| Username |
Post |
| Biswo |
Posted
on 21-Oct-01 05:53 PM
I met him in Sajha Bus bound to Chitwan. It was not difficult for me to recognize
him. He was just a little older than when I saw him last time. Except for the
newly wrinkled lineament, everything else was same.
"Sir, you remember me?" I asked him politely. He tried his best. When I reminded
him I was from his neighboring village, he exclaimed with surprise. "You grew up so
fast!"
-----------------------
Sajha Bus got some mechanical problem once we passed Gajuri. We got off the
bus. He followed me to the nearest ledge of multilayered stone. Nearby was a
small hut, and it was easy to see the dusts blown by passing vehicles had
changed the color of everything of that hut.
" I went to the national convention of milk producers association of Nepal." He
said. "I have been elected vice president".
"Was it a partisan election?" I asked with curiosity.
"No. We were united for our interest." He said with a distinct joy in his face. "We
are facing a lot of problems now. The government has imposed milk holidays and
we are facing problem in selling our milks."
"How come? I still see no pure milk in Kathmandu."I asked with curiosity.
He was just a vice president. A teacher turned vice president of milk association.
He was not an economist, and his gamut of knowledge about milk trade was still
somewhat limited.
A few gentlemen joined us. The Veep pointed to me , and introduced me to the
newcomers, "He is from ---village, and son of Mr----". All newcomers looked at me
and tried to refresh their memory.
-----------------
We went to the small hut. Either it was made a makeshift tea shop, or it was a
run down tea shop lurking in the road waiting for unfortunate travellers who
travel along Prithvi Rajpath. In Mugling-Kathmandu road, there are so many
traffic jams(due to landslide and other reasons), traffic mishaps, and driver's
licentious behavior that every small hut has chance to earn money by doing small
time business.
"How much for a cup of tea?"
"Rs 5 per glass." He replied. The veep of milk association smiled wrily, and
told me,in somewhat sarcastic tone, "This is more than what we sell our pure milk
for."
Tea price was steep. We knew we were scalped, but yet we decide to sip the hot
tea.The cost of vegetable (chanaa, aalu) was even exorbitant.
"Is Chitwan the biggest milk producer district? " I asked.
"No, it is probably Ilam. We rank third or fourth." He said.
"How many cows do you own?"
"I used to own traditional low-milk-producing cows. But recently I bought quite a
few Rs 55,000.00/each cows from Punjab. They have better genetic quality, and
give milk 25 litre/day . "
"All of you own this much cows?"
"Yes." the crowd replied to me. I was enjoying my status as an educated young
man of the village.
"If the government doesn't buy my milk, where should I take them? Who will buy
thousands of litres of milk? Should we just spill them in the road, and incur loans
to feed the cows? Will bank give us rebate?" A fusillade of angry complaints came
as if I was the almighty politician listening to their problems.
"Why don't you make your own (cold) storage and start marketing?"
"We will do. But that takes time. When they were encouraging us to rear cows,
they didn't tell us there won't be buyers."
--------------***************-----------------------******************
When we reached Tandi, every body got off the bus and simply fade away from
my eyeshot. A new picturesque village arrived, and I also got off. Then I saw a
gentleman driving a truck in the road.
"Hey, what's up? When did you come back?" He shouted at me.
"Good. How come you own the truck? What do you do?"
He stopped his truck. Pointed at the far-flunged village of his own, and told me his
story:" I made a milk factory. Can you see my house (and the factory from here?"
"What does that (milk factory) mean?"
" I buy milks. I also have my own cows. And I store them, and sell them to Birgunj
and other cities."
"How did you get money for that?"
"From bank." He replied to me. He was all joyous.
"How much do you sell?" I asked him.
"Demand exceeds supply now!"
Cheerful, he started his small truck. I wished him good luck.
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| Gandhi |
Posted
on 21-Oct-01 09:09 PM
Biswoji
Asymetry of market information has been considered a worldwide phenomenon which causes higher marketing cost, higher cost to the consumer and lower profit to the producers, when it is in agricultural production. This may be the cause why this year's nobel prize in economics is given in this area. What you gave is a vivid example of asymetry of market information and inefficient market functioning at micro level.
