William Kramer

Farmers Rejoice: Exploitative Middlemen in the Spotlight

The Financial Times (US) published a full-page article October 2 entitled “To feed a need” that brought to mind research that WRI generated back in 2003 on the Indian conglomerate, ITC, and its rural engagement strategy called e-Choupal.

In brief, both the article from last Friday and the case study document the benefits of direct market access by poor rural farmers in India: by avoiding the traditional market middlemen and establishing transparent and honest markets, poor farmers achieve higher prices, and the markets benefit as well.

India has now created a National Spot Exchange in Bihar, one of India’s poorest regions; it is a unit of the Multi-Commodity Exchange. While the article never refers directly to ITC’s pioneering effort to break the stranglehold of middlemen on rural farmers, it seems clear that their private sector business has provided the model for the government’s new programs.

One can only hope that public adoption of this business model does not undo the gains farmers who have had access to alternative markets have enjoyed, but rather amplifies the positive impacts, and extends the benefits substantially.