Agri Business

The MSP mirage hits Maharashtra’s soya farmers

Rahul Wadke Mumbai | Updated on January 27, 2018 Published on November 27, 2017

Gunny bags containing soyabean stacked at Latur market yard   -  RAHUL WADKE

Astride soyabean sacks, 33-year-old market intermediary Parmeshwar Suryavanshi is literally at the top of his game..

Suryavanshi belongs to the set of middlemen, locally called Adityas, at the Agriculture Produce Market Committee (APMC)-controlled marketyard at Latur in Maharashtra.

Below MSP prices

When he raises his voice to call out bids, he also raises prices of soyabean though not quite enough to reach the minimum support price (MSP) of ₹3,050/quintal. The price hovers between ₹2,600 and ₹2,800. In the current season, farmers are bringing in, on an average, about 30,000 quintals of soyabean to the market.

In the kharif of 2016, Maharashtra produced 39,455 million tonnes of soyabean. The price bids at the Latur APMC, one of the largest wholesale markets for beans and pulses, serve as the national benchmark. The prices are tracked daily even by the Prime Minister’s Office. Adtyas sell soyabean on behalf of farmers and charge a commission on the final price.

Quality issues

Elsewhere, traders — using a long, poker-like implement — are stabbing the gunny bags, drawing a sample. Some sift through the beans, comparing the colour and texture.

Others chew a few beans, assessing the presence of moisture. Dry soyabean fetches higher prices and even a premium in the market.

Suryavanshi is the dramatis personae when he finally closes his bid by vigorously pointing to the sacks and goes on to raise a new bid for the soyabeans, which have just been stacked up in the warehouse ready for sale.

Latur APMC chairman Lalit Kumar Shah accepts that the prices farmers get (between ₹2,500 and ₹2,700 a quintal) are really less. He says thatsoyabean also do not make it to the government’s procurement centres because the norms —such as on the moisture content, foreign matter, and damaged seeds — are difficult to comply with.

Global demand, prices

Shah said that the agri-based industries make products such as soya de-oiled cake (DOC) which is used as a cattlefeed in the international market.

But, today, there are no takers for the Indian meal as the base price of soyabean is much less in other countries.

When soyabean is procured in the Indian market, about 80 per cent is used for making DOC, 17 per cent for extracting oil and the rest is used for other by-products.

Therefore, the export price of DOC should rise in the international market, only then the local prices of soyabean will increase, he said.

Import duty, too late

Last week, the Centre raised the import duty on crude palm oil to 30 per cent from 15 per cent and on refined oil to 40 per cent from 25 per cent. Import duty on crude soyabean oil has been increased to 30 per cent from 17.5 per cent, while that on refined soyabean oil has been raised to 35 per cent from 20 per cent.

This duty increase is an attempt to curb cheaper shipments and boost local prices for supporting farmers and refiners.

However, the prices at Latur have not increased beyond ₹2,800 per quintal.

Maharudra Shette, a 39-year-old farmer from Usturi village in Nilanga taluk of Latur, said that farmers had expected a good price jump. Shette said that at the State-run procurement centre at the Latur APMC, it took him four days of paperwork to sell 17 quintals of soyabean.

On the final day of the sale, he had to have a small truck on-call, so as to make the final delivery at the procurement centre. In effect, the gains from selling the soyabean at the APMC were wiped out by the additional expense on transportation. Plus the payment will happen only after December 1, he said.

This is the eleventh in a series of Farm Distress. The first report appeared on November 16. The previous article in the series appeared on November 27, on Haryana’s cotton farmers.

Published on November 27, 2017
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