This problem has been prominent for the last 8 - 10 years initially faced by the milk producers in Ilam district. People milked their cows and fed their animals what they cooked in it (Gailai Khir Khuwaune) when the dairy factory in Biratnagar closed twice a week and farmers had to bear a two-days-a-week milk holiday. What you follow is a real problem how the producers are being deprived of their right to profit.
A simillar case was experienced with Angora rabbit in eastern hills of Nepal. This problem was again faced by the farmers of Terhathum, Ilam and Dhankuta. Initially they were taught about the profitableness of angora wool. They were given a tentative information that 'a kilogram of angora wool (raw) is worth Rs. 3500' and 'angora wool is in high demand in ........... market'. This led small farmers to keep few rabbits in their hut and make some wool out of them. The problem - there were no vendors, no nearby markets to sell them, no technical knowledge on shearing, storage and disposal, no quality control etc. Once a pair of angora rabbit cost almost a milking buffalo which was, within three years, down to 300 per pair. Many farmers who started the business in the hope of profit ended with loss in terms of their labor involved and cost of feed, farm house etc. However, being a non-perishable item they were given ample time to search for the market. Later the farmers formed coperatives, channelled for the markets in India, few processing plants were established in the area. Now, though the price is not as expected (3500 per kg), it is still profitable (1200 - 2100 per kg) and those who sustained the business over the time are now satisfied.
May be these milk producers can raise enough capital to establish few milk processing plants in various parts of the country and intervene the market in a large scale. I have seen a great potential for enterpreneurship in some of these farmers groups. I hope this recurrent problem and nonsense decline in profit will encourage one of these groups to come into the milk processing industry.
Gandhi
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| GP |
Posted
on 21-Oct-01 10:27 PM
For sometime, my grandparents were too in
Chitwan to catch booming business
in Chitwan, like him many moved after the land acquision for
the proposed Pokhara International Airport at Chhinedanda.
My grandparents were surprised with the life style of peoples
of Chitwan, most of the peoples employee the labours from
Bihar because they said Nepali labours are either too expensive
or not so hard working, like the Indian counterpart. Still they
had great savings. Chitwan is US of A inside Nepal, I mean
your neighbours come from some other corner of Nepal
and the name of the place and their life style is strang to you.
Thus, No cared much what you are doing, and what kind
of job you can or can not do. Thus, the "Pahadia" Bahun
will be having Poulltry Farm, and surprising his relatives
in Pahad wll be surprised too. Chitwan is really a great
place from Natural Beauty (Tiger Tops) to Human Development.
In recent years, Chitwan is facing problem with market.
Well, Ashu might argue that Let market remain open
to Indian Products, and but, I am not that much of
extrovert to let all garbage enter to Nepal in the name
globalization and free market. In this context, the
Nepali markets should be monitored and the quality
less, but, cheap Indian vegetables should be controlled
to let the fresh products from Chitwan find ways to
KTM, or let Govt. Provide cold storage and other facilities.
Why from Govt. ? Ashu might come up with his
theories. But, the idea of govt. is essential in Nepal
where government does not allow peoples to have
large plots of land, thus diivsion of land to small units
does not allow small farmers to have their separate
cold storage and its needs government's initiation.
This is the main drawback of having lands divided into
too smaller units. Here the American theory of economy
fails. Well, in Japan, we can find majority of farmers
having smaller units of plots. The difference lies in that
Japan has large number of coperatives working in each
village and run by local peoples and supported by
government. In Nepal, cooperatives might work, but,
the initial investments are so high, question remains
who is going invest on such cooperatives? Well,
there are many Sahakaris are coming and do exist in
Chitwan too. But, the local peoples have to spend
lot of money in transferring their product and in
peak season these cooperatives (illusive) pay the
farmers quite less and thus the middle man is
getting huge profit. Government does not have
enough rules and laws to protect those lower middle
class farmers. Government needs to think towards
this aspect too. But, our government is so bad and we
can smell they have 41 ministers. I think our constitution
should be changed to call MP not as member of Parliament,
but, as Minister of Parliament, so that, they could have
less race for becoming Minister, and spend more time on
important things.
