We get this question often from Investors as we released the “Kaveri Multibagger” based on Farmers Amendment Act 2020.
Our View is the bill is GOOD FOR FARMERS based on the following key points.
- DEMAND-SUPPLY IMPACTS PRICE as you can see the stock prices are going up because the Volume is limited & Thus Multibaggers are created. Same way the Farmers will have a LIMITED VOLUME on “FARM PRODUCE” let it be potato, onion or anything. This Produce cannot be quickly created, it requires a process of seeding, farming & a lot of time delay involved. So LIMITED Supply will Increase the Price. [currently this component is enjoyed by middleman & not farmers]
- FARMERS CAN ENTER CONTRACT WITH NEW COMPANIES which will Activate the Next Component called DEMAND. HIGHER DEMAND will increase the Price. Direct contracting with companies will improve the benefits directly reaching farmers.
- HIGHER INCOME LEADS TO BETTER YIELDS more money in the hands of farmer will make them REINVEST into better seeds, insecticides, equipment, higher yielding methodologies & better knowledge which will IN TURN yield more income in the future.
How the Problem of NO MSP is addressed?
In an open-market the MSP (Minimum Support Price) does not play a bigger role. If a contracting company does not honor the buying contract, there will be second level buyers & shop owners appearing to take away the products.
The question of Uneducated Farmer gets cheated, Yes that is happening already & it will happen for minor % too. A farmer is doing business hence they need to acquire Business Acumen in the field which is possible through Grouping with other Farmers, Hiring Contract Validation etc. But this Bill be beneficial for MAJORITY FARMERS!
How the Problem of Removing Certain Foods from Essential Commodities going to Affect?
It is NOT going to Affect the Farmer.. YOU the consumer is going to get affected.
So who are the Whole Beneficiaries & Victims of this Act?
The Beneficiaries are going to be Farmers & Corporates. This is the reason more Farming & Agro companies are registered by Biggies like Ambani, Adani in 2019 & 2020 & Government is Pushing the reforms.
The Main Victims are going to be Middle Men & State Agencies as they loose Commissions & They should!
But the Biggest Victim is going to be YOU the consumer. Once the Farmer & Corporate are stream-lined following things will happen:
- Farmers get agreed price from Corporate
- Corporate in few years going to Build huge godowns & storage mechanisms to HOARD the products
- Corporate can now Hike the Price to end customers
- Customers cannot go to Street Sellers as they are OUT OF SUPPLY
- Street Sellers cannot go to Farmers to load more supplies as they are CONTRACT LOCKED
- Farmers will NOT take new contracts with Street Sellers as they offer low price & volume
- So price of food is going to be Incremental year-after-year
YOU the end-customer is going to pay the higher price![Soon government will Remove Food Prices from Inflation to make them look good too]
See the Bill Summary here https://instapdf.in/farmers-bill-2020/
Your views are welcome!