Mandi prices of many rabi crops fall below MSPs

Updated: April 28, 2020 5:52:23 PM

According to an FE analysis of mandi prices in Madhya Pradesh and Rajasthan, where rabi crops arrived even before closure of mandis around March 20, all crops were sold below their respective MSPs.

mandi, sabzi mandi, vegetable supply, lockdown, 21 day lockdown, agriculture ministry, economy, essential supplies, rabi crop, vegetable price,The Food Corporation of India (FCI) buys about 30% of wheat and paddy produced in the country and the quantity has been increasing every year, putting a burden on the firm to dispose of the surplus.

By Prabhudatta Mishra

Even as farmers wait to receive the PM-Kisan benefit from the government after the Covid-19 outbreak, the support will be offset by losses for them.

Notwithstanding the concerns over broken supply chains, mandi prices of at least three rabi crops – mustard, chana and masur – are ruling at 11-14% below their respective minimum support prices (MSPs). Unless the government implements a robust procurement system after the lockdown is lifted, farm-gate prices of many crops could remain depressed, causing further hardship to farmers, market observers say.

According to an FE analysis of mandi prices in Madhya Pradesh and Rajasthan, where rabi crops arrived even before closure of mandis around March 20, all crops were sold below their respective MSPs.

For the 2019-20 crop year (July-June), MSPs of rabi crops were raised by 5-7% from the previous year. The Centre is yet to announce this year’s procurement policy for oilseeds and pulses under PM-Aasha scheme, the Budget allocation of which has been reduced by a third to Rs 500 crore for FY21.

Chana in Madhya Pradesh had a slow start with arrivals of the fresh crop at about 26,000 tonne so far. Guna district had the highest 3,940 tonne of arrivals during March 16-21. Average price was Rs 3,725/quintal, 24% below the MSP, on March 21 at the Kumbhraj mandi in Guna. Prices were at same level in other major producing districts like Rajgarh, Dewas, Khargone and Vidisha. Farmers have stopped bringing the crop since then due to lockdown.

Masur arrival at Bina in Sagar district of Madhya Pradesh stopped after March 20 when the price was Rs 4,250/quintal against the MSP of Rs 4,800. Sagar district saw the largest arrival in MP since March 16 before lockdown put everything to a halt. Shivpuri, Raisen, Vidisha, Ashoknagar, Shajapur, Damoh and Rajgarh are other major producing districts of masur in MP, country’s largest producer.

Rajasthan, the country’s top producer of mustard, has so far seen arrival of nearly 94,000 tonne of the crop since March 16. Average farm-gate price in Niwai mandi in Tonk district was Rs 3,605/quintal as on March 19, which is 19% lower than its MSP. Mandi prices were below MSP in other major producing districts such as Alwar, Baran, Dausa, Kota, Swai Madhopur and Bharatpur.

“This year, the mustard harvest was delayed due to late planting as normally the crop starts coming to mandis around end of February. The Rajasthan government has postponed the official procurement after lockdown. There will be rush to sell crops once mandis are open,” said farmer leader Rampal Jat. Unless the government makes necessary arrangements for procurement at MSP without putting any restriction on quantity to be sold, prices will be depressed as the oilseed crop is also good, Jat said.

He suggested the government to allow the notified agency, Nafed, to buy oilseeds and pulses at MSPs through the e-NAM portal. When the government has authenticated data of over 9 crore farmers under the PM-Kisan, it should use that information for procurement of crops, he said.

The Food Corporation of India (FCI) buys about 30% of wheat and paddy produced in the country and the quantity has been increasing every year, putting a burden on the firm to dispose of the surplus.

Ujjain district in Madhya Pradesh received the highest arrival of wheat in the state since March 16 and the average price was 4% lower at Rs 1,850/quintal on March 21. However, with the opening of official procurement centres, wheat has increased to its MSP level of Rs 1,925/quintal in Ujjain and many other mandis.

Madhya Pradesh, the third-largest contributor of wheat to the central Pool managed by the FCI, has seen arrival of about 3.5 lakh tonne of the grain since mid-March as farmers in the state normally harvest earlier than Punjab and Rajasthan due to rise in temperature, official said.

First published in The Financial Express edition dated 6 April 2020

Do you know What is Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget, Customs Duty? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1As edible oils pact with Malaysia, Indonesia ends, India should now hike import duties: SEA
2Unexpected policy timing, expected outcome: These measures could help RBI disinfect the economy 
3Coronavirus lockdown: India Post to home-deliver fruits in some Bihar cities