Well, a friend of mine who came from Chitwan, he was my senior
while I was studying in Chitwan. I got some of those
information from him. Looking at the information, I was talking
to him why not Chitwan peoples have Cyberbased Co-operatives
so that the products can be directly sold to the dealers or
retailer cum distributers using computer and internet system.
The idea I gave him was like this:
1. We register sahakari.com, so have URL:
http://www.sahakari.com/
2. We buy few digital cameras, video cameras and
portable computers.
3. Establish one office in Bharatpur or Narayangarh
plus keep in touch (with percentage paid) with
local internet or email providers.
4. Make a network. Then, contact farmers. Ask them,
how much they expect, starting price. Live video.
(where one agricultural specialist also accompanies).
So, the specialist confirms that what he sees in Video
is what is available in field. (since sahakari.com
works only as cooperative linking owner and
buyer, so they get little percentage, so cheating
chances is very less. I mean grabing moeny
and leaving the spot.
5. Put a live auction at http://www.sahakari.com/
6. The person who succeeds to pay high amount
goes to field or Sahakari.com provides other means
to load the Cauliflower or eggs to KTM. Meanwhile,
the retailer cum distributer starts finding his
customer and his items are coming very soon.
7. Customers get the very fresh units of Cauliflower
because every steps are tracked. Insurance company
insures that the purchased items arrives to his gate.
(I mean if purchased using Credit Card like MAster or
Visa Card: these cards are available in Nepal effective only in
local curriences).
8. Thus, a new market starts. In this assumption and idea,
the friend, got excited and registered SAHAKARI.com
and I hope it will become one useful DOT COM business
center in Nepal.
We needed some dot com companies to work towards this.
As someone wrote here that we have 20,000 internet
users, i.e. 20,000 households have computers. What we
need is to develop TRUST, the Sahakari that mushroomed
in Nepal, made SAHAKARI Banks as JOKE and peoples
are afraid of this mechanism. Trust is that we earn, not
buy. Govt. rules and law enforcement officers
can enhance and keep the Trust in track. In Japan, if
found guilty in any cooperatives or banks, they, do
not be prized with ministry position, but, they find
a space in Jail. Out of 41 ministers, we have heard
at least 50% of them having indulged in vaious illegal
things, corruptions, raps, women mishandling and
killings. In such countries, you can not have Amazon.com
but, ....................TaukoFora.com, MancheMara.com
and .... StreetVandalieGara.com
GP
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| Biswo |
Posted
on 22-Oct-01 11:52 AM
Gandhiji:
Isn't the theory of asymmetric information the same theory for which this year's
Nobel prize was given? Btw, I enjoyed reading your acadamic explanation of the
buyer-seller problem I raised.
In another note(this serves as an answer to GPji also), tired by this unnecessary
Milk Holiday, the Chitwan District Development Committee, Bharatpur Municipality
and Ratna Nagar Municipality(Tandi area) decided to establish one milk-processing
factory somewhere in Ratna Nagar. The idea was to store, process, and sell the
available milk in powdery and other forms , so that they wouldn't perish soon, and
would become more durable to market. I don't know if the factory is already in
place.Anyway, imagine our market flooded with not Nestle's, but our own milks.
Again, the bottomline is this:only enterpreneurship can lead us. A free, and
not-corrupt environment is conducive. Indians are asking for more tight
restriction on export to India from Nepal in upcoming trade treaty, and only way to
mitigate the effect of such restrictive trade provision for us is to produce
more quality production, and to encourage ruthless enterprenuers who can go
anywhere to promote their trade.
Here is another classic case:
On my way to Kakadvitta in 2046, I saw farmers in Lalbandi selling tomato in
virtually gratis.1 Rupee per bag. As a I.Sc. student in Kathmandu the following
year, I had to pay as much as Rs 35 per kg for lower quality tomato.I don't
think Lalbandi is so far from Kathmandu..
|
| GP |
Posted
on 22-Oct-01 09:09 PM
Food Surplus in peak seasons: What to do?
