Why do farmers resort to dumping produce?

Farmers are the worst hit due to the coronavirus lockdown, unable to harvest crops and sell the harvested produce in the market. The dairy farmers of Assam and Karnataka; and vegetable, fruit and flower growers of Tamil Nadu, Maharashtra, Punjab, Haryana and West Bengal have left their produce rotting in fields or dumped on the roadside. Similar reports continue to pour in from other States as well. Disruptions in the agricultural supply chain in the aftermath of the nationwide lockdown has left the farmers with no option but to dump their farm produce.

When agricultural innovations for increasing crop production are being encouraged on a large scale, why farmers are always left in the lurch at times of bumper harvest? What are the underlying factors that push the farmers to take such an extreme step?

Market behaviour

During normal conditions, farmers manage their produce by dividing it between self-consumption, using it as seeds for future cultivation, selling it at the Minimum Support Price (MSP) under the procurement schemes or in the Agricultural Produce Market Committee (APMC) markets. But, the situation changes significantly when good monsoon results in a bumper harvest. When output increases by 10 per cent, prices collapse by more than 10 per cent and consequently the income from the crop for the producer falls.

However, the fall in prices due to bumper harvest is not passed on to the consumers. Somewhere between the consumer and the producer, the effect of this fall is absorbed as larger profits by the middlemen. When the farmer has taken all the efforts, why should someone else reap the fruit, so to speak?

As and when a bumper harvest occurs, large quantities of produce arrive in quick succession; government agencies are unable procure the excess production as they are constrained by limited buying capacity. Even in normal conditions, except paddy and wheat, the level of procurement is abysmally low in other mandated crops; it’s less than 5 per cent of the production in most pulses and oilseeds.

Vegetable and fruit growers, in particular, have allegedly stated during the ongoing lockdown that besides transportation and procurement bottlenecks, the absence of any cold storage and processing facilities has left them with no option but to dump their produce on the roads. Are we deliberately treating the farmers as mere agents of production all along?

Lack of technology transfer

The poor state of agricultural marketing in India has been reported by a number of committees, including the Royal Commission of Agriculture way back in 1928, the National Commission on Agriculture (1976) and the National Commission on Farmers (2006). Even today, the share of farmers in consumer’s price is very low — even under normal market conditions. According to the Dalwai’s Committee on Doubling of Farmers’ Income, it generally varies only from 15-40 per cent. The state of the farmers becomes very miserable during a bumper harvest, when they either dispose the stocks at throwaway price to middlemen or dump it on roads.

Given the fact that the country has state-of-the-art facilities to process fresh fruits and vegetables, and value addition in the form of chutneys, pickles, jams, juices and sauces, farmers can definitely make huge fortunes out of the bumper produce. When there is a separate Ministry for Food Processing and many research institutes such as the Central Food Technological Research Institute, National Dairy Research Institute, National Research and Development Centre, then why are no concerted efforts taken to prevent the farmers from dumping their surplus farm produce?

The Committee of State Ministers in charge of Agricultural Marketing to Promote Reforms (2013) had underlined in its report that cold storage units exist in less than one-tenth of the markets and grading facilities in less than one-third. With these constraints, how can we manage farm produce both during bumper harvest and a pandemic like the coronavirus?

The need of the hour is to not only to build high-tech storage facilities, but also to manage them efficiently. Some estimates point out that harvest and post-harvest losses account as much as 40 per cent of farm production in India. A mechanism should be established such that the crops and their condition in the field can be quickly identified and remedial measures can be implemented. In the absence of such a mechanism, post-harvest crop losses would continue to remain very high. Better road connectivity and markets closer to villages also need to be established.

If all States provide their whole-hearted acceptance to the proposed model Agriculture Produce Marketing Committee (APMC) Act, 2017, then all markets can be integrated. This will benefit the farmers immensely as the surplus produce in one region can be transferred to deficit regions.

Narayanamoorthy is former Member (Official), Commission for Agricultural Cost and Prices, and Alli is Senior Assistant Professor in Economics, Department of Social Sciences, Vellore Institute of Technology. Views are personal

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