Vertical Upward Integration in the Farming Sector

First and foremost I would like to tell my farmers brothers/sisters that I understand and feel their concern regarding the agricultural reform bills that have been passed by the Indian Government. We can feel your anguish and understand what is fueling the protests. The government has passed 3 laws without input from farmers. Now Government is unwilling to agree to farmer’s demand and farmers are adamant and the nation is paralyzed. We hope that the outcome of ongoing discussions with the Government is fruitful and satisfactorily addresses your concerns.

The government says the reforms, which opens the farming sector to private players, will not hurt farmers but have not satisfactorily addressed farmers’ concerns. So, if the Government agrees and makes concessions to the farmers this time, the issue will prop up again in future. Long term the policies may not be fully in farmers’ interest as other vested stakeholders will attempt to engineer something of this sort again.

We need to think outside the box to come to a solution to this vexing issue. I think this can happen, when farmers take control of their produce and give value added end products to consumers directly. Let us take an example of wheat. At present farmers sell the wheat at say MSP to the government or private sector agencies. Instead if the farmers set up a co-operative, that buys their product at MSP, stores the grains in silos, convert them to end products consumed and then sells them through co-operative operated outlets. The co-operative could sell following wheat products:

Atta (flour), Sooji, Maida, Chapatti/Phulkas, Paronthas (Aloo, Methi, Saada), sliced bread, halwa etc.

As the co-operatives generate money, the surplus cash could be reinvested in new products besides rewarding the shareholders. While proposing this idea, I have the success of Amul Dairy in my mind. Amul started out with milk then added butter, ghee, cheese, ice cream etc. and today there are a plethora of products marketed under that brand. The mention of word butter reminds of Land O’Lakes brand in USA, which is cooperative founded in 1921. They have 10,000 employees and $ 14.9 Billion revenue. There is also a USA cooperative of orange growers called Florida’s Natural brand founded in 1933 with revenue of $ 470 million. Recently, we have seen how Baba Ramdev has spawned a growth in Ayurvedic products in India using a similar model. I have just touched the tip of the iceberg but when a detailed study is carried out many more ideas using the model of farmer-to-consumer direct can become a reality.

Such a venture will not only make farmers less dependent on the government or even private sector but also make them masters of their produce and destiny. Through these efforts they can provide employment to many thousands and bring economic prosperity to themselves and the community.

Wishing our farmers best of luck, financial security, and economic success. Let this new model become the second Green Revolution bringing prosperity to the farmers.


More by :  Bhupinder Singh

Top | Analysis

Views: 3302      Comments: 1

Comment Bhupinder jee
I was about to request you to educate us with a research based article with facts snd stats. This is a great start. I like it bc it’s balanced and not bias.
It will nice of you can expand to publish both view points. Why Modi Govt is doing it. What are the benefits for India. How does it hurt our farmers. There are lot articles that document that Punjab politicians ( Badal) are getting filthy rich and farmers are getting a small share of the sales. To be continued

13-Dec-2020 09:38 AM

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