In Japan, the price of a kilogram cabbage exceeded $5.
in 1994-95. Similarly, the price of Japanese 1kg rice (Chamal) exceeded
$20, while the imported rice from Thailand, I got 10kg pack in just
5 yen (i.e. just 25 paisa per KG) in the same year. Because of
the changes in taste, the Japanese consumers rejected the
Thai Rice and thus, people's house were broken (thieves) not
to steal jewelleries or credit cards, but, to steal the Japanese
Rice (True story). Why? In 1995 (around) they had drought
or problem with Food shortage in market.
(This example can be compared with the Tomato in Biswor ji's
example in Nepal). How taste matters?
In the following year, the cabbage and rice flooded from
China, Korea and America. Still the price of Japanese Rice
was double of imported rice if not 1.5times. From following year,
Japanese govt. says they have enough stock of rice
and requested farmers to switch to other products or
let the land be barren and govt. will pay compensation.
Last week, the Japanese Beef Market was in crisis, after
they were reported to have found Mad Cow disease somewhere
in Chiba or Wakayama. All supermarkets had disappearance
of Beef corner. Now, govt. says they will compensate for those
who will have direct or indirect impact from this crisis.
Here, free market alone is not an issue, but, govt. monitoring
and support is visibally necessary to keep the market alive
and protect farmers from collapse. FREE MARKET DOES NOT
HAVE ANY MEANING WHEN YOUR MARKET IS NEAR COMPLETE
COLLAPSE. Same trend is necessary in Nepal, govt. can not
say just you should be survive in FRee market and keep their
eyes closed. Then, thats not govt. for people, but, for whom
I don't know?
Meanwhile, let me cite one talk that I listen from two
specialists when I was travelling with them in a Train.
One of them said that in Switzerland, peoples usually,
including govt. store the major product of current year,
and they mainly consume the product of last year, thus,
are always ready to avoid any drought or natural
disaster that would make their market suffer from
food shortage. He was telling, they store those products
like wheat flour, by making enough spaghatty, (dried)
or powdered milk or ... whatever possible way
and keep in their own private stores or govt. funded
community store house. Thus, the market is always
supported by peoples and govt. 's cooperation.
(in such cases, the american way does not work,
because america has huge annual products, than they
really need. This can be realized in restaurants,
in USA one food item, that, when ordered you never
care about amount, and is almost always more than
enough to make your stomach full. While if you look
at the Japanese Restaurants, if you wish to widen
your belly, then, one item is not enough. The price
does not cover only service, but, also the amount.
Thats why rice is served in SS, S, M , L , and 2L
sizes, the 2L size is still not enough to those BHATE
Nepalis who have just entered to Japan from Nepal directly.)
Lets continue talk in prev. para:
Nepal also had peak season and drought years,
and there are many places where food is shortage
in rainy seasons, and peoples eat wild food and
die (as we heard large number only last year),
and on the otherhand, our Agricultural Ministry
exports rice to Bangladesh. Is not it a bad practice
and I mean what is for Govt. ? If govt. can not
store or transfer the products to remote places,
it can promote or subsidize the other methods of
preparing the food that suits and ease transfer to
those needy places. One of the great success in
Nepal is the CHOW CHOW (noodles), and I am not
sure how much stock they have in their store, but,
it will surely solve very short problem. But, we need
at least annual shortage problem by installing more
spaghattty and dry rice cakes. I mean there are many
types of product in Japan, made from Rice and dried
like biscuittes. As a sample, I took a few packs of
such dried rice biscuits, and peoples (to whom I distributed
it) were surprised to find the exciting taste, and
they also felt it can be a great substitute to peoples
habit of eating PETBHARI BHAT KHANE custom
and also can be used to suppliment in places where
food shortage hits. But, such industries need
huge money, and the imported machines cost alone
like 200million rupees, (when I contacted a prime
producer who owns patent) and the custom duty
for that machine can not be imagined. While the
manufacturer says the smallest machine having
lowest capacity, still needs 2000tons of rice
(annual) to make it profitable production. But, such
business (particularly this) could even find market
not only in Nepal, like in Bangladesh or India, where
seasonal flood could creat crisis of food, and peoples
in those countries might find the product a good
source of comfort as a stored item. But, all this needs
govt.'s good policy and monitoring.
