Peanut Market News January 19, 2018
Gujarat's farm sector, which grew at supernormal rates not so long ago, is today in deep distress. Farmers are hugely discontented due to lower prices, escalating input costs, and delayed payments by procurement agencies. And along with erratic weather conditions, this has fuelled widespread resentment. For a sector that witnessed a remarkable 8.15 per cent Compounded Annual Growth Rate (CAGR) between 2012-13 and 2015-16, this is a crushing experience.
Delay in procurement
Consider this: Dilipbhai Tulsibhai Atkotiya, a groundnut farmer with 15 bigha (about six acres) of land in Golida village of Rajkot district, is waiting for his turn to come up at the procurement centre so that he can bring about 40-45 quintals of his crop to sell at the Mininum Support Price, which was fixed at Rs 4,500 per quintal.
Owing to a bumper groundnut crop this kharif season, the Gujarat government had last month announced procurement of groundnut at the support price of Rs 900 per 20 kg, after the prices declined to as low as Rs 3,250/quintal.
But Atkotiya will probably never get to sell his crop to the procurement agencies, as the procurement process has put him on ‘unending wait’.
"Last week I registered myself against token number 2274. I was told that only 900-odd farmers have been asked to bring their crop. That means it will take at least a month for my turn to come, and that too, only if the procurement continues its work at the current pace. I need money urgently, but I’ll be lucky to get away without damage to my crops until my turn comes," says Atkotiya.
The Rajkot District Co-operative Marketing Union is currently procuring on behalf of GujCot, which was mandated by Nafed to conduct procurement operations in Gujarat.
The State government has set a target to procure groundnut worth Rs 500 crore at the support price in the current season. But Lakhabhai Dobariya from Boghavadar village in Jasdan taluka of Rajkot is wary of the government’s intent. “This all seems to us like a poll-oriented practice. Given the bumper crop, a procurement target of ?500 crore is negligible. Many farmers are afraid they will be left out,” he says.
In the 2017 kharif season, Gujarat, one of the largest groundnut-growing regions in the country, saw more farmers taking to the oilseed, particularly after the pink bollworm menace caused heavy losses to their cotton crop.
The State government has estimated a record bumper crop at about 32 lakh tonnes (lt) of the oilseed this kharif season against last year’s 29 lt, as the acreage increased to 16.15 lakh hectares, up 16 per cent from the normal 13.87 lakh hectares.
According to Maganbhai Jhalvadiya from Padadhari, the bumper crop worsened the farmers’ plight. At the time of sowing, a farmer tracks the price trend of alternative crops and after considering all the factors, he bets on one crop, which seems the most promising.
"Farmers avoid taking up an entirely new crop," says Jhalavadiya, who heads the local Taluka Marketing Cooperative Union in Padadhari. “They will switch between cotton, pulses and groundnut. But for the past three to five years, prices of commodities have persistently been low. This placed farmers in a dilemma. Even at an MSP of Rs 4,500, groundnut isn’t profitable for farmers. The same is the case with cotton, whose price is Rs 4,250-4,500 per quintal.
Farmers who opted for groundnut could take up two crops in the year, but cotton is a longer-duration crop, which limits farmers' prospects.
At Bedi Market Yard on Morbi road, there has been a flood of groundnut arrivals, with more than 4,200 farmers registering themselves to sell the oilseed at the MSP. Officials collect the documents, including Aadhaar card, bank account details, and farming documents.
"We have a huge bunch of copies of these documents collected from each farmer," said Ramesh Yadav, an IT officer at Bedi Yard. “They have to be scanned and uploaded, and then we make entries in the online system for each farmer. The process takes at least 15 minutes per farmer,” he added, noting that poor internet connectivity, server failures and a mismatch in documents led to frequent delays in processing.
A marketing officer at GujCot said farmers’ payments have been delayed due to mismatch in the data. About 38,000 farmers have registered themselves across the State through various agencies, and about 85,000-90,000 tonnes, valued at over Rs 380 crore, had been procured till November 14.
"Once the farmers bring the crop, it is inspected by the competent authority and then dispatched to the warehouse," said Piyush M Vadera, I/c Chief Executive, Gujarat State Cooperative Marketing Federation Ltd, another Nafed-appointed agency for groundnut procurement. After processing it, Nafed clears the payment to State agencies in a week.
No support system
Agriculture scientists consider this the key pain-point. Farmers from Gondal and Lodhika talukas of Rajkot district point to the growing discontent due to the government’s neglect of the farmers’ needs.
Former union minister YK Alagh noted that there had been colossal neglect of the need to build a support system for agriculture produce. "In absence of adequate market infrastructure and support system for farm produce, farmers are at the mercy of seed companies and traders. This makes them vulnerable to exploitation."
Prof Hemant Kumar Shah, an Ahmedabad-based economist, said the key reason for the prolonged farmers' distress is the poor data collection, which is compounded by escalating input costs and diminishing subsidies, besides improper public distribution systems.
"The government doesn't have credible data on irrigation to frame an effective policy for farmers. Also, the subsidy on electricity and water has fallen to almost nothing. The input costs of fertilizers, pesticide and seeds have gone up, but the prices for farm produce are capped," adds Shah. The government’s policies, he notes, are weighted in favour of corporates and the manufacturing sector rather than on the farm sector.
Experts further say that besides the policy and structural issues affecting farmers in the State, there are inherent issues of crop pattern that have affected agriculture.
The availability of Narmada Canal water for agriculture in select regions of the State prompted farmers to take up more cash crops such as cotton. "This resulted in increased exposure to one crop and a reduction in cereal acreage over the past decade or so. The State isn’t self-sufficient in cereal production, but it has remained predominantly a cash-crop State. Climatic or pest adversities in one crop can cripple the entire farm sector," said Shah.