Market intelligence

Advance information on anticipated price behaviour of different crops is vital for farmers to take informed decisions

One of the key deficiencies of agricultural marketing that has not received due attention is the dearth of advance information on anticipated price behaviour of different crops — technically called market intelligence. This knowledge is vital for farmers to take informed decisions about what and how much to grow and when and where to sell. The present market information services normally put out only the ruling prices in major mandis. These are of limited avail to the farmers given wide variations in rates at different places and different points of time. Price volatility is the most pronounced in high-value, perishable and semi-perishable crops such as vegetables and fruits which are grown by the farmers primarily to get better returns. But lack of reliable marketing counsel often thwarts this bid.

Marketing guidance is imperative also for various other reasons. The ways and means of price discovery and price risk-management in the agriculture sector are rather limited. Futures trading and, more importantly, options trading, which are the most common instruments of price discovery and price risk hedging the world over, are disallowed in India for most farm commodities. Besides, the existing price assurance schemes, such as official procurement at government-fixed prices and the price deficiency payment system, have failed to cover more than a fraction of the farmers. The others sell their produce in the nearest mandis at whatever prices are quoted by the exploitative traders. Though farmers are not unaware that the prices normally rise after the peak marketing season is over, they can ill-afford to take the risk of deferring the sale without having an idea about the likely extent of price spike. Withholding the produce can prove counterproductive if the incremental returns do not even cover the storage expenses, which happens quite often in the case of potato, onion, tomato and other spoilage-prone products.

The potential gains to farmers from credible market advice have been demonstrated in a few pilot projects ran by public sector farm research bodies. The most notable among these initiatives is the one carried out by the Indian Council of Agricultural Research and narrated in its 2017-18 annual report. Implemented through a network of 14 institutions across the country, this project involved issuing price forecasts for over 40 farm commodities twice a season — prior to crop sowing and at the time of its harvest. All possible means of communication, including personal contacts, SMSes, pamphlets, television, radio, websites of farm universities, Facebook, WhatsApp and YouTube, were used to convey these forecasts to the farmers.

The impact analysis of this service showed that potato growers of Uttar Pradesh, who followed the expert advice issued by the Varanasi-based Banaras Hindu University and sold their output in May, instead of the usual March-April, managed to realise 30 to 40 per cent higher prices. The average increase in earnings was between Rs 100 and Rs 150 a quintal. Similarly, the cotton growers of Gujarat, who went by the advisories circulated by the Junagarh centre of the state agricultural university, gained around Rs 36,000, on an average.

If the public sector bodies can offer such gainful marketing advice to the farmers, the private companies, too, can do so and perhaps with greater efficiency. They can conceive innovative models to deliver relatively more diversified and value-enhanced information to the farmers to cater to their multiple needs. The IFFCO Kisan Sanchar service launched by the cooperative sector fertiliser giant, IFFCO, in collaboration with the telecom major Bharti Airtel and Star Global Resources Ltd., can be a case in point.

In 2017-18, the IFFCO Kisan Sanchar disseminated about 75,000 voice messages to nearly two million farmers in the local languages. Apart from market intelligence, vital information on other aspects of farming and animal husbandry, weather forecasts, government schemes and agricultural news, was also communicated through these messages-cum-advisories. If more companies, especially those engaged in agri-businesses, come forward to launch similar services, it would make farm marketing more remunerative and Indian agriculture more profitable.

surinder.sud@gmail.com