Money for nothing, pumpkins for free
BULANDSHAHR/NEW DELHI : When Surendra Panwar speaks, his words are steeped in politeness. For instance, when asked whether it was his farm, Panwar’s response was, “Yes, but it belongs to you as well”. That said, on 1 May, when this reporter spoke to him at a lush green pumpkin field in Prangarh, a village in Uttar Pradesh’s Bulandshahr district some 80 km from Delhi, the tension was palpable.
Panwar, a well-to-do farmer who also dabbles in vegetable trading, was sweating despite the pleasant evening breeze. He was plucking the best pumpkins to send to friends and family. Some days back Panwar asked fellow villagers to pluck as many they needed. For free. “Inside my head I never planted this crop,” Panwar said, more to himself than to me.
If Panwar had sent the harvest to the wholesale market in Delhi’s Ghazipur mandi, it would have sold at less than ₹1.5 per kg. That would not cover the cost of plucking and transport, let alone growing expenses.
Panwar’s loss from an acre of pumpkin is capped at a modest ₹30,000 since he owns the land. For those farming on leased land, the losses are much higher. For instance, 50-year-old Sukha Saini from Sikandrabad tehsil of Bulandshahr took 10 acres on lease at a hefty ₹300,000 to grow spinach. Traders are now offering Saini around ₹5 per kg, just enough to cover the cost of harvest and transport.
“At these prices I cannot recover the land rent and growing costs”, Saini said, adding that half the harvest was lost to a freak hailstorm last month.
As India announced a stringent lockdown more than 40 days ago to control the spread of the novel coronavirus, farmers who grow perishables like fruits and vegetables have been among the worst hit. Farm gate prices plunged due to a supply disruption—from transporters quoting a higher price to ferry the harvest and mandis scaling down operations—coupled with a fall in consumer demand and petty retailers disappearing from the roadside.
Rising numbers of covid-19 cases in large agricultural markets like Azadpur in Delhi and Koyambedu in Chennai poses an additional risk—as mandis which facilitate aggregation and sale of produce limit their operations, farmers will be left with little option but to dump their harvest.
The disruption in the food supply chain has also rekindled an old debate: reforming agriculture markets and reducing the dependence on trader cartels in regulated market yards. During this ongoing crisis, states like Madhya Pradesh, Uttar Pradesh and Maharashtra have again promised to deregulate markets and allow direct purchase from farmers.
The idea is to allow large buyers—like food processing companies and retail chains—to purchase directly from farmers. This is expected to reduce the number of agents in the supply chain and help farmers capture a higher share of the consumer price.
The all-important question is, will this attempt at reforms have staying power in the post-covid-19 world?
For now, in Bulandshahr, while some are distributing their harvest for free, others like Vikrant Chaudhary have ploughed their spinach back into the field with a tractor.
For those growing yellow carrots, the largest commercial crop in these parts, the nationwide lockdown in force since 25 March has spelt disaster.
“Carrots are mostly used by hotels and the catering industry which are shut. So the volumes we supply fell by over 70%,” said Subhash Deswal, co-founder of Sunshine Vegetables, which contracts farmers to supply carrots at a predetermined price. The company which boasts of a five-storey cold storage has over 5,000 tonnes in excess stocks, looking for buyers.
Small carrot growers are now selling the crop for a measly sum of ₹2-3 per kg. At times even that is elusive.
Last Thursday, a group of farmers from Sheikhpura village sent 200 bags to the Ghazipur mandi in Delhi. Not a single piece was sold. The group lost the ₹6,000 spent in transport, plus the money spent on plucking and washing the carrots. What’s more: they had to pay the trader to dispose the unsold carrots. “There are days when only pig farms buy the harvest to feed animals for a rupee a kg,” said Bharat Singh, a farmer from the group.
While farmers are selling carrots for ₹2 per kg or spinach for ₹5 per kg, a few hours away in Delhi and Noida, consumers were paying over ₹30 per kg. The situation is similar for tomatoes and watermelon from Madhya Pradesh or grapes and mangoes from Maharashtra. Social media is full with stark images: cows munching fresh strawberries or goats feeding on green capsicums dumped by a farmer in Punjab.
“Social media messages urging households to stay away from vegetables, mostly sold on push-carts by Muslim retailers, also led to a drop in demand in urban areas of Uttar Pradesh,” said Sudhir Panwar, professor at the Lucknow University and former member of the state planning commission.
Sales via twitter
The scale of the tragedy is staggering. Farmers in India grow more horticulture crop (estimated at 313 million tonnes in 2019-20) than they grow grains and pulses. India is the second-largest producer of perishables globally and a leading exporter of grapes and bananas. The horticulture sector contributes a third to India’s agriculture gross domestic product (GDP). Yet the vegetable grower faces recurrent price risks unlike the paddy or wheat farmer who can store the produce to sell at a later date.
Except for potatoes and onions which can be stored both at the farm gate and consumption points, the small vegetable grower and the well-to-do orchard owner have been hit equally by the lockdown. Few lucky ones managed to beat the lockdown blues to an extent—such as a handful of growers’ cooperative from Maharashtra, which now supplies directly to apartment complexes in urban areas.
