Where MSP becomes hard nut to crack

Groundnut and cotton are the most important crops in Gujarat’s Saurashtra region. The ruling BJP, which suffered huge reverses in Morbi and 10 other districts of this belt at December’s State Assembly elections, has reasons to grant handsome MSP increases for both.

Written by Gopal B Kateshiya | Rajkot | Updated: July 5, 2018 2:19:26 am
The MSP for groundnut has been hiked to Rs 4,890 per quintal.

Nathubhai Kadivar is happy about the Narendra Modi government jacking up the minimum support price (MSP) for groundnut to Rs 4,890 per quintal this kharif season, from Rs 4,450 in 2017-18. “I have just sown the crop in 10 hectares and cotton in another 10 (the MSP of long-staple kapas has also been hiked from Rs 4,320 to Rs 5,450 per quintal). The price announced is very good,” says this farmer from Nasitpar village in Tankara taluka of Morbi district.

However, he also recounts last year’s bitter experience of not being able to sell his 140 quintals from five hectares at the MSP of Rs 4,500 per quintal, inclusive of the Gujarat government’s Rs 50 bonus. “Not only was my yield below the normal 36-37 quintals per hectare, but I had to sell at an average of Rs 3,625. By the time my turn came, the government had stopped procuring,” complains Kadivar.

The 50-year-old is a relatively better-off farmer, with his 20-hectare holding (half of it taken on lease) having assured irrigation from the Demi-II dam. “Groundnut yields are less than cotton (about 40 quintals/hectare) and so are realisations. But it has a shorter duration (100-120 days), allowing me to take a rabi (winter) crop. That is not possible in cotton, which grows for 200-240 days,” he explains.

Groundnut and cotton are the most important crops in Gujarat’s Saurashtra region. The ruling BJP, which suffered huge reverses in Morbi and 10 other districts of this belt at December’s State Assembly elections, has reasons to grant handsome MSP increases for both. But neither farmers like Kadivar nor those in the trade are convinced about their effectiveness, when open market prices are ruling way lower.

“Last year, the MSP was Rs 4,500, but I got the best-quality groundnut from the market at Rs 3,500. It was a bumper crop and the government could not have procured every pod produced,” notes Dhansukh Nandania, proprietor of Ravi Oil Mill at Gondal, about 40 km from Rajkot.

What is heavily weighing down sentiment now is the huge unsold stock of groundnut with National Agricultural Cooperative Marketing Federation of India (Nafed), the apex agency that procured 10 lakh tonnes (lt) during 2017-18. 8.08 lt of it was just from Gujarat, which produced around 32 lt of the oilseed.

“About 7.4 lt of stocks, including 40,000 tonnes procured in 2016-17, is still lying in godowns at Gujarat,” admits V R Boda, chairman of Nafed, which is currently disposing of its groundnuts at just over Rs 3,300 per quintal.

For the Modi government, the real challenge ahead is in ensuring that farmers get the MSPs just announced. And it would be more in crops other than wheat and paddy.

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