Allahabad/Bulandshahr/Nashik: As the Rabi harvests start, Abhay Singh’s heart begins to sink. He has four acres of rocky land in Baasghat village in the trans-Yamuna area of Allahabad. He toiled all season to grow mustard, wheat and chickpea, hoping that both wheat and mustard harvests would fetch him good prices. But the markets had other plans for Abhay, and the millions of mustard farmers in India. An above average mustard crop has led to prices crashing in most places.
“After seeing a rise in the need for mustard oil, especially after [Prime Minister Narendra] Modi’s call to farmers to grow mustard, I planted mustard too. But now when it’s harvest season, I can’t even get Rs 4,200 for all my mustard crop. Where do we go now? There is no government procurement,” Abhay says.
While the MSP or minimum support price for mustard is around Rs 5,450 yet Abhay says that farmers are getting at least Rs 1,000 less in local mandis. Mandis are state-set up agricultural markets.
Affairs are noisier on the western front – in Rajasthan – too, as mustard crops in many regions there are under the weather.
Farmers in Dholpur, Ajmer, Jaipur, Nagaur, Pali, and other areas came under the spell of untimely rain and hail storms last week, resulting in major damage to the crop. Making matters worse, the hail and rain struck freshly harvested mustard, and in some places the standing crops. Some areas in Pali reported 30% losses in mustard earlier this February. And yet, major market yards (mandis) in Rajasthan, as per the E-Nam website, reported sales below MSP prices, with the lowest prices reaching Rs 3,225 per quintal in Srikaranpur mandi in Rajasthan.
Fateh Singh, a three-acre mustard farmer near Jaipur did not report significant gains this season. “First, the weather affected the mustard crop not only in our area, but various parts of Rajasthan and Madhya Pradesh. And now we are getting, on an average, between Rs 4,100 and Rs 4,400 per quintal. There is no government procurement, so where should we go?”, he asks.
Fateh says he is slightly better off considering that in “Madhya Pradesh, fearing bumper production, the government has not opened procurement and given the middlemen and market a free hand.”
He adds that coriander, which used to sell for Rs 30,000 a quintal, cannot even fetch Rs 5,000 a quintal this season. “Garlic has already been sold for Rs 3-5 a kg. I feel that because farmers didn’t allow for the farm laws to go through, the government is using these ways to push farmers to be looted by predatory market forces,” Fateh says.
His comment came as two of India’s largest edible oil conglomerates – Adani-Wilmar Fortune and Cargill’s Rath brand – along with a network of millers and warehousing middlemen, potentially stand to gain the maximum profits from this mustard price fall. Hoarders and middlemen are quick to fill their godowns with mustard when the prices are low, like they do every year, and farmers and consumers may be systemically squeezed for corporate profits.
If this sounds fantastical, consider how else can one explain the fact that Adani-Wilmar reported 15% profit in December 2022. Not by charity, certainly.
If we look towards India’s favourite staple, potatoes, the scene is no better. To understand the aloo-nomics, I went to the nearest potato belt in Bulandshahr (of Uttar Pradesh) and met up with Guddu Bhatti in Kavara village. Bhatti has been growing potatoes for decades, but has never experienced such hardships. And it’s not the crop yield that’s troubling him, but the prices.
“On an average, farmers in the area spend Rs. 30,000 on aloo seed, Rs 10,000 on soil preparation, Rs 2,000 on water, Rs 5,000-6,000 on fertilisers and pesticides, and another Rs 19,000 on labour (weeding and harvesting) per acre. Even if you take a conservative figure, we are spending Rs 60,000-65,000 per acre on potato cultivation. We get 300 katta (50-52 kg gunny bags) per acre,” the 42-year old explains.
“The selling rate is Rs 200-250 per katta. This leaves nothing for us. Because many of us have taken agri-input loans and have to pay interest. In the end, we can’t even save Rs 2,000 per acre, despite getting a bumper crop,” he adds.
That whole day, I met with other farmers in the area, all of whom complained of similar problems of bumper harvests leading to lower incomes.
“It is not just aloo, for tori [ridge gourd] we are getting Rs 2 a kg. For cauliflower, farmers have refused to sell to the market because the price is Rs 90 -100 per katta, while the harvesting itself costs between Rs 80 and Rs 85. Tomatoes are going for Rs. 50 per 25-kg crate, and carrots for Rs 10 a kg,” Bhatti narrates.
Unfortunately, Bhatti echoes the sentiments of many farmers who are caught in this cycle.
For a picture of how onion farmers have fared, I moved southward towards Nashik in Maharashtra, where I caught up with the APMC (Agricultural Produce and Livestock Market Committee) veteran, 66-year-old Khemraj Kor. In his long career as a farmer, he served for two years as the chairman of Satana APMC mandi and eight years as its director. Satana, near Nashik, is one of the biggest mandis for onions and is comparable to the Lasalgaon mandi. He assured me that onion production was above average, and yet the prices were dismal.
“Growing onions is an elaborate process. From nursery to weeding, to digging, and harvesting – it takes a lot of effort. It is a four-month crop and costs us between Rs 1,350-1,500 per quintal, so about Rs 15,000 per acre. Currently, we are not even getting Rs 300-500 per quintal for our onions. So, what should the farmers do?” Khemraj asks.
He also highlighted that untimely rain and heat waves in the region had affected production, and yet the prices were very low. “Eight to 10 years ago, the price was Rs 700 per quintal, and even today we are not getting that price. The input costs have increased drastically, from diesel to seeds to fertilisers, yet farmers get nothing, and that’s why they are dying by suicide. This season too, three farmers, two from a Scheduled Tribe community, have died by suicide. Prices have crashed in our area,” he adds.
But what is the way out? “Like I have said many times before, there should be MSP for onions and potatoes too. This is the need of the hour. Currently, onions in Varanasi are selling for Rs 25/kg, but farmers in our areas are not even getting Rs 3-4. Even if you add the transportation and storage costs, there is a big margin which is taken by middlemen. If MSP is there, farmers will get a fair deal, otherwise farmers and farming both will be finished,” he says.
As the devil’s advocate, I ask him if all purchases happen at MSP, what will happen to the demand? He looks at me for a second and replies, “Whether you live in a palace or a ghetto, you will eat onions. There is demand for onions everywhere, from Pakistan to Turkey to Russia. If the government gives export subsidies and helps farmers export, we can improve our incomes and also bring good foreign exchange for the country.”
As I finish speaking with Khemraj, it dawns on me that no matter which crop I look at, the pattern repeats itself. A good harvest is no longer good for farmers. It benefits traders, hoarders, middlemen, and corporations more. Without government safeguards through MSP and public procurement, the “free-market” system is rigged against farmers. Each bountiful harvest only heralds doom for them and at once, astronomical profits for a selected few. And in the end, the market always wins in the agri commodity roulette, leaving the farmers sweating, and milking the consumers dry.
Indra Shekhar Singh is an independent agri-policy analyst and writer, and hosts The Wire’s ‘Krishi ki Baat/Farm Talks’. He was also the former director, Policy and Outreach, NSAI. He tweets at @indrassingh. Views expressed are personal.