Rajasthan Procured 7 Lakh Tonne Less Mustard Than Target as Market Price Slipped Below MSP: RTI

An RTI filed by The Wire revealed that the government's mustard procurement under the Price Support Scheme (PSS) for oilseeds this year is about 66% less than its target.

New Delhi/Jaipur: When online registration for crop procurement in Rajasthan resumed in May after a month-long suspension, Manoj Kumar immediately registered himself.

Kumar, a farmer from Ramgarh village in Rajasthan’s Nohar, was allotted the date May 15 when a government agency would purchase 25 quintals of mustard and 15 quintals of gram from him at the minimum support price (MSP).

Manoj Kumar, a farmer from Ramgarh village in Nohar, holding his registration form for state procurement. Photo: The Wire

Two days before the date allotted to him, the procurement centre was suddenly shut down with no reason provided for the same.

Kumar kept his produce at home for a month, waiting for the procurement centre to reopen. Then, he sold his produce to a local trader at a price that was far below the MSP. “The local trader paid me Rs 3,800 per quintal for gram and Rs 3,600 per quintal for mustard,” Kumar told The Wire over the phone.

The MSP for gram and mustard is Rs 4,875 per quintal and Rs 4,425 per quintal respectively. By selling at a low market price, Kumar suffered a total loss of Rs 85,125.

“I was aware about the loss but I had no other option available. I had to repay a lot of people and it couldn’t be postponed,” he said.

The state shuts its procurement operations only when it has procured the required amount of the agricultural commodity. However, the Rajasthan government terminated its mustard procurement even though it hadn’t met its target.

An RTI filed by The Wire with the Union Ministry of Agriculture, Cooperation and Farmers Welfare has revealed that the Rajasthan government’s mustard procurement under the Price Support Scheme (PSS) for oilseeds this year is about 66% less than its target.

The procurement target for mustard, which is calculated as 25% of a particular crop’s actual production in the state, was set at 10,46,500 metric tonnes for the year 2020. However, the Rajasthan state co-operative Marketing Federation Limited (RAJFED), an apex state agency that deals in procurement, procured only 3,45,682.46 metric tonnes of mustard across the state.

According to the Commission for Agriculture Costs and Prices (CACP), a ministry of agriculture, cooperation and farmers welfare’s body that proposes the MSP every year, Rajasthan is the highest mustard producing state with a share of 44.3% of the total production in the country.

Also read: Rajasthan: Crop Procurement Portal ‘Suspended’ Amidst Lockdown, Rates Fall Below MSP

Government intervention in the form of procurement of agricultural commodities is necessary to maintain fair prices in the market.

According to the data provided in the RTI, about 3,20,444 farmers in the state had registered themselves with the government portal to sell their mustard produce to RAJFED, but the ultimate beneficiaries of the procurement operations were only 1,38,506 farmers and about 1,81,938 farmers were excluded from seeking benefits of procurement.

The state authorities, however, said that this huge gap was actually reflective of the profit that farmers had made outside the government procurement scheme, implying that the market price of mustard in Rajasthan was higher than the minimum support price (MSP) set by the government.

Speaking to The Wire, managing director of RAJFED Sushma Arora said, “The scheme is meant to support the farmers but ultimately it works according to the market forces. This time, the market price for Mustard was higher than the MSP because of which the farmers themselves didn’t turn up for state procurement.”

However, farmers in Rajasthan have denied the government’s claim. They have said that the market price of mustard this year was lower than the MSP.

“Out of the approximate 40 lakh metric tonnes of mustard production in Rajasthan, Sri Ganganagar alone produces about 10 lakh metric tonnes, which is the government’s procurement limit from all over Rajasthan,” said Anil Godara, a farmer from Mirjewala village in Sri Ganganagar.

“Since private traders know that the government cannot cater to all farmers, they put up a price lower than the MSP. This time, the mustard rate was between Rs 3,600 and Rs 3,900 per quintal,” he added.

Godara’s statement corroborates with data from the Agmarknet which shows that the average monthly wholesale price of Mustard in most of the mandis in the district of Sri Ganganagar in the month of May and April was between Rs 3,392.85 and Rs 3,993.05 per quintal.

Also read: After MP’s Bumper Wheat Procurement, Storage and State Finance Challenges Lie Ahead

Interestingly, in February this year the principal secretary, Department of Cooperation in Rajasthan had written a letter to the joint secretary, Department of Agriculture and Cooperation of the Union government proposing the implementation of a price support scheme (PSS) for mustard, a copy of which was seen by The Wire.

He had mentioned that the ruling market price of mustard ranges from Rs 3,000 to Rs 3,967 per quintal in Rajasthan while the MSP is Rs 4,425 per quintal.

He stated that the expected production of mustard in the state would be 39.53 lakh metric tonnes and accordingly, the expected procurement would be 9.88 lakh metric tonnes.

A woman works in a field of mustard. Credit: Reuters

A woman works in a field of mustard plants. Photo: Reuters

The godown capacity for storing the procured agricultural commodities was proposed to be 1,23,823 which included 1,04,953 warehouses under the Rajasthan State Warehousing Corporation and 18,900 under the Central Warehousing Corporation. Additionally, 165 APMCs (Agricultural Produce Market Committees) were also included to use their godown facility.

Kunji Lal Meena, the principal secretary of the Rajasthan cooperation department, who authored the letter, told The Wire, “The market price was low in February [when the proposal was made] but it went ahead of the MSP during the procurement period (March to June) which is why the procurement of mustard is low. In gram, we have successfully procured according to the sanctioned limit,” he said.

While both Meena and Arora had claimed that the market price of Mustard in Rajasthan was higher than the MSP, data by Agmarknet, a Union agriculture ministry portal which provides information about the price and arrival of the agriculture produce, shows that the average market price of mustard in the state was Rs 3,805.3 per quintal in April, Rs 4,073.65 per quintal in May, and Rs 4,318.01 in June; all below the MSP.

The RTI further highlighted that the target for masoor was 8,380 metric tonnes. However, the state didn’t procure it at all.

Regarding the absence of procurement for Masoor, Arora said, “There is hardly any Masoor grown in the state.”

Also read: Amid Lockdown, UP Centres Procuring Grains From Fewer than 2 Farmers a Day on Average

Speaking to The Wire, some farmers said that they didn’t sell their produce to government agencies this time because they would take months to process their payment and, given the uncertainty arising from COVID-19-induced circumstances, farmers had decided against waiting.

“I sold Mustard at Rs 3,200 per quintal, which is about Rs 1,225 less than the MSP,” Sonu Kumar, a farmer from Jorawarpura village in Rajasthan’s Kota told The Wire over the phone. “Agricultural income is my only source of income. There are several expenses to be met, especially after the harvest, and this time, with a serious health crisis around, it was even more important to have some money at hand.”

“Last year, it took over three to four months to get the price money after selling our produce to the government agency. This time it would not have been intelligent to wait,” he added.