"Farmer suicides rise 15% to 235, opposition raises pitch for loan waiver" screams the TOI of March 19th 2017, 36,359 Cr farm loans waived off in UP, screams another head line, a mad scramble to waive off farmer loans seems to be the order of the day. Are these sustainable propositions? Does the farmer really benefit? Is the money actually being reimbursed for the downstream follies, mismanagement and greed that we want to push under the carpet? Can technology be leveraged to bring the farmer to the party? Some soul searching seems to be in order.
India is an agrarian economy with around 60% of its people depending directly or indirectly upon agriculture. The Indian agricultural sector accounts for 18% of India's GDP. It is the largest producer of pulses and the second largest, producer of rice and wheat. With a record such as this, an Indian farmer should have been the cynosure of all, or is it? Juxtapose this against the data of the National Crime Records Bureau of India, wherein, it is reported that in 2014, 5,650 farmers committed suicide and it will be apparent that not all is well. Further the report cites that farmer suicides account for 11.2% of all suicides in India.
The highest number of farmer suicides were recorded in 2004 when 18,241 farmers committed suicide. The farmer's suicide rate in India has ranged between 1.4 and 1.8 per 100,000 total population, over a 10-year period. Very high indeed.
Various reasons have been offered to explain why farmers commit suicide in India, including: floods, drought, debt, use of genetically modified seed, public health, use of lower quality/quantity pesticides due to less investments producing a decreased yield and also government economic policies. However several studies have also shown that more than one reason is often associated with farmer suicides.
Arvind Panagariya, Vice Chairman of the NITI Ayog notes, "farm-related reasons get cited only approximately 25 percent of the time as reasons for suicide" and "studies do consistently show greater debt burden and greater reliance on informal sources of credit" amongst farmers who commit suicide.
With technology at its best, and a very proactive Government to adjudicate, is it not possible to mitigate the farmer's woes and worries? Any intervention in this space, however limited, would raise the bar of living for the farmer. Effective use of technology can go a long way.
If a humane approach to the problem is explored, greater debt burden and greater reliance on informal sources of funding amongst farmers can only be addressed through consolidated bank loans at soft interest rates and subsidies. The dependence on informal sources for funding, its availability and the interest attached with it, sometimes compound and sometimes compounding the compound can be killing for anybody. Add to this, if the farm yields less or if nature is circumspect in spreading its goodies, the farmer, literally is on the streets. Small farmers with less than two acres are the worst off. Large farm holders may be playing the game of devouring the smaller fish. Let's explore the nuts and bolts.
Cash crops are expected to return a profit to the farmer. Rabi crop in India is wheat, followed by barley, mustard, sesame and peas. Kharif or summer crops on the other hand like millet and rice are harvested in the rainy season. Each of these fundamentally dependant on the vagaries of nature, has its own supply chain and the farmer earns to varying degrees that is allowed by its own supply chain e.g., the government procures Rabi and Kharif crops at a fixed price and the farmer gets an assured price for his produce. The supply chain is that of the government. It may also be true that an open market offloading would earn more for him. Costs involved are prohibitive for him to do so. Invariable the farmer supply chain ends with his transferring his assets to the next in line, middlemen and the processor who owns the storing and the processing capability.
A food supply chain is a systemic movement of the food from farm to customer. This includes various intermediate processes like production, processing, distribution and consumption. A domino like cascading affects the entire supply chain and hence the prices. Here the resources and material, flow downstream for the production of goods and provision of services, while the money paid by the customer flows in the reverse direction to different elements involved in the chain. There are too many intermediaries in the chain. They are important because they act as substitutes for non-existent infrastructure. Over the years the intermediaries have grown adding little value to the produce but significantly raising the costs.
Rabi-Kharif commodities produced have to undergo a series of operations such as harvesting, threshing, winnowing, bagging, transportation, storage, processing, and exchange before they reach the market. There is considerable crop loss at all these stages and a consequent cost escalation. Fruits and vegetable suffer the largest post-harvest, accounting for almost 25% to 30% of production. Further, perishability, market gluts, price fluctuations are all responsible for high marketing costs.
