How falling farm prices worry BJP ahead of Haryana and Maharashtra polls

Falling prices of agricultural produce are worrisome for the BJP in Haryana and Maharashtra, where elections are due, Sanjeeb Mukherjee reports

That farm issues and politics have an easy commerce is an old adage. And the truth of this was again tested when it was found that Madhya Pradesh, which had its Assembly election last year, and Maharashtra, which is going to the polls, have a common concern: Soybean prices.
 

The Rakshabandhan day this year was particularly bad for Kamlesh Patidar, a farmer in Devariya village, Mandsaur district, Madhya Pradesh.
 

When his relatives were busy with the festivities, Kamlesh was ploughing down his full-grown soybean with two tractors.

His frustration was that the price he was getting in the open market was not enough to cover his basic cost of production, let alone fetch him any profit.
 

 

An enraged Kamlesh not only destroyed his crop but also advised his fellow farmers to do so.
 

Soybean has been selling in Madhya Pradesh and its adjoining markets at Rs 3,500-4,000 per quintal, which is the lowest it has fetched in more than 10 years.
 

The minimum selling price (MSP) of soybean is Rs 4,892 per quintal. The rates being quoted in Madhya Pradesh mandis is a good Rs 800-900 per quintal less than the MSP.
 

Recently, farmers in the state started a relay protest, demanding a purchase price equivalent to Rs 6,000 per quintal.
 

Soybean was sown in around 12.51 million hectares this summer, nearly 2 per cent higher than normal acreage under the crop.
 

Normal acreage is the average of the last five years.
 

The plummeting of soybean rates just ahead of the harvest is also due to cheap imports of edible oils, which are now allowed at nil duty till March 2025.
 

This measure to control inflation has seen a flood of imported edible oils in the country, negatively impacting farmers’ earnings.

The data sourced from the Solvent Extractors Association (SEA) showed in July India imported around 1.84 million tonnes of edible oils, marginally less than the 1.85 million tonnes imported in June.
 

Most notably, India imported a record 1.08 million tonnes of palm oil, which is the highest since November 2022.
 

“A big chunk of Madhya Pradesh’s agriculture is soybean-based and such a sharp slump in open market rates jeopardises the rural economy,” Kedar Sirohi, head of the farmers’ cell in the Madhya Pradesh Congress, told Business Standard.
 

The echo of this episode is also being felt in neighbouring Maharashtra, which is the largest soybean-growing state in the country after Madhya Pradesh.
 

A few days ago, a group of soybean farmers had met Union Agriculture Minister Shivraj Singh Chouhan during one of his visits to the state.
 

Chouhan had to assure them that the Centre would use all instruments in its armoury, including direct purchase at MSP, deficiency price payment, and even other steps to help protect the interests of farmers.
 

The crucial difference between Madhya Pradesh and Maharashtra in this case is that the latter goes to polls in the next few weeks.
 

After its below par performance in Maharashtra in the Lok Sabha polls, which some experts have blamed on growing distress in the state’s rural belt, another poor showing could further dent the credibility of the Bharatiya Janata Party-Mahayuti government in the state.
 

Soybean is grown in a major way in the Marathwada and Vidarbha regions of the state, both of which gave the thumbs

down to the Mahayuti in the Lok Sabha elections.
 

Arhar or tur
 

What could give a headache to the ruling dispensation is that the political implications of the coming kharif harvest are not limited to soybean.
 

Arhar is the largest pulses crop in the country after chana, accounting for 13-14 per cent of annual pulses production. It is one of the prime kharif crops grown in Maharashtra.
 

The sowing of arhar in the country is over. It was planted in around 4.57 million hectares, which is more than normal acreage under the crop (the average of the last five years’ area).

 

Trade sources say arhar is a long-duration crop and some varieties require 5-11 months to mature. Therefore, predicting anything on the final harvest could be premature. But, given that the start has been good, one can expect a strong harvest this year.
 

If the arhar harvest is good this year and imports flood the market due to zero duty, there is every possibility that pulses prices might soften in the days to come.
 

Though this might be good for the consumers, for farmers it could spell trouble. Last month, Indian Pulses and Grains Association Chairman Bimal Kothari had said prices would not increase this year. Rather, they will fall.
 

Rahul Chauhan, commodity analyst at iGrain India, says prices might not push up much in FY25 because globally the production of tur, urad, and lentil has been good and there could be price competition among Australia, Canada, Myanmar, and African countries.
 

In Maharashtra, cultivators of cotton, grapes, and onion, for all of which the state is a leading producer, have been facing the brunt of falling prices due to export curbs and dropping demand.
 

Surplus rain in September, as predicted by the Met, may aggravate the distress by damaging standing crops.
 

Rain in central India, comprising the Madhya Maharashtra, Marathwada, and Vidarbha regions of Maharashtra, is almost 17 per cent above normal so far this season.

Basmati in Haryana
 

Farmers’ issues are predominant also in another poll-bound state, Haryana, where basmati rates have dropped to Rs 2,500 per quintal from last year’s Rs 3,500-4,000 per quintal. A major reason for this dip is the cap on basmati exports priced below $950 per tonne.
 

Last week, the Centre initiated a series of measures to support the sugar industry and reports said steps were in the offing to raise import duty on edible oils and lower the minimum export price (MEP) of basmati rice.
 

A quick response from the government could go a long way in salvaging the electoral situation for the ruling Bharatiya Janata Party in the poll-bound states.