Rabi procurement starts slowly across North India amid distress sale fears

In MP, farmers say sales under new 'Sauda Patrak' method below MSP; Haryana mustard farmers wait for their turn to sell

Brajwasi Meena, a young farmer from Sheupur district in Madhya Pradesh, decided not to sell his 50 quintals of wheat as the trader was offering him a price which was almost Rs 250-350 quintal less than the minimum support price of Rs 1925 a quintal under a new system called, ‘sauda patrak or parchi’

“If I had sold the crop at the rate offered by the trader, I would have incurred a loss of almost Rs 11,000 in a trolley full of wheat, which weighs 50 quintals,” Meena said.

Disappointed, he tried contacting the local officials who said there was little they could do as under the ‘sauda parchi’ system, a farmer has to sell his wheat to the trader at whatever price he decides.

The system, which has been re-introduced in Madhya Pradesh, after a gap of several years, is a form of contract between a trader and farmer, and is issued by the Agriculture Produce Marketing Committees (APMC). The farmer does not bring his entire produce to the mandi, but just a sample of the crop.

Based on the sample, the buyer purchases the crop from the farmers-doorstep or any other designated place outside the usual mandi, while the sales are recorded in the mandi’s records.

A trader can purchase 25-30 per cent of produce through the ‘sauda patrak or parchi’ system. The buyer is given custody of the produce only after he makes full payment.

The system was introduced in the state to expedite sale of wheat, which has suffered due to the Covid-19 lockdown.
 

“This system was introduced as a reform measure to the APMC and to facilitate out of mandi sales by farmers and is meant for those farmers who are running short of cash and can’t wait for their turn to sell in government registered procurement centres,” 
said Bhagwan Meena, a young farmer leader from Madhya Pradesh.

He further said that if a farmer couldn't his basic MSP, what was the use of such a reform. Although farmers sold to traders earlier too, that was largely through an auction process. However, in order to avoid crowding in mandis this year, the state government introduced the system of ‘sauda patrak or parchi’.
 

"Private traders are also unwilling to offer a good price for the wheat due to unseasonal rains in early February, crops in some parts of MP have lost their lustre leading to a drop in its value," Bhagwan Meena said.
 

Meanwhile, Brajwasi Meena said that he would wait for his turn to sell in the government registered mandi as he had harvested around 350 quintals of wheat and without a good price, he would suffer a huge loss.
 

In Madhya Pradesh, in most government procurement centres, the number of which has been increased to over 4300, farmers are being called in two shifts to sell their wheat. Only 20 farmers from each panchayat are allowed to sell in one shift to ensure that there is no overcrowding in the mandis.
 

While social distancing is needed control the spread of Covid-19, for many farmers the spectre of distress sale looms large as purchases have to be staggered over a period of time to ensure that few farmers gather at the mandis.
 

The annual purchases of major rabi crops in North India largely wheat, mustard and also chana to some extent have been delayed as most cereal mandis were closed in the aftermath of the nationwide coronavirus lockdown.
 

The relaxations given in the last few weeks have allowed to them to open but their functioning has been staggered to prevent crowding by farmers, traders, wage laborers and other.
 

So far, till Friday evening, the Central government had procured around 60,000 tonnes of wheat from the four major states of Punjab, Madhya Pradesh, Rajasthan and Uttar Pradesh. In Haryana, the procurement of wheat will start from April 20.

The government plans to purchase around 40 million tonnes of wheat from farmers this year of which Punjab is projected to buy around 14 million tonnes, Madhya Pradesh 10 million tonnes and UP another 5.5 million tonnes. Haryana is planning to purchase around 7.5 million tonnes of wheat.

 

Together these four states account for over 90 per cent of the country’s annual wheat purchases at a fixed minimum support price.
 

“In Punjab, procurement has also started on a slow pace largely due to the 50 quintal per farmer rule but we are hopeful that it will pick up pace in next 2-4 days,” said Ghuman Singh, a farmer from Nabha near Patiala.
 

He said that the state government should sort out the issued with commission agents as they are an integral part of the procurement operations and could be of great help in this time of crisis.
 

In Haryana, where the state government has started the purchase of mustard ahead of the annual wheat procurement season, till Friday evening around 58,000 tonnes of mustard had been purchased from over 23,000 farmers.
 

Around 1.34 million tonnes of mustard has been registered for sale at the mandated MSP of Rs 4,425 a quintal.
 

“Farmers are apprehensive and fear a repeat of last year when government promised that mustard procurement will re-start after wheat purchases is completed but it never happened and they were forced to sell their produce at Rs 800-1000 below the MSP,” said Ramandeep Mann, prominent farmer leader.
 

He said if the same situation was repeated this year, farmers would face greater distress because the situation was completely different. "The sudden unseasonal rains on Friday evening has also increased their worries as it can damage the harvested crop.
 

In Uttar Pradesh, the wheat procurement will gather steam in the next 3-4 days. The state plans to purchase 5.5 million tonnes of wheat from farmers this year.