Apart from direct consumption of fruit and vegetables where cleaning, latex removal, washing, drying, sorting and packing in the main are the processes, traditional processing technologies such as thermal bottling and canning, freezing, dehydration, drying, and fermentation are widely applied in the processing of fruits and vegetables, for subsidiaries like juices, jams etc., and their manufacturing. The supply chain here essentially comprises processing, packing and transportation to the markets which also are many, wholesale and retail in the main. Unfortunately the farmer is forced to sell his produce to bigger players usually middlemen at a pittance of the actual sale price since he does not have the wherewithal to do anything further or better.
While minimal and traditional processing technologies present considerable opportunities for innovation and vertical & lateral diversification in fruit and vegetable sector, why can't we disrupt the markets to give the farmer a way of reaching his produce to the home directly? "A la farm to home"? Let's explore some options in the ensuing mango season.
A mango supply chain travels through growers to middlemen, to agents to wholesalers to retailers or retail cart traders and finally to consumers. Data of the National horticulture board shows that 55% of mango farmers follow this chain and earn just 28% of the consumer price. Only 3% of the farmers use growers to processors to consumers supply chain and earn 44% of the consumer price. A case for disruption of this process is called for, so that the farmer benefits the maximum.
Typical figures show that one acre farm yields about 3 tons or about 15000 mangoes in a season. This of course needs fertilisers, pesticides, fencing, and labour for plucking, sorting, loading, security, final sorting and lastly packing and above all a very condescending nature. A farmer expends Rs. 2 laks per acre for this produce. Crop insurance can further hike the costs. He barely recovers his investment at 30% of the consumer price, who however purchases the same at somewhat exorbitant Rs. 600 to 800 a dozen clearly making a one acre project unviable. How can technology help him?
A one/two acre owning farmer could set up a fully automated mango processing plant on the farm itself, where one mechanical processor on a single shaft, fully IOT enabled, could process 1000 mangoes on a one hour cycle, through stem and latex removal, washing in cold and then hot water, drying, and sorting followed by automated packing. At not more than Rs five lakhs for such a plant, farmer pooling would bring down the plant cost to a pittance since two acre produce requires only thirty hours processing before packing. Ripening cycle will need to be redefined with the use of appropriate technology. Devoid of chemical treatment, this can even preserve the fruit's flavour and its naturally available minerals. A shared cold storage facility, again located on the farm itself can enhance the shelf life.
Additionally, soil health card launched by the Government could also be easily plugged into the processing plant on the farm which will carry crop-wise, fruit wise recommendations of the nutrients and fertilisers required and the optimal harvest cycle, for the individual farms so that farmers can improve productivity through judicious use of inputs and credible information. Online data of the soil card and the IOT devices on the processors, along with AI enabled expert data can be analysed and made available to the farmer as a set of do's and don'ts on his mobile.
Orders booked on a mobile application, linked to digitisation push would deliver farm fresh mangoes to consumers who can of course be from anywhere in the Country and reaching out to them could be tied with courier services or the farmer's cooperative that can operate a network of assorted vehicles where the traffic management becomes a transportation optimisation problem. Easily achievable with a host of tools rooted in technology. The farmer would now have a share of 60% to 65% of the consumer price. Needless to say his income goes up, bringing down the liabilities and bringing up a new found zest for life. He and his brethren can further explore very lucrative export markets as well, since quality can be closely monitored in a controlled environment. Several new start-ups can spin off.
Similar interventions can be made in all produce of fruits, vegetables and other agricultural produce. If this prevents even one suicide and enhances the quality of life for the farmer is it not worth the effort?
Guest Author
Former Chairman of AICTE, Dr. Mantha is an eminent academician. At present, he is Chancellor KL University and Adjunct Professor, NIAS, Bangalore.
