The more the farmer produces the lower the price he gets, and vice versa. Chickpea growers have been reminded yet again of this well-worn truism with the market rate of chana crashing on projections of a bumper crop in Madhya Pradesh, which accounts for a very high proportion of the national output.
Hovering in the range Rs 2,300 to Rs 2,500 per quintal, the rate is much lower than the minimum support price of Rs 3,100, the first time this has happened in nearly a decade. Rates in states such as Maharashtra, Rajasthan, Karnataka and Jharkhand have not come below the MSP. The MP government has never been required to procure gram from farmers because the market rate in the last decade has always been higher than the MSP. In 2011-12, for example, it had reached Rs 4,500 per quintal.
With just days to go for the crop to be harvested and brought to mandis, there is no clarity if and when procurement of gram will begin. National Agriculture Cooperative Marketing Federation of India (NAFED), the nodal central agency for handling procurement, is yet to hear from the central government.
Estimates by various agencies suggest the produce in MP could be about 47 lakh tonnes. Cultivated over nearly 35 lakh hectares this year, the crop involves about 28 lakh farmers. Of this, the government could end up procuring up to 15 lakh tonnes if the projections hold and the rates don’t go up.
In a state used mainly to procuring wheat and paddy, procurement of gram will be a first, a venture that will entail its own set of problems such as starting the registration process afresh, arranging jute bags and finding storage space when the available facilities are already under strain. For wheat, MP has an elaborate process of procurement, with farmers registering in advance and get SMS alerts on when to arrive at procurement centres.
“Due to increase in acreage and favourable weather, the eventual yield of gram in MP could end up the highest in recent times. In the absence of market intervention (such as procurement) farmers may resort to distress sale,’’ said an official with the Directorate of Pulses Development, which functions under the Ministry of Agriculture.
Concerned over the low rate and the possible distress sales by farmers, state government officials have already met their counterparts in the agriculture ministry. Chief Minister Shivraj Singh Chouhan has called on the prime minister and the union finance minister and urged them to begin procurement of gram and to increase the credit limit of NAFED to Rs 5,000 crore.
Principal secretary (cooperation) Ajit Kesari said the state government gave its estimates to NAFED at their last meeting. He attributed the 24 per cent higher projected yield to a 10 per cent increase in acreage in the state. According to him, gram procurement could go as high as 20 lakh tonnes.
Should the Centre give the go-ahead, Kesari said, state agency MP State Cooperative Marketing Federation itself could begin procurement of gram along with that of wheat, which starts March 18. Unlike wheat, the gram will be procured only at 500 mandis and upa-mandis in keeping with NAFED guidelines.
Retired director for agriculture G S Kaushal blamed the crash in rates to the import of pulses that have flooded the market. He cautioned against the estimated projections, however, saying untimely rains and hailstorms could take their toll on the yield. “In any case, the mere announcement that the government will begin buying gram at the MSP will take the rates up because farmers will not sell at the prevailing rate,’’ he said. He also blamed a cartel of traders and businessmen and vested interests for projecting higher yields to bring down rates. “Once the rates are down they buy and hoard to maximum profits.”
Bharatiya Kisan Sangh leader Suresh Gurjar said the government should stop importing pulses because such imports distort local rates. “Farmers from countries that give high subsidies dump their produce in India and make money at the cost of our farmers,” he said.
The BJP government is putting pressure on the central government for an early announcement of dates for gram procurement because it does not want to lose its grip over its core constituency of farmers in the election season. Should the central government refuse or delay an announcement related to procurement, the state will be in a bind. Officials and politicians have been seeking to create an impression that MP will buy the gram if the Centre refuses to do so. The truth is, procuring 15 lakh tonnes needs close to Rs 5,000 crore.