Bhavantar Scheme: Committee found no evidence of price suppression in Madhya Pradesh

Published: June 19, 2019 5:17:51 AM

The committee attributed the below MSPs of these crops to higher arrivals and suggested the government intervention in the market should be ‘continual’.

Bhavantar Scheme, Madhya Pradesh, Economic Growth, IEG, Economy news, BBY, Bhavantar Bhugtan Yojana, soyabean, groundnut, sesame, ramtil, maize, moong, urad, turBhavantar Scheme: Committee found no evidence of price suppression in Madhya Pradesh

By Prabhudatta Mishra

An expert committee, formed by the Centre, has found no evidence of traders’ collusion or artificial supression of mandi prices of soyabean, maize and urad during the implementation of the Bahvantar scheme in Madhya Pradesh. The committee attributed the below MSPs of these crops to higher arrivals and suggested the government intervention in the market should be ‘continual’.

In case of soyabeans, there was a suspicion among farmers in Indore and Ujjain about possible collusion among small number of (edible) oil plants to suppress prices. Because soyabean prices were much lower at about Rs 2,400/quintal (against MSP of Rs 3,399) during the period when the Bhavantar Bhugtan Yojana (BBY) was in operation (October-December 2018) and rose immediately after that to reach about Rs 3,800/quintal in February 2019.

The agriculture ministry had last year commissioned the Delhi-based Institute of Economic Growth (IEG) to analyse the implementation of the BBY, which was launched as a pilot first time in the country by MP for select kharif crops during 2017-18. The panel submitted its final report to the ministry in February 2019.

The IEG report said: “One of the major reasons for price decline was the large market arrivals during the BBY period. A small window of only 75 days open to the farmers for bringing their crop to the mandis. The rush of arrivals may slow if the window is widened to about four months.” Further, it said that the farmers will have no incentive to look for the best possible price in the market since they know that they will be compensated for the difference.

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The MP government had paid Rs 1,570 crore to farmers in kharif 2017 under BBY, first time when it was launched in any state and had covered as many as eight crops— soyabean, groundnut, sesame, ramtil (all oilseeds), maize (cereal), moong, urad and tur (pulses). However, the government aborted a plan to undertake the operation under BBY during rabi 2017-18 season for chana, masur and mustard crops after mandi prices dropped over 30% against their MSPs as it could have cost the state around Rs 3,500 crore. It shifted to physical procurement system under Price Support Scheme (PSS) for these rabi crops.

Former chief minister Shivraj Singh Chouhan had announced ‘up to’ Rs 500 ‘flat’ (under BBY) for each quintal of soyabean and maize sold by farmers to compensate them for selling their crops below the MSPs during kharif 2018-19. The new government under Kamal Nath in March decided to pay at Rs 250/quintal to 2.85 lakh farmers who sold 22.6 lakh tonne of maize under BBY. A panel was formed to work out the payment to be made to soyabean farmers.

Since the estimated production of soyabean in the state was about 67 lakh tonne, the Centre had allowed it to implement Bhavantar for 16.82 lakh tonne of the crop. However, over 8.5 lakh farmers had sold more than 25 lakh tonne of soyabean and wanted to be covered under BBY. The Centre is yet to release funds to the state, sources said.

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