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Posts Tagged ‘checks and balances’

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

Barnyard millet rice - two different quality samples

Barnyard millet rice – two different quality samples

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.

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