In 2006, Nitish Kumar’s government showed the way by repealing Bihar’s Agricultural Produce Market Committee (APMC) Act and allowing crops to be freely traded outside the state’s regulated mandis.
But 14 years on – when the Narendra Modi government at the Centre has enacted a law dismantling the monopoly of APMC mandis all over India and Nitish Kumar is seeking a fourth full term as chief minister – farmers in Bihar aren’t impressed.
“Hamein yahan sarkari mandi aur MSP par khareed dono chahiye (We want both APMC and MSP-based procurement here),” says Bhubaneswar Yadav, who farms 10 acres at Tulsitol village in Balia block of Begusarai district.
Yadav sells his entire maize and wheat to Sunil Sah, a local village-level vyapari or produce aggregator. “We had an APMC at Begusarai, which is now shut. Even MSP procurement of wheat at the PACS (primary agricultural credit society) here has stopped after 2015-16,” he points out.
Official data corroborates this: Out of the 389.92 lakh tonnes (lt) wheat that government agencies purchased from last year’s crop this April-June, Bihar’s contribution was a paltry 5,000 tonnes – as against Madhya Pradesh’s 129.42 lt, Punjab’s 127.14 lt, Haryana’s 74 lt, Uttar Pradesh’s 35.77 lt and Rajasthan 22.25 lt.
But hasn’t Bihar’s – and now the Centre’s – agricultural market reforms given farmers the freedom to sell to anyone, anywhere and anytime?
“Kya azadi? Hum apna fasal Gulab Bagh aur Dalkhola tak bhi nahi le ja sakte hain. Kahan Kalkatta, Dilli aur Mumbai (What freedom? We can’t afford to take our produce even to Gulab Bagh in Bihar’s Purnia and Dalkhola in West Bengal’s Uttar Dinajpur districts, forget Delhi, Mumbai and Kolkata),” retorts Gaurav Kumar.
This farmer, from Sapaha village in Khagaria district’s Gogri block, has just sold his last 60-quintals lot of maize at Rs 1,100/quintal. In all, Gaurav produced 240 quintals from 6 out of his total 10-bigha (8.7 acres) holding, in which he also planted wheat and mustard on 2 bigha each. His first 60-quintals tractor-trolley load, sold on May 2 immediately after harvesting, fetched Rs 1,200/quintal. The second load went for Rs 1,060 on May 7 and the third for Rs 1,020 on May 29. These rates were below his average realisation of Rs 1,620/quintal in May 2019 and the government’s MSP of Rs 1,760.
Gaurav’s buyer is Saroj Kumar, who aggregates about 20,000 quintals from 100-odd farmers in Sapaha and surrounding villages. A small vyapari – both he and Gaurav are from the same Yadav community – his firm Ansu Traders supplies maize to feed millers as far as Palsana in Rajasthan. “The grain I buy at Rs 1,100/quintal is delivered at Rs 1,350 in Palsana. After deducting transport cost of Rs 180, loading and other expenses, I earn a Rs 30/quintal margin,” he explains.
However, Saroj, also an 8-bigha farmer from Thatha in Khagaria’s Mansi block, is convinced that Bihar needs APMC mandis “like those in Punjab and Haryana”. Having these in Khagaria, Begusarai or Samastipur “is good for both farmers and vyaparis like me”. Farmers can take their tractor-trolleys to local mandis, but it is beyond them to book trucks and pay bhada (transport charges) for distant markets.
“In APMCs, there is trading and proper pricing of not only ‘A’ grade Godrej-Pass (a reference to maize bought by Godrej Agrovet, India’s leading animal feed company), but also ‘B’, ‘C’ and ‘D’ quality produce. Even I will benefit from having a shop in a regular market yard, attracting more buyers and generating more business,” he adds.
Bihar’s sole functioning mandi – it isn’t an APMC any longer and run by private traders with no formal government oversight – is at Gulab Bagh near Purnia. This “freest” grain market of India was, till around 2005-06, handling 3-4 rail rakes daily during the peak maize season from mid-April to mid-July. These rakes, each of 2,600 tonnes, are loaded from the Purnia, Ranipatra and Jalalgarh railway stations.
“That is today down to one rake. 80% of those selling there are farmers from within 20-25 km range and the balance local vyaparis. Gulab Bagh, too, will become history in due course,” predicts Nawal Kishore Jha, a grain trader and commission agent at Balia.
A hint of what lies in store for farm produce trading in India, post APMC reforms, can be had from the operations of this 52-year-old B.Com pass from Begusarai’s G.D. College.
Jha’s firm Hanuman Bhandar does an annual business of 10,000-12,000 tonnes of maize, 10,000 tonnes of wheat and 2,000 tonnes of soyabean. He sources grain from 10-20 smaller vyaparis and supplies to companies such as Godrej Agrovet, Pasupati Agrovet at Cuttack (Odisha), Phoenix Poultry at Jabalpur (MP) and IB Group at Rajnandgaon (Chhattisgarh), besides feed millers in Bihar like Sona Gold (Patna) and Ugraya Foods & Feeds (Muzaffarpur). Jha also has his own 6,400 sq ft godown with 1,200 tonnes storage capacity.
Another example of a somewhat big or bada vyapari is Bablu Kumar Sah from Maheshkhunt in Khagaria. A Teli (oil-presser) by caste, he handles roughly 10,000 tonnes of maize and 2,500 tonnes wheat every year – again procured from village-level aggregators for supplying to large mills and starch manufacturers.
Sah’s firm Shiv Udyog owns no warehouses, but has rented godown spaces – one at Maheshkhunt and the other at Ekania village in Mansi block of Khagaria – for storing 55,000 bags (3,300 tonnes) of maize. These have been pledged with HDFC Bank, which has extended him a 9.5% interest-bearing loan for 11 months against 70 per cent of the stock value.
Sah, like Jha, supplies to companies and also trades on his own account. “Last year, I bought ‘A’ grade maize at Rs 1,700/ quintal in May, which rose to Rs 2,200 by December. This time, the price of what I stocked at Rs 1,220 has gone up to Rs 1,325-1,350, which isn’t much after adding interest and storage,” he admits.
The significant thing is that there are no APMC mandis involved here. Farmers sell grain to the small vyapari, who bags it and supplies to the bigger commission agent-cum-trader. The processors/millers, in turn, only deal with the bada vyapari. They aren’t buying directly from farmers yet – despite Bihar’s Agricultural Produce Market (Repealing) Act permitting it since 2006.
“I am now forced to sell to one vyapari, who pays me after 20-30 days. We need a local APMC, where there are more buyers and payment is made within 2-3 days,” sums up Bhubaneswar Yadav.
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