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In Maharashtra, demand grows for a minimum support price for all farm produce

LiveMint logoLiveMint 18-06-2017 Abhiram Ghadyalpatil

Ahmedabad/Nashik/Warda (Maharashtra): Rajendra Borgude, 42, is a prosperous farmer half of whose 50 acre-irrigated farmland goes under grape cultivation. He drives a Nissan Terrano and was able to get a crop loan of Rs12 lakh from Nashik District Central Co-operative Bank (NDCCB) in 2016. In the first week of June, Borgude led the angry farmers in Naitale in blocking roads, throwing milk and farm produce on streets, and bringing agriculture markets in the area to a halt—part farmers’ strike in Maharashtra from 1-12 June.

The reason for his anger: no guarantee of an assured price for his grapes and tomatoes. “I had to sell grapes for Rs10 a kilogram to local traders. Last year the cost was Rs40 per kg,” he says.

Maharashtra government has declared a farm loan waiver but has yet to define the criteria for eligibility. “Loan waiver is welcome though I am not sure I will get the benefit. But the real solution is a legally guaranteed minimum support price for all farm produce. Unless I am guaranteed a price of at least Rs40 per kg for grapes, farming is a gamble,” says Borgude.

Fruits and vegetables are not among some 28 farm commodities which get a government-fixed minimum support price (MSP).

Some 535km away Gajanan Charde, a dryland farmer in Vidarbha’s Wardha district, is in distress even though his produce is among those crops that carry an MSP. Charde is bitter with Prime Minister Narendra Modi who, speaking in Vidarbha as a Prime Ministerial aspirant in March 2014, promised a higher MSP by factoring in 50% cost of production. In 2016-17, he gave an MSP of only Rs5,050 per quintal (or 100kg) for tur.

“Last year, the traders were offering Rs9,000 per quintal because there was a shortage of tur. I thought Modi would give at least Rs6,000 since he wanted more tur grown,” Charde says. He carries a debt of over Rs1 lakh from a nationalized bank. “Had I got a higher MSP for tur, I would not need a loan waiver,” he adds.

In the last three years, the MSP for tur or arhar has gone up from Rs4,350 to Rs4,625 to Rs5,050 per quintal. In the same three years, the tur yield in Maharashtra, India’s largest tur producing state, has gone from 510,000 tonnes to 444,000 tonnes to a record high 2.35 million tonnes in 2016-17.

Charde was one of those farmers who responded to Modi’s appeals and shifted from cotton to tur expecting a higher MSP. But he sold his 25 quintals for only Rs126,250 at the MSP.

According to the National Crime Records Bureau (NCRB), 60,750 farmers committed suicides in Maharashtra from 1995 to 2013.

Though bitter, Charde considers himself lucky—the bulk of tur in Maharashtra was bought by traders for Rs3,800-4,100 per quintal.

In the year when Maharashtra’s agriculture sector recorded a growth of 12.5%, why are the farmers in regions as distantly located as Nashik and Wardha up in arms?

“In 2016, when there was no drought, it is the double whammy of market, in the form of lack of good MSP and private market prices, and the government—in the form of inept handling—that have caused this widespread anger among rich and poor farmers alike,” a farm sector expert and former Maharashtra bureaucrat says, requesting anonymity.

“There are structural and systemic problems which are pre-Modi. But while Modi has not been able to solve most of those structural problems, he has heaped some of his own on the farmers like demonetisation, failure to fulfil the 50% of cost of production promise, and concrete steps to increase farmers’ income,” farm activist Vijay Jawandhiya says.

To be sure, the farm distress has been a steady phenomenon in Maharashtra since 1995. According to the National Crime Records Bureau (NCRB), 60,750 farmers committed suicides in Maharashtra from 1995 to 2013.

Between 2014 and 2016, more than 10,300 farmers have committed suicide in the state. Till May end this year, the state has seen around 900 farmer suicides.

The root causes as farm experts have pointed out are crop failures due to inconsistent climate, unstable and unpredictable market prices, and archaic regulations that market middlemen exploit. Farmers say the systemic problems have been aggravated by “market disruptors like demonetisation”, indebtedness, and government’s targeting of consumer inflation at the cost of good remunerative prices.

Pandurang Bodke, a farmer in Sinnar village, Nashik district, points out that farmers are also consumers. “Last year, soyabean sold for Rs4,100 per quintal and the price of edible oil was Rs75 per litre. This year, price of soyabean has dropped to Rs2,700 but oil still retails for Rs80 per litre. How does a farmer survive?” he asks.

In Puntamba, Rajendra Jagdale, runs a small tea and snacks stall. “I just about manage to survive because of daily income from this stall. Surviving solely on farming is impossible. I sold onion for Rs5 per kg as compared to Rs20 last year. For an investment of Rs2 lakh, the income was only Rs85,000,” Jagdale says. He prefers legally guaranteed MSPs for all crops over loan waiver.

“Loan waiver will only make us eligible for fresh credit. What will happen next year if prices are still volatile? Government should declare MSP well in advance.”

Harish Petkar, dairy farmer in Puntamba, decided four years back to invest in pomegranate when maintaining 25 Holstein-Friesian crossbred cows became unviable. “Those 25 cows would together give around 150 litres of milk each day and the milk collection centre used to send one tanker exclusively to my farm. But the price of cow milk was only Rs17 per litre then. Maintenance cost is Rs250-300 per day per cow. I cut down on the herd and now have only four cows left,” Petkar says.

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He took a loan of Rs20 lakh from Axis Bank and invested the money in developing a pomegranate farm on his 18.5 acres. “It takes four to five years for the trees to bear fruit. There is an investment of Rs1.25 lakh per acre of pomegranate. If we are getting a price of Rs50 per kg, the income could go up to Rs3.5 lakh per acre of which Rs2 lakh would be net profit. But the price today is only Rs35 per kg and even pomegranate farming has turned unviable,” Petkar says.

In Niphad of Nashik district, 24-year-old Kundan Sangle agitatedly shows his onion sale receipt. It is a sad document. It says he sold 23 quintal of onion on 13 June for Rs565 per quintal plus Rs100 as bonus from Maharashtra government.

“The expense per acre is Rs40,000. I got only Rs15,295,” Sangle says. Tell this price of Rs6.65 per kg to Kailash Pachore of Sinnar who on 11 June had sold his onions for a miserable Rs3 per kg. “I would say Sangle was still lucky,” Pachore says.

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