Cooperatives — answer to farmers’ woes
Large cooperatives for key crops encompassing production, processing and marketing can bring gains to producers, consumers
whereby the interests of both producers and consumers are taken care of.
For this to happen, the owner and operator of this entire value chain have to be both producers and consumers. That farmers are also consumers supports the foundation for this structure as commercial interests then converge to not protect both producers and consumers.
Among producers, the category which needs protection primarily are small and marginal farmers (owning up to 2 hectares); among consumers, it is only those whose income levels are low (who can be identified on the basis of colourcoded ration cards) who deserve essential items at “fair” rates.
A large cooperative network, that encompasses producers, processors and market players, will economise the cost of intermediation and bring gains to all. Existing cooperatives can be refashioned towards this end by enlarging their scale and scope. As for subsidising poor consumers, the government can pay the difference.
THE WAY FORWARD
Thankfully, such a structural solution is emerging now with a reenergised cooperative sector making its presence felt. The creation of a separate Ministry for Cooperation offers a beacon of hope.
Early signals are that the longstanding problem of finding a “fair price” is beginning to be addressed through entities like Nafed and NCCF.
Cooperation Minister Amit Shah had announced in January that the entire produce of pulses of farmers who register with Nafed and NCCF (at start of production) on their portal, will be bought at MSP.
The same can be done for oilseeds and TOP too, if infrastructure for decentralised storage can be worked out for TOP under Nafed/NCCF leadership utilising Agri Infra Fund loans. Sorting/grading, basic processing and packing can also be taken up under this.
In the backdrop of this push by the Ministry of Cooperation, a fivestep strategy is suggested to increase farmers’ income without causing inflationary pressures:
Ministry of Cooperation to announce a “policy of assured procurement” at MSP of, say, 10 crops including pulses, oilseeds and TOP through Nafed/NCCF. Make this “assured procurement” applicable for all farmers who register on a procurement portal at the time of sowing itself along with land details. (Verification through digitised land records can be used to eliminate aggregators/traders from this process)
Nafed/NCCF to plan and “capture” the entire value chain of the commodities under the guaranteed MSP items from procurement to primary processing to packaging to retail sales.
Nafed/NCCF to set up retail outlets all over the country for “Bharat” brand agri commodities. These outlets will be a conduit for regular supply to consumers. Franchisee models can be worked out and bank funding may be available to entrepreneurs for setting up “Bharat” brand outlets.
Alongside, plan, procure and hold appropriate buffer stocks of pulses, oilseeds and TOP utilising shared and decentralised infrastructure which can be built by member cooperatives of Nafed/NCCF.
Agriculture, which is a State subject, to be moved to the Concurrent List so that Central Government initiatives through Nafed/NCCF do not run into legal hurdles.
The writer is a former banker with experience in agri-credit operations