Nagpur: Farm produce traders have pointed out to chief minister Devendra Fadnavis that the state government wants private players to purchase at minimum support price (MSP), but the state itself has been unable to carry out its procurement operations effectively.
In a letter to Fadnavis, Federation of Association of Traders (FAT) has said the state itself could not handle the MSP purchases for tur and chana properly. Farmers had to wait for as long as four months to get their money, it said.
The traders, who are up in arms against the state government’s move to make it mandatory even for private players to buy produce at MSP, are planning to meet on September 3. A decision on suspending purchases may be taken during the meet. Maharashtra cabinet last week cleared a proposal to amend the law and become the first state to make it mandatory for private traders to buy farm produce at MSP. Violators would be penalized with jail term and a fine of Rs50,000.
The letter says that it would not be practical to implement the MSP policy, because rates of a whole gamut of commodities are ruling below the MSP in open market. The current market rates of crops like jowar, maize, tur, chana (chickpea) and soyabean are at Rs1,150-1,400, Rs1,250, Rs3,650, Rs3,500, and Rs3,250 a quintal respectively. As against this, the MSP stands at Rs2,300, Rs1,750, Rs5,450, Rs4,400, and Rs3,377 respectively.
There is no such bar elsewhere in the country. If the price goes up in Maharashtra due to the MSP mandate, cheap imports may flood the market from outside the state or even abroad, leaving the state’s traders at a loss.
The traders have also blamed the National Agriculture Cooperative Marketing Federation of India (Nafed), a central agency for battering the prices. Nafed is flooding the markets with commodities at rates lower than the MSP. This has made it difficult for the open market rates to sustain at a higher level.
Nafed managing director Sanjeev Kumar Chaddha told TOI that the agency has no choice but to clear stock so that space is created for further MSP purchases. Chaddha, who accepted that commodities like tur are being sold at much below the MSP, said the stock is being offloaded in a staggered manner. This would prevent rates from crashing is the thinking.
In 2016, Nafed had purchased a record quantity of 50 lakh tonnes tur. So far, only the stock purchased in 2016 is being sold in open market. The rest is being supplied through the public distribution system, which does not have any impact on the market.
Pratap Motwani, vice president of FAT, told TOI that it would not be viable for the trader to buy at MSP if elsewhere the rates are low. The state government should first control the market. It would be difficult for rates to sustain if Nafed continues to flood the market with cheap stocks.
Dipen Agrawal of Nag Vidarbha Chamber of Commerce said if the policy is implemented, the state’s traders may stop purchasing or cut down procurement. This would only leave the farmer at a loss.
