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Editorial – Farmers and markets

Small scale family farmers in India, though are seasonal producers and produce on a smaller scale, yet contribute to the food security of the nation. Traditionally, these family farmers have been on a subsistence level producing small surpluses to the market. With low production, poor market orientation and lack of value addition capacity, small farmers end up having low bargaining power in the market, receiving low returns for their produce.

Graded tomatoes, ready for market. Photo: S Jayaraj (AME Foundation)

Graded tomatoes, ready for market. Photo: S Jayaraj (AME Foundation)

The challenges for family farmers have increased multifold with the introduction of ‘free trade” policies of the government. Food supply has increasingly fallen under the control of giant multinational corporations. There is an unprecedented level of control on the entire food supply – from production and processing to distribution and consumption of food.Food is no more a source for survival, it has turned into a commodity for profit. By replacing the local traditional food systems with foods which could be traded globally, small farmers have lost control not only on their traditional foods but also on the way the food has to be produced. This has a disastrous effect on family farmers, food security, and the environment.

An equally massive standardisation process has been experienced on the consumer’s side. The political and economic power accumulated by major players in food retailing has led to the imposition of industrialised junk food, the homogenisation of diets and, by the same token, the destruction of local markets through which family farmers have traditionally sold their produce. The growing homogenisation of production and consumption practices is both a cause and a consequence of the emergence of what Jan Douwe van der Ploeg calls the “food empires” (2008), the governance mechanisms for food and agriculture at a global scale. Truly international, their power increasingly extends to the economic and political arenas, and they now capture an ever larger share of the value added along the food chain.

Local alternatives

Vegetable market in a small town
Vegetable market in a small town

In response to changing external conditions, many local alternatives have been emerging to address the issue of marketing for family farmers. Contract farming has been the foremost one tried by farmers in several crops like tomatoes, potatoes, gherkin, baby corn, onions, cotton etc. However, the contractual arrangements with private companies while helping small and marginal farmers overcome constraints in accessing inputs, credit, extension and marketing, has an inherent risk of companies promoting monocultures and intensifying inequitable benefit sharing.Other forms of emerging farmer markets are E-choupal, which in addition to forward integrating farmers into the markets, sells agricultural inputs and other products of the organisations through backward supply chain movements.

Motivated by the success of dairy cooperatives in India, farmers in many areas have tried cooperatives as an institutional form to market produce. Devpasli mandli, a farmers cooperative described in this issue is one such initiative which, besides improving incomes, brought about immense impacts on the social lives of tribal communities in Gujarat (Raghavendra Dubey, et.al., p.21). The cooperative facilitated forward and backward linkages to its members and has been successful in eliminating middlemen in marketing many products like soyabean, black gram, groundnut and vegetables.

Other models of marketing which are operating successfully are the Rytu Bazars in Andhra Pradesh, and Apna Mandi in Punjab, which enable direct interaction between producers and consumers. These markets, supported by the respective State governments are largely benefitting both producers and consumers, inspite of its limitations.(Subhendu Dey, p.12)

Producer companies are emerging as an institution models for efficient marketing by small farmers. Formed generally around a specific commodity, the members benefit through economies of scale. The real challenge in such initiatives lies in organising the small and marginal farmers in improving their production and linking them to better markets through collectivization. MSSRF, (p.6) helped the Muttlur farmers from trader exploitation by helping them form producer organization and enabling them to get a major share of the value chain.

With the emergence of super market chains, efforts are made to link farmers and farmer groups to the MNC retail outlets. In an effort to enhance farmers’ share in the retail market price, the National Agricultural Innovation Project helped mango farmer groups get linked to retail outlets like Reliance, Heritage foods etc. (Dixit et.al., p.9) The farmers realized better price for their produce, initially. The biggest challenge, however, was the ability to adjust to the fluctuating demand. Left with surpluses and lack of storage infrastructure, farmers had to face losses. International experience has also shown that, except for the huge profits raked in by the supermarket chains, organized retail did not benefit small farmers and the consumers too.

Way forward

In a situation where transnational corporations are playing an increasingly dominant role in the world’s agri-food systems, two of the greatest challenges that family farmers face are developing strategies to improve market access and adding value to their agricultural production.

While family farmers are working to improve access to markets, they are also benefitting from an increasing demand from an urban population interested in consuming healthier, good quality, food that is not contaminated by pesticides and is free from GMOs. But for many small farmers who are organic producers, obtaining thirdparty certification is a challenge denying them access to premium prices. For such farmers, PGS has evolved as an inclusive solution for domestic markets and short chains. It is an effective way to develop local markets for organically produced food.

There are many successful experiences that set examples that may be amenable to replication. In general, these successful cases involve developing closer relationships between producers and consumers through revitalising and reorganising local or regional markets, in ways that create space for economically beneficial exchanges and also promote the biologically-diverse and culturallycontextualised production, typical of family farming.

References

Paulo Petersen, Building markets: A challenge for family farming, Farming Matters, Vol 29, 2, June 2013

Van der Ploeg, J.D., 2008, The new peasantries: struggles for autonomy and sustainability in an era of empire and globalization, London, Earthscan.