N. P. Karunadasa SLAS (Retired) Kandy.Courtesy The Island

May 30, 2016, 7:53 pm

Unlike in developed countries, people who live by the sweat of their brow such as farmers and fishermen in third world countries like Sri Lanka, are vulnerable to merciless exploitation by middlemen. Farmers, especially paddy farmers in our country seem to be caught up in a vicious circle out of which there seems to be no escape. Firstly, they need a considerable amount of money for land preparation. Then they need money for seeds and fertilizer. Finally, they need money for harvesting, threshing and storage. To make matters worse, most of the farmers have no standing with institutional credit agencies, including banks, because they have failed to repay the loans obtained earlier for agricultural purposes, the blame for which cannot always be put on the farmers.

Default on loans may have taken place due to crop failures or natural disasters and the failure of the authorities to ensure timely availability of water, fertilizer and other needs. Sometimes farmers get carried away by false promises of politicians to waive off agricultural loans and deliberately default on repayment of loans, getting into the bad books of banks in the process. This state of affairs makes the farmers easy victims of village loan sharks. The other vexed problem emerges once the farmer harvests his yield. While the authorities seem unable to organize the purchasing of paddy at a reasonable (guaranteed) price, the unscrupulous money lenders set in motion the process of exploiting the farmers. They pressurize the farmers to repay up their loans with interest at exorbitant rates. Meanwhile, the farmers try to dispose of their paddy at the guaranteed price, sometimes waiting for days on end in queues to hand over the paddy to the PMB stores.

More often than not, their efforts fail, and the money lenders step in, set a low price and appropriate a large quantity of the farmers’ paddy against the outstanding loans. Farmers are usually left with a quantity of paddy barely sufficient to meet the consumption needs of the family. The vicious circle re-starts with the commencement of the new cultivation season.

I believe the only way out of this situation for the farmers lies through their organizations. However, these should be properly organized as strong, empowered entities. There are numerous farmers’ organizations in the country, but unfortunately only a very few of them, if at all, fall into that category.

The strengthening and empowering process of farmers’ organizations should start at the very bottom. Empowerment is a direct result of knowledge and awareness. Therefore, a mechanism should be set in motion to educate the members about their rights and responsibilities, vis-à-vis their organization. Most of all, a feeling of ownership of their organization should be inculcated in them. Steps should be taken to ensure active participation of the members in the affairs of their organization. Once the organization is on the way to becoming a strong, empowered entity, it can commence gradually attending to the needs of its membership. For example, it could start providing credit facilities at least to meet a portion of the members’ needs. Marketing, especially in the case of paddy, is one of the most important areas where farmers’ organizations could play a vital role. It is a fact that the demand for paddy is very limited; it comes only from mill owners, whereas the demand for rice is virtually unlimited. Therefore the farmers’ organizations should concentrate on exploring the possibility of supplying the end product, rice, to the market, instead of paddy. I believe that it would be beneficial for the consumers too, because the cost spread would be narrowed by one step by eliminating the middleman.