The perils of plentiful production
Monday, 22 March 2010
Shamsul Huq Zahid
A few weeks back, angry farmers left a large quantity of tomatoes scattered over the road in front of the deputy commissioner's office of a district as a mark of protest against abnormally low price of their produce, only one Taka a kilogram (KG). The incident made news headline in national dailies.
The news also made the Dhaka residents angry because of the fact they were buying tomatoes at Tk.12 a kg when farmers are finding it hard to sell the same.
Farmers are now facing, if not similar, problems with their bumper potato harvest. Space scarcity in cold storages is forcing the growers to sell potatoes at prices lower than their cost of production.
Hundreds of potato growers have been waiting in front of cold storages for days together with the hope that they would be able to find space for storing their produce. The owners of cold storages across the country have hiked their charge by Tk.100 per sack of potatoes to Tk. 260 this season. To make things worse, in many places middlemen, who had booked space in cold storages in advance sensing that there would be a bumper crop this year, are demanding extra amount from the potato growers for releasing their space. Farmers are finding is extremely difficult to meet the demands of both cold storage owners and middlemen.
In many places, circumstances have forced the growers to sell potatoes at prices that hardly meet even half of its production and transportation costs.
Potato growers' sufferings have originated from a bumper harvest this year. According to the Department of Agricultural Extension (DAE) estimate, the potato production this year would be more than 11 million tonnes as against the original target of 7.2 million tonnes. The cold storages, numbering 310, have the capacity to store only 2.6 million tonnes. Usually, a part of the harvested potatoes is consumed in the initial months, farmers preserve another part in their own homes using traditional methods, and the remaining quantity is supposed to find their way into the cold storages.
The present scenario in the cold storage industry has come in contrast to the developments even a decade back. There was a substantial over-capacity in cold storages and good number of them became financially sick and bank loan defaulters.
However, with the gradual expansion of potato cultivation beyond the traditional production areas, the production of the crop has been going up in recent years. For instance, farmers of some northern and southern districts, including Rangpur and Kurigram, Meherpur, Borguna, have taken up potato cultivation in recent years. Now the once-sick cold storages are now basking in more than usual potato production.
Marketing, storage and transportation, thus, have turned out to be major problems for the farmers across the country. Bumper production of any crop often proves to be a bane of their farmers.
Take the case of tomato. There are a good number of agro-processing companies that are marketing bottled tomato sauce. But they have their own contract growers and hardly they buy tomatoes from the open market. Had there been enough facilities for tomato preservation the farmers would not have faced problems with their produce. In that case, the consumers would not have been forced to buy imported tomatoes at prices between Tk. 80 and Tk.100 a kg during off-season.
The problems associated with bumper harvest of any crop turn out to be disincentives for the farmers. Failing to sustain financial losses in the event of bumper harvest in a particular year, farmers tend to switch over to another crop next year, leading to a lower harvest of the crop that was grown in abundance a year back. Such a development gives rise to distortion in prices of agricultural items. It is most likely that many farmers who are in distress with their potatoes this year would chose to cultivate some other crop in next winter.
The government has always been more interested in facilitating agriculture production through adequate and timely distribution of farm loans and inputs at subsidized prices among the farmers. But it has paid little attention to the marketing and storage needs of the farmers.
True, it is not possible for the government to do marketing of farm produces or build up storage facilities at upazila or district level. But it can surely create an environment where private sector people would feel encouraged to create extensive marketing network and build storage facilities.
Another viable alternative could be the farmers' cooperatives. There is no denying that cooperative movement which had demonstrated some potential until late 70s has lost its way because of lack of leadership and irregularities, financial and otherwise. The cooperative movement that originated in Kotbari, Comilla and flourished in many parts of the country has become almost irrelevant now because of the shortsightedness of the policymakers.
But it could be a different story altogether. The shining example is Amul or Gujarat Cooperative Milk Marketing Federation. Born in a sleepy village in the Indian state of Gujarat in 1946, the cooperative still collects nearly 0.5 million litres of milk from 2.12 million farmers everyday and converts the same in branded and packaged products.
Despite all the changes in the country's economic policies, the marketing of agricultural products has remained almost in primitive stage where middlemen or 'fariahs' call the shot. It is time that the policymakers lend a close look at the marketing and storage of agriculture goods and try to organize the farmers through a nationwide cooperative network.
