Govt’s data shows major winter crops aren’t fetching MSP rates

By Hindustan Times on 30 Apr 2019 | read
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winter crop,Rabi,wheat

Trade in three key winter-sown crops — mustard, lentil (masur) and gram (channa) — has got off to a poor start, selling mostly below federally mixed minimum support prices (MSPs) in key agricultural markets of the country, official data shows, highlighting the continuing agrarian crisis.

Price data from Agmarknet, the government arm that tracks commodity rates in major agricultural markets, indicate that farmers’ income could take a hit again this year if prices don’t pick up. After poor prices roiled agricultural incomes in 2016-17 and 2017-18 amid bumper harvests, farmers staged protests in several states. This prompted the government to set MSPs, an assured price, at 1.5 times the input costs — or expenses incurred by farmers towards cultivation — so that cultivators get at least 50% returns.

Winter harvests began arriving in wholesale markets on April 1, which marks the beginning of the peak rabi or winter-sown marketing season. So far, prices of major crops have barely touched MSP levels, except for wheat. Wheat usually gives higher returns to farmers because it is bought by the government in large quantities at declared MSPs.

In October 2018, the Centre raised the MSP of winter lentils (masur) by 5.3% to Rs. 4,475 a quintal (100 kg), while the support price for mustard, the winter oilseed, was raised by 5% to Rs. 4,200 per quintal. Wheat MSP was raised to Rs.1,840 a quintal, a 6% hike over the previous year. The support price for gram or chickpeas was raised by 5% to Rs. 4,620 per quintal.

MSP is a floor price set by the Centre to help avoid distress sale and also serve as a benchmark rate, but price trends show farmers will find it tough to sell winter crops at such prices. Experts say the government isn’t buying sufficient quantities at these rates (known as procurement) to mop up surpluses and pull up overall rates. This is a key reason stoking the country’s continuing agrarian distress.

Mustard has so far on average sold 17% below MSP (between April 1 and 15). In most markets in Rajasthan, the largest grower of winter mustard, the commodity has failed to reach MSP levels.

For instance, between April 1-15 in Rajasthan’s Alwar, which is categorised as a principal market for that commodity, mustard prices ranged between a low of Rs. 3,425 a quintal (on April 1) and a high of Rs. 3,650 a quintal (on April 10), against an MSP of Rs. 4,200, the data showed.

That’s 16% below MSP. During this period, about 8,971 quintals were traded in Alwar, with daily arrivals of nearly 1000 quintals, which indicates Alwar is a major mustard trading hub.

In Uttar Pradesh, the fourth largest producer of mustard, the commodity sold 15% below MSP between April 1 and 15. In the state’s Hapur agricultural market, mustard prices last week trended 13% below MSP, ranging between a high of Rs. 3,660 (April 25) and a low of Rs. 3,600 (April 29) against an MSP of Rs. 4,200.

“This year will end up like last year because most items are selling below MSP. I don’t think wheat is doing any better in states where the government’s procurement system is weak. That is why we have been demanding a law prohibiting buying of crops below MSP,” said Rakesh Tikait, the national spokesperson of the Bharatiya Kisan Union.

Farmers aren’t getting MSP rates for gram, another major winter crop, which on average sold 12% below the MSP rate of Rs. 4,620 between April 1 and 15. In Gujarat’s Dahod agricultural market, gram sold on average for Rs. 4,250 a quintal (8% below an MSP of Rs. 4,260) in this period.

Gram prices continue to be depressed elsewhere. Between April 23 and April 29 in Madhya Pradesh’s Dewas and Vidisha market, gram fetched on average Rs. 3,900. In Vidisha, the commodity touched MSP levels on April 27 before dipping again. Lentil prices too were lower than MSP by 9% in the last fortnight. In Madhya Pradesh’s Ujjain, for instance, the average price was Rs. 3,400 against an MSP of Rs. 4,475.

An official overseeing procurement of oilseeds and pulses said on condition of anonymity that since this is the beginning of the procurement season and prices would improve in the next two months. In states such as Rajasthan, which has a less robust procurement machinery compared to states such as Punjab, even wheat was trending below MSP in some markets. For instance, in Alwar, wheat sold for Rs, 1,725 between April 23 and April 27, about 6% below the MSP of Rs. 1,840. “The government procured only about half of maximum allowable limit of 25% oilseeds and pulses in 2018. It must at least procure 25% to effect a change in market rates,” said Abhishek Agarwal, Comtrade Ltd.

First Published: Apr 30, 2019 07:45 IST