The Centre has asked information from states on recent instances of large-scale distress sale by farmers and also steps taken by them to arrest such sales. This followed repeated instances of distress sale of cereals, mainly paddy by farmers despite a steady rise in Minimum Support Price (MSP) for the last few years.
The information has been sought by the union agriculture ministry as part of the process to devise just MSP for 2013-14 kharif marketing season, sowing for which will begin from June onwards.
Officials said though regularly, the Commission for Agriculture Costs and Prices (CACP) seeks details on various issues from states before formalizing its recommendations on MSP for different crops, this year around inputs are also being sought on distress sale of crops, mainly paddy to ensure that farmers get a right price despite producing more.
Paddy is the biggest foodgrain grown during the kharif season. In 2012-13 crop marketing year, India is expected to produce around 85.5 million tonnes of paddy, almost 7% less than the previous year.
Officials said the problem of distress sale in paddy is largely prevalent in eastern Indian states of West Bengal, Bihar, eastern Uttar Pradesh, Assam and Odisha.
Together, these five states produce almost 45% of the total rice produced in India. However, in 2013-14, 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 that farmers are being compelled to sell their produce at low rates,” a senior official said.
He said prices have fallen almost 10-20% 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 2012-2013 crop
season that started in July, almost 16% more than the previous year.
The official explained that while the local administration blames the Food Corporation of India (FCI) for not adequately lifting paddy, FCI officials complain that the quality of paddy is not up to mark.
“As a result of this logjam, farmers are the real suffers,” CACP chairman Ashok Gulati said.
In eastern India, the team found out that there was a standoff 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.
