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Maharashtra to ban purchase of farm produce below MSP

LiveMint logoLiveMint 03-05-2017 Abhiram Ghadyalpatil

Mumbai: Maharashtra will soon introduce legislation banning the purchase of farm produce below the minimum support price (MSP), chief minister Devendra Fadnavis said at an agriculture review meeting on Wednesday. Fadnavis said the law will make procurement of farm produce at MSP fixed by the government mandatory across the state.

However, the chief minister did not clarify if the proposed law will also apply to licensed traders who operate at Agriculture Produce Marketing Committee (APMC) mandis.

Farmers sell their produce to licensed traders at APMC mandis if their produce does not meet the standards of Fair Average Quality (FAQ) fixed by the government procurement agencies to buy at MSP. Farm produce not graded as FAQ is generally sold below the MSP.

Calls and text messages to Maharashtra’s principal secretary, agriculture, went unanswered.

The announcement is significant in the wake of the failure of government agencies to procure the bulk of Tur dal yield at MSP in Maharashtra following a bumper yield in 2016-17 kharif season. From an estimated yield of 2.35 million tonnes, the state and central government agencies have procured only around half-a-million tonnes.

After the chief minister’s assurance last week that around one million tonnes of Tur registered at procurement centres till 22 April would be procured at MSP, government agencies have resumed purchase.

“The government estimates that around 1 million tonnes of tur has been registered at the procurement centres till 22 April and this stock remains unsold. It is unlikely that all of this stock would be purchased at MSP because the grading standards are quite strict. It is likely that some of this stock would be procured by traders below MSP,” said an agriculture marketing department official who did not wish to be named.

The official said the chief minister “may have proposed the law in order to protect farmers from traders who in situations of excess production resort to price rigging to make sure the farmers sell at much below MSP.”

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