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Why are farmers from other states coming to Punjab to sell paddy in bulk?

Why is this bulk being brought to Punjab’s mandis instead of being sold in the respective states? The simple answer to this question, experts say, is Minimum Support Price (MSP).

Written by Anju Agnihotri Chaba | Jalandhar |
November 17, 2020 4:08:20 am
farmer protests, cotton paddy purchase, Punjab paddy, Punjab cotton, Punjab news, indian expressPunjab’s Agricultural Produce Marketing Committee (APMC) yards have been receiving paddy (non-Basmati) in bulk from other states to sell here.(Representational Image)

FOR SEVERAL years now, Punjab’s Agricultural Produce Marketing Committee (APMC) yards have been receiving paddy (non-Basmati) in bulk from other states to sell here. Why is this bulk being brought to Punjab’s mandis instead of being sold in the respective states? The simple answer to this question, experts say, is Minimum Support Price (MSP).

While the Centre’s, through its three farm laws, mainly the Farmers’ Produce, Trade and Commerce (Promotion and Facilitation) Act, 2020, claims that farmers can earn good profits when the market will be open, farmers of other states are sending their crops to the Punjab government’s APMC yards.

“Despite the Centre’s ‘one nation one market’ or open market push, MSP is the biggest attraction among farmers across the country. That is why farmers of Bihar and UP are selling their paddy through traders in Punjab’s mandis where it is being sold at the MSP rate. Though these farmers are not getting the full MSP as farmers of Punjab are getting for their paddy, they are still fetching a higher rate for their paddy in Punjab than the local markets of their own respective states,” said Devinder Sharma, a distinguished agriculture and food expert.

“My suggestion to the government is that it make cash credit Limit (CCL) open for paddy crop in Punjab till March-end so that farmers from other states can also come and sell their crop at MSP rate in Punjab’s mandis. It is also workbale under the open market rule of the Centre’s Bill,” he added.

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Sharma further said that when around 15-25 per cent farmers growing different crops benefit from MSP, the remaining 75 per cent also want to be covered under it. One example of it is farmers of Bihar and UP selling their paddy in Punjab through the traders because of MSP. “No private player is offering them a price even close to the MSP for their best quality crop, then who will give them more than MSP as claimed by the government?” he asked.

“In Punjab, paddy is being purchased at Rs 1,888 MSP rate from farmers and when we sell it to traders or rice shellers, who can bring it to Punjab to sell in Punjab’s mandis, we fetch Rs 1,400-1,500 per quintal as they (traders) have to bear Rs 50-100 transportation charge per quintal, depending upon the distance and remaining Rs 300-400 is their own profit. But when we sell the same paddy to our local traders, we are not getting more than Rs 1,100-1,200 per quintal,” said Suman Kumar, a farmer from Parasgarhi village in Supaul district of Bihar, who owns 5 acres of land.

He further said that farmers in Bihar are selling to local traders because the APMC Act has already been abolished there in 2006, who are offering very less and then several farmers developed links with traders having contacts in Punjab and Haryana and started selling their wheat and paddy to them, who offer better price than the local purchaser there. With this, both farmers and traders earn Rs 300-400 more per quintal after selling their crop at MSP rate in Punjab’s mandis.

“Why are we protesting for the past two months? Our only argument is to get the assured MSP for every crop along with wheat and paddy. This time when Punjab’s productivity is also at an all-time high, getting MSP is the farmers’ right,” said Jagmohan Singh, general secretary, Bharti Kisan Union (BKU) Dakaunda, adding that every states’ farmer in India wants MSP for their crop and government should enact such a law that no crop should be sold below the MSP.
He further said that if paddy from Bihar and UP is coming here the main reason for it is only the ‘MSP’ and this small fundamental principle is not being accepted by the government, “which has all the control over the private players who are minting money at the cost of farmers’ hard labour”.

Dr M S Sidhu, retired economics professor from Punjab Agriculture University (PAU), Ludhiana, and expert, said: “MSP is calculated taking every input into account and it is for welfare of farmers and when government decides about MSP of any crop it is its duty to get it implemented despite the fact that MSP may not have any legal entity but still it is a basic directive which should be followed for the well-being of the farmer community.”

This year, the Punjab government may cross the procurement figure of 200 lakh tonnes (20 million tonnes) paddy soon. This procurement is around 3 million tonnes more what the Punjab was actually estimating before harvesting of paddy and would be over 4 million tonnes (40 lakh tonnes) more what the state actually will produce from around 21 lakh hectares paddy (non-Basmati) area in the state this year. Even if Punjab’s productivity touches 7 tonnes per hectare, the total production would not go beyond around 150 lakh tonnes of paddy (non-basmati).

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