NSEL scam leaves Idukki farmers wary of fly-by-night buyers

Written by Rajesh Ravi | Kochi | Updated: Oct 11 2013, 17:38pm hrs
Farmers in Idukki district of Kerala are now wary of private companies that promise good returns for their products at the farmgate. From a multinational company that promised to procure cocoa in the early eighties to several companies that promised bounty from vanilla in the late nineties, farmers in the region have seen several fly-by-night operators who promised to eliminate middlemen and give them adequate returns.

The latest scam that has left them scared and diffident is a joint venture with the controversial National Spot Exchange (NSEL).

NSEL had formed a public limited company in association with farmers called the 'Western Ghats Agro Growers Company' (WGAGL) in September, 2012. The company was supposed to function as an aggregator for member farmers to use futures exchanges to hedge their price risks in related commodities. Problems in NSEL have led to uncertainty in the future of WGAGL. The company was supposed to function as an aggregator for member farmers and help them get good returns. As the first project, we convinced hundreds of farmers to be part of the company and formed two collectives for processing and grading of cardamom in Kattapana, Idukki, Fr George Kochuparambil told FE. "Now there is no communication from the WGAGL officals on the activities and the future of the company," he added.

Many of the farmers even held back cardamom hoping to sell through WGAGL and lost money in the process. We invested in space for a grading and processing centre. NSEL helped in procuring two grading machines. After the problems in NSEL began, the people there have hardly had any contact from the WGAGL Kochi office and farmers are feeling cheated, he added. The plan of WGAGL was to form such collectives across Kerala and Tamil Nadu to procure and sell pepper, cardamom and nutmeg. The company had acquired a warehouse in the Spices Board Park in Puttady to store and deliver products that would be sold through the NSEL sites.

It is true that the farmers have not invested money as INFAM provided the initial seed money on their behalf. But after having seen several such non-starters, farmers are now scared of any move to provide an alternate platform, a father who was closely associated with the organization said. The initiative to form an association with NSEL for an alternate platform was taken by the late Fr Mathew Vadekkemuriyil, former national chairman of Indian Farmers Movement (INFAM).

Cardamom farmers have no option but to sell to licensed dealers who take part in electronic auctions conducted by the behest of the Board in Puttady. Spices Board on its part is thinking of opening up the system by amending the existing laws, which calls for licensing of dealers. Opening up the system or bringing in new dealers would help in better returns to the seller.

Meanwhile, officials of WGAGL who talked to FE feel there is still hope in reviving the process. Our idea was to eliminate the middlemen and provide farmers with a good platform to sell their products... sources said.