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Farmer incomes fall despite good wheat harvest, they blame MSP cut on mismanagement at mandis

Farmers say mandis have made many new arrangements due to lockdown but didn’t cover their wheat produce, which caused shrivelling leading to lower MSP & delayed procurement.

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New Delhi: The rabi harvest this year has almost matched the level of the previous year despite the nationwide lockdown to curb the spread of the novel coronavirus, thanks to a slew of agricultural produce marketing reforms initiated by the central and state governments.

However, farmers’ incomes have still declined, due to alleged mismanagement by state mandi boards and unseasonal rainfall.

The agriculture ministry estimated a 2.5 per cent increase in wheat output to 106.21 million tonnes this year. But many farmers across the states told ThePrint that they are being paid less than the minimum support price (MSP) for their produce. They complain that the wheat they brought to the mandis was left without shade, which caused shrivelling, leading to a lower price and delays in procurement.

Punjab Chief Minister Captain Amarinder Singh tweeted about the problem to Prime Minister Narendra Modi.

“Have requested PM @NarendraModi Ji to review the unjustified value cut on wheat MSP which will lead to loss of income for farmers. In this hour of crisis, we should aim at increasing the income of farmers. Requested him to direct the concerned dept to rollback this decision,” Amarinder tweeted Tuesday.

Also read: India’s farmers can keep economy running in Covid crisis. But who will tell Modi govt that?

The reforms

To encourage farmers to bring the produce to the market on time, the central government had asked states to adopt direct marketing through cooperatives and farmer producer organisations (FPOs).

Also, to ensure social distancing norms and to decongest mandis while boosting the supply chain, it focussed on the National Agriculture Market (e-NAM) and FPOs.

Under this process, FPOs can directly trade on the e-NAM portal — they can upload product details from collection centres with picture/quality parameters and avail the bidding facility without physically going to the mandis. Farmers can also sell their produce from Warehousing Development and Regulatory Authority (WDRA)-registered warehouses, and don’t need to physically bring the produce to the nearest mandi.

ThePrint had reported earlier how state governments have ensured a robust procurement of rabi crops by increasing procurement centres and allocation e-tokens for entry in mandis.

Selling below MSP

However, even with the new direct marketing system in place to ensure farmers get appropriate prices for their crops, many have said they had to sell their produce below MSP.

Wheat in Madhya Pradesh gets harvested before Punjab and Haryana, but MP farmers had to wait as the Covid-19 outbreak delayed procurement. Farmers who did not have adequate storage capacity resorted to distress sale.

Khairlal Sahu, a farmer in Barha, Jabalpur, had to sell his wheat to a trader who was offering him a price, which was Rs 300-350 per quintal less than the minimum support price of Rs 1,925 per quintal under a new system called ‘sauda patrak’. In this system, traders can decide at what rate they want to procure the produce, and state government officials cannot intervene.

Sahu told ThePrint over the phone: “I had to sell the crop at the rate offered by the trader because I could not afford to come back to the mandi every day. Also, we are in urgent need of money to prepare for the next crop cycle and to pay for transportation.”

Sahu said he had to bear a loss of almost Rs 13,200 for a trolley of wheat, which weighs 60 quintals.

On 25 April, farmers across mandis in MP also complained that chana dal was being procured by traders at Rs 4,200/quintal, much below the MSP of Rs 4,875/quintal.

ThePrint approached Govind Singh Rajput, MP Minister for Food, Civil Supplies and Consumer Protection, and Cooperatives. His office responded: “The scheme was reintroduced in the state on the request of the Centre to encourage direct procurement in the state by cutting middlemen and state intervention.”

It added, “Also, the scheme encourages social distancing because the farmer has to bring only a sample of the crop to the mandi and the rest of the business can be done between the trader and farmer at another place outside the mandi once the full payment is done, which makes the mandis less crowded.”

However, the office of the minister said Madhya Pradesh has requested the Centre to procure more from state mandis through the FCI and NAFED, to ensure MSP is provided to the farmers of the state.

The minister’s office also said state agencies under price support schemes will procure chana at the minimum support price of Rs 4,875 per 100 kg, mustard at Rs 4,425 per 100 kg and masur dal at Rs 4,800 rupees per 100 kg from May onwards. The state will also start purchasing mustard at a minimum support price soon.

Also read: No labour, no transport, no demand: UP small farmers’ troubles pile up under lockdown

Unseasonal rain

Rain and hail just before the harvest, and while the crop was at mandis for procurement, have also caused losses to farmers in Punjab, Haryana, Uttar Pradesh, Rajasthan and Madhya Pradesh.

Intense rains crushed the ripe standing wheat crop, while moisture worsened the quality of wheat at some mandis, where it was left in the open. This caused shrivelling of the wheat, which led to a lower price and delays in procurement of the produce.

Jaswinder Brar, a wheat farmer in Moga, Punjab, whose 270 quintals of wheat were either damaged away or shrivelled in the rains this Monday, told ThePrint: “Though there is marking and every other arrangement here to maintain social distancing, there was no arrangement to protect our crop from the rain. We had pleaded to the authorities to get us some tarpaulin when the weather began to change, but nobody responded.”

“Now, the wheat is completely wet; the moisture is more than permissible limits of 12 per cent. This leads to delay in procurement as the crop has to be dried first. It also damages the bran, leading to its discolouration,” Brar explained, adding that he how has to go through the whole process of getting an e-coupon after drying the wheat, which will lead to double cost of labour and transportation.

Farmers in Haryana also complained that traders were offering only Rs 2,100 to Rs 2,300 per quintal for wheat as against the 2019 price of Rs 2,700 per quintal due to discolouration caused by the moisture.

Government response

An Food Corporation of India official, who did not wish to be named, admitted to ThePrint that there are certain rules that can compromise with the MSP to be provided to the farmer.

“Moisture greater than the permissible limit of 12 per cent leads to rotting of food stock in godowns if kept for a long time, which is highly likely due to the bumper crop produced this year and the huge amount of storage available with FCI,” the official said.

“Also, wheat soaked in water is often returned by states and PDS shop owners as the beneficiaries refuse to take it on the grounds of shrivelling and lack of lustre in the foodgrain, for which the FCI gets blamed,” he continued.

“Evaluation of wheat in various mandis across states is often done manually and prices fixed accordingly, which leads to middlemen, traders and local FCI officials arbitrarily determining the prices on the ground of produce quality,” the official added.

On the issue of the lack of provisions in Punjab’s mandis to protect the wheat produce from unseasonal rains, an official in the state’s department of food civil supplies and consumer affairs explained: “Before the Covid-19 outbreak, the FCI had three times the minimum requirement of buffer stocks, and the tarpaulins related to temporary storage and shade arrangements were diverted there to make open storage space for foodgrains due to overflowing godowns.”

The Punjab official added: “There is a rapid dispatch of foodgrains to other states by FCI under PM Gareeb Kalyan Yojana and open market sale scheme. We will provide the shade and storage arrangement in mandis as and when the temporary godowns get free.”

Also read: How Punjab kept its farm economy going and brought Asia’s largest grain market back to life


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