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By Murali Kallummal, Consultant, Centre for WTO Studies, Indian Institute of Foreign Trade (IIFT), New Delhi, and K Sakthi Srinivasan, Lecturer, Department of Management Studies, Kongu Arts and Science College, Erode, Tamil Nadu
Summary
With India being the largest producer of fruits and the second largest producer of vegetables in the world, agricultural markets play an important role in providing a means of livelihood to millions of small and marginal farmers.
However, a majority of small producers do not get a fair price for their produce. This is because rural markets are characterised by large intermediaries and the market chain is highly unorganised with gains not forthcoming to the primary stakeholders.
Also, fruit and vegetable products have a very short shelf-life and poor infrastructure deprives both consumers and producers from benefiting. There is therefore an urgent need to promote fair rural markets.
An innovative market mechanism that took shape in the heartland of Tamil Nadu, shows how this can be done. Popularly called ‘uzhavar sandhais’ or farmers’ markets, this is a unique farmers’ market model wherein ‘informed consumers’ buy the products of poor, small and marginal farmers at fair prices that induce the producers to stay in farming.
This study explains the concept behind farmers’ markets and assesses the impact of such markets. Six uzhavar sandhais from two districts -- Erode and Coimbatore -- were selected randomly for the study.
The main reasons behind starting this market system are:
- To facilitate farmers to sell fresh fruits and vegetables directly to the consumer at remunerative prices without the intervention of middlemen and traders.
- To hold the price of vegetables steady, giving no room for manipulation by middlemen and traders.
- To act as an information centre for marketing vegetables, and a check on levels of exploitation.
- To provide adequate training to all farmers in accessing information, like prices prevailing in similar markets.
The market is located in an important centre to help both customers and farmers living in and around the centre. Each farmer is allotted a shop or shed to sell his/her produce. The government appoints a marketing committee to identify the farmers and give them a permit card or identity card. They do not have to pay any rent or commission. The marketing committee fixes a price that is applicable for the particular commodity, for the whole day.
The system benefits both farmers and consumers. It enables small farmers to get better profit margins and is popular with consumers who buy at prices below those in the wholesale market. The study also highlights the problems that farmers face in the system such as transport, market timings and shortage of sheds on busy weekends.
The study makes several policy suggestions. It concludes that, on the whole, this is a system that needs to be replicated if small farmers are to make a viable living in the face of increasing globalisation and the presence of large commercial interests in the agricultural sector.
Click here to read the full paper in PDF format.
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