Quantity and value of wheat and barley exported from India by sea

In our view, the figures in this Table are sufficient in themselves to condemn the elevator system as a practical measure so far as the export trade is concerned. The view taken in some of the evidence we received in this country was that the falling off in the export of wheat from Karachi from an average of a million tons in the pre-war years, 1910-14, to one of 350,000 tons in the post-war period, 1918-26, was due to the inferiority of the Indian product as compared with that of other countries and that this was largely due to the unsatisfactory conditions in which it is marketed which, in their turn, are the result of the absence of an elevator system. We are unable to accept this view. It is not borne out by the evidence we received in England, to which reference has been made in paragraph 340 above. It is our view that the fall in the exports of wheat must be attributed in the main to increasing consumption in this country. So marked is this tendency that it would appear by no means improbable that India may, within a few generations, cease to be a wheat exporting country, in spite of the increased production of wheat to be anticipated as the consequence of the extension of irrigation.

The most modest scheme for an elevator system which was placed before us involved an expenditure of nearly two millions sterling, of which £800,000 represented the cost of an elevator at the port. The figures we have given above show that, even in the years when export is most active, it is very doubtful whether it would be sufficient to justify expenditure on this scale and it is clear that, in some years, the port elevator would be practically idle. Nor does it seem that one of the advantages claimed for the elevator system, which is that it would tend to steady export throughout the year, could be secured. The evidence we received on this point in London showed that the demand for Indian wheat is most active in June and July, as it then fills a gap between supplies from other sources. The existence of an elevator system would not alter the seasonal character of the demand. It is not surprising, in these circumstances, that the proposals for an elevator system have not received any support from the export interests involved.

The question has now to be discussed from the point of view of internal trade. It was urged that a system of country and terminal elevators in the Punjab could be worked without a port elevator or terminal elevators in the consuming centres, since elevators can discharge into bags automatically weighed and bulk transport is not, therefore, essential. It may, however, be remarked in passing that, if bulk transport is not essential, one of the main arguments in favour of the elevator system, which is that it facilitates such transport, can no longer be sustained.

We should, in any circumstances, have hesitated to advocate the establishment of the elevator system for the internal trade of India without far more definite evidence on the subject than has been placed before us. We do not consider that the agricultural and marketing aspects of the problems have been sufficiently examined. We have grave doubts whether the difficulties have been sufficiently appreciated of dealing with a multitude of small and, for the most part, uneducated cultivators whose individual contributions are very much smaller than are those of farmers in countries in which the system has been successfully worked. The difficulties of persuading the cultivator to accept a system of pooling at the primary elevator, involving, as this must, the loss of identity for the individual parcel and the holding by the cultivator of a certificate bearing on its face the quantity of the parcel marketed and its grade as assessed by the staff of the elevator, must be formidable. That this difficulty is felt to be a real one we judge from the evidence given before us suggesting that, in the earlier stages of the venture, the identity of the cultivator's parcel should be preserved by storage in a separate bin. Having regard, however, to the substantial increase in cost involved in the construction of a multiplicity of bins, and in view of the small quantity of grain commonly marketed at any one time by the average cultivator, we find it impossible to accept this proposal as practicable. Again, the question of the training and control of the large subordinate staff which would be required to operate the elevators, and the opportunities for malpractice offered by any system of grading and pooling at the primary elevators, present added difficulties. Those difficulties would not be removed by the adoption of the suggestion made to us for the guarantee by Government of the certificates as to both quantity and grade. The large number of grades required to meet the needs of the internal trade is a further complication. We were informed that no less than nine such grades would be required in the initial stages of the scheme. Here again, the constructional detail required at the terminal elevators to cope with this multiplicity of grades must add largely to the cost of construction. Meantime, the mills operating at the consuming centres are equipped with the means required in the existing condition of the trade to effect the necessary grading, and we have no evidence to suggest that internal consumers would be prepared to pay for the grading and cleaning of their grain in terminal elevators. A very detailed investigation into the various points discussed above would be necessary before the introduction of the system could be recommended. But, in present conditions, the factor which tells decisively against the elevator system is its prohibitive cost. Even without the

port elevator, the scheme we have mentioned above involves a capital cost of over a million pounds and entails the construction of 78 elevators with an average capacity of 3,500 tons. It is most improbable that private enterprise would be forthcoming to undertake a scheme of this magnitude and it would, therefore, have to be financed by Government. The advantages to the cultivator which would result from it appear to us to be altogether too problematical to justify a recommendation that the scheme should be carried out by the State. Such funds as are available can, in our view, be utilised to far greater advantage in the numerous ways we have advocated elsewhere in our Report. It may be that when the Sukkur Barrage and the great irrigation schemes now in progress or under consideration in the Punjab are completed, the export trade in grain will, at least for a time, increase sufficiently to bring an elevator system within the range of practical politics. We are of opinion that, in present conditions, no further investigation into its possibilities is called for.

STANDARDISATION OF CONTAINERS.

