Vertical Upward Integration in the Farming Sector [OP/ED]

Wishing our farmers best of luck, financial security, and economic success....

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. 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 stake holders 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. 

Additionally the co-operatives can enter into deals with major consumers such as SGPC, DSGMC etc. securing long term deals to supply to them, thereby creating a win-win situation for both parties. 

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. Recently we have seen how Baba Ramdev has spawned a growth in Ayurvedic products using 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. This venture could grow and become a conglomerate down the road as Con-Agra, Archer Daniels Midland, General Mills.

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.

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