On January 7, Union Consumer Affairs minister Ram Vilas Paswan took to Twitter, to issue a stern warning to “hoarders”, whom he blamed for “creating artificial scarcity for speculation” and causing the recent price increase in edible oils.
The tweet had very little impact. Wholesale soyabean prices have, if anything, risen a tad to Rs 4,250 per quintal in Maharashtra’s Latur wholesale market — well above the Centre’s minimum support price of Rs 3,710.
Ashok Bhutada of Kirti Group, a Latur-based edible oil miller, has a clear explanation why prices aren’t easing: “The so-called hoarding is happening at the farmers’ end. They are the ones holding on to their crop, which is also reflected in low market arrivals. And unlike for traders, there’s no law that forces the farmer to sell”.
Soyabean isn’t an exception.
Between September and December, when retail onion prices soared from around Rs 30 to Rs 100-plus per kg (they have since fallen to Rs 50 or so), Paswan has similarly urged state governments through Twitter to “act” against alleged hoarders of the bulb. However, imposition of stockholding limits under the Essential Commodities Act — and even Income Tax department raids on onion traders — failed to bring about any price correction.
The reason was again the same: The farmers were the ones with the crop, which they were bringing to the market in a staggered fashion to make the most of rising prices. Senior Maharashtra government sources confided to The Indian Express how officials from the Union Consumer Affairs Ministry would, in their daily video conferences, ask them to “urge farmers to offload onion stocks”. Farmers, of course, wouldn’t heed such counsel and not sell until the price was right.
What has brought about this transformation isn’t simply supply shocks. Yes, production of onion, soyabean and a host of other crops have been hit due to extended monsoon and unseasonal rains. But unlike the past, farmers (see our accompanying story from Gujarat) have seemingly turned it to their advantage, so that price increases more than offset any output losses. And here, it is improved access to market information (which only traders previously possessed) that has helped them make studied decisions on when and how much to sell.
“Information is a great leveler. Many farmers today have as much information on prices, supply and demand as we do, and it is all available at the touch of their phones. So, they no longer sell in bulk immediately after harvesting their produce,” explains Bhutada.
Processers like Bhutada as well as traders at Latur and other major wholesale markets declare their daily purchase price of soyabean every morning between 10 and 12:30. These rates are, in turn are made “viral” by brokers and subagents to farmers, who further forward it to their respective WhatsApp groups. This almost immediate dissemination of “bhav” (price) allows farmers to truly play the market.
Yuvraj Patil, who has grown soyabean in 19 out of his 30-acre holding at Shelgaon village in Nanded district’s Ardhapur taluka, hasn’t sold a single grain from the 175 quintals he harvested in late-November. “I’m waiting for prices to cross Rs 4,500 per quintal, which should happen by March. I have been reading they could even touch Rs 4,900” he confides. Patil, who keeps a tab on analysts’ reports in local and business dailies, also sends these to the 10 farmers WhatsApp groups of which he is part. Each group has 200-odd members, which means the information reaches some 2,000 farmers at one go and they, then, forward to more.
But isn’t he taking a risk holding on to his entire produce? “Yes, but it’s a calculated one. Neither I nor any trader sees prices going below Rs 4,000 before the next crop. Last year, I sold my 150 quintals at an average of Rs 3,845 and the profit was good,” he points.
During August-December, the WhatsApp group of ‘Hoy Ami Shetkari’ (Yes, we are farmers) was flooded with farmers discussing onion price trends. “Every day, someone would start by asking Ata Karaidchye ka (should we sell?). This would set off animated discussions, with people posting market rates and the crop status in Maharashtra and also Karnataka. One could, therefore, take very informed calls,” reveals Ankush Chormale, one of the 14 farmer-administrators of the group.
Now, that’s a revolution — perhaps as disruptive as the ongoing student and youth protests!
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