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1 Online Open Access publishing platform for Management Research Copyright by the authors - Licensee IPA- Under Creative Commons license 3.0 Research Article ISSN Problems and expectations of the farmers in marketing paddy in Tiruvarur district, Tamilnadu Research scholar, Government Arts College, Karur. aarurvathana@gmail.com ABSTRACT Indian economy is primarily an agricultural economy. The very existence of economic activities of the entire people is bound up with the state and health of this sector. In India, about 70 per cent of the people are engaged in agricultural pursuits and about 50 per cent of the national income originates from agriculture. Hence the level of efficiency and productivity in agriculture more or less determines the efficiency of Indian economy. In India, people and their entire totality are so much bound up with the fortunes of agriculture that the pace of life and the pattern of activities do no more than mirror all that happens in this sector. Since agriculture is the contributor of the largest amount of goods and services to the development of the country, it becomes essential and responsible on the part of the Government to regulate and control the marketing system of Agricultural produce. Agricultural marketing in India is beset with many defects. The farmer, in general, sells his produce at an unfavorable place and at an unfavorable time, and usually gets very unfavorable terms. So, in such circumstances, it is common to find that the agricultural producers as a class are being exploited by the purchasers. Keywords: Farmer management, farmer friendly, economy. 1. Introduction 1. Importance of the study Paddy, being the major food grain has to pass through too many middlemen such as commission agents, wholesalers, millers cum wholesalers, retailers in the chain of distribution. Such too many middlemen take lion share of profit and consequently the price goes up abnormally. Hence, as a measure to avoid profiteering by the middlemen, our Government is bound to evolve a sound food policy of keeping the price always under control and maintaining adequate stock position to meet the rice requirements of people under public distribution system. Also the Government is bound to effect a sound marketing system to enable the producers to get fair price for their produce by eliminating the inherent defects prevalent in agricultural marketing such as lack of organizations, forced sales, presence of superfluous middlemen, multiplicity of market charges, multiplicity of weights and measures and malpractices of markets. Thus, it becomes important to study about monopoly procurement system and its success in achieving its objectives. 1.1 Statement of the problem 253

2 The position of agricultural marketing in India is deplorable. The Indian farmer is very poor, illiterate and ignorant. The twin objectives of the Government that ensuring MSP to the farmers and also ensuring availability of food grains to the weaker sections at affordable prices were defeated due to the existence of middlemen, malpractices etc., even now in the procurement system of the Government. Hence, a study has been proposed to explore the activities of the Government in paddy procurement and to assess the problems of paddy producers in that connection. 2. Objectives of the study The objectives of the study are 1. To analyse the current scenario of food grains procurement system in India. 2. To identify the problems of the paddy producers and to observe their expectations in marketing their paddy under Monopoly Procurement System in Tiruvarur District. 2.1 Methodology The study is descriptive in nature. Survey method was adopted to carry out the objectives of the study. Both primary and secondary data were used in the study 2.2 Data collection Secondary data were collected from a wide spectrum of sources including Websites of various organizations. The primary data were collected from the farmers of the district by conducting sample surveys using structured, pre-tested interview schedules, adopting stratified random sampling models. 2.3 Data collection tool A well structured interview schedule was administered in this study to elicit information from the sample farmers. 2.4 Population of the study The population of the study constitutes the total number of farmers in the district 2.5 Sources of data Tiruvarur District comprises of seven taluks. Of these, only five taluks were taken up for the study. There are 98 Primary Agricultural Co-operative Banks (PACB) in these five taluks. A list of 98 PACBs and their addresses were obtained from KCCB Central Office, which served as the source of information required for the present study. Similarly a list of DPCs functioning in the study area was obtained from the TNCSC Ltd., Tiruvarur and the same was used as the source to select sample Bill clerks. 2.6 Samples from farmers From the list of PACBs, 20 were selected at random. Registers of Members of the PACBs were used for selecting members. With the help of the list of members, non-members were 254

3 identified and selected. Of these 20 PACBs, 4 from each taluk were selected on a random basis. There are four categories of farmers namely Big, Medium, Small and Marginal farmers in the study area. Therefore, a total of 320 farmers, 4 farmers of each category from each PACB were selected on random basis. Among the farmers nearly 20 per cent are nonmembers of the PACBs. Therefore to include them also, 80 farmers, 16 farmers from each Taluk (4 each of the 4 categories) were also selected at random. Thus the total number of Sample farmers of the study was from PACB members and 80 from PACB nonmembers. Analysis and Interpretation of Data: The data thus collected were classified, tabulated, analysed and interpreted with the help of relevant statistical tools making use of Statistical Package for Social sciences (SPSS). 2.7 Hypotheses used in the study Several hypotheses were framed in the study to evaluate the efficiency of the paddy procurement system in the study area. The hypotheses were tested with the help of suitable Statistical techniques like Students t - test, Chi-square test, F-test and F- test-anova, etc., 255

