Agri Business

As groundnut trades below MSP, farmers in Gujarat turn jittery

Rutam Vora Ahmedabad | Updated on January 16, 2018 Published on October 26, 2016


State to start procurement after Nov 5; pest attack scare compounds woes

Groundnut farmers in Gujarat are a worried lot. Their expectations of making a fortune by shifting from cotton to groundnut seem to have fallen flat as prices of the oilseed have fallen significantly below the Minimum Support Price (MSP), with reports of moth and white grub beetle attacks.

This kharif season, Gujarat — the largest producer of the oilseed — has witnessed record groundnut sowing, on over 16.4 lakh hectares, with output projected at 26 lakh tonnes, one of the highest in three years. This sent out a bearish sentiment for the price, taking it down as low as ₹552 for 20 kg as against the MSP of ₹844 per 20 kg.

Farmers in Kodinar, near Junagadh, and parts of Saurashtra created a huge uproar over non- remunerative prices for the crop and demanded government intervention.

To this, the State government responded by announcing that it would procure groundnut at the minimum support price after November 5.

“The government is planning to procure about 1 lakh tonnes of groundnut at MSP rate. The government will make provisions of ₹100 crore for the same under the emergency fund. The government has already directed the agencies such as civil supplies department, Nafed, Gujcot, Gujcomasol, CCI for the procurement at MSP rate,” State Agriculture Minister Chiman Sapariya said in a statement here.

Not enough?

However, commodity experts termed the government’s move as an eye-wash and criticised the insufficient quantum of funds allocated for procurement.

“The government plans to procure 1 lakh tonnes of groundnut at MSP rate. This works out to over ₹400 crore funding requirement, against which the government has made a provision for only ₹100 crore,” said Ramesh Bhorania, a farmer from Rajkot.

Echoing similar sentiments, leading commodity expert Biren Vakil stated that the announcement lacked effectiveness on the ground. He added: “This is a temporary phenomenon and there will be only a short-term impact on prices as arrivals are high at the current stage.”

To concerns of moth and white grub attacks on the groundnut crop, Vakil, who was also part of the SEA Groundnut crop survey team, stated that the damage to the area is limited to about 5 per cent of the total sowing area.

“There is a limited region in Saurashtra where such moth and white grub attacks have been reported. But this area is not more than 5 per cent. The overall crop is good,” he said.

Published on October 26, 2016
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