Agri Business

COVID-19 lockdown: Farmers turn towards off-market sale of crops

Rutam Vora Ahmedabad | Updated on March 24, 2020

As most APMCs remain closed, farmers resort to the 'sell-from-farm' option

The 'work-from-home' option seems to be applicable even to those working in the agricultural sector, especially during such critical situations.

Farmers, who usually sell their crops through an established supply chain that was set up by the APMCs, have adopted a method to avoid market yards and sell their produces from their doorstep.

As all major states have imposed a lockdown to restrict the spread of the deadly coronavirus, most APMCs have also been closed, bringing the commodity trading to a grinding halt.

However, farmers have decided to explore the option of 'off-market' sale or what they call it as 'sell-from-farm'.

In Gujarat, oilseed, grains and spices producers are, increasingly, turning towards such off-market sales. "This is a beneficial proposition for us on two counts. First we don't incur transportation cost. Second, we don't need to pay commission and other labour charges that we usually do at APMC," Ramesh Patel, a farmer from Visavadar taluka in Junagadh district told Businessline.

Then again, off-market sales isn't a new phenomenon. Experts note that such mechanisms had existed earlier as well and a significant quantity of crops are sold through this mode. "But what is important to note here is that the APMCs are closed at all major markets. There are restrictions regarding the movement also. So in a scenario like this, the farmers have no option but to sit at home with their produce lying on the field. Therefore, more and more farmers are now resorting to this mode of trade because they need money immediately so that by March end, they can repay their loan obligations," said Vitthal Dudhatara, President, Bhartiya Kisan Sangh - Gujarat unit.

For crops such as wheat, oilseeds and spices, the sales have to take place before any climatic adversity strikes the region. "We are fearing unseasonal rains in the later part of this week. This poses a threat to the harvested crop. So it is better that farmers sell-off the crop as early as possible to the buyers," said Dudhatara.

A buyer, who is usually a trader or a wholesaler, remains in touch with a ‘broker or agent’ from the village itself and receives an update about the readiness of the crop. Once the farmer informs the ‘broker’ about his crop being ready for shipment, the trader is informed and then the price as well as other transport arrangements are made. In the entire transaction, the agent or broker receives a payment from the trader while the farmer has nothing to pay.

Patel, who has about five acres of land and grows wheat, informed that selling from the farm-gate was a profit-making proposition for him. Explaining he said, he sold wheat at the rate of Rs 1665 per quintal from his farm-gate recently. "I got at least Rs 200 higher than what I could get at the APMC. In addition to that I need not spend on transport from my farm to APMC and no labour cost is required. So this gives more profit," said Patel adding that APMC cess - a tariff payable to the APMCs of the Taluka - continues to be applicable in off-market transactions.

At a time when APMCs are closed and supply chains are disrupted, the off-market sales model has rescued many farmers, who are often found off-guard and are vulnerable in times of natural calamities or market-driven fluctuations.

Published on March 24, 2020

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