Gujarat: Government procurement too slow, farmers sell groundnut cheap

Crop piles up in Saurashtra, farmers sell in open rather than wait for govt bonus.

Written by Gopal B Kateshiya | Rajkot | Updated: November 14, 2017 8:38 am
gujarat assembly elections, gujarat assembly elections 2017, Gujarat farmers, Gujarat groundnut farmers, Gujarat Bharatiya Kisan Sangh, Narendra Modi, rahul gandhi, congress, vijay rupani, BJP Bags of groundnut wait for buyers at the Rajkot agriculture produce market. (Express Photo: Chirag Chotaliya)

About a month before poll dates were announced for Gujarat, the state government had announced it would procure groundnut at Rs 4,500 per quintal — a Rs 50 bonus over and above the central minimum support price.

Today, farmers are selling groundnut in agriculture produce market committees (APMCs) in Saurashtra at prices much below the MSP, with the government way short of the procurement target it has set itself. With farmers selling at an estimated average of Rs 3,500 per quintal, the Bharatiya Kisan Sangh has demanded that the government protect them from loses by paying them the difference between the market price and the MSP.

In a state where the total groundnut production has been estimated at 31 lakh tonnes, the country’s highest, the state government had requested the Centre to procure 8.5 lakh tonnes; the Centre asked the National Agricultural Cooperative Marketing Federation of India (NAFED) to procure 3.5 lakh tonnes. As of November 10, NAFED had procured 78,128 tonnes, worth around Rs 350 crore, including 52,000 tonnes from groundnut bowl Saurashtra.

While NAFED has opened around 130 procurement centres in Saurashtra, Kutch and northern Gujarat, APMCs in Saurashtra remain flooded with groundnut. Four of the major APMCs — Rajkot, Gondal, Jamnagar and Junagadh — have witnessed sale of around 30,000 tonnes through open auction since the kharif groundnut season began a month ago.

If farmers are selling at lower prices because of the slow pace of procurement, the reason for the market rates is the wholesale rates of groundnut oil — Rs 100 per kg, wholesalers say. “We can’t offer higher prices to farmers,” said Jay Sakhrelia, a wholesaler at Rajkot APMC.

“Small and marginal farmers who need money immediately are preferring the open market because there are long waiting lists for sale to government, and the government also takes a couple of weeks for making payment. We have demanded that the government increase the number of procurement centres and also pay farmers on the very day it procures his groundnut,” said Vitthal Dhudhatra, president of the Gujarat unit of the Bharatiya Kisan Sangh (BKS).

In election season, the situation has brought the government under pressure from at least two groups. The Sardar Patel Group, one of the outfits behind the Patidar quota agitation, had disrupted auction proceedings in Rajkot two weeks ago, demanding that the lowest bid be Rs 4,500. In Junagadh, the RSS-affiliated BKS had forced suspension of the auction late last month.

“We understand that the government cannot purchase every pod of groundnut. But it must also insure farmers against losses they incur by selling in the open market. I had written to the government a month ago to adopt the model of the Madhya Pradesh government by paying farmers the difference between MSP and selling price in the open market,” Dudhatra told The Indian Express.

Such is the accumulation that in the last two weeks, Rajkot APMC has opened its gates only twice to allow farmers to bring their produce inside. Gondal APMC, the largest wholesale market of groundnut in the state, too is allowing arrival only twice a week. And Jamnagar APMC is allowing arrival on alternate days.

At the Rajkot centre, 707 tonnes has been procured from 380 farmers while another 3,000 tonnes is on the waiting list. The waiting lists are similarly long in Gondal, Junagadh, Jasdan and Vinchhiya.

Farmers who had sold on October 25 and 26 got their payment Monday. “I had been checking with my bank but they said each time the payment had not been credited… Today, I got an SMS alert that the payment has been credited to my account,” said Labhu Jalu, a farmer from Rampara in Rajkot.

NAFED sources said the payment was delayed due to confusion over who would pay the GST. Groundnut attracts 5% GST, recoverable from the buyer. “There is confusion over who will pay this GST. Will the cooperative society that is facilitating the purchase pay it, will it be the agency tasked with the procurement, will it be NAFED, the state government or the central government — that is yet to be decided. Therefore, payment to farmers was delayed,” said an NAFED source.

MoS (Agriculture) Vallabh Vaghasiya denied GST was an issue. “GST is [being described as] a hurdle in Gujarat because elections are on; it is not an issue anywhere else,” the minister told The Indian Express. “Payment has nothing to do with GST. There is a procedure that takes seven to 10 days, such as generating bills after godowns give receipts of arrival of stock etc.”

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