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close this bookCERES No. 096 - November - December 1983 (FAO Ceres, 1983, 50 p.)
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View the documentFood shortage strikes a growing number of African states
View the documentChallenge posed to marketing system for India's groundnuts
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Challenge posed to marketing system for India's groundnuts

Although India is one of the world's major producers of oil seeds, its domestic output averages only about one third of estimated requirements and the overall deficit in production has fluctuated from about 300 000 tons in good years to as much as 800 000 tons with poor harvests. Since most oil seed crops in India are rain fed, they are vulnerable to failure of the monsoon. Farmers are understandably cautious about making large investments in production. The oil seed trade has been noted for speculation and fluctuation in supplies and prices, in the western state of Gujarat, which accounts for about one-third of India's production of groundnuts, the main source of edible oils, the oil seed trade has been concentrated in the hands of a few politically powerful families The standard practice of traders has been to depress prices to producers artificially in good years by delaying the purchase of the crop and to force consumer prices up in bad years by withholding stocks of oil from the market.

These practices are now being challenged through an ambitious new project designed to create an integrated approach to oil seeds production, processing, and marketing and to give growers direct access to their markets, The spearhead of the new project is Dr Verghese Kurien, chairman of the National Dairy Development Board (NDDB) and the Indian Dairy Corporation. He has already made his mark in organizing Indian dairy farmers into a strong cooperative organization {see "Milk and justice", Ceres, Nov.-Dec. 1978). Now in its third year, the new project has already organized 850 village cooperatives in Gujarat province alone, involving between 50 000 and 60 000 farmers in the Gujarat Cooperative Oil seed Growers Federation. Initially, the project will concentrate on groundnut production; the major beneficiaries will be small to medium farmers There are a total of 347 000 groundnut growers of whom about two-thirds have holdings of less than 10 hectares.

Kurien was able to launch his project, valued at about $200 million, with donated food aid in the form of oil from Canada and the United States. He was thus able to establish a procurement, processing and delivery system for the farmers.

"The Federation owns two of the largest oil seed processing plants in Gujarat now," says Kurien, "and we are going to build three more new ones. Then we feed in the inputs to farmers to increase their production - better seeds, pesticides, aerial spraying, fertilizer supplies. So this whole thing is an integrated approach and the system is commanded by farmers. In my opinion, if you can do this for 10 or 15 percent of the total crop, then that is enough to discipline the competition, that is enough to ensure that the others have to pay similar prices. "

"Last year," Kurien explains, "we said that we would have groundnuts for 4 050 rupees per ton. The normal price would have been 3 100 rupees."

The principal aim of the project will be to help producers use new techniques that will protect them from climatic variation.

"We have 700 officers," says Kurien. "Their average age is about 29 years. They are highly trained and qualified, and very highly motivated. I have started the Institute of Rural Management in order to train managers to serve as employees of the farmers rather than going to multinational companies. We hope to provide managers who will go where their skills are most needed, rather than where their skills are most rewarded."