Falling soybean prices adds fuel to farmers' anger in MP

Soyabean prices have fallen from Rs 4,500 a quintal in Indore in March 2015 to Rs 3,000-3,500 now

Overdependence on the soybean economy has added to the woes of farmers in the Malwa region of Madhya Pradesh, leading to the violent protests last week.

According to the Soybean Processors Association of India (SOPAI), the last time prices of the legume touched Rs 4,500 per quintal at the Indore mandi, or wholesale market, was in March 2015. Since then, prices have hovered around Rs 3,000-3,500 per quintal.

This has crippled the economy of the region, and the worst-affected are farmers. With soybean prices failing to recover, tillers have been pushed into debt even in the lean production season.

“Let the government assure me that I will get at least Rs 6,000 per quintal in the kharif season; much of my problems will be over,” said Raj Kumar, a farmer at Mandsaur. He had taken part in the protests in Madhya Pradesh, demanding better prices for their produce and a loan waiver.

The agitation, which started on June 1, turned violent on Tuesday (June 6), with police firing on protestors in the Piplya Mandi area of Mandsaur, about 250 km northwest of state capital Bhopal, leaving five farmers dead. Another succumbed to injuries on Friday, taking the death toll to six.

The farmers’ protest has spread to other areas of the state now.

Rich in black volcanic alluvial soil, the Malwa region is spread over the districts of Ujjain, Ratlam, Mandsaur, Neemuch and Indore. The area is called the soy capital of the country, thanks to the favourable soil and climate and also because of the available market for the crop in the nearby processing plants.

Soybean has been the mainstay for millions of farmers in the region — along with wheat. Unfortunately, prices of both have not been commensurate.

A farmer said, “The loan that we get every year from primary agriculture cooperative societies for buying seeds and fertilisers is disbursed in instalments, despite us repaying in time. This hurts our operations capacity.”

Since 2012, the area under soybean cultivation in Madhya Pradesh was about 5.5-6.2 million hectares. Productivity has risen from 608 kg per hectare in 2012 to 1,116 kg per hectare in 2015.

But experts feel prices are unlike to remain steadily high for a number of reasons.

Rajesh Agarwal, a former president of the SOPAI and an old hand in soybean trade, said farmers of Malwa have to realise that they won’t get the same price for soybean every year. The prices of the legume in Indore and the nearby areas are linked to the wide global trade in soy oil and soy meal.

If the international market remained weak, there was little the traders and processors in Madhya Pradesh could do. Even with low prices of raw material, the sector was hardly making profit and almost 70 per cent of the installed processing capacity remained unutilised.

“Farmers must realise they will earn more only if their productivity goes up. Only then will the processing units run at full capacity,” said Agarwal.

Over the past two decades, a little more than 50 small and big soybean processing plants in the region have closed down. The rest are also functioning at less than 40 per cent crushing capacity.