345. In Indian conditions, the matter of containers is one which arises mainly in regard to the marketing of fruit and vegetables. It is obvious that, if one or two types of package are selected as best adapted to trade requirements and these types alone are manufactured, not only will cheaper packages be available but, with standard methods of packing, the quantity element will also be standardised. Standardisation of containers thus contributes to increased business efficiency and a corresponding reduction in marketing costs. The fruit and vegetable trade in India is mainly in the hands of small traders who do not combine to secure the advantages of bulk transport, with the result that the packages booked are small and in miscellaneous shapes and sizes, whilst the methods of packing adopted are often very primitive. In view of the climatic conditions in this country and the long distances over which much fruit has to be transported, the question of suitable containers for fruit and vegetables assumes special importance. Valuable information on the subject of containers has already been collected by the Empire Marketing Board. We recommend that this information should be obtained by the agricultural departments and that experiments should then be carried out which will enable the departments to give the growers of these products advice as to the material which can best be used for containers, with special reference to the question of the returnable against the non-returnable package and the most efficient methods of packing. In this connection, we note with satisfaction the experiments carried out in the Bombay Presidency with a view to improving the container used in marketing fresh mangoes. We have no doubt that the forest departments will be prepared to advise and assist the agricultural departments in discovering the best types of wood for the manufacture of containers. We think that a useful stimulus would be given to the trade in fruit and vegetables if the concession granted on the North Western Railway which allows "returned empties" to be despatched back to Quetta and Chaman in returning fruit vans, though booked at goods rates, were made of general application.

COLD STORAGE.

346. In paragraph 314, we have pointed out that the extensive employment on the railways of refrigerator or cold storage vans for traffic in fruit and milk-to which may be added vegetables and fish-must depend upon the extent to which this form of traffic develops and on the establishment of cold storage depôts at suitable centres. At present, cold storage depôts have only been established on a small scale in Calcutta and Bombay. The existence of a number of such depôts at the ports and in up-country centres would undoubtedly do much to stimulate the internal traffic in fruit, vegetables and fish. The possibilities of developing an export trade in certain Indian fruits such as mangoes also appear to deserve investigation. An investigation somewhat similar in character to that carried out into the question of grain elevators might, however, be undertaken under the auspices of the Railway Board with a view to determining whether it might be possible to enlist private capital in an enterprise which would make an important contribution to the welfare of the small cultivator and of the fishing community. Cold storage is in other countries playing such a remarkable part in the marketing of goods, both for export and for internal consumption, with results so generally profitable to the private enterprise undertaking the arrangements as well as to the farmer, that we do not doubt that sooner or later there will be a similar development in India. We trust that those concerned will keep abreast with the research on the subject of cold storage which is being carried out in other countries, and will, when the time comes, prosecute in India any investigations required to adapt modern practice to local conditions.

MARKET SURVEYS.

347. We have sought to make plain the extent to which the prosperity of the cultivator and his progress in agricultural efficiency depend upon sound marketing. It has been pointed out that comparatively little has been done by Government in India to assist the cultivator in his marketing operations. The collection and study of exact information on the question must necessarily precede the formulation of an effective policy for the improvement of marketing. Guesses and hearsay cannot provide the grounds for action, and, at present, the departments of agriculture are without much of the material essential for a forward move. We think the provincial departments should at once begin a study of marketing conditions. The expenses of the work should not prove unduly heavy, and we are satisfied that any funds disbursed will be amply repaid. But if such surveys are to be of value, the personnel engaged upon them must be suitably equipped and the plan of investigation both businesslike and thorough. The investigator should combine a sound knowledge of economic theory with a practical acquaintance with the conditions of production and sale of the commodity with which he is concerned. He must be prepared to develop his conclusions in accord with facts as these are established by him and must eschew the temptation to mould and colour 'facts' to suit prepossessions. He should usually concentrate his attention upon one class of produce at a time, though a group of

commodities handled throughout the length of the marketing chain by one set of intermediaries may sometimes be conveniently included in a single survey. A survey of production, of internal consumption and of the export trade, where this exists, will form an essential preliminary to the proper understanding of the existing situation. The extent to which production is localised and, in some instances, to which it is seasonal will demand the investigator's attention. In India, he will not, save in exceptional cases such as that of white sugar, be called upon to consider how far and in what circumstances imports compete with the home product. Where reliable and continuous statements of prices exist, he should examine the movement of prices over a period of years and the extent to which seasonal fluctuations appear and to which prices differ between one locality and another. He will attempt to analyse the whole price structure and, as far as possible, to measure the margin attributable to the various functionaries concerned. He must make himself closely acquainted with the factors which influence both the quality and quantity of supplies. The relation between the producing and consuming centres and the state of communications will come within his purview and he will need to understand the methods by which crop forecasts and crop estimates are made. He will then turn to the conditions of demand and obtain a general appreciation of what is demanded in terms of both quality and quantity. Here again, an examination of seasonal fluctuations and local differences will be required. It will not be sufficient to enquire into the nature of the demand unless the extent to which it is met by supplies at remunerative prices is also taken into consideration. A critical examination of the marketing machinery will then follow and the investigator will examine the efficiency of the markets, their physical conditions, their administration and the facilities they offer. At this stage, close attention should be given to the relation of the cultivator to his primary market, including the influence of debt upon his freedom of choice as to where and when he will dispose of his produce, the extent to which produce is sold to village traders and marketed by them and the tolls and taxes on the cart or the value of its contents which are levied by the municipal or other local authority. The extent to which a comparison of prices generally between market and market can be taken as a reliable index of market conditions is another point to which attention must be paid. The technical study of storage methods and facilities will lie outside the province of the investigator; on the other hand, the study of the amount of storage available, the costs of storage and the margin available for their recoupment, as well as the consideration of the most suitable place at which to store, are integral parts of a marketing investigation. In the penultimate stage of his enquiries, the investigator will trace the channels through which the commodity passes in its journey from the producer to the consumer. He will study the various types of middlemen and endeavour to appraise the services rendered by each. As far as data are available, he will examine the costs of distribution under different conditions. Finally, the investigator will study the position of the co-operative movement and the extent to which savings in distribution