Release date: 22/04/2021
V. Ramanatha Rao, C.L. Laxmipathi Gowda, S.V.R. Shetty, and M.J. Vasudeva Rao,
Co-founders, Global Research for Development Support Ventures
While smallholder farmers (SHF, defined as owning less that 2 ha of land) constitute a large segment (86%) of the farming community in India, at present they have a negligible role, if at all, in deciding the price of what they produce. In our view, they should be enabled to play a more active role. We present a brief picture of the scenario as it exists, in order to justify our view.
SHF and marginal farmers constitute 86.2% of all farmers in India, but own just 47.3% of the arable land, according to provisional numbers from the 10th agriculture census 2015–2016 (https://www.mdpi.com/2071-1050/12/9/3751). Their average holding is declining (1.08 ha in 2015-16, down from 1.15 in 2010-11 (http://agcensus.nic.in/document/agcen1516/ac_1516_report_final-220221.pdf). With this meagre natural capital, a typical farmer is trying to produce enough food for his/her family, while also feeding the country.
Most of them are subsistence farmers, but a few have a small surplus to sell, the proceeds of which are not adequate to financially sustain their families. And even when they are in a position to sell, they have very low bargaining power, and they are thus at the mercy of the market forces (including issues of supply vs. demand), leading to a much lower price realization for their produce. Occasionally, they are also hit hard by vagaries of the weather, such as drought and flood, and by pests. Most SHF are also not able to take advantage of crop insurance schemes, for various reasons.
It is important to remember that what they produce is our most important product—food; as such, society (the general public, administrators, policymakers, etc.) need to view them with the respect that is their due. Farmers produce not only for themselves and their neighbours, but they also contribute to the global food basket and its strategic reserves. Farming is also a means of livelihood or employment for the farmers’ family members and other hired labour. In India, farmers, both small and large holders, have been hailed as “Annadata” (provider or giver of food), and slogans like Jai Kisan (victory to farmer) have been aired. Despite such recognition, when it comes to getting an appropriate and fair deal/price for their produce, farmers usually get the short end of the stick!
While farmers are a key to ending hunger and malnutrition worldwide, they are increasingly facing barriers to profitability, especially the SHF, who constitute the most vulnerable section. It is inexplicable that a farmer is the only ‘producer of goods’ who has little or no say in determining the price for what she/he produces!! Like all other producers, farmers too invest their capital and labour (most often the entire family, with the women folk playing a double role as homemakers and farmers) and should be able expect a fair return on their investments.
We believe that, like any other producer of goods that are marketed, farmers should have a voice in determining the price of what they produce. It is only ethical that they do so. We are aware that farmers do occasionally voice their opinions in determining prices, as in the following instances: (1) in some States of India, their costs of production are taken into account before arriving at the minimum support price; and (2) in those exceptional cases where a farmer is able to sell directly or via contract farming, etc. But these hardly alter the general picture.
What we propose is that consulting farmers should be made a general principle in determining the price of their produce. India could take the lead in this matter, like it did in recognizing farmers’ rights to crop varieties, and show the world the way forward. Enabling farmers in this manner would help build confidence among the SHF, and it could make them progressively less dependent on State subsidies and support, which is a desirable objective in the long run.