Patna/Hasanpur: Can you think of a farmer saving up Rs 2 lakh every month just from farming? Or starting a grain bank that takes a company’s turnover to Rs 70 crore in just eight years, with foreign investors queuing up?
These are true stories hidden in the remote villages of Bihar. Agricultural reforms may not be an election issue in the state, except for their references in Prime Minister Narendra Modi’s speeches, but Bihar offers a glimpse of what these reforms could do to transform farmers’ lives.
In September, the Centre got parliamentary approval for three laws, freeing farmers from the clutches of traders by allowing them to sell their produce wherever they want, and practice contract farming. They failed to create any buzz in Bihar as the state had already repealed the Agriculture Produce Marketing Committee (APMC) Act in 2006, allowing farmers to sell directly to private players.
Fourteen years since, the move hasn’t produced the desired results, but its impact is visible as one travels through villages, though in sporadic ways.
The grain bank for 41,000 farmers
Meet Kishor Kumar Jha, CEO and director of Ergos agri-supply chain. Jha was a banker in Bengaluru, but started this company in 2012 to create a ‘grain bank’, which would let farmers store their grains in its warehouses, and get credit against grains from banks and non-banking financial institutions (NBFCs). They would also be able to sell it on their terms wherever Ergos managed to negotiate a better deal for them.
In eight years, Ergos has come up with 70 warehouses in five districts, with a storage capacity of 50,000 metric tonnes of grain, and 41,000 farmers engaged with it. All the farmers have to do is to bring their grains to the warehouse, where it is kept at a charge of Rs 10 per quintal per month, and wait for offers that Ergos keeps sending them.
“The dismantling of the APMC (by the government in 2006) was the reason Praveen Kumar (Ergos co-founder) and I thought of building this grain bank. We didn’t have to worry about those licencing requirements,” Kishor Jha told ThePrint.
“We offer farmers ‘your grain, your price, your timing’. Farmers’ income has gone up by 30-35 per cent because of this,” he said.
Ergos’ turnover is Rs 70 crore today, and it raised Rs 80 crore equity from three foreign investors recently. The company has employed 150 graduates from local colleges so far.
“The grains in our warehouses are fungible. They are electronically merged. Millers and local food processors are happy to buy from us… We plan to have 400-500 more warehouses in the next two years,” said Jha.
The village head who changed his fortune with technology
One of the warehouses Ergos took on rent in Hasanpur’s Nayanagar village, about 140 km northwest of Patna, was built by Sudhanshu Kumar, the village head. His is another story of how farming can be made profitable with the help of modern technology and marketing.
An alumnus of St Paul’s School, Darjeeling, and a Delhi University post-graduate, Kumar decided to return to his village in 1990 to do farming. His father gave him the “worst” piece of land — a mango orchard — hoping that the son would give up on becoming a farmer. The orchard used to fetch around Rs 20,000-25,000 in a season. Kumar sought help from scientists at the agriculture university in Pusa, and in the very first year, the orchard fetched him Rs 1.35 lakh. Last year, it earned him Rs 13 lakh.
In 1997-98, he received offers worth Rs 85,000 for produce from his litchi orchard; now, the produce sells for Rs 22-23 lakh.
Kumar has now tied up with Reliance Fresh and BigBasket to market his horticulture produce. He sent 14 tonnes of litchi to Delhi by flight this year, as more customers wanted home deliveries due to Covid-19.
“We were always cash-strapped,” Sudhanshu Kumar said. Today, his annual turnover is Rs 60-80 lakh, and savings are around Rs 24 lakh.
“Until 2006, when the APMC Act was repealed, no companies were coming to me. Things are changing now, but the government needed to take follow-up actions to bring the market closer to the people, which hasn’t happened,” said Kumar, who got prestigious Jagjivan Ram Kisan Puraskar in 2010 for using innovative tools and techniques in his orchards.
Praising the Centre’s agricultural reforms, Kumar recalled that a trader had “disappeared” with Rs 32 lakh worth of maize some time back. “These things will stop now as contract-farming is allowed,” he said.
Transformation visible, but not to politicians
Sarvana Kumar, Bihar’s principal secretary, agriculture, who as district collector in the early 1990s helped Sudhanshu with micro-irrigation, told ThePrint that the agriculture economy in Bihar was in a stage of transformation, with more and more farmers using modern technology and getting directly linked with the market.
“The Chief Minister (Nitish Kumar) is cognisant of the need of farmers. On his instruction, we have now set up a marketing department to help farmers,” Sarvana Kumar said.
The change is visible as one travels around the state. About 40 km south of Nayanagar, in Ilmasnagar, a cold storage facility is under construction. Half-a-dozen such facilities have come up in Samastipur.
Dablu, a farmer in Ilmasnagar, has been putting his potatoes in a cold storage for Rs 250 per season. “Sometimes, the potatoes even rot in the cold storage. I think they may be replacing ours with those of big traders. But even then, it’s better to put them in the cold storage and wait for a better price, instead of selling the produce when there is a glut,” Dablu said.
These are similar stories of change in many parts of Bihar, but politicians in the state are oblivious to them — or probably find it inconsequential in caste-dominated elections. CM Nitish Kumar, who could claim credit for triggering these changes through the repeal of the restrictive APMC Act, capital subsidies and other incentives, does not seem to remember his contributions.
But his ally, Prime Minister Narendra Modi showcases the Centre’s agricultural reforms. And the signs of change in Bihar’s countryside, howsoever miniscule and sporadic, hold out hope for farmers across the country post the agri reforms.