Agri Business

For Haryana’s farmers, MSP is only an illusion

Rajalakshmi Nirmal BL Research Bureau | Updated on November 28, 2019 Published on November 28, 2019

At Haryana’s Taraori mandi where paddy is weighed on manual scales and packed

Commission agents, who procure paddy, pay less than the MSP. There is no moisture testing or correct weighment. Is there a nexus all round?

It is widely perceived that MSP operations in Haryana are quite effective and farmers there are a happy lot. But the reality is quite different. In the last paddy season, many farmers in Karnal’s Taraori, the largest grain mandi in Haryana, got only ₹1,750/quintal against the Minimum Support Price of ₹1,815/quintal.

BusinessLine’s investigation into the issue revealed a few shocking facts. One, across mandis in Karnal (indeed, entire Haryana), the FCI does not procure directly from farmers but through commission agents. Two, the commission agents, arhatiyas, usually do not give a proper bill to farmers; they give only a kachi parchi. Three, there is no moisture-testing of the paddy.

Farmers get lower than MSP

Also, there is no ‘open-bidding’ for basmati (where there is no government procurement and private millers buy from farmers) in any mandi, including Taraori. Interestingly, Taraori is one of 585 eNAM mandis that promise pricing transparency. For Kharif 2019, the Centre-set MSP for paddy is ₹1,815/quintal. But farmers of Taraori whom BusinessLine spoke to received ₹1,730-1,750, and some times even less.

In Haryana, paddy procurement happens via State agencies, including the Food and Civil Supplies Department, Hafed, Haryana Agro Industries, Haryana Warehousing Corporation; none of them does it directly, but through the commission agents. The little the FCI procures is also through commission agents.

“The Arhatiya says moisture is higher than the desired level, and that is why he is paying a lower price. But when I ask him how much it is, he doesn’t have an answer. He just says take it or leave it…”, laments a farmer. The Taraori mandi does have moisture meters, but are used only when some farmers sell basmati rice through the eNAM platform. Not, as a rule. So, it is only by touch and feel or by biting the grain do commission agents set the price for a farmer’s paddy.

Nor are there electronic weighing scales. “We see the weight only at the arhatiya’s shop where there is a traditional weighing scale. We know this scale is not precise... we lose 1-2 kg on every bag, but we don’t have an option,” says another farmer.

Not many farmers can raise their voice as they take an advance from the agents against the crop.

Sources tell BusinessLine that commission agents pay farmers less than the MSP, but they take the full price from the procurement agencies.

No open bidding

There is no open bidding in Taraori for basmati rice. Krishan Sharma from Nadana village, Karnal, who is a farmer and also a teacher at the government school, says: “Once I leave my paddy at the shop of the arhatiya, I have to go. He contacts me after a few hours and tells me the rate. There is no information on who purchases my paddy. If there is an open auction, a farmer can get a better rate as there will be competition among millers, but in the current system, there is no room for this…”

Published on November 28, 2019
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