Why is Madhya Pradesh buying onions from its farmers and letting them rot?
Policy after policy in the agriculture sector has attempted to minimise the profit of the middleman in an attempt to help the farmer earn the lion’s share. But state policies have failed to do this, and Madhya Pradesh is no exception.
The trader has trumped the government once again. Here’s why. On July 1, the Madhya Pradesh government would have completed almost 25 days of its much bandied about, most recent "pro-farmer" effort — of procuring onions from farmers.
Rattled by the farmers’ protests that rocked the western part of the state in the first week of June, the Madhya Pradesh government announced the procurement of onions from farmers at Rs 8 per kg.
The move was aimed at helping distressed farmers who, on not getting a remunerative price for their produce, began dumping onions on the road. But is the decision helping farmers or traders? Procurement started June 5, while the farmers’ agitation was in progress.
To date, the state government has procured about 5.64 lakh tonne onions, spending about Rs 500 crore. What is the government going to do with the onions it has bought? Here’s where the trader continues to make good of the harvest even as the sun doesn’t shine.
MP Markfed, the agency procuring onions on behalf of the government, hands the produce over to the state civil supplies corporation for disposal. The corporation has fixed Rs 2 per kg as the offset price for onions and is auctioning them to traders.
Traders are buying onions at Rs 2 to Rs 4 per kg. While the market intervention announced by the government may have provided some relief to the farmer, it has not provided any respite to consumers as onion prices in the retail market hover around a steep Rs 10-12 per kg.
Onion procured at auctions is being sold in the open market at five times the price. Traders are making a killing doing this. What’s stopping a trader from buying onions in an auction at Rs 3 per kg and selling it back to the government at Rs 8 per kg?
The procured onions are being moved to districts where there is a dearth of the vegetable for sale at PDS vends. The government has started a verification process for the farmers who sold onions to the state. A maximum per acre limit has been fixed for the procurement. Patwaris are doing the rounds of villages to see if the farmers who had sold onions had actually sown them. However, it may be too late for that as farmers have already ploughed their lands for the kharif crop.
Onions procured by traders are ferried out of the state/district by the police. Districts bordering other states have been asked to check the arrival of onions from outside.
Is the top political executive of the state not aware of what’s happening? It is, but the hare-brained onion procurement agenda seems to be a step taken to take the minds of the opposition and farmers off the growing clamour for farm loan waiver.
Also, Rs 450 crore seems a smaller price to pay than Rs 30,000 crore — which is what it would cost the exchequer to bear the farm loan waiver. Thousands of tonnes of onions are lying rotting as no arrangement for their storage was made prior to the procurement.
Thousands of tonnes of onions belonging to farmers who had queued up at buying centres were also at risk as the monsoon arrived.
(Courtesy of Mail today.)