The Centre has asked for information from states on recent instances of large-scale distress sale by farmers and on steps taken to arrest such sales. This follows repeated instances of distress sale of cereals, mainly paddy, by farmers despite a steady rise in the minimum support price (MSP) for the last few years.
The information has been sought by the agriculture ministry as part of the process to devise a just MSP for the 2013-14 kharif marketing season, sowing for which will begin from June.
Though the Commission for Agricultural Costs and Prices (CACP) regularly seeks details on various issues from states before formalising its recommendations on MSP for different crops, inputs are also being sought on distress sale of crops to ensure farmers get the right price despite producing more, officials said.
Paddy is the biggest foodgrain grown during the kharif season. In the 2012-13 crop marketing year, India is expected to produce around 85.5 million tonnes (mt) of paddy, almost seven per cent less than the previous year.
Officials said the problem of distress sale in paddy is largely prevalent in eastern states of West Bengal, Bihar, eastern Uttar Pradesh, Assam and Odisha.
Together, these five states produce almost 45 per cent of the total rice produced in India.
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However, in 2012-13, for the second year, running paddy prices in the open market of these eastern states have dropped below the MSP because of inept procurement facilities, forcing farmers to sell their produce in distress.
“Two teams of officials from the department of agriculture and CACP toured some areas of eastern India and found farmers are being compelled to sell their produce at low rates,” a senior official said. He said prices have fallen 10-20 per cent below the MSP in Bihar, Odisha and other eastern states. The government has fixed a minimum support price of Rs 1,250 per quintal for common grade rice for 2012-13 crop season that started in July, almost 16 per cent more than the previous year.
In eastern India, the team found out that there was a stand-off between rice millers and FCI because of which paddy purchases were slow.
“There was also cartel of millers who pushed paddy prices down for their own benefit,” another official said. He said the findings of the team and all other subsequent field analysis would be shared with top functionaries in the government to find an amicable solution to the plight of paddy farmers in eastern India.