Collectives to change farmers' bargaining power
Wednesday, 1 April 2009
Syed Fattahul Alim
Compared to industry and service, the agriculture's contribution to the economy is only 20 per cent of the Gross Domestic Product (GDP). If considered from the perspective of only GDP contribution at the present level, one may develop a wrong notion about agriculture's real potential, which has not been fully tapped so far. For the impediments lying in the way of its contributing to the economy in a bigger way, it will be necessary to change our outlook about agriculture. In fact, without changing the condition of the tens of millions of farmers, the overwhelming majority of whom are still engaged in subsistence farming, it is not practicable to think of developing the status of agriculture so far as its contribution to the overall economy is concerned.
But how is to improve the economic status of the farmers most of whom are still beyond the reach of the resources of the mainstream economy that the industries and the services consider as their sole preserve? Needless to repeat, it is the perpetual gap between the cities and the countryside that has kept agriculture in a state of, as it were, eternal bondage. Many Non-governmental Organisations (NGOs) are working among the peasantry with their various development programmes including extension of credit facilities. But so far no noticeable change has taken place in their lives. It may at best be said that the status quo is being maintained and that that their conditions might have worsened had such unofficial interventions were not available. However, it is still a matter of debate to utter any final word about the NGOs' success rates in changing the lot of the farmers.
Governments are forever in praise of the farmers, who in spite of their extreme poverty and vulnerability, are feeding the nation and unless battered and dislocated from their home and hearth by the natural disasters, they have religiously been doing more than their bit to present the economy with bumper harvests regularly. The governments thank the farmers every time the nation comes face to face with the danger of severe food shortage, but they pull the economy back from the brink in the end. But when calculating in terms of their contribution to the economy they cut a sorry figure at only 20 per cent to the GDP.
If the proportion of the total workforce of the nation the agriculture employs is taken into account, it would outweigh the contribution in this respect by the other sectors of the economy taken together. In fact, agriculture employs 60 per cent of the nation's total workforce. It is, therefore, an anomaly that the contribution of agriculture in the economy is so low, despite the huge workforce it employs and the vital service of feeding the nation even in times of extreme adversity it renders.
There are some quite mutually conflicting issues that needs to be resolved before agriculture may make its due contribution to the economy and condition of the millions of farmers are improved. The general expectation of the public is that they would be supplied with agricultural products, especially staple crops at a low price compared to other industrial products. That means, despite their vital contribution to the economy as the great fighters of hunger, people in general are not willing to pay for their products of labour at a price comparable to that of the consumer goods from the industries at home and abroad. However, the high price of rice and other agricultural products that one often experiences in the Bangladesh market, does not also help the farmers any way. Because it is the market manipulators and the middlemen who make windfall gains out of such irrational price hike of essential agriculture-based products. But farmers, who grow these products, are again placed at the mercy of that selfsame market where they have to buy these essential commodities from. Though they had to sell those commodities like rice, lentil, rye, mustard, vegetables and so on cheap, they have now to pay a far higher price for those items from the same market. But where will they get this additional money to pay for those commodities and then feed themselves and their children?
In the circumstances, just to talk about improving the condition of the farmers without ensuring a fair price for their products is a time-wasting as well as barren exercise. So, to change the status of the farming community of the country, the primary task would be to ensure a fair price for their products. But the consumers are already paying high price for the farm products. Where does this money then go?
It is well known that the middlemen, by dint of their convenient position to negotiate between the farmers and the market, eat up the lion's share of the value that farmers produce through their hard labour in the field. This is a kind of injustice being done to the farmers throughout the ages.
The first thing to do is to organise the farmers into collectives. The consumers groups would then be able to negotiate with farmers' collectives for fixing the price of the products to be sold to the former in the market. However, peasant cooperatives are not a new idea in the country. Sadly, their long presence notwithstanding, the cooperative movements could not make much headway in the past. One would need to carry out some study to find out the shortcomings that rendered those past attempts at developing the farmers' cooperatives into gainful institutions of the farmers. One basic limitation those peasant cooperatives suffered from is that they were mostly saving groups and their goals were not specific. As a consequence, they fell easy prey to village politics and were misused by the powerful rural elite, the corrupt members of the union council or parishad. Whatever access those cooperative groups had to the resources of the institutions like banks, local government bodies and other government as well as social institutions, the powerful social elites representing those cooperative societies grabbed at those. The larger section of the peasant community, the poor and the middle peasants who had no voice in these forums, gradually lost their interest in these cooperative societies.
