Farm distress: Gujarat’s groundnut growers take a hit as prices plunge below MSP

After cotton last year, the BJP state government faces a fresh challenge ahead of late-2017 elections.

Written by Gopal Kateshiya | Rajkot | Updated: November 3, 2016 11:03 am
gujarat, gujarat farmer, gujarat groundnut farmer, gujarat farmer distress, agricultural household, farming gujarat, india news Threshing of groundnut in progress at a farm near Rajkot. (Express Photo: Gopal Kateshiya )

GROUNDNUT FARMERS last week forced a suspension of auctions at the agriculture produce market committee (APMC) mandi in Amreli to protest against tumbling prices of Gujarat’s second biggest cash crop after cotton. The new groundnut-in-shell crop is fetching around Rs 3,500 per quintal, well below the minimum support price (MSP) of Rs 4,220 for the current marketing season.

Janak Padsala, a farmer from Abhrampara village of Amreli district’s Savarkundla taluka, is a happy man as far as yields go this time. “I got roughly 26 quintals per hectare, the best in the last three years,” says the 29-year-old who harvested his crop a week back and has just started threshing it in order to separate the khokha (pods) from the stems. Also Read: Bumper soyabean— and crashing prices!

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Last year, Padsala had sown kapas (cotton) on his entire seven-hectares holding. But following a severe pink bollworm attack, he planted groundnut on six hectares this year. He doesn’t regret the decision, but is concerned about prices. “I want them to reach at least Rs 4,250 per quintal. Till then, I’ll keep selling the kapas from my remaining one hectare, which should meet my immediate expenses,” he adds.

gujarat, gujarat farmer, gujarat groundnut farmer, gujarat farmer distress, agricultural household, farming gujarat, india news Jetha Parvadiya inspecting the groundnut pods from his field in Atkot village of Rajkot. (Express Photo: Gopal Kateshiya )

But not everyone has Padsala’s holding capacity. Madhu Vaghasiya, 40, has sown only groundnut in his 10 hectares land at Kalsari, a village in Visavadar taluka of Junagadh district. “The loss of income from consecutive monsoon failures in 2014 and 2015 forced me to borrow Rs 20,000 to even buy diesel for my tractor. I have no choice but to sell, now with Diwali over. Besides, I need the money to purchase inputs for the rabi crop,” notes the Class X pass farmer. His crop has also suffered white grub insect infestation, reducing his yield to just six quintals per hectare as against an average 20 quintals-plus in good years.

But Vaghasiya has water in his wells, allowing him to grow wheat, chana (chickpea) and jeera (cumin) in the coming rabi winter season. Others aren’t even this lucky. 56-year-old Jetha Parvadiya’s groundnut crop has been hit by white grub, an indicator of which is the pods that are being blown away along with the foliage during threshing.

“The khokha are as light as the foliage because there is hardly any dana (kernel) inside them. The pest has really caused damage and I’ll be happy if my yields even touch 10 quintals per hectare,” avers a stoic-looking Parvadiya, who farms 3.25 hectares with his younger brother Manu at Atkot village in Rajkot’s Jasdan taluka. For years, they had been growing groundnut and cotton on equal portions of their land. This time, the brothers increased the share of groundnut by half a hectare after last year’s losses in cotton on account of pink bollworm. “Groundnut seemed a better choice also because prices were Rs 5,000-5,500 per quintal only three months ago. But now, it looks there’s no hope even on that front,” he adds.

The younger brother Manu Parvadiya, 42, is even more worried. “We have spent some Rs 39,000 per hectare, which includes two heavy (but unsuccessful doses) of pesticides to control white grub. At 10 quintals per hectare and current market prices, we cannot recover even production costs,” he complains. Manu — his elder son is pursuing a master’s degree in commerce and the younger one is in Class IX — knows he can realise a better price by holding back his crop: “But I have Rs 2.5 lakh of loans to discharge, apart from paying the school/college fees of my sons. I have to sell within a month”. Worse, the open wells in their fields do not have enough water for irrigating rabi crops. The only solace the brothers have is from the groundnut foliage, which may provide sufficient fodder for their pair of bullocks, a cow and a buffalo.

White grub attacks in some places notwithstanding, Gujarat’s farmers seem set to harvest a record-breaking groundnut crop this time due to overall good weather and timely rains. But the yield gains from a bumper crop, following back-to-back drought years, are being nullified by the steep drop in groundnut prices. To assuage farmers — Gujarat is slated to go for Assembly polls late next year — the BJP-ruled state administration has announced that it will start official procurement of groundnut at the MSP after Diwali.

APMC functionaries, however, also attribute the falling realisations to the high moisture content in the groundnut-in-shells marketed by farmers. “Ideally, moisture content shouldn’t exceed 7 per cent, whereas these are above 15 per cent for the crop now being brought, which also affects the kernel quality. That, along with an all-time-high production, is the reason for the low prices,” claims Jayantibhai S Dhol, chairman of the APMC at Gondal near Rajkot, Gujarat’s largest market for groundnut.

Amrutlal Parakhia, director of extension education at Junagadh Agricultural University (JAU), partially agrees. Traditionally, farmers stacked the harvested groundnuts in barns and left them to sun-dry for weeks before undertaking threshing. “But this time-consuming method farmers cannot afford when they need money for sowing winter crops — more so this year. Hence, they harvest the crop and leave it in the field for threshing within a week’s time. The resultant groundnuts-in-shell will have higher moisture content, while also prone to aflatoxin accumulation in the nuts. And that obviously has a bearing on prices, too,” he observes (Aflatoxins are chemicals produced by pathogenic fungus which resides in soil and dead/decaying matter in the field).

November and December are the peak months for groundnut arrivals in APMCs. The oil-bearing seed was sown in 16.42 lakh hectares (lh) in Gujarat this year, 3.46 lh more than in 2015. The increased acreage was at the expense of cotton, which registered a drop from 27.61 lh to 24 lh. The Saurashtra region’s 11 districts — especially Rajkot, Junagadh and Devbhoomi Dwarka — accounted for 13.5 lh area, with farmers in north Gujarat planting another 2 lh this season.

JAU has pegged Gujarat’s groundnut output this year at 35 lakh tonnes (lt), out of India’s total 65 lt. About 30 per cent of the crop goes for crushing and production of oil. The balance is used for table consumption (as roasted nuts), exported or processed into peanut butter. JAU had forecast prices to rule at Rs 4,100-4,400 per quintal levels, based on projections of exports from India rising to 8 lt, from last year’s 5.3 lt.

The trade is, however, not all that optimistic. “This is the time the government should allow export of bulk groundnut oil, which will also benefit farmers. Right now, we can ship out the oil only in five-litre tins, which raises packaging costs and renders exports uncompetitive,” says Vikram Duvani of Smiit International, a Junagadh-based exporting firm.

Falling groundnut oil prices — from Rs 2,300 per 15-kg tin to roughly Rs 1,600 in less than two months — have also had a role in depressing farmers’ realisations. “Groundnut prices were Rs 7,500 per quintal when the oil was selling at Rs 2,300/tin. Now when oil prices have come down, there is bound to be a correction in groundnut as well. But groundnut oil production in Gujarat is only two lt, 5 per cent of the state’s total oil consumption. People, moreover, switch to other oils when prices of groundnut oil go up,” points out Suresh Kaneriya, a leading oil miller (‘Rani’ brand) and secretary of the Rajkot-based Saurashtra Oil Mills Association.