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India globalised: How NY speculator impacts farmer
Published on Tue, Apr 22, 2008 at 23:42, Updated at Wed, Apr 23, 2008 in 
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PLAYING SAFE: With shares tanking globally, speculators find it safer to park their stocks in food grains.
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Bhopal: Jeet Mal Patidar had a good harvest this year – over a thousand quintals of wheat. But he is in no hurry to sell his produce and instead of being carted to the mandi, it is hoarded in a warehouse.
Patidar is willing to go for Rs 50 per quintal and wait for six months if necessary, while the rest of his produce is hoarded at home.
"We see on TV and read in newspapers everyday that wheat production has gone down across the globe. Previously, the Government used to import wheat but now it is not able to do so. The Government is buying locally and the current prices are hovering around Rs 1100 per quintal. Hopefully, the prices would further increase by at least Rs 200,” Patidar says.
This is a phenomenon that the Planning Commission is acutely aware of and even confirms its existence.
This comes even as pension funds are being diverted to commodities in the New York and Chicago board of Trade.
With shares tanking globally, speculators find it safer to park their stocks in food grains. Clearly, it is the new age of uncertainty.
"We are entering into an age of extreme uncertainty and this has to do with global factors,” affirms Planning Commission member Abhijeet Sen.
Worryingly, the Government has to fall back on market intervention strategies that it is not comfortable with. It has already asked individuals and companies to notify purchase of grain exceeding 10,000 metric tones. This move was aimed at discouraging aggressive buying by companies and facilitating procurement by the government.
"Only 25 per cent is being sold and that too by farmers who need immediate money. Rest is being stored by the farmer,” explains Kanwar Jeet Dangi, who is Chairman of Misrodh Cooperative Society.
The Agriculture Produce Market Committee (APMC) laws were reformed on the grounds that farmers get a better price. However, small farmers who are in maximum need of better prices can't hold on to their stocks and are selling them cheap, a fact corroborated by Dangi.
"Only farmers in distress are selling their produce," he says.
In this globalised world, perhaps, it was just a matter of time before speculation in New York or Chicago could influence farmers in Madhya Pradesh – what to produce, how much to sell, when to sell and to whom.
As India bravely enters the fast-changing new world of uncertainties, it is becoming very clear that agriculture, especially food management policy is painfully short in catching up.
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I was a student of Prof Sen. I must say he has it completely wrong on this one. Since finishing
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