Monday, May 5, 2008

the real world of subsistence agriculture

The appreciation of what a peasant farmer has to endure to make a living is something no book can teach and until one lives that life completely, the nuances of the risks he faces are cannot be comprehended and then evaluated.

Many of the people in the aid business, be it donors or government bureaucrats are merely trying to salve their consciences or at best do their jobs. To do it effectively all the dynamics have to be accounted for. In my opinion risk minimization is the way to approach this subject, rather than poverty alleviation of rural farming populations.

I have endured an additional risk this year 2008, over the risks I have begun to accept. The weather pattern internationally and specifically to Sri Lanka has been extremely unusual with some saying El Nina effect. The rainfall has been excessive island-wide, which has led to the farmer being unable to plant his vegetable crops according to plan, which consequently has resulted in steep prices the consumer has had to pay. Ironically the steep prices have NOT helped the farmer increase his income, as his overall net revenue has fallen due to his crop loss being greater than the price increases, where most of the margins are accounted for in the post harvest food chain down to the ultimate consumer.

In my case where I use paid labor, I have had to pay wages for people who have not been able to do a days work due to the rain, and whoever tells me to supply raincoats is off the mark. I have bought boots for them and they don’t like to use them, if I supply raincoats its jut the dogs who will have a field day tearing them apart, when they have been put aside and forgotten in the fields when the rain ceases. Such is the mentality of the person who is now part of this society where they expect everything free, be it from the government or their employer.

In my case even trying to grow organic is a farce, in an environment where I am unable to minimize risks, the only practical way being under greenhouses where most risks are eliminated. Take today’s example of the wholesale prices paid by small shop keepers to buy vegetables in the Meegoda wholesale market close to my farm and close to Colombo. (inevitably buying large bags of between 50kg and 70kg will command prices about 20% less than what I note below, but also have a higher percentage wastage as there is no way of sorting out as one has to buy the whole bag of the truck, not knowing the quality of what is inside.
All prices are for a kg (2.2lbs) as of May 4th 2008
Tomatoes Rs 150, Capsicum Rs 240, Green Chillies Rs 200, Makaral Rs 80, Karavila Rs 70, Bandakka Rs 70, Wambatu(auberrgine) Rs 70 and Cucumberr Rs30. Now I sell my produce on home delivery at between Rs 80 and 100 a kg as I find it difficult to sell at a higher price to cover my costs, and in the shop on the farm I sell at Rs 20 a kg less. How can I sell my better produce (as in no pesticide and no chemical fertilizer, but sometimes with the odd pest embedded) at higher prices to compensate me for extra costs and low yields? I have to sell my Tomatoes at Rs 250kg and no one will buy at that price.

So Colombo ladies who think you can buy good for less than the Kollupitiya market think again, you just can’t afford my produce if I were to sell at a price where I can afford to eat at least one meal a day. I am effectively subsidizing your lifestyle. Anyway why do you want to eat Organic when the air around you is so polluted that no matter how much organic you eat you will not be able to cleanse your body from the carcinogens you breathe?

Returning to the topic, the conclusion is that due to supply and demand factors the price of vegetables is beyond anyone’s control least of all the farmer’s, and in order to stabilize the prices while giving the farmer a greater share of the pie, a lot more has to be invested in post harvest technology over an above yield improvements which are still necessary at the farm. So NGOs if you are still interested in helping the rural farmer, rather than your good selves in posh cars and offices and fat salaries then please take heed.

A farmer will never sell you produce if he can get a better price. So you give a price point that is high enough to encourage him to grow, while limiting how much you will buy, so you don’t encourage the farmer becoming a middleman at your expense. The produce you receive you keep in conditions that allow longer shelf-life, and you arrange the disposal of such. Keep strict management controls so you don’t lose on this deal, and run it as a business with incentives for management properly structured. As a private sector person I would also like to do something with a long- term profit motive but the capital cost of establishing an enterprise precludes me from going ahead, unless development financing of a long-term nature can be obtained at concessionary rates. Such enterprise actually would be more effective than trying to do it through the NGO or government due to inefficiencies.


cj said...

Hi I am really not commenting about your post but by some miracle I came across your blog and have been absolutely delighted, stunned and in absolute awe about what I read.
First I must confess you are doing something which I have always wanted to do. But due to pressures of having to provide for a family never got down to doing it. But I think what you are doing is absolutely great and I do wish it was me. Well the maind reason I am writing to you is to ask how I can purchase your rice? Is there any outlets which sell in Colombo or do you visit regularly? Do give me a call when you have the time my number is 0773184137 and my office email s and once again let me complement you on taking a step which I would never have dared to do.

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