For Nashik grape growers, new law brings back aftertaste of sour frauds

“I had his address and after waiting for a month went to Allahabad to get my money back,” recalls Pagar, who stayed in a local hotel for seven days while trying to trace the trader. His efforts proved futile. “After spending over Rs 50,000, I returned empty-handed. All I could do was lodge a police complaint at the Chandvad station, but obviously nothing came out of it,” he admits.

For grape farmers in Nashik and pomegranate growers in Solapur and Ahmednagar, selling outside the Agriculture Produce Market Committee (APMC) mandis is nothing new. They have been doing this even before the Maharashtra government, in July 2016, “deregulated” fruits and vegetables, by allowing their trade outside of these regulated markets.

In grapes and pomegranates, the buyers — whether traders, processors, organised retailers or exporters — mostly come to the farm-gate and load the fruits directly from there, with very little produce being traded in the mandis. Farmers typically have longstanding relationships with traders with whom they strike deals. The latter come to the vineyards/orchards when the crop is almost ready and make an initial part payment at the agreed price. The remaining amount they pay after the total quantity to be bought is harvested.

All these transactions are essentially underwritten by trust. There are no written documents here that farmers can produce if a trader was to dishonour an agreement — or simply vanish as it happened to Pagar. That also explains why someone like him isn’t particularly impressed with the recently passed law — the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 — that permits free sale and purchase of crops outside the physical premises of APMC mandis.

“It looks fine in theory. But who will guarantee my payment even though the Act says that it has to be made within three working days? And what can the police or SDM (sub-divisional magistrate) do if a trader defaults or runs away?,” asks Pagar, who sells his onions at the Pimpalgaon Baswant APMC mandi, which is around 20 km away in the neighbouring Niphad taluka.

“Some traders have sought to buy directly from my field, but my experience with grapes has made me wary of such deals. In APMCs, they have at least a mechanism to ensure payment even if the price may be less and I need to haul my produce there,” he adds.

Echoing the view is Santosh Gorade, who cultivates onion and grapes on four acres each in Takli village of Niphad taluka. “In grapes, I have no option as there is no APMC where it is traded. But onions I will continue to sell at Lasalgaon (India’s largest wholesale mandi for the bulb), though it is 10 km from my village. For farmers, security of payment is most important,” states the 38-year-old.

In APMC mandis, the farmer is usually issued a trade slip after his produce gets auctioned by the commission agent, who guarantees that the trader makes the payment for the quantities bought at the bid price. Only traders licensed by the APMC can buy from the mandis. In the event of default, the money can be recovered from the trader by encashing the bank guarantees that he is required to give for obtaining the APMC licence. The APMC also has the powers to seal the shops and offices of the commission agents and auction off these to recover the dues owed to farmers.

“There is no question of payment default by any trader in an APMC or an adathiya (commission agent) running away. Where will they go?,” says Gorade. Under the newly passed law, any dispute arising out of a transaction between a farmer and a trader is to be settled through the office of the SDM concerned. “This will never work in practice,” opines Garade.

Manikrao Patil, secretary of the Nashik unit of the Maharashtra State Grape Growers Association, claims that payment defaults to farmers in his district alone are to the tune of Rs 10-15 crore annually. “We should have a system that compels traders to register details such as their name, address and bank accounts with the local police station before they enter into transactions with growers. Otherwise, we will see more cases of duping in the coming days,” he warns.