MP farmers dreams come a cropper on bumper output

The Indore mandi (market), Madhya Pradesh's largest, has been witnessing huge arrivals of soybean this month. Farmers, who bring their crop to the market from areas adjacent to the city, return with millions of rupees.

However, this year they are not a happy lot because soybean prices have taken a beating, thanks to a good crop.

The Sanyogitaganj Krishi Upaj Mandi, spread over an area of 17 acres in the heart of Indore, is the largest wholesale market in the central Indian state of Madhya Pradesh.

Established in 1953, the functioning of this mandi came under government decree in 1970, when the Agricultural Produce Marketing Committee Act came into force.

According to mandi officials, annual turnover tops Rs 350 crore with all major foodgrains, pulses and oilseeds sold here.

Farmers from any part of the state are free to sell their produce at the mandi, while traders have to pay a nominal fee of Rs 1,000 to get a trading licence, valid for 5 years.

Auctioning Process: The produce which farmers bring to the market here is sold through a transparent auction system, overseen by mandi officials.

Every morning, farmers bring in their produce through various means of transport""mainly trucks and tractors""and place it on long platforms earmarked for different commodities.

The auction takes place in two phases, with the first starting around 8.30 am and second after 12.00 PM.

Mandi officials said the first auction is for large volume lots, while smaller quantities of grain are auctioned in the second one.

Brokers and buyers rove the platforms examining the quality of produce offered by different farmers, and announce the price they are willing to pay for each lot. The mandi official, who accompanies the buyers, then settles the auction by announcing the highest bid.

The manner in which brokers and buyers examine the quality of grains appears overtly casual. A buyer just picks a handful of grain and fingers it to assess the quality.

Mandi officials admit that this is not a foolproof system of quality assessment, but claim that cases of cheating are minimal and are soon resolved.

The entire process begins with an announcement by mandi officials, which is carried across the entire spread through loudspeakers. Deals are struck swiftly and the process is over within minutes.

Once a lot is sold, the mandi official issues a signed slip for the quantity sold and the price. The farmer then delivers the quantity to the buyer and collects payment.

On Saturday, farmers brought some 5,000-6,000 bags of soybean to the Indore mandi. At an average price of Rs 1,100 per 100 kg, they together netted Rs 5.5 million.

Current prices are markedly lower than Rs 1,270 per 100 kg that prevailed about four months ago. A bumper crop following good rains this year has depressed prices and with it muted the jingle in farmers' pockets.

The mandi has adopted the practice of collecting guarantees from buyers to ensure that there is no default in payments to farmers.

Such guarantees can be in the form of physical assets or bank guarantees.

The mandi board levies 2 per cent tax on the buyer, of which a part is used for the development of rural roads, another part goes to the state government kitty and the rest is used to meet mandi expenses, including staff costs.

The mandi currently employs around 50-55 employees. Incidentally, Saturday's auction started late because it was "ganna gyaras," which means the first day of the arrival of fresh sugarcane crop. Farmers were busy in the morning with salutary offerings to the gods, a mandi official said.