4 2.8 Procurement of Paddy- Indian scenario The Government policy of procurement of food grains has the broad objectives of ensuring Minimum Support Price (MSP) to the farmers and also ensuring availability of food grains to the weaker sections at affordable prices. It also ensures effective market intervention thereby keeping the prices under check and also adding to the overall food security of the country. The Food Corporation of India (FCI), the nodal central agency of the Government of India, along with other State Agencies undertakes procurement of wheat, paddy and coarse grains under price support scheme and rice under statutory levy scheme. The procurement under Price Support is taken up mainly to ensure remunerative prices to the farmers for their produce which works as an incentive for achieving better production. Before the harvest during each Rabi / Kharif Crop season, the Government of India announces the MSP for procurement on the basis of the recommendation of the Commission of Agricultural Costs and Prices (CACP) which along with other factors takes into consideration the cost of various agricultural inputs and the reasonable margin for the farmers for their produce. To facilitate procurement of food grains, FCI and various State Agencies in consultation with the State Government establish a large number of purchase centres at various viilages and key points. The number of centres and their locations are decided by the State Governments, based on various parameters, so as to maximize the MSP operations. For instance for procuring Wheat and Rice, more than procurement centres were operated for each crop during Such extensive and effective price support operations have resulted in sustaining the income of farmers over a period and in providing the required impetus for higher investment in agriculture sector for improved productivity. Whatever stocks, which are brought to the purchase centres falling within the specifications of the Government of India are purchased at the fixed support price. If the farmers get prices better than the support price from other buyers such as traders, millers etc., the farmers are free to sell their produce to them. FCI and the State Government or its agencies ensure that the farmers are not compelled to sell their produce below support price. 2.9 Procurement of Paddy State Scenario The Tamil Nadu Civil Supplies Corporation Ltd., (TNCSC Ltd.,) made a beginning in the field of local procurement of paddy and rice from Samba 1973 through levy and direct purchases. There are two main seasons for procuring paddy in Tamil Nadu namely Kuruvai (from 1 st October to 15 th December) and Samba (from 16 th December to 31 st July). The procurement operation which commenced from Samba 1973 continued thereafter under various systems like Monopoly procurement, Parallel procurement, Levy system and Compulsory procurement upto either individually or in combination depending upon the circumstances at various point of time. From Government of Tamil Nadu has adopted Decentralised System of procurement as per the MSP and uniform specification fixed by the Government of India. The TNCSC Ltd., has become the sole agency of procurement on behalf of Food Corporation of India. The system of procurement in Tamil Nadu was made strictly by the Corporation from the farmers without involving any intermediaries by opening larger number of Direct Purchase Centres (DPCs) in various villages with the substantial quantity of procurement still used to come from the Cauvery delta area. The procurement in other potential districts is also being encouraged by the Corporation and the State Government. The 256

5 Corporation is having 23 Modern Rice Mills mostly concentrated in the Cauvery delta areas and the paddy procured is hulled through these mills and also through the private Hulling Agents enrolled by the Corporation. The custom milled rice is adjusted against the central pool allotment made to the State by Government of India opinion about paddy procurement system in Tiruvarur district The results of the opinion survey conducted among the farmers about the monopoly procurement system are 2.11 Knowledge about the Monopoly Procurement System The farmers should have adequate knowledge about the monopoly procurement system and about MSP of paddy so as to sell their paddy easily and at right price. Whether the farmers have such knowledge or not, is given in table 1. Table 1: Knowledge about the Monopoly Procurement System Particulars Marginal No. of Small Medium Big Total % Known Unknown Total Source: Primary data Table 1 show that 39 per cent of the farmers did not know anything about Monopoly Procurement System and MSP. Marginal farmers and small farmers were totally unaware of these facts. As much as 88 medium farmers and 90 big farmers knew about Monopoly Procurement System and MSP. Big and medium farmers know much about the Monopoly Procurement System and also about the MPS and MSP compared to small and marginal farmers. If the farmers are well informed about MSP then there would not have been unofficial deductions in the price paid to them by DPCs and unfair trade practices at DPCs Preference to procurement systems Table 2 reveals the opinion of the farmers as to their preferences to different procurement systems. Table 2: Preference to Procurement Systems Procurement Systems Marginal No. of Paddy Producers Small Medium Big Total % Monopoly Traders levy

