Crop prices: The pulse of producers

Israel Khan grows arhar as an intercrop in alternate rows with soyabean and cotton.

Written by Vivek Deshpande | Amravati | Updated: February 9, 2017 2:09 am
Crop prices, ARHAR DAL PRICE, PULSES PRICE, farmer crop price, amravati arhar, arhar farmers, MSP, modi government, pulses promotion, arhar promotion, arhar price, indian express news, india news, business news Farmers at the Amravati APMC market yard.

Israel Khan from Dhamori, Nandakishor Babhulkar from Mhaispur, Arun Shende from Rajura, Amol Savai from Naya Akola, and Salim Shah Baba Shah from Pusda — all villages in Amravati district — have the same story to tell. As farmers of arhar (pigeon pea) — a crop in the news not too long ago — they have seen its prices virtually halve from over Rs 9,000 per quintal at this time last year to less than the minimum support price (MSP) of Rs 4,625, excluding a bonus component of Rs 425/quintal, announced by the Narendra Modi government.

What has particularly disappointed them is the fact that the current government had mounted a special effort to promote pulses this year — including by hiking the effective procurement price (MSP plus bonus) for arhar from Rs 4,625 to Rs 5,050 per quintal for the 2016-17 crop season. But all this has made little difference to farmers in this traditional arhar bowl of Maharashtra’s Vidarbha region.

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Israel Khan has three acres of non-irrigated land in Dhamori village of Amravati’s Bhatkuli taluka. On these, he grows arhar as an intercrop in alternate rows with soyabean and cotton. While planted at the same time around mid-June, the soyabean and cotton crops are harvested by end-September and late-November, respectively. Arhar harvesting starts from mid-January onwards. Khan’s crop of 8.5 quintals is lower than last year’s nine quintals, courtesy a biting cold this time that impacted pod-filling and led to flatter beans. But the crash in realisations is what has left him shell-shocked. “All I got was Rs 36,000 from selling my 8.5 quintals at Rs 4,235 per quintal. If you subtract my input costs of Rs 21,000 at Rs 7,000 per acre, it hardly leaves anything,” he says. Last year, his nine quintals crop fetched Rs 9,000-9,100 per quintal.

At Mhaispur, also in Bhatkuli taluka, Nandakishor Babhulkar has harvested 12 quintals of arhar intercropped with soyabean, cotton and moong (green gram) on equal portions of his four-acre holding. His overall production hasn’t fallen; only the seeds have suffered slight shrinkage because of lower-than-normal temperatures through December-January. But his concern is again over price. “The going rate is hardly about Rs 4,300 per quintal. So, I have decided to wait till May, hoping that it will go up,” notes Babhulkar.

“Waiting till May” is what Babhulkar’s fellow-villagers, Narayan Bhatkar and Ashwin Dhore, are also doing. A retired teacher, the 77-year old Bhatkar expanded arhar cultivation in his 28-acre farm from 12 acres to 17 acres this time, encouraged by last year’s high prices. But the current prices have made him visibly disillusioned — all the more because of the government not really walking the talk on procurement at the MSP.

“The government agencies demand our 7/12 extract (a proof of land ownership), while also insisting that our produce be of uniform and clean quality. Besides, the procurement happens only at the APMC (agriculture produce market committee) yard in the district headquarters. Private traders pay less, but don’t ask any questions and are willing to purchase even un-cleaned grain,” explains Dhore.

The expectations of prices remaining at last year’s levels, the government’s own pulses promotion drive and, of course, the munificent monsoon rains together led to a 30 per cent jump in the area planted to arhar in the Amravati division (comprising Akola, Amravati, Buldhana, Washim and Yavatmal districts) from 3,95,100 hectares to 5,12,700 hectares this year. But that has been of little benefit to the likes of Bhatkar, Babhulkar and Israel Khan. With arhar dal now retailing at below Rs 90 per kg in Mumbai — as against Rs 160 at this time last year — pulses have seemingly gone off the government’s radar.

Proof of it is procurement. At the Food Corporation of India’s purchase centre at the APMC yard in Amravati, a mere 4,000 quintal of arhar has been bought as on February 7. This is as opposed to cumulative private trade purchases of 4,08,250 quintals for this season in the same mandi. It is only somewhat different at the APMC in the adjoining Akola district, with open market purchases and government procurement at 1,47,000 quintals and 11,000 quintals, respectively.

However, Swapnil Taywade and Himanshu Patil, technical assistants at the government purchase centre in Amravati, have their own take. Farmers, they say, sell to traders/middlemen mainly under obligation, as the latter often advance them money at the time of sowing. As regards the 7/12 extract, they claim that if farmers aren’t able to produce it, “we simply take a written undertaking that the crop belongs to them.”

Even with respect to prices, the officials point out that the rate paid on clean grain is what really counts. For example, 50 quintals of unclean and un-sieved arhar will fetch Rs 2,27,500 at an open market price of Rs 4,550 per quintal. But this produce will weigh only 45 quintals when cleaned and sieved. So, the Rs 2,27,500 paid for 45 quintals of clean arhar effectively translates into a price of Rs 5,055, which is more than the MSP of Rs 5,050 per quintal. In other words, the farmer is already getting the MSP-equivalent rate. Rather than take the pain of cleaning his grain and selling to FCI at Rs 5,050 per quintal, he may as well sell un-sieved arhar to the trader at Rs 4,550 sans any bureaucratic procedures!

According to Satish Atal, the Amravati APMC’s biggest pulses trader, there are cases now of village-level traders purchasing the produce along with securing their 7/12 extracts. These, they then take to the government centre for offloading at the MSP, especially when the open market prices are lowers and the maths after adding cleaning costs is favourable.

Atal blames the fall in prices mainly to imported arhar, which is selling at Rs 4,300 per quintal. “The government should impose an import duty of 20 per cent, which will take this price to over Rs 5,000. They should also remove stockholding limits on pulses. A trader or a dal miller cannot stock up more than 2,000 quintals and that restricts how much he can buy. The ultimate sufferer is the farmer,” he adds. Is the Modi government listening?