Establishment of a mechanism to ensure a fair remuneration for farmers is urgently needed.
What are problems with marketing agricultural produce?
Only a few staple crops are covered under MSP.
In the absence of a price safety net for non-MSP crops, farmers flood markets on harvest, resulting in a price crashes.
This inflicts financial losses on farmers in the name of free market, although low prices haven’t been observed to increase demand substantially.
The situation however, offers an opportunity for speculators, who hope to profiteer a few weeks later when stability returns, as most items can be stored for a few weeks.
The situation calls for a system correction to provide a mechanism for assuring farmers of a fair return for their efforts.
What could be the way ahead?
Developing a mechanism that determines a farmer fair price (FFP) for all essential non-MSP crops could help.
This is to be done by taking into account, the cost of production plus a reasonable profit, at the beginning of every harvest season.
It could be made mandatory for all negotiations/auctions, for farmer produce to begin at FFP as the base price.
Farmer Producer Organisations (FPOs) could be called up to handle enforcement of FFP and negotiations if desired by farmers.
The FFP mechanism could be designed by the state marketing boards in consultation with all stakeholders.
At the consumer end too, a similar model of FFP can be established which makes the consumer aware of the prevalent price range.
This would keep the speculative interests away as abnormal profiteering would not be a possibility.
