With soyabean prices having crashed in many markets of Maharashtra, chief minister Devendra Fadnavis urged Union finance minister Arun Jaitley to intervene and increase duty on imports to prevent any further crisis. Significantly, for the first time in nearly 30 years, the Centre has had to intervene and has directed its agencies to purchase soyabean directly from farmers at minimum support price (MSP).
The Centre has fixed a soyabean MSP of R2,775 a quintal, including a bonus of R100. The state government has declared the minimum support price for soyabean at R2,850 per quintal, but grain merchants are purchasing it at the lowest rate of R1,500-R2,000 per quintal, stating that the produce was of poor quality, according to several farmers.
In a representation to the Union finance minister, Fadnavis has stated that because of ample rains, there has been good production of soyabean in the state by at least three times over last year. Therefore, there is a possibility of soyabean prices dropping down further in the state, he said.
The CM said the government has already begun procurement centres at MSP so that farmers do not have to resort to distress sale. According to officials, the market rates have slumped to R2,700-R2,500 per quintal, against an MSP of R2,750. In parts of Maharashtra, the rates are even lower.
According to industry experts, alongside a bumper harvest, there has been a drop in soyabean seed demand and a drop in meal prices. Soyameal exports dropped 44% to 421,741 tonnes during April-September, first six months of this financial year, from the same period last year.
Export of soyabean meal and its other value-added products fell by 55% to 19,139 tonnes during last month, according to industry data. The export stood at 42,104 tonnes in the year-ago period, Soyabean Processors’ Association of India (SOPA) said in a statement.
“The export of soyabean meal and its other value-added products (HS Code 2304) during October 2016 is just 19,139 tonnes compared to 42,104 tonnes in October 2015 showing a decrease of 54.5% over the same period of last year,” SOPA said. On a financial year basis, the export fell by 61% during April-October 2016 at 94,871 tonnes as compared to 2,43,632 tonnes in the corresponding period of the previous year, it added.
SOPA chairman Davish Jain said the association has been requesting the government time and again for raising the duty in soyabean oil import so that it becomes remunerative for farmers. There has been a 400% rise in edible oil imports in the last four years. In 2012-13, the import of soyabean oil was 10.5 lakh tonnes and it has now increased to 40 lakh tonnes, he said. This is detrimental to oilseed cultivation in the country which will begin to depend on import and farmers will get dissuaded by this, he added.
The country’s oil import bill in the last four years has increased from R6,500 crore in 2012-13 to R18,000 crore in 2015-16 and at the same time, the oil prices have gone down. Earlier, the revenue from crushed soyabean was 45% and 55% came from soyabean meal. The proportion has now changed to 65% soyabean meal and 35% on soyabean crushing.
Moreover, soyabean meal export from the country has dropped down to 4 lakh tonnes from 47 lakh tonnes and in value terms it translates to R1,500 crore now from R15,000 crore four years ago, according to senior industry experts.
According to Jain, the country has to bear an additional loss of R25,000 crore on the loss of export earnings and dependence on oil imports. Earlier, soyabean used to be sold by farmers at 40% above MSP. “This is the first time in 30 years that the government has had to intervene,” he said. He added the association would approach the government again to press for policy changes.