Mandi on my Mundi
A rather typically excellent article by Gurcharan Das has got me excited momentarily. Here he talks about the inefficiencies in the Indian commodity market (in other words, Beck Bagan Market or your local sabzi mandi) and the impact of the entry of professional retailers.

There are a number of insights in the article, but the one that excited me most was this - in trying to answer why is it that in India farmers themselves receive such a small fraction of the actual price that the consumer pays (in other words, why is the farmer's bargaining power so low compared to the traders), he points out the following

"A typical farmer harvests his crop, loads it on his bullock cart, travels 30 km to the mandi, where he is often forced to sell at distress prices. Once at the mandi, he cannot return without disposing his produce. He needs the money and the trader knows it. Had he known the price before he left, he might have waited a few days. Where e-chaupals have arrived farmers are happy because they get to know mandi prices via the Internet."

He goes on the lend support to the entry of professional retailers (which would benefit consumers and farmers alike by reducing the middleman), communication mechanisms like the internet, mobile phones and specifically tickers set up by the national commodities exchange in local languages, bank loans hedged against future prices (which currently the RBI doesn't allow them to do!) and crop insurance.

Thus he successfully lends sophistication to the ancient subject of farming so that overintelligent people like you and I can understand.
- posted by Rallix @ 2:00 PM