Or, a desperate cabbage farmer from Karnataka’s Chamarajanagar district, Kannaiyan Subramaniam, who took to Twitter to scout for buyers. Subramaniam is saddled with a stock of 100 tonnes of cabbage. As the supply chain was disrupted by the lockdown, local traders offered Kannaiyan between 50 paisa to a rupee for a kg of cabbage, compared to the average farm gate price of ₹11.50 per kg last year.
He was relieved when WayCool Foods, a farm supply and distribution company, reached out with an offer to buy 8 tonnes. Kannaiyan received a modest ₹5.5 per kg and support for transporting the produce to Coimbatore in Tamil Nadu.
“The heavy handedness with which the lockdown was enforced in the first week led to a fear psychosis for everyone in the food supply chain… even now wholesale markets and retailers are only operating for limited hours. If this situation continues, I may not plant the next crop,” Kannaiyan said.
On a brighter note, he adds, the crisis has opened up a “direct dialogue between farmers and consumers.” Kannaiyan is now getting calls from housing societies in Bengaluru but he is unsure if they can absorb the large volumes.
“The existing crisis in perishables is a reminder that India needs a mature supply chain. The goal should be to open up multiple channels for farmers to sell their produce without dismantling the existing mandi structure,” said Karthik Jayaram, chief executive officer (CEO) and co-founder of WayCool Foods.
On 2 May, Prime Minister Narendra Modi chaired a meeting which brainstormed how to unshackle markets to ensure a fair return to growers. It also discussed ways to make agricultural trade transparent and strengthen farmer producer organizations (FPOs) and the electronic National Agriculture Market platform (eNAM).
But none of this is breaking fresh ground—more like banging against an ancient wall.
India’s agricultural markets are fragmented and governed by state regulated by Agricultural Produce Marketing Committees or APMCs. These regulated markets are usually opaque, where prices are determined by a cartel of traders who abhor entry of new buyers.
This, coupled with the presence of a large number of intermediaries in the food supply chain is the reason why consumers often end up paying many times the price a farmer receives.
Despite repeated attempts to weaken them, APMCs have survived—no competing agency could aggregate large volumes of produce and also help in price discovery, no matter how imperfect the process.
Attempts to put in place a robust network of FPOs where farmers can collectively bargain for better prices did not take off as they are starved of capital and market access. The eNAM platform which promised a farmer, say from Tamil Nadu, access to a buyer in Uttar Pradesh, failed as governments were slow to set up assaying and grading labs and a reliable dispute resolution mechanism (when farmers do not receive payment for produce sold online, or traders complain of poorer quality that what was promised).
What of the promises by some states to deregulate markets and allow direct purchase from farmers? “The problem is that the scale of organized retail in India is too small for back-end sourcing from farmers to work. This is why organized retailers (such as Reliance Fresh or Bigbasket) end up relying on mandis,” said Pravesh Sharma, former IAS officer at the agriculture ministry who was instrumental in nurturing a network of FPOs across India.
According to Sharma, who now heads an agritech startup called Kamatan, the hackneyed talk on reforming agricultural markets is mere optics. “We keep discussing market reforms during a crisis but there is no political will to see it through. What we need is to develop a farmer-to-consumer value chain for perishables, learning from the success of dairy cooperatives like Amul.”
Fifty-year-old Kiran, a widow and a mother of two dependent children, was readying for lunch outside a carrot sorting facility when I met her in Bulandshahr last week. The greens, a bowl of fried okra and cucumber to go with wheat flat bread, were a break from the usual potatoes and chillies. “A farmer gave it to me for free,” Kiran said.
But the free vegetables, Kiran realizes, is also hurting her. Abundant labour and low farm gate prices have reduced daily wages by a third, to ₹200 now. “In the last month I have managed to find work for ten days,” she said.
Another daily wage earner Babita Kohli who lost her job as a housemaid in the Sikandrabad town was busy harvesting carrots with her two children. Unused to the work which requires a certain skill, the three together manage to earn just about ₹220 in a day. “I don’t know how we will survive after the harvest season ends,” she said.
That question lingers heavily on the minds of the landless who have managed so far by harvesting wheat and vegetables. There will be a lull before kharif planting begins with the onset of monsoon in June, and a long one till summer crops are harvested in October.
At the Dalit hamlet in Prangarh, residents were also worried their names have been chucked out of the subsidized food scheme. Bilium, a gregarious old man, was dismissive that the coronavirus will ever reach them. “We roast ourselves in the sun every day,” he said, referring to a widespread (and unscientific) belief that the virus cannot survive when exposed to sunlight. “But without work, we can only afford a frugal meal of goat meat and rice,” the old man joked as his young son showed the blank pages of the food subsidy card.
Before leaving Bulandshahr, I asked Surendra Panwar—the farmer who distributed pumpkins for free—if he will continue planting despite the crash in prices. Yes, of course, he said. Ummeed pe duniya kayam hai. Hope is all that is left.