It is worthwhile to note that banking on the failure of the cooperative societies, NGOs have made their entry into the village communities of Bangladesh with their promises of changing the farmers' lot. But how far they have really fulfilled their mission is another story.
The country chief of UN's Food and Agriculture Organisation (FAO), Ad Spijkers, in an interview the other day stressed agriculture as the 'backbone' of the economy and stressed bringing the consumers groups on the doorstep of the farmers so that the latter may get fair price for their products. On this score he mentioned the experience of Netherlands in linking the consumers' groups to the markets close the farmers. To this end farmers would need to organise themselves into associations so that they may bargain with the consumers on their doorstep. This is one way of eliminating the middlemen. But the farmers' group will need proper market information to increase their bargaining power. The FAO official also mentioned the role crop insurance can play in protecting the farmers' interest and suggested launching of a crop insurance schemes on a pilot scale, which, however, would be difficult to design and deliver in a situation where the agriculture itself is fragmented, he admitted.
Anyway, these bottlenecks have to be overcome, if farmers are to be helped and agriculture taken out of its feudal bondage. In this context, adequate investments in agriculture by the government as well as the private sector would help farmers produce more, organise themselves better and set bargain price for their products with the wholesalers who would have to arrive at the farm gates to get the supply of their commodities. And, of course, it must not be the other way around. This is how the farmers may gradually begin to bring about a change in their lot by themselves.
The government can build necessary infrastructure, provide orientations about modern marketing, develop information centres for them in their rural setting so that the farmers' collectives may equip themselves better.
In this way, by developing and strengthening the farmers' groups and increasing agriculture's productivity, it is possible for the nation and the entire economy to take a big leap forward.
Compared to industry and service, the agriculture's contribution to the economy is only 20 per cent of the Gross Domestic Product (GDP). If considered from the perspective of only GDP contribution at the present level, one may develop a wrong notion about agriculture's real potential, which has not been fully tapped so far. For the impediments lying in the way of its contributing to the economy in a bigger way, it will be necessary to change our outlook about agriculture. In fact, without changing the condition of the tens of millions of farmers, the overwhelming majority of whom are still engaged in subsistence farming, it is not practicable to think of developing the status of agriculture so far as its contribution to the overall economy is concerned.
But how is to improve the economic status of the farmers most of whom are still beyond the reach of the resources of the mainstream economy that the industries and the services consider as their sole preserve? Needless to repeat, it is the perpetual gap between the cities and the countryside that has kept agriculture in a state of, as it were, eternal bondage. Many Non-governmental Organisations (NGOs) are working among the peasantry with their various development programmes including extension of credit facilities. But so far no noticeable change has taken place in their lives. It may at best be said that the status quo is being maintained and that that their conditions might have worsened had such unofficial interventions were not available. However, it is still a matter of debate to utter any final word about the NGOs' success rates in changing the lot of the farmers.
Governments are forever in praise of the farmers, who in spite of their extreme poverty and vulnerability, are feeding the nation and unless battered and dislocated from their home and hearth by the natural disasters, they have religiously been doing more than their bit to present the economy with bumper harvests regularly. The governments thank the farmers every time the nation comes face to face with the danger of severe food shortage, but they pull the economy back from the brink in the end. But when calculating in terms of their contribution to the economy they cut a sorry figure at only 20 per cent to the GDP.
If the proportion of the total workforce of the nation the agriculture employs is taken into account, it would outweigh the contribution in this respect by the other sectors of the economy taken together. In fact, agriculture employs 60 per cent of the nation's total workforce. It is, therefore, an anomaly that the contribution of agriculture in the economy is so low, despite the huge workforce it employs and the vital service of feeding the nation even in times of extreme adversity it renders.
