A friend recently forwarded the following three really good questions about millets. They do help us better understand the cost of millet rice in the retail market.
- On an average how much does the farmer receive per kg of millets? Is there an MSP for millets?
A typical millet farmer earns anywhere from ₹12 to ₹35/kg for millet grains based on the millet grown, the market, when the transaction is happening and whether they are selling it at farm gate or in the market. Farmers growing certified organic millets get anywhere from ₹25 to ₹40/kg.
MSP, or Minimum Support Price, is the lowest that a farmer shall be paid for a certain agricultural produce. These have been fixed/added to by state govts for the millets that are cultivated at a large scale in their respective states – sorghum in Maharashtra, finger millet in Karnataka, etc. But please note that MSP only applies to transactions at registered mandis. Given that almost 90% of farmers sell to intermediaries, and very likely at the farm gate very few farmers realize the MSP. And anyway, none of the small millets have a declared MSP.
- Why do millets cost so much more than rice and wheat?
There are multiple reasons for the high cost of edible forms of millets as compared to that of paddy and wheat. I shall present the most significant ones in brief. Please note that many of these reasons are intertwined and for simplicity and significance, we treat them as separate reasons. So as one can expect these are subjective; there are multiple ways to look at these issues and what I am laying out here is one such.
The primary determinant to the relatively higher price of millet rices and other staple forms is the weak supply chain. A huge amount of work has gone into developing the paddy rice and wheat supply chains – from on farm production support to farm gate processes to infrastructure support for smoother and efficient trading to subsidies and support for processing the grains into edible forms to monetization of the by products to reaching the processed edible forms of paddy rice and wheat to customers. Millets, unfortunately, are traveling through their value chain with very little support and currently is a fairly inefficient system. This weak supply chain increases the cost at different stages, the costs accumulate and get passed on to the customer. Some of the margins and buffering by the different players in the value chain is justifiable. But many do use this as an
excuse, feeding their greed and deceiving customers.
There are different products available in the market place – the spread in quality is fairly broad, but the spread in prices are not. Typically, consumer awareness about the quality and pricing of the products helps in keeping a check on the prices and weeding out the inefficient and greedy players. Unfortunately, consumer side awareness of millets and ways to identify their quality is very low. This has allowed and sustained many inferior products being priced much higher than what they are worth. Better informed customers (and traders) can effectively even the playing field for everyone’s benefit. We have quite a bit of information on this site, the Mera Terah Run 2016 – Miles for Millets campaign site and on my personal blog. (Yes, soon we will be aggregating all this into a single site!) You, dear reader, in visiting this site are one among those who have the opportunity to influence how much does good quality millet rice cost in the retail market. Please educate yourself about the various aspects of millets, talk to the retailers, vendors and share the links to these articles on millets, their quality, their processing, benefits, etc. And do demand better quality and lower prices.
- If you price them so high, the farmers will cultivate them only for the market and not consume any. Does this not defeat the purpose ?
True. High prices do make even food crops become cash crops in that most farmers, given their near distress situation, would sell it in the market place rather than keep part of their harvest for eating at home.
But do note two points here: (i) individual players in the market place do not decide on the price of a product and (ii) not every player in the marketplace is working to benefit the farmer.
As mentioned earlier, in pursuing a solution in the current paradigm of economics of scale, the market place is going for larger and larger small millet processing units, aggregating grains from further and further distances. In the process, compromising to go for polished millet rices that are nutritionally far inferior to what small scale processing can deliver. This consolidation on the one hand is actually depriving consumers of the nutrition that whole grain unpolished millet rices offer. On the other, this move towards aggregation and large scale processing makes the edible forms of millets even less accessible than they already are to the producers. The solution is to develop large numbers of distributed, close to producer, small scale processing units that can benefit both the producers and the consumers.
Some of us who are motivated to work towards making safe and nutritious foods affordable for the consumer are equally conscious of and work towards making these foods accessible to the producers, i.e. farmers and farm labourers too. One of the primary necessities for this to be realized is small scale reliable small millet processing units close to the producers. More on the advantages and disadvantages of the scale of processing in another post in the not too distant future.
So to wrapping this up, while high prices is a deterrent to producers bringing millets back into their diets, access to reliable processing is also a significantly hurdle. With conscious efforts and support of the community, we believe we can make a difference. One such example is the Mera Terah Run 2016 – Miles For Millets.
From a facebook conversation …
Ramanjaneyulu GV:
While there are issues in supply chain and this applies to all food crops. As per our experiences the key issues are..
1. Poor yields: still average yield per acre is 4-5 quintals (in monocrop condition) compare it with paddy (20-25q), wheat (18-20q) or maize (25-30q). The unit cost wud be high
2. Lack of appropriate Processing facilities: the recovery in processing is low and the initial players (at least I can say about people from AP and Telangana) always tried to maintain secrecy about feed back on the machines they tried. So everyone has to try and retry..
3. The price payed to farmers was very low compared to the price realisation by the seller. The new age middle men who came into millet marketing again ran their business worse than traditional traders. I have seen in many locations farmers got less than 20% of the final price.