A few weeks back, angry farmers left a large quantity of tomatoes scattered over the road in front of the deputy commissioner's office of a district as a mark of protest against abnormally low price of their produce, only one Taka a kilogram (KG). The incident made news headline in national dailies.
The news also made the Dhaka residents angry because of the fact they were buying tomatoes at Tk.12 a kg when farmers are finding it hard to sell the same.
Farmers are now facing, if not similar, problems with their bumper potato harvest. Space scarcity in cold storages is forcing the growers to sell potatoes at prices lower than their cost of production.
Hundreds of potato growers have been waiting in front of cold storages for days together with the hope that they would be able to find space for storing their produce. The owners of cold storages across the country have hiked their charge by Tk.100 per sack of potatoes to Tk. 260 this season. To make things worse, in many places middlemen, who had booked space in cold storages in advance sensing that there would be a bumper crop this year, are demanding extra amount from the potato growers for releasing their space. Farmers are finding is extremely difficult to meet the demands of both cold storage owners and middlemen.
In many places, circumstances have forced the growers to sell potatoes at prices that hardly meet even half of its production and transportation costs.
Potato growers' sufferings have originated from a bumper harvest this year. According to the Department of Agricultural Extension (DAE) estimate, the potato production this year would be more than 11 million tonnes as against the original target of 7.2 million tonnes. The cold storages, numbering 310, have the capacity to store only 2.6 million tonnes. Usually, a part of the harvested potatoes is consumed in the initial months, farmers preserve another part in their own homes using traditional methods, and the remaining quantity is supposed to find their way into the cold storages.
The present scenario in the cold storage industry has come in contrast to the developments even a decade back. There was a substantial over-capacity in cold storages and good number of them became financially sick and bank loan defaulters.
However, with the gradual expansion of potato cultivation beyond the traditional production areas, the production of the crop has been going up in recent years. For instance, farmers of some northern and southern districts, including Rangpur and Kurigram, Meherpur, Borguna, have taken up potato cultivation in recent years. Now the once-sick cold storages are now basking in more than usual potato production.
Marketing, storage and transportation, thus, have turned out to be major problems for the farmers across the country. Bumper production of any crop often proves to be a bane of their farmers.
Take the case of tomato. There are a good number of agro-processing companies that are marketing bottled tomato sauce. But they have their own contract growers and hardly they buy tomatoes from the open market. Had there been enough facilities for tomato preservation the farmers would not have faced problems with their produce. In that case, the consumers would not have been forced to buy imported tomatoes at prices between Tk. 80 and Tk.100 a kg during off-season.
The problems associated with bumper harvest of any crop turn out to be disincentives for the farmers. Failing to sustain financial losses in the event of bumper harvest in a particular year, farmers tend to switch over to another crop next year, leading to a lower harvest of the crop that was grown in abundance a year back. Such a development gives rise to distortion in prices of agricultural items. It is most likely that many farmers who are in distress with their potatoes this year would chose to cultivate some other crop in next winter.
The government has always been more interested in facilitating agriculture production through adequate and timely distribution of farm loans and inputs at subsidized prices among the farmers. But it has paid little attention to the marketing and storage needs of the farmers.
True, it is not possible for the government to do marketing of farm produces or build up storage facilities at upazila or district level. But it can surely create an environment where private sector people would feel encouraged to create extensive marketing network and build storage facilities.
Another viable alternative could be the farmers' cooperatives. There is no denying that cooperative movement which had demonstrated some potential until late 70s has lost its way because of lack of leadership and irregularities, financial and otherwise. The cooperative movement that originated in Kotbari, Comilla and flourished in many parts of the country has become almost irrelevant now because of the shortsightedness of the policymakers.
But it could be a different story altogether. The shining example is Amul or Gujarat Cooperative Milk Marketing Federation. Born in a sleepy village in the Indian state of Gujarat in 1946, the cooperative still collects nearly 0.5 million litres of milk from 2.12 million farmers everyday and converts the same in branded and packaged products.
Despite all the changes in the country's economic policies, the marketing of agricultural products has remained almost in primitive stage where middlemen or 'fariahs' call the shot. It is time that the policymakers lend a close look at the marketing and storage of agriculture goods and try to organize the farmers through a nationwide cooperative network.