6 Free Trade Both Monopoly & Traders Levy Both Traders Levy & Free Trade Total Source: Primary Data It is clear from the table 2 that out of 400 paddy producers, 71 per cent feel that the monopoly procurement system is more preferable to other systems in many aspects of its services. 11 per cent prefer Traders Levy System, 10 percent the Free Trade, 6 per cent both the monopoly and Traders levy system and only 2 per cent prefer both the Traders levy and Free trade. It can be seen that the majority of producers prefer the monopoly procurement system Prices of Paddy In a country like India, where the average farmer is proverbially a poor man, the price of paddy paid to him should be equal to MSP. The Government fixes the price of paddy. Whether they are paid to farmers, at the same price or at a differential price is stated in table 3. Table 3: Price of Paddy Price Minimum Support price (MSP) Marginal No. of Small Medium Big Total % MSP after Official cut only MSP After Official & Unofficial cut Total Source: Primary data From Table 3 it is clear that all the farmers in the study area are selling their paddy not at the MSP but only after unofficial deductions. No one farmer is able to get full MSP even if he is small or marginal farmer. In DPCs, the MSP is subject to both official and unofficial cuts. Official cut in the MSP is determined by the bill clerks according to the formula fixed by the Government for excess refraction contents in the paddy. To bribe the higher officials and to meet out the local expenses unofficial cuts are done by the bill clerks in the DPCs Government policy on Paddy procurement It is the prime responsibility of the Government to procure the paddy of the farmers at MSP in any quantity, at the doorsteps of the farmers and at the right time without waiting. How successfully the Government discharges this responsibility can be viewed from the opinion of the farmers. Therefore, the opinion of the farmers about the existing policy of the Government in the procurement of paddy is given in table

7 Source: Primary data Table 4: Government Policy on Paddy Procurement No. of Opinion Marginal Small Medium Big Total % Satisfactory Not Satisfactory Total As given in Table 4, all the 400 farmers were not satisfied with the existing policy of the Government regarding procurement of paddy : Hence, they were of the opinion that it should have been the responsibility of the Government to take steps to procure paddy without any difficulty to farmers and ensure MSP to them. 3. Problems of the farmers The analysis over the opinion survey conducted among the farmers in the study area reveals that the farmers were forced with many problems in selling their paddy to the DPCs. In order to understand the depth of problems in detail, the farmers were grouped in to two namely marginal and small farmers one group and medium and big farmers the other. The problems of the farmers are enlisted in the table 5. Problems Malpractices including Price Cut Table 5: Problems of the farmers Marginal & Small No. of Paddy Producers Medium % Rank & Big % Rank I I Delay in Payment VII III Undue waiting Time IV V Transportation VI VI Storage Problems V IV Existence of Middlemen II II Unfair Treatment VIII VIII Lack of Information III VII Source: Primary Data From Table 5, it can be understood that the malpractices including price cut is the first and foremost major problem of all the paddy producers irrespective of their size of land holdings in the study area. For marginal and small farmers, existence of middlemen, lack of information 259

8 about the functioning of the system, undue waiting time at the DPCs for selling their paddy, storage, transport to bring their paddy to the DPCs from the harvest place, delay in payment of price and unfair treatment of the bill clerks and load men were the problems accounted for and ranked accordingly by them. As far as medium and big farmers were concerned, they were also posed with the same problems but they have ranked differently. Except the problem lack of information, with all other problems the big and medium farmers were the worst affected group as the number of these farmers is always higher than that of the marginal and small farmers. It doesn t mean that the small and marginal farmers were not so affected as the other group. Existence of middlemen is the only problem, which affects both the groups equally. So, it is true that each and every farmer is posed with some problems in marketing their paddy in the DPCs. These problems have defeated the very purpose of the monopoly procurement system of the Government as it has miserably failed in its attempt of ensuring fair and remunerative price to the farmers. 3.1 Expectation of the The poor farmers expect nothing more than fair and reasonable price for their products and fair trade practices in the agricultural marketing. The expectations of the farmers, as opined by them are enlisted in the Table 6. Table 6: Expectation of the Expectations No Deduction from MSP No Delay in Payment No Delay in Procurement Small and Marginal Rank Medium & Big Rank 184 II 196 III 162 IV 181 VI 165 III 175 VII Mobil Purchase 84 VIII 195 IV Supply of Gunny Bags 155 V 190 V Higher MSP 200 I 200 I No Spillage 105 VII 142 VIII Payment by Cheque Source : Primary Data 128 VI 198 II Table 6 shows that all the 400 respondents expect increase in the MSP in conformity with increase in the cost of inputs. Inputs like fertilizers have witnessed multi fold increase whereas MSP of paddy has not been increased in the same rate. During the last 10 years, the maximum increase in the MSP was only 27 per cent during the year over the previous year. The overall increase in the MSP of paddy was only 86 per cent during last 10 years between and (vide Table 3.38). Therefore, the farmers with huge cry expect that the paddy pricing should be made cost effective. In the case of marginal and small farmers, their expectations were ranked as follows: 1.No deduction from MSP, 2. No delay in procurement, 3.No delay in payment, 4.Supply of gunny bags, 5.Payment by cheque, 6.No spillage and 7.Mobile purchase. The medium and big farmers give different priority to these 260