There are some quite mutually conflicting issues that needs to be resolved before agriculture may make its due contribution to the economy and condition of the millions of farmers are improved. The general expectation of the public is that they would be supplied with agricultural products, especially staple crops at a low price compared to other industrial products. That means, despite their vital contribution to the economy as the great fighters of hunger, people in general are not willing to pay for their products of labour at a price comparable to that of the consumer goods from the industries at home and abroad. However, the high price of rice and other agricultural products that one often experiences in the Bangladesh market, does not also help the farmers any way. Because it is the market manipulators and the middlemen who make windfall gains out of such irrational price hike of essential agriculture-based products. But farmers, who grow these products, are again placed at the mercy of that selfsame market where they have to buy these essential commodities from. Though they had to sell those commodities like rice, lentil, rye, mustard, vegetables and so on cheap, they have now to pay a far higher price for those items from the same market. But where will they get this additional money to pay for those commodities and then feed themselves and their children?
In the circumstances, just to talk about improving the condition of the farmers without ensuring a fair price for their products is a time-wasting as well as barren exercise. So, to change the status of the farming community of the country, the primary task would be to ensure a fair price for their products. But the consumers are already paying high price for the farm products. Where does this money then go?
It is well known that the middlemen, by dint of their convenient position to negotiate between the farmers and the market, eat up the lion's share of the value that farmers produce through their hard labour in the field. This is a kind of injustice being done to the farmers throughout the ages.
The first thing to do is to organise the farmers into collectives. The consumers groups would then be able to negotiate with farmers' collectives for fixing the price of the products to be sold to the former in the market. However, peasant cooperatives are not a new idea in the country. Sadly, their long presence notwithstanding, the cooperative movements could not make much headway in the past. One would need to carry out some study to find out the shortcomings that rendered those past attempts at developing the farmers' cooperatives into gainful institutions of the farmers. One basic limitation those peasant cooperatives suffered from is that they were mostly saving groups and their goals were not specific. As a consequence, they fell easy prey to village politics and were misused by the powerful rural elite, the corrupt members of the union council or parishad. Whatever access those cooperative groups had to the resources of the institutions like banks, local government bodies and other government as well as social institutions, the powerful social elites representing those cooperative societies grabbed at those. The larger section of the peasant community, the poor and the middle peasants who had no voice in these forums, gradually lost their interest in these cooperative societies.
It is worthwhile to note that banking on the failure of the cooperative societies, NGOs have made their entry into the village communities of Bangladesh with their promises of changing the farmers' lot. But how far they have really fulfilled their mission is another story.
The country chief of UN's Food and Agriculture Organisation (FAO), Ad Spijkers, in an interview the other day stressed agriculture as the 'backbone' of the economy and stressed bringing the consumers groups on the doorstep of the farmers so that the latter may get fair price for their products. On this score he mentioned the experience of Netherlands in linking the consumers' groups to the markets close the farmers. To this end farmers would need to organise themselves into associations so that they may bargain with the consumers on their doorstep. This is one way of eliminating the middlemen. But the farmers' group will need proper market information to increase their bargaining power. The FAO official also mentioned the role crop insurance can play in protecting the farmers' interest and suggested launching of a crop insurance schemes on a pilot scale, which, however, would be difficult to design and deliver in a situation where the agriculture itself is fragmented, he admitted.
Anyway, these bottlenecks have to be overcome, if farmers are to be helped and agriculture taken out of its feudal bondage. In this context, adequate investments in agriculture by the government as well as the private sector would help farmers produce more, organise themselves better and set bargain price for their products with the wholesalers who would have to arrive at the farm gates to get the supply of their commodities. And, of course, it must not be the other way around. This is how the farmers may gradually begin to bring about a change in their lot by themselves.
The government can build necessary infrastructure, provide orientations about modern marketing, develop information centres for them in their rural setting so that the farmers' collectives may equip themselves better.
In this way, by developing and strengthening the farmers' groups and increasing agriculture's productivity, it is possible for the nation and the entire economy to take a big leap forward.