Skip to main content

Community Supported Agriculture

Most products have the cost of failure built into the price of the product. For example, a film. When a film gets made, there are so many things at stake, that the all these risks are covered by the premium on the ticket. If a film ticket was prices simply by dividing the cost + profit by the number of people watching, it would be pretty cheap. Or consider for example, the price of a car. The insurance premium that the manufacturer pays is built into the cost of the car. Or say a doctor, who conducts very risky operations get paid highly...and now you ask what's the point??

The point is, this doesn't happen with a farmer.A farmer faces all the vagries of nature or monsoon. Alll his risks are unmeasurable and unpredictable. But does he get to decide his pricing? Why does market not behave perfectly when it comes to agriculture? Why doesn't the theory of high risk - high return apply to agriculture? How does a farmer hedge his risks then is the main question!
The answer as I found today lies in Community Supported Agriculture. This is a fantastic system wherein buyers share the risk with a farmer. They are participants in the farming process economically and hence emotionally. If the monsoon isn't good in a year, and the farmer isnt able to grow enough tomatoes, the buyers will have to forgo the amount but may be compesated by a good winter and receive abundent peanuts. But since the risk is spread, it becomes insignificant to every individual. Morover, the farmer can concentrate on growing quality stuff rather than having to worry about selling it. There are various flexible models around the worls for CSA. Just google it up and its an interesting read. Looks like my next career move ;-)
Labels:

Comments

Kaustubh said…
they need attention...
If possible watch marathi films Gabhricha Paus and Gosht Choti Dongraevdhi.....these films portray this issue in very in-depth manner
1:39 am
Kalpesh Saglani said…
I believe that this modle already prevails in the Goan Cashew Industry.
Where the buyer (factory owner) takes the risk along with the farmer.
12:56 pm
Kalpesh Saglani said…
I believe that this modle already prevails in the Goan Cashew Industry.
Where the buyer (factory owner) takes the risk along with the farmer.
12:57 pm
thelaukik said…
@Kaustubh
I plan to see these movies! I hope swine flu and time permit me to. :-). Fantastic Marathi films have been made on these topics.

@Kalpesh
The cashew factory owners are not consumers. Besides, they don't share the risk by paying before the crop. They pay the farmer only when the product comes to them. That is not what is sharing the risk is. If they were to share the risk, factory owners would have paid a cetain amount (say Rs. 1 lac) to a farmer every year, promising to buy a fixed quantity (say 1000 Kg) from them else be ready to forgo the money. Being redy to forgo the money is the important part Kalpesh. No one is ready to do that for a farmer.
9:36 pm
Post a Comment

Popular posts from this blog

The oscar for dilemmas

As I was travelling from Goa to Pune in a Bus, I overheard some conversation and could see a lot of dilemma on the face of a fellow passenger. As the story evolved, I could connect with him. Thus it went: They were a couple, he was with his fiance/wife/girlfriend (a non-ma/behen relationship). There was another girl (pretty) who wanted to a lady's seat. She could get it only if this gentleman would give up the company of his travel mate as there were no other female passengers on the bus. I have been through similar situation and have said no and felt guilty about it till the society at large did something equally unjust to me. But this incident in the bus the other day, sparked off some more such dilemmas that I have come across quite often. I thought of having a golden globe of dilemmas; put them on the blog and see which is the most common dilemma. First being the one above, the second dilemma that comes to my mind is of cheating in exams. No No. Me cheating is taboo enough! It ...
2 comments
Read more

The business of all that is complex

Very recently I have been following Jason Fried's posts on 37signals.com. I am impressed by his minimalist thoughts and the whole idea of customers 'growing out of' and 'growing into' your product. Per Jason, there are just a certain simple features that customers really want and a product company should strive to be the best at those features. But beyond these features, your customers will always have some desires and will keep asking for more features. One should learn to say no to such demands and crowd the Product with features that only a few of your customers will actually use. These frills not only hamper the performance of the product technically, but also make the Product manufacturer waste a lot of effort in the form of product support and other allied activities. This seems to have been working for folks at 37signals.com and many more such companies (SFDC, Flip Video recorders etc.) I then started thinking of this philosophy in the context of Indian IT co...
2 comments
Read more

RSS - an answer to the caste discrimination

One of my old post on Rashtriya Swayamsewak Sangh drew a comment today. It posed a few question about the stand RSS takes on the issues of caste system in our contry. The reader also asked if RSS could be a possible solution. And this, my dear readers in the fuel for this post. Let me put forth some facts about the organisation called RSS right at the beginning. RSS is a social organisation. There is no formal registration and participation is completely voluntary. It is not a political, religious or profit making orgnisation. There are no posts, there are only responsibilities (in fact that what they are called). These facts make it clear that this is a place where entry and exit is pretty easy. There are no costs involved with either. Which means there is no-one who can tell you that he will get you registered with the RSS and do you a favour. RSS is for everyone. In my opinion it is a perfect place where caste ism cannot exist. There are no reservations for a certain community. T...
9 comments
Read more