9 expectations by ranking them in the following order : 1. Payment by cheque, 2. No deduction from MSP, 3. Mobile purchase, 4. Supply of gunny bags, 5. No delay in payment, 6. No delay in procurement, and 7. No spillage. The expectations of the farmers are reasonable, genuine and simple to be adhered to. They expect nothing new nor even modification in the existing system but exact implementation of the system intact. 4. Correlation between the problems and expectations of the farmers There were 8 important problems to the farmers in selling their paddy at DPCs similarly there are 8 expectations. A correlation is fitted between the problems and expectations of the farmers. It reveals that there is positive correlation between these two variables as they were related to each other by 67 per cent. The relationship between these variables is also a significant one. 5. Conclusion Finally, the TNCSC Ltd. as the agency of the Government has played a key role in the paddy procurement operations and thereby for the welfare of paddy producers in Thanjavur District. At the same time the performance of the TNCSC Ltd. has its own short-coming in certain aspects. These shortcomings are to be over come through suitable actions. The officials involved in the procurement operation should be sincere, cordial and honest to the paddy producers to win their confidence. Then only, the objective of our Government to evolve a sound food policy through a sound marketing system can be achieved by eliminating the inherent defects in paddy marketing and makes the procurement system a farmer friendly one. 6. References 1. Agrawal A.N. and Lal, Kundan, (1996), Agricultural Problems of India, Vikas Publishing House, Delhi, pp Agarval A.N., (2002), Indian Economy Problems of Development and Planning, Wishwa Prakashan, New Delhi, pp Amartya Sen, (1975), Employment, Technology Development, Oxford, pp Bhagwati, J.N., India in Transition Freeing the Economy, Clarendon Press, pp Batra, M.M, (1998), Agricultural Production, Prices and Technology, Allied, Delhi, pp Bhalla, G.S. (ed), (1994), Economic Liberalisation and Indian Agriculture, Institute of Studies in Industrial Development, New Delhi, pp Hanumantha Rao, C.H.: Agricultural Growth and Stagnation in India, in Readings in Agricultural Development, ed., A.M. Khusro, pp Khusro A.N., (1998), Readings in Agricultural Development, Allied Publishers, pp

10 9. Kahlon A.S., Tyagi, D.S., (1985), Agricultural Price Policy in India, Allied Publishers, New Delhi, pp Misra S.K. and Puri V.K., Indian Economy, Himalaya Publishing House, Mumbay, pp Parthasarathy, G., (1971), Green revolution and weaker section, Bombay, 1971, pp Poduval, R.N., (1987), Foodgrain economy of Tamilnadu, Emerald Publishers, Madras, pp Rao V.K.R.V., (1974), New Challege before Indian Agriculture, Vikas, Delhi, pp Rabindranath Gosh, (1977), Agriculture in Economic Development, Vikas Delhi, pp Randhava, M.S., (1974), Green Revolution, Vikas, Delhi, pp Ruddar Datt and K.P.M. Sundharam, (2003), Indian Economy, S. Chand & Company Ltd., New Delhi, pp Rudra, Ashok, (1992), Political Economy of Indian Agriculture, K.P. Bagchi and Co., Calcutta, pp Sankaran S., (2003), Indian Economy Problems, Policies and Development, Margham Publications, Chennai, pp Sau, Ranjit, (1973), Indian Economic Growth: Constraints and Prospects, Calcutta, Orient Longman, pp Sadha, A.N., (1985), Technological Change and Agricultural Development in India, Himalaya Publications, Bombay, pp Tyagi, D.S., (1990), Managing India s Food Economy, Sage Publications New Delhi, pp

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