Basis for Dharani Initiative

When the Timbaktu Collective (www.timbaktu.org) initiated its organic farming project in Anantapur dist, there were certain areas that required immediate attention in order to relieve the farmers from their distress situation. The Collective felt that a producer owned processing and marketing venture would be able to address the following major issues.

1. Unavailability of Credit
   Due to recurring drought conditions, most of the borrowers in rural areas of Rayalaseema region cannot repay the loans borrowed earlier.  In view of this, financial institutions keep them as de-faulted borrowers, included in the black list, ceasing their chance of borrowing again. This had become a stumbling block to majority of the rural households in all the regions in the state particularly in Rayalaseema region.  Consequently, the dependency on moneylenders and private financiers leading to increase in the cost of production, unremunerative cultivation and increased indebtedness.
2. Exploitative Trading
   An entire district of farmers specialising in one crop, had also significantly increased market risk for farmers. Private traders and groundnut processing mill owners, whose pricing and weighing methods are at unfair terms, control much of the local market. These traders and mill owners often also couple as suppliers for farm inputs such as seed, chemicals and credit to farmers. The relationship as a whole is exploitative and often leaves the farmer at the mercy of the trader/mill owner. With the entire local system tuned and built to support only groundnut, in terms of marketing, credit, insurance, inputs, production know-how or social support, the farmer is forced to go back and continue growing groundnut, but only to further sink in the mire.
3. Trade policies and increased market risk
   The purchase price of groundnut has also been affected by policies relating to oil imports and trade. Imported Palm oil, sold at much lower price than that of groundnut oil. The local groundnut purchase price was affected by the situation in Maharashtra-Gujarat (which are other major groundnut producing regions) and bigger traders up the value chain, which only further exposed the Anantapur farmer to greater market risk.
4. No access to growing Organic food market
   The Organic food market is growing at a healthy rate of 15-25% worldwide. In India too, the awareness for Organic and healthy nutritious food is on a constant rise. Much of the organic food grown today in India, as well as the organic guarantee systems developed, are focused on export markets in European Union, United States and Japan. The focus on export allows nutrition to 'leak out' from the country. Small-holder farmers have no direct access to this growing market and neither do they benefited from its added margins for lack of proper infrastructure and the requisite technical and marketing ability.

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