MP traders, not farmers, reaping benefits of agricultural produce

Shahroz Afridi | Jun 8, 2018 | 6 min read


The early morning air was still a little crisp from the previous night’s drizzle, but Rajesh Kushwah, a farmer in Bhopal’s Berasia town, had beads of sweat lining his forehead. Kushwah reached the district’s biggest Karond mandi at 6 am to sell eight sacks of bottle gourd, containing 10 kg each, which were grown in his field in the adjoining town. The mandi is abuzz with hundreds of other farmers like him who have come from nearby places to sell off their produce to wholesale traders. The ‘competitive bidding’ starts and traders settle for a final price of Rs60 per sack for bottle gourds. Kushwah goes home with only Rs480, anxiety written large on his face.


“I had invested around Rs18,000 in bottle gourds this year. This is too less a price for my labour and investment,” he said.


In another corner of the mandi, the trader who bought Kushwah’s bottle gourds at Rs6 per kg began negotiations with retailers. Within hours, he resold Kushwah’s produce at Rs12 per kg, earning at least Rs900. The same vegetables were again sold in the markets in neighbouring towns for Rs30-35 per kg.


It has been a year since the clashes in Mandsaur in Madhya Pradesh claimed the lives of of six farmers when police opened fire on protesters seeking fair crop prices. But brimming granaries and starving farmers continue to plague the state, which will witness Assembly elections in November. The problems of depressed agricultural commodity prices continue to soar even as a race among political parties to woo farmers has already begun. Addressing a gathering to mark the one-year anniversary of the Mandsaur agitation, Congress president Rahul Gandhi on June 6 announced that the party will waive farmers’ loan in 10 days if it comes to power and also take action against those responsible for the farmers’ deaths.


Tussle between farmers and traders 

Mandi officials at Karond said 8,000-10,000 quintals of vegetables arrive here every day, throwing light on the huge earning difference between traders and farmers of nearby areas. Farmers said their profits are negligible even when there is a rise in vegetable prices since the gain is mostly usurped by traders in connivance with government officials.


Kushwah grows soybean as the primary crop and cultivates vegetables at other times of the year. But selling his primary crop has been a distressing exercise. Four months after widespread agrarian protests, the Shivraj Singh Chouhan government in the state had launched the Bhavantar Bhugtan Yojana (BBY) in October – a scheme of paying farmers the difference between minimum support price (MSP) and the average wholesale price to mitigate losses. However, benefits of the scheme for soybean closed in December and since then the rates in mandis have crossed the MSP of Rs 3,050.  


“I had sold soybean in October for Rs2,650 per quintal and had also availed benefit of the price difference between its MSP and wholesale rate through BBY. But soon after the scheme closed, the price rose to Rs3,300 per quintal. This shows that traders deliberately keep prices depressed while purchases under BBY are made so that the benefits do not go to farmers,” said Kushwah.


Farmers pay around Rs4,000 per quintal when the crop is purchased by them in seed form that further adds to their burden.


The situation is similar for most farmers in the state who try to sell their crops and avail benefits of government schemes. “Initially, we thought BBY was a good scheme because the government would take care if our crops are sold below the MSP. But we make numerous rounds of mandis to keep track of our payment that hardly comes on time,” said Bheem Singh, another farmer.


State general secretary of the Bhartiya Kisan Union (BKU), Anil Yadav, said, “Garlic was brought under BBY. At first, it sold at Rs8,000 per quintal and then dropped to as low as Rs200 per quintal over the months. The cartel of traders had brought down the rate below its MSP. One of the local farmers had invested Rs27,000 in buying garlic seeds and another Rs8,000 for fertilizer and labour costs. But he got only Rs6,000 from the mandi sale, suffering a loss of Rs29,000.”


Till around January, garlic was being sold at Rs60-80 per kg. In Mandsaur, the prices later fell to as low as Re1 per kg. “Many farmers threw their produce as it was not a viable option to even carry it to the mandi. A similar trend was observed in the case of tomatoes and onion. Why do rates of agricultural produce fall when farmers are about to sell them but rise again later?” asked Yadav.


The scheme, which was introduced in the wake of simmering discontent among farmers, has only left them fuming. “It proved beneficial only to traders, who systemically controlled and lowered rates during the Bhavantar period and later increased them to make huge gains,” said another farmer, who did not wish to be named.


Traders under lens

Ajay Dubey, an RTI activist and member of Transparency International, an international NGO fighting corruption, said, “We had obtained a list of 400 suspicious Bhavantar transactions across the state that were compiled by the mandi board officials.”


Dubey said he has placed an application with the income tax department to probe the matter and see why some traders were found buying huge quantities of produce only from select farmers. “It could be only the tip of an iceberg,” he said.


Explaining more about the modus operandi of traders, BKU general secretary Yadav said, “Traders buy produce at dirt cheap rates from local farmers and ask them to avail of the benefits of BBY from the government authorities. Or, they themselves would buy the produce from mandis of other states where the rates are low and make false entries on names of farmers to avail of Bhavantar benefits.”


Yadav also gave the example of a sting operation that was carried out by a media house last year, exposing the nexus between mandi officials and traders.


In a recent raid at the godown of a trader, identified as Dayaram Sahu, in Lateri area of Vidisha district, officials had seized unaccounted and unverified stocks of chana and masoor dal in large quantities. The stocks found at his godown were more than what he had bought from the mandi.


A food official who was part of the raid said, “Sahu was found guilty of selling 320 quintals and 210 quintals of chana dal at lower MSP rates, The produce was procured illegally from some other place at cheaper prices, which is against government rules.”


In another instance, licence of 30 traders were cancelled in Shajapur area recently after they were found involved in a BBY scam.


In an announcement made by chief minister Chouhan in March, it was decided that gram, lentils and mustard would be removed from the BBY scheme. The motive, according to government officials, was to encourage farmers to sell these crops at MSP in order to get the “right prices”. 


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