The Hindu Business Line : AP Govt intervention adds spice to chilli trading

EVEN in the era of liberalisation, Government intervention is helpful to people who are otherwise left to the mercy of market forces. This was what happened to the chilli farmers of Warangal district in Andhra Pradesh during the first week of March.

When the chilli farmers demanded more money for their produce, the traders not only refused to pay more but also stalled purchases. However, when Andhra Pradesh Marketing Federation (Markfed), at the instance of the State Government, entered the market to prevent the falling prices, there were no stocks of the agricultural produce for sale. Traders had purchased most of the chilli stock at a price, which they refused to pay earlier. Consequently, Markfed could procure only 50 bags of about 40 kg each while 7,000 such bags were sold in the agricultural market yard.

The chilli farmers resorted to violent protest on March 1 and 2 at the Enumamula agricultural market in Warangal district as traders refused to pay more than Rs 2,400 per quintal (qtl). Following this, the State Government asked Markfed to buy fair average quality (FAQ) chillies at a price of not less than Rs 2,700 per qtl.

Accordingly, Markfed personnel visited the agricultural market yard only to discover that the traders had purchased chilli stocks from farmers at the same price, which they had refused to pay earlier. Today, the price of FAQ chillies is ruling at Rs 2,850 per qtl.

According to the State Commissioner of Marketing, Mr D.S. Murthy, the prices of chillies had fallen below Rs 2,700 per qtl on March 1 with the farmers dumping their produce in the market yard. The market was closed for the preceding two days and, hence, there was a sudden arrival of stocks into the market yard following which the traders reduced the price.

Mr Murthy told Business Line that chilli production in the State this year was estimated to be 5.38 lakh tonnes against 3.05 lakh tonnes last year. Andhra Pradesh is a major exporter of chillies and European purchasers recently visited the State to inspect the agricultural market yards and production conditions.

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