Are middlemen in agriculture and horticulture exploiting Uttarakhand farmers?

A new APMC Act as well as an agriculture policy launched this year by the Uttarakhand government indicate that the state Government sees the stranglehold of middlemen in the agriculture and horticulture businesses a real problem, something which should be get rid off in order to boost production, and help farmers get best prices.

To attain the objective even better, the Uttarakhand Government is contemplating to use the success of the Basmati Rice Model where farmers are getting as high as Rs 37-38 kg from companies like Kohinoor which are procuring paddy directly from them. In the said model, the Government claims to have successfully removed most of the intermediaries from the basmati rice sector by organizing a series of farmers’ meets.

According to the Uttarakhand Organic Commodity Board, farmers last year got Rs 37 per kg as gate-price for their paddy; with the procuring companies further selling basmati rice ranging between Rs 80-200 a kg in the retail market.

Basmati Rice production in Uttarakhand:

Uttarakhand currently produces 330,000 quintals of basmati rice from 11,000 hectares of area under basmati cultivation, mainly in four districts -- Udhamsingh Nagar, Dehradun, Haridwar and parts of Nainital.

Ten years ago at the time of foundation of Uttarakhand, on November 9 2000, basmati rice was produced only in an area of only 1,500 hectares. Thus in a decade the Basmati cultivation area in Uttarakhand increased about 630 percent.

What ails the ‘After Harvest’ Agriculture and horticulture in Uttarakhand:

But Poor logistics (the facilities in between the harvesting of the crop and the produce reaching the ultimate consumer) like shortage of cold storages; godowns and transport are still seen as major stumbling blocks in the agriculture and horticulture businesses. Notably, in Uttarakhand the wastage attributed to the lack of proper and sufficient logistics is nearly 70 per cent.

Determined to put agriculture in the growth trajectory, the Uttarakhand government, which sees contract farming as the best way to increase agriculture production, has included contract farming as one of the key features of the new agriculture policy. (In the contract farming model adopted by the Uttarakhand Government, top companies like Reliance and Walmart are invited to villages to talk directly to with the cultivators; and pay the cultivators in advance, fully or partially, to cultivate on their lands, the agriculture commodity wanted the company. Keeping the contract manufacturing in mind, the new agri policy of the government also focuses on chakbandi or land consolidation scheme as most of the farm holdings in the hill state are fragmented.

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With agricultural land fast occupied by houses, roads and other infrastructure, the key points and emphasis of Uttarakhand's new agri policy may not be welcomed by all. For instance, increasing Basmati cultivation is good, but such industrial cultivation can make the land infertile over the years (crop rotation increases fertility). In addition, sole focus on one crop totally removes the likelihood of cultivation of other crops as well. That apart, taking companies to the farmers, for contract farming, could kill the Subsistence agriculture in hills -- which is surely an agriculture type best suited for the hill ecology and topography. Hence rather than introducing companies directly to the farmers, the government should focus on establishing agri produce procurement centres near villages, so that a cultivator who produces just a couple of kilograms of high quality organic vegetables or fruits, can leave his/her produce there and get instant payment. Not to say, the Government should ensure that these centres are properly managed and have facilities to properly store the collected produce (like refrigerators, cold storages etc.).
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