In India price of produce is decided by somebody else, not the farmer

More than 15 farmers in in Nalankurichi, Kadayam and Eithamkattalai villages in Tirunelveli district of Tamil Nadu are doing a little more than growing crops.

They have formed a group and are engaged in direct retail marketing of their produce. The idea mooted by Mr. David Raja Beula, Assistant Director of Horticulture, Kadayam, Tirunelveli, seems to have been received well both by the growers and the customers.

Denmark experience

“Named ‘Farmers direct involvement in retail sale,’ I conceived this idea when I happened to vist Denmark for an agriculture summit. I interacted with some Danish farmers who were practising a similar concept.

“The produce was cleaned, graded, and transported from the farm to customers homes based on order over phone. And I thought of trying a similar exercise here and this is just a pilot study which seems to benefit the farmers in the region,” says Mr. David.

Accordingly some farmers were briefed about it and Mr. David also started contacting his friends’ circles to spread the word about this project. Many became interested in buying the produce since they were farm fresh.

A time frame was given to both the farmers and the customers (2-3 months) and farmers briefed about what crops to grow. Mr. David had already made a note of the requirements from customers.

Today the list of buyers and sellers has been steadily increasing and Mr. David needs to work all seven days a week in networking with both sides of the group.

Sundays are busy

Sundays are the most busy days for the farmers in the retail network as they get several visitors who buy vegetables and fruits by the dozen and place weekly orders.

Sometimes Mr. David volunteers to drive the farmers produce to customers. Each farmer in the network is advised to grow a minimum of 4-5 vegetables and fruits to cater to the demand and choice.

Some educational institutions in Tirunelveli have also been quite eager to buy the produce directly from the farmers for their students’ messes.

Says farmer Mr. Susairaj, a member of the network: “I get Rs.8-10 a kg of bottlegourd which I was selling at Rs.2 a kg some months back. My customers are mostly lawyers, doctors and office going executives who place orders beforehand as to what vegetables or fruits they require the ensuing week. I pluck, grade, clean and keep it ready for them,” he says.

Personal experience

Another farmer, Mariapichai, growing ladies finger in half an acre of land is able to earn a net profit of Rs. 27,000 against his normal Rs. 13,000 till three months back.

The additional net profit the farmer received was Rs. 14,400 which worked out to 110 percent additional net profit after introduction of the new marketing strategy.

“India is the only country in the world where the price of agriculture produce is determined by somebody other than the growers (farmers).

Though agriculture is supposed to be the lifeline of a nation’s development, in reality nobody seems to be bothered about it,” says Mr. David.

Two kg of paddy costs somewhere between Rs.8-10. If you mill it into rice you can get one kg of rice. The milling costs, labour etc comes to around Rs.4-5.

The cost of rice must be anywhere between Rs.20-25 but what is the cost in today’s market? One kg costs Rs.44 and goes up tol Rs.50.

Similarly take the case of vegetables. If you buy them at the farmers’ gate in the fields the cost is nearly 6-7 times lower than in supermarkets or shops.

Who benefits?

“The difference in price (from paying to farmers and the price customers give at the local shop) is nearly Rs20-25. Who gets this money? Not the farmers or the buyers, but the middlemen who control everything from transport vehicles to cold storages to fixing the commodity price.

“This retail direct selling concept should break this strong hold middlemen have over marketing”, he hopes.

Through this direct selling method the farmer need not depend on any middlemen. The farmer himself weighs the produce and sells it to customers at a good price. Both seem to be happy as customers get fresh products and farmers get a good price.

But people have to remember that this is just a small pilot project and needs to be scaled up in future, according to Mr. David.

For more details those interested can talk to Mr. David at 09486285704 or email microeconomicsdavid