Cut out middlemen: Is Maharashtra govt's plan to delist fruits, vegetables a step in right direction?

Is the government an efficient middleman? Are the prices at the end of the chain, especially the food supply chain, reasonable? It seems that the answer is no, going by the latest prices of an essential commodity, the tur dal – a primary source of protein for most people. When the prices of tur dal in stores are just a tad below Rs 100 a kg, why has the government asked that the price be pegged at Rs 120, including for sale in the public distribution system, which is supposed to meet the needs of the poor at affordable rates? According to calculations made by Mumbai’s Grahak Panchayat, as reported in the Maharashtra Times on Monday, it ought not be higher than Rs 90 per kg in Maharashtra, as the procurement support price is Rs 48 per kg. This means that, without profit, by reckoning the cost of the pulse – its milling, transport, and distribution – it comes out to almost treble the price, by the time it reaches the consumer. [caption id=“attachment_2156299” align=“alignleft” width=“380”]  Representational Image. AFP[/caption] That is, without any profiteering by the middlemen, who are normally and justifiably accused of doing so. They work out contracts at the time of sowing and depending on the output and the demand, play with the prices. Then there are the commission agents in the agricultural produce market committees (APMCs), who corner a slice of the profits. Can the government not do any better, when it can help ease the market by its supplies? Everything the government does in any sector can be suspect of being priced at a ‘cost plus’ arithmetic which often includes the gigantic cost of ‘bureaucracy’ and bribery. No one is going to pay a bribe without whittling down the quality or cutting corners in one way or the other. However, when it comes to fruits and vegetables, the Maharashtra government wants to cut out the middlemen. Of course it should cut them out. For they are the major cause of high costs to the common man. The government has therefore decided now to fall in line with the Centre, and deregulate the market for fruits and vegetables so the producer can directly sell to the consumer. The APMC act is to be amended, and the rules under which the deregulated market should function are to be prepared. The Devendra Fadnavis cabinet has decided on this. APMCs are the lone platforms from which the farmers were allowed to sell so far. Notwithstanding the various tricks played to keep their profit margins as high as possible but with always a facile explanation about the crop being bad, or of the arrivals for the day being poor. This sector had been crying out for drastic changes so the farmer is spared the atrocious low prices and the consumer the astronomical prices. Over two years ago, while holding the portfolio of Agriculture in the Manmohan Singh government, Maharashtra’s own Sharad Pawar did a great disservice to the consumers. He had spoken of how high prices the consumer paid meant higher prices for the farmers, this at that time in the context of onion, as important to an Indian kitchen as the tur dal is to the dining table. That had absolved the APMC commission agents of the sins of profiteering and the message went across the country that it was alright to do business in the manner they did all along, and because the APMCs were the only route through which the groceries could reach the kitchens. That he could have avoided, but it only strengthened the impression that in politics vested interests matter. The move to make changes in the law now, however, comes at a time when the Bharatiya Janata Party in the state is trying to strengthen itself in every possible sector. Weakening the APMCs, which are ruled mostly by Congress or the NCP men, together or severally, helps it, not by capturing them but by weakening them. It is seen as an attempt to deny them their supremacy, if it is seen from a political perspective. But that does not detract from the merits of the free flow of fruits and vegetables, without the hindrance of the APMCs in the state. That said, how prepared is the state to shift from one mode to the other without substantial conceptual formats at least? How would the farmers move their produce and where would they sell them in space-scarce cities? They wouldn’t even find a patch on the sidewalks that wasn’t already overcrowded. What the government, with its gargantuan machinery, cannot do with regard to tur dal even in a period of crisis, the farmers should now do with a scattered market for vegetables and fruits. One question remains unanswered: what about the produce like potatoes from Madhya Pradesh, for instance, that come by the trunk-full when Maharashtra’s farmers cannot meet the state’s demand? After a day’s token shutdown of their businesses on 4 July, which sent the prices of vegetables and fruits higher than the existing normal high for several months on one pretext or the other, Maharashtra’s APMCs have gone on an indefinite strike. Since the farmers are not equipped yet to do business on their own, the APMCs want to show how indispensable they are. Let me end this with an irony few may have noticed. When two well-connected families in Vashi, where the biggest APMC is located, decided to trim costs and donate the saved money to help distressed farmers, the attending commission agents decided to add, on the spot, Rs 10 lakh to it, to save the farmers. There are other ways of paying them better, I thought.