4. The high price tag is also limiting the marketing scope..
So…needs lot of work which focus on good selections for better yields, open sourcing machine designs and experiences, trying to build the supply chain by squeezing in the costs at trading end and increase the farmers share to atleast 50%.
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My reply …
Dwiji Guru:
Ramoo sir, I do agree that there are many reasons to the prices. And broadly I agree with the ones you have identified, with some qualifiers, which I share here …
1. Yields: Compared to intensive crops like paddy, millets are low yielding. But when compared to the yield/input costs, millets are comparable, if not better. And lets not forget that millets can be cultivated in much less fertile soils than paddy can. So millets can be cultivated in at least 3 to 4 times as much area as paddy can be. In toto, from a back of the envelope calculation, it appears that the potential output of millets from most places (in India or any other country), is higher than the potential output of paddy.
2. Processing, or lack thereof: Yes, I do agree that this is a major stumbling block. In fact APMC market arrivals of FM and LM in Karnataka during Dec 2014 – Dec 2015 was ~50k tons. An insignificant fraction of this reached the consumer market in the staple forms.
Even today, the demand for the edible forms of these millets is far higher than the supply and that also explains the cost in simple terms.
The experiences of processors have been mixed. I do not dispute your experiences, but I do think that a lot of the processors were not able to reach a state where could confidently take on fabricator’s and recommend against one (or more). Reaching a stable state in processing millets is quite a challenge and most players even today are getting stumped by input material every now and then. I do share your observation that the secrecy has hurt the ecosystem, but I do feel that it was very human of them to have done what they did.
3. Recovery during processing: Most millets have a rice recovery of about 65% (by weight). Kodo and Browntop are the two exceptions (~55 to 60 for the former and 60 to 65 for the latter). This as you can see is not very different when compared to Paddy. The main difference is that processing inefficiencies and a lack of monetizing the by products of the processing has lead to the cost of processing being piled on to the primary product i.e. the millet rice.
This has also been an abused explanation – a lot of greed and inefficiencies have been fueled and condoned.
4. Price paid to farmers: Yes, and the numbers I shared does reflect your observations. Should we raise this to 50% of what the consumer pays? Sure ! Will we be able to? Yes, but only if there is a paradigm shift in the rules and ways of the market.
5. Marketing scope: there are sufficient nutritional benefits from the use of whole grain (unpolished) millet rices that it is worth the price for many consumers. But unfortunately, fly by night operators are making a fast buck peddling millet rices polished to varying degrees (to increase throughput in processing and to cash in on the craze for white) at the prices for the unpolished rices. And this is where I felt it is important to work on consumer awareness.
6. Another important factor has been the role of policy makers and the fixation to support intensive crops like paddy and wheat to the neglect of other cereal crops. Now with climate change and chaotic rainfall patterns across the land, we see them scurrying around for alternatives to these very crops that they stifled and trampled on over the last 4 decades.
I shall be sharing my views on yields and seed selection in a separate post soon.
I agree that we need to open source a lot of knowledge gained over the past few years of working on millets. And this is the track I am on. I am working on a training manual for small millet processing, parts of which I am sharing as independent articles online. The compiled one will be made available soon as well.
There are many improvements that can be done in the machines and this is another area in which I am trying to get something going, trying to get some smart hands and minds to work on the challenges there. I hope we will we be able to share the machine designs as open source material, but I do not have it with me to promise that it would be so.
To conclude, yes, there’s lots of work on hand ! 🙂
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Continuing the conversation ….
Ramanjaneyulu GV:
i agree with some of your points. 20 q even at Rs. 1500/q gives them 30,000 if we take out cost of cultivation of rs. 10.000 if they can go SRI/organic farmers will be left with 20,000/season. 5 quintals even with 2500 per quintal gives only 12500 and taking out the costs of 2500 (very low indeed…if we calculate the farmers time spent in field it wud be atleast 5000-6000)…so small and marginal farmers who has just one or two acres look for optimising the incomes…that even at the cost of increasing their risk….
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and further …
Dwiji Guru:
There’s one thing we are missing in this equation Ramoo sir – on land that can support paddy we can expect about 10 quintals/acre for most millets. With a system like SRI, this can easily be increased to 15q. But that’s not the strength millets – the fact that it can grow in soils that are much less fertile than what most other crops need is its strength.
If a paddy farmer cultivating using industrial farming practices seeks to shift to something sustainable, and has sufficient water, I suggest diversifying to multiple varieties of paddy, preferably traditional ones. If water is a challenge, then I would suggest going for millet cultivation, but not using input intensive methods. I shall explain my reasons for this in another post on the blog.
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Ramanjaneyulu GV:
My analysis is based on the experiences i hear from the small and marginal farmers i keep hearing. This is not just to support paddy cultivation. Unless some of these questions are addressed the area may not be addressed
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and probably the last exchange in this conversation, at least for now …
Dwiji Guru:
completely agree. These are important issues that need to be addressed and the more we think, come up with strategies, discuss and try out, the better will our chances be of identifying ways to cross these hurdles.
BTW, I hope you wont mind if I share this conversation as comments on the blog post.
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and the final word 🙂 …
Ramanjaneyulu GV :
Ofcourse not…this is increase the public discourse
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