invariable. On the other side when there is hike in the price there is small quantity to sell because of less of production. The volatility of prices of vegetables and fruits is so frequent. At the same time there is a big difference in the harvest and the retail price, particularly in daily use products of vegetables and fruits. Some times the retail prices becomes double and even more then the harvest prices. But what is the share of the farmer in those enhanced prices. Nothing, the farmer’s share can be easily created through the cooperative model replicable to the dairy cooperatives.
Basmati is a variety of rice that is grown on the river banks. India and Pakistan holds monopoly of this product. India is exporting Basmati worth thousands of crores of rupees in which the contribution of Punjab is about 80 percent. Suppose the farmer is selling Basmati at Rs.2000/- per qtl. the exporter is selling it at Rs.8000/- per qtl. Albeit the basmati needs the storage, shelling, loading and transportation etc, but what is the share of the farmer in that huge profit earned by the traders. It is difficult for a farmer to perform all these services, irrespective of the size of the holding but the Cooperative Society of the farmers or the Basmati producer’s company can easily perform all such activities to create the share of the farmer in those profits. Small farmers Agricultural Business consortium, the Central Government Agency is encouraging to form the Farm Producer’s Companies, but it had been observed that no significant progress could be made on this front but if the cooperative societies for such functions may be encouraged and helped with guidance, the number of farmers can join it as it has appeared in the dairy cooperatives. Success of the processing unit depends on the concatenation of different factors. The business and professional acumen is required that can easily be provided in this model.
There is a big potential of value addition in the Agro products through Agro-Processing Units. The products of vegetables, fruits, pulses and oil seeds etc have big scope for their processing, but it can’t be put on a farmer, but the cooperative unit on the basis of the product can be formed to create the share of the farmers. Similarly number of products needs long term preservation, that needs the modern stores, equipped with required techniques and instruments, that is out of the reach of the farmer, but cooperatives of the farmers, in their villages could be the best option.
83 percent of the farm holdings are below the 5 acres in the Punjab, they are mainly interested in assured marketing of their products. The research for availing of higher yield of different crops had given very good results those can replace the area under wheat and paddy. The yield of maize that was just 798 kg per hectare in 1960-61 has escalated to 3892 kgs in 2016-17, similarly cotton as 756 kgs from 260 kgs, grond nut to 1920 kgs from 926 kgs Mustered as 1412 kgs from 505 kgs and sugarcane as 813 qts from 340 qts per hectare in the same period. Same better results were obtained in other crops. But the area under these crops has depleted instead of increasing. The area under maize depleted to 1.16 lakh hectares from 3.27 lakh hectares, Cotton to 2.85 lakh hectares from 4.47 lakh hectares. Sugarcane to 88000 hectares from 1.33 lakh hectares and ground nut to only 12000 hectares from 67000 hectares, Mustard to 31000 hectares from 1.09 lakh hectares from 1960-61 to 2016-17. Now the Government of India has announced an new policy of procurement of other products with the collaboration of State Governments. Good results are expected on the front of diversification of crops. Lack of adequate raw material had been a major impediment in the installation of Agro Processing Units for value addition. Here again this model is the best option so to protect the farmers from their exploitation from traders in the value addition business for those crops.
But it is equally important to shift the population from farm to non farm sector, where the cooperative model could be much helpful to generation employment. It is often quoted that cooperatives have failed in India but it must succeed. The cooperative model can dovetail agricultural marketing with processing and it can be helpful to enhance the income of the farm sector.
The Writer is a Senior Fellow of
Institute of Social Sciences, New Delhi
