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Bringing mandis nearer to farm: A technique to cease wheat smuggling into Haryana, Punjab

Since big shares of paddy and wheat, 12 months after 12 months, finds technique to Punjab and Haryana which supply a assured MSP realisation, there are sufficient the explanation why this shouldn’t be handled as an ‘unlawful’ exercise. The very fact of the matter is that as a result of the Central authorities didn’t spend money on increasing the mandi community and thereby did not create circumstances the place an assured MSP might be delivered, farmers have been disadvantaged of appropriate advertising and marketing alternatives

As soon as once more, regardless of strict vigil at borders with Uttar Pradesh, giant portions of paddy are being introduced from the neighbouring state to be bought in Haryana mandis. Experiences of paddy arriving at grain markets in Karnal, Gharaunda, Kunjpura, Indri, Taraori, Nissing in Karnal and Kurukshetra districts in Haryana proceed to hog the headlines.

This jogs my memory of stories stories some two years in the past that talked of how quite a few FIRs below Part 420 (dishonest) and 120-B (legal conspiracy) of the Indian Penal Code had been filed in opposition to unscrupulous merchants who had been making an attempt to usher in paddy into Punjab from Uttar Pradesh and nonetheless far-off, from Bihar. Name it a racket or blame these merchants for illegally smuggling paddy into Punjab and Haryana, the very fact stays that there usually are not sufficient advertising and marketing alternatives accessible in Uttar Pradesh and Bihar that deprives farmers from getting the Minimal Assist Worth (MSP).

This week, stories say UP farmers are getting a value of Rs 1,500 to Rs 1,700 per quintal in opposition to the MSP for paddy being Rs 2,040 per quintal. Such low costs immediate merchants to buy paddy at low costs, after which transport it to Haryana and Punjab mandis, the place farmers receives a commission as per the MSP mounted. Now earlier than you cry ‘foul’ and blame officers of the State Agricultural Advertising and marketing Board to be ‘hand in glove’ with merchants, let’s be clear: the persevering with exercise each harvest season solely tells how mistaken are the claims that markets present farmers with greater costs.

If the markets had been benevolent and had been offering farmers with the next value, I see no motive why truckloads of paddy need to be transported yearly from Bihar and UP into Punjab and Haryana, which have a strong advertising and marketing infrastructure and supply farmers with an assured value of paddy (and for that matter for wheat). It’s as a result of sufficient infrastructure is missing in different states that giant portions are illegally transported to be bought at the next value it could fetch within the mandis within the frontline agricultural states of Punjab and Haryana. Though paddy procurement started on Oct 1, as per the FCI database, UP has procured solely 0.1 lakh metric tonnes of paddy until Oct 15. Comparatively, Haryana had procured 28.66 lakh metric tonnes, and Punjab has procured one other 18.94 lakh metric tonnes.

As per the newest accessible Situational Evaluation Survey (SAS) for Agriculture 2021, analysing crop manufacturing information for 2019-20, solely about 14.5 per cent farmers had been in a position to promote kharif paddy, and one other 9.7 per cent farmers had been in a position to promote wheat on the MSP value introduced. Contemplating that bulk of procurement is going on in Punjab and Haryana, procurement is way much less in a lot of the states, and barring Tamil Nadu, Chhattisgarh, Telengana and Madhya Pradesh (primarily for wheat), procurement is right down to a trickle elsewhere. Many analysts have argued that the majority paddy gross sales that occur exterior public procurement are at costs which might be a lot decrease than the MSP introduced or in different phrases the non-public commerce principally purchases paddy at misery costs.

As a result of majority farmers have by no means bought paddy at MSP they continue to be unaware of the procurement system from which they’ll get the next value. Even the SAS survey report tells us that solely 30.3 per cent of paddy rising households and 27.2 per cent of wheat cultivators knew about procurement businesses, which tells us very clearly concerning the absence of public procurement in most previous of the nation. That’s the reason the enduring farmers protest on the borders of New Delhi in 2020-21 remained confined to farmers from Punjab, Haryana and to some extent neighbouring components of Uttar Pradesh as a result of farmers in remainder of the nation weren’t even conscious of what procurement was all about, and the way that they had misplaced out on greater value all these years.

Equally, contemplating that solely 40.7 per cent of the paddy rising households, and 37.1 per cent wheat farmers had been conscious of MSP, the demand for making MSP a authorized proper didn’t discover an echo from the remainder of the nation. Nonetheless, it brings me to a associated and maybe extra vital facet. Given the keenness of the federal government to usher in ‘one-country-one-market’, and given the thrust by mainline economists all these years to permit for unhindered inter-state buying and selling of agricultural commodities, it’s obscure why the so known as ‘unlawful’ transportation of paddy and wheat from far and large, to be dropped at Punjab and Haryana for the next value realisation, ought to invite punitive motion. In spite of everything, should not farmers be allowed to hold their produce to any a part of the nation the place they’ll get the next value? Did not we make this promise on the time the three contentious farm legal guidelines had been launched (and later shelved), and wasn’t that implied as bringing in ‘freedom for farmers’?

It is time to rethink. Since big shares of paddy and wheat, 12 months after 12 months, finds technique to Punjab and Haryana which supply a assured MSP realisation, there are sufficient the explanation why this shouldn’t be handled as an ‘unlawful’ exercise. The very fact of the matter is that as a result of the Central authorities didn’t spend money on increasing the mandi community and thereby did not create circumstances the place an assured MSP might be delivered, farmers have been disadvantaged of appropriate advertising and marketing alternatives. As I’ve stated earlier, the necessity is to develop the prevailing 7,000 APMC regulated mandis, growing the quantity to 42,000 mandis, if a market needs to be made accessible at each 5 kms. What makes Punjab and Haryana governments oppose the opening of such a long-distance advertising and marketing channel is to make sure that the State doesn’t deprive its farmers of an assured value, given the restricted availability from RBI of a money credit score restrict of Rs 36,999-crores for use for paddy buy at MSP. Properly, this quantity actually must be elevated in order to allow further procurement from exterior. In spite of everything, this extra quantity will present for financial justice, contemplating lack of sufficient infrastructure solely drove these farmers to benefit from the next value realisation in Punjab and Haryana. That is honest sufficient.

In any case, the extra inventory that’s procured will kind a part of the procurement that needs to be made for the Central pool. With Bihar admitting that throwing away APMC community in 2006, below stress from free market apologists, was a mistake and is subsequently re-introducing public procurement, it’s excessive time different States are made to place extra money in creating extra mandis. Why ought to merchants be made to journey all the best way to Punjab and Haryana to get the next value? We additionally know that the worth acquire in actuality from the thriving ‘unlawful’ buying and selling exercise is shared among the many middlemen and transporters, and doesn’t profit farmers.

To make sure that the farmers get the next value, one of the best ways is to deliver mandis nearer to the farm. Let the good thing about public procurement, which ensures value discovery, attain farmers. This can be actual freedom for farmers.

(The creator is a famous meals coverage analyst and an professional on points associated to the agriculture sector. He writes on meals, agriculture and starvation)

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