MP moves to reform soybean selling at mandis

State will introduce sample-based auction

In order to improve realisations for farmers and to bring in transparency in soybean selling, the Madhya Pradesh government has introduced sample-based auction for the commodity. The pilot project will be implemented at Ujjain, one of the biggest mandis (wholesale agricultural markets) in Madhya Pradesh, and once the new system is found to be successful, it will be extended to 10 other mandis.

The sample-based auction will not only save post-harvest losses, but also encourage farmers to produce fair average quality commodities that ensure better return on their yield. Madhya Pradesh has been the biggest producer of soybean.

“Unlike traditional auction, sample-based auction will bring farmers and traders closer. Also, traders will be assured of fair average quality of the commodity at mandis, while farmers will get better price of their commodity. We have introduced one session of sample-based auction at all A-class mandis of the Ujjain division,” Ravindra Pastor, commissioner of Ujjain division, told Business Standard. “The traditional auction system will also continue at all mandis,” he added.

Soybean is a prominent cash crop in Madhya Pradesh. Soybean farmers sell the commodity to traders in government-regulated mandis. The traders participate in auctions and sell it in forward deals to soybean-crushing units and processing companies.

Traditionally, farmers bring their yield to mandis at their own expenses and sell it through an open outcry ascending bid auction known as ‘Boli’. A mandi employee puts a ‘Boli’ after visually inspecting the quality of the commodity on four parameters - colour, moisture contents, shrivelled grains and foreign material. However, none of the Bolis can go below minimum support price. From here, the traders bid upwards until the commodity is sold. The mandi charges two per cent fee from traders on each commodity traded.

In this process, each trader samples the commodity by fetching a certain quantity from each lot, thereby increasing wastages by spilling the commodity in the mandi premises. In sample-based auction, farmers are required to place the samples of their commodity at a designated place where a three-member committee - in which the farmer is also a member - decides the quality of the commodity. “All traders do not need to roam around in the huge mandi premises and sample each lot. Also, farmers have an option to fix a minimum price for his commodity. The auction can begin from that fixed price,” Pastor noted. All farmers are required to get themselves registered to go through the sample-based auction, which is an option available to them.

“All prescribed mandis that have sample-based auction sessions each day have been asked to earmark a separate space for the traders and farmers. Thus, we keep all records and ensure transparency. Also, in the days to come, we will go digital for sampling and trading. The traders will have current prices of each mandi,” said a senior official at Ujjain mandi.

Madhya Pradesh is known as soybean bowl of India. It grows two varieties - yellow and black soybean. Last year, soybean arrival in mandis stood at 3.86 million tonnes. This year, the soybean arrival in all mandis during the April-September stood at 668,000 tonnes against 1.23 million tonnes in the year-ago period. “Ongoing festivity and late sowing are the prime reasons for low arrivals this year. However, it will be more than the previous year once we have October data,” said A P S Solanki, additional director, State Mandi Board.

Madhya Pradesh has estimated 6.6 million tonnes of soybean this year from 5.7 million hectares. Prices in Ujjain mandis are hovering between Rs 2,700 to Rs 3,200 a quintal.