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LATEST NEWS UPDATES | Price risks make farmers wary of private markets -Sayantan Bera

Price risks make farmers wary of private markets -Sayantan Bera

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published Published on Dec 7, 2020   modified Modified on Dec 11, 2020

-Livemint.com

For over 12 days now, farmers have been pressing the Centre to repeal a set of agriculture laws passed in September. Centre argues that the agenda is to offer choice to farmers while growers see unregulated private markets as a threat to minimum support prices. Mint explores.

* Why are farmers more wary of pvt markets?

Over the last five years, low global and domestic commodity prices have taken a toll on agricultural incomes. Many farmers already depend on private markets, and not the government, to sell their produce. In private agri markets, price risks are high and recurrent. Prices of commodities like cotton are determined by global trends, while those of perishables fluctuate depending on seasonal factors, weather and demand-supply dynamics. Due to their weak bargaining power in the private market—a result of their inability to store, process or time sales—farmers often dump their perishables or sell them dirt cheap.

* How do the farmers counter these risks?

With price risks taking a toll on income, farmers often fall back on assured government purchase of cereals like rice and wheat, where prices are comparatively steady. This is why the Punjab farmer is addicted to paddy, even though its cultivation has depleted ground water tables. The same is true for sugarcane where the Centre announces a fair price. The lopsided price incentives, coupled with risks in alternative crops, force a water-stressed region like Marathwada to grow cane. Centre hopes that alternative marketing channels envisaged in the reform acts will lift farm-gate prices and align crop choices to demand.

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Livemint.com, 7 December, 2020, https://www.livemint.com/news/india/price-risks-make-farmers-wary-of-private-markets-11607355864787.html


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