Here is an interesting read titled:
The price of potatoes written by Gurcharan Das in today's Sunday Times.
I sometimes wonder why I pay Rs 10 per kilo for potatoes when the farmer receives only Rs 3. My potatoes travel some distance, I realise, from the farm to the mandi to my bania, and each person in the chain must get his cut. Still, the gap of Rs 7 seems excessive, especially when the American farmer receives Rs 4 to Rs 5.
.........but studies by agricultural economists show that farmers in the developed countries do get a bigger share of the consumer price because their distribution chain is shorter.
Reliance opened seven supermarkets in Hyderabad last month and my friend bought potatoes there for Rs 10 per kilo compared to Rs 18 at his bania's shop. Another friend who works with an NGO in rural Andhra reported that farmers, who had supplied potatoes to Reliance, reported receiving higher than the mandi price.
A typical farmer harvests his crop, loads it on his bullock cart, travels 30 km to the mandi, where he is often forced to sell at distress prices. Once at the mandi, he cannot return without disposing his produce. He needs the money and the trader knows it.
Had he known the price before he left, he might have waited a few days. Where e-chaupals have arrived farmers are happy because they get to know mandi prices via the Internet.
Since his crop is perishable, the farmer needs a warehouse to enhance his staying power. NCDEX is putting up a thousand cold storages with world class grading facilities, but large retailers will also bring air-conditioned warehouses and trucks, and this will save India's huge post harvest losses, as high as 40% for some crops.
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The message we could derive is that farmers would get more money in their hands to spend...hence they would spend more on Farm Machinery-implements, Irrigation like pumping/pipes, Housing renovation-paints/tiles, Cars/Bikes, FMCG etc etc....and so on....
And we have already been dscussing indirect/direct beneficiaries due to establishment of new cold-chains, SCM, logistics etc....
India seems poised for phenomenal growth (ONCE IN A 5-GENERATION OPPORTUNITY!----this is a borrowed term as you all know by now)
What are the views of other forum members?
Edited by kulman - 19/Nov/2006 at 5:46pm
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