'Lack of planning led to farm market slump'

By S.K. Ramoo

BANGALORE, DEC. 13. The recent steep fall in the prices of some agricultural and horticultural commodities in Karnataka has caused a furore in the State Legislature. The legislators, cutting across party lines, favoured prompt market intervention by the Government and its agencies for successfully scuttling distress sale by farmers.

The plummeting prices of paddy, maize and tur dal are a matter of grave concern. But neither the legislators nor the Government have cared to analyse the root cause of the problem. The Government's occasional market intervention had stabilised the prices of onion, potato and tomato initially, giving only momentary relief, agriculture economists feel. According to them, market intervention was only a temporary solution and not a permanent one.

The Cabinet had recently decided to set up a Rs. 100-crore Market Intervention Fund. By way of market intervention through its agencies, the Government had incurred considerable expenditure and had failed to get back the amount. It was only a short-term relief, a political strategy to win over the farming community. Prof. R. Dwarkinath, the reputed agriculture expert and chairman of the Karnataka Agriculture Commission, said several factors accounted for the current slump. He attributed the fall in prices to traders not fully lifting market arrivals. They seemed to be in a ``wait-and-watch'' mode as they were aware that under the WTO agreement, the country would import a few agricultural commodities.

He said there was neither production-planning on the part of farmers nor free flow of market information. There was also no mechanism to counsel farmers on the type of crop they should go in for. A majority of farmers were motivated by ``herd mentality'' rather than by any rationale based on the principle of supply-demand.

Prof. Dwarkinath said farmers' psychology was such that if some of them had made good money the previous year by raising a particular crop, others blindly emulated them the following year oblivious of the fact that a particular crop grown over a larger area led to over-production which, in turn, caused a market slump.

Such situations rose frequently mainly because the Government, agriculture universities and other agencies engaged in promotion of agriculture failed to provide adequate market information well before the sowing season, to enable farmers to plan their production and devise a suitable cropping pattern. Hence, there was a need for an efficient mechanism to help them plan the type of crop they should grow, Prof. Dwarkinath said.

Lack of agriculture infrastructure was another major handicap. Farmers did not have adequate cold storage facilities or refrigerated warehousing close to their fields to stock perishable produce and those engaged in dryland farming were always the worst-hit. Farmers with access to irrigation facility were always better off than their dryland counterparts, he added.

Farmers should be rendered active partners in the production- planning process and market information mechanism. In the absence of timely dissemination of information relating to market forces and other relevant data, growers would be severely handicapped. This is the crux of the problem.

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