As someone said here, last time, when one installs
pasmina shop, others also come to install the same
shop, same things, confusing customers, I mean
mushroomed. When one engineering college was
established, in just another 2/3 years you can find
more than dozens of engineering colleges, and same
in air plane business. Most of them, do such business
because they lack enterpreneurship, and their
education at highschool or TU does not work.
It should start from school's education. I mean
first we need to teach good sociology, community
and what is citizenship, and honesty, ....
Please, look at the NepaliTimes, the interview
"Cynism .... ".
GP
P.S> Sorry being long.
|
| Gandhi |
Posted
on 22-Oct-01 10:49 PM
GPji
I enjoyed going through your writing, long but formidable.
It is good that some enterpreneurship is being developed among the different agricultural (including livestock) commodity producer groups in different parts of the country. However, as you said, they need external support initially in terms of technology and both human capital and capital for investment. Different success stories have been told in high value low volume agricultural commodities like seeds (More can be learned from within the country through SEAN and related organizations, supported by Seed Sector Support Project). These groups were initially supported by different INGOs and now they are governing more than half (?) of the total cereal and vegetable seeds traded in Nepal. Hadn't they been backed by those international organizations in terms of builing seed stores, development of technical and marketing skills through human resource development within the farmers groups, it would be just like what the tomato farmers in Lalbandi and Milk producers in Ilam and Chitwan have been. It is extremely important to support for the farmers especially with high volume low value commodity production.
The nature of agricultural market is quite different from industrial market. In saying so, I am also emphasizing the need for government intervention in agricultural market. Market alone cann't function efficiently to provide benefit to the producers and consumers. It is never expected for private sector to invest in large cold stores which remains half the year nearly empty because of the seasonality of production. Even they build, the operational cost (+ returns to operator) will be translatted to the users in terms of higher rent. Free market is not sufficient to serve in the agricultural sector. If we see the benefit received by farmers in the developing countries, which never tire of defending globalization, average government subsidy to a farm is around $37,000 per year in US and $12,000 - $23,000 in the European Union. In our country the leaders and policy makers seem to enjoy sunbasking following the old classical macroeconomic idea of market functioning.
Our farmers operate in subsistently small scale hence lack any economy of scale. Where you bring a law not to hold more than 6 hactare of land for farming, how can you say production and consumption will be driven by the market and farmers will be better off? Farmers don't know what is support price. Once I heard from the radio that minimum price for paddy was fixed by the end of Mansir. In other countries minimum support price and government subsidy program drives the production in our case........? We are far better fixing paddy price in Mansir, and distributing chicken and building roads in Ashadh just not let the budge seize (not to let the budget seize before going to bureaucrats' pocket). I have seen many marketing stalls built with foreign assistance which are turned to abandoned animal shades and public toilet with 8 months of completion.
There are so many unusual things happening and nobody seems to care. We need real social and eocnomic reform in the country. Tara khai you 'Sati le sarapeko deshma kahile janata ko bhalo hune ho?'
Gandhi
|
| Biswo |
Posted
on 23-Oct-01 12:01 AM
GPji and Gandhiji:
Thanks for your informed responses. I learned a lot from your postings.
However, in my original posting, a subtle aspect of scalping by legitimate sellers
has been mentioned. It is quite evident in Naubise-Mugling route. You pay very
exorbitant price for very low quality things there.[I mentioned the high tea price.]
A lot of time when I went back to home from abroad, I was always faced with
the harsh reality of such expensive and non-hygienic food being arrayed in
the stores along the road. Worse thing is the drivers tend to stop the vehicles in
front of a few clustered shops, which virtually control the market by oligarchic
practice.
Any suggestion how such situation can be transformed to safeguard both
consumer interest, and market interest?
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