A saga of a cotton grower

The state government itself estimated the cost of production of cotton per quintal at Rs 5,174. The Swaminathan Commission recommended the minimum support price (MSP) to be 50 per cent over the cost of production.

Therefore, the state government urged the Centre to fix the MSP for cotton at Rs 7,761. But, the MSP was fixed at Rs 4,100, which is less than even the cost of production by Rs 1,074. Is this the way to save farmers from the brink of suicides?

The situation is not unique to cotton, though this particular case study is illustrated in this article to understand the nature and character of market manipulation haunting farmers

Uncertainty writ large on his face, a cotton grower enters market place with a sense of hope and despair. Having invested a lot in cultivating cotton, huge debt raised to do so is staring at him. The farmer brings his produce to the market every day, thinking that eluding justice may dawn on him at least this day. The loud promises made by our politicians reverberating in his ears, it does not take much time to realise that the market yet again mocks at him.

The market committee which is in place to protect him colludes with traders. The Cotton Corporation of India (CCI) officials who should be active in the market to stabilise the prices often end up in disappearing within a hour or so after the buying begins.

The traders form a ring. The market officials meet those traders not to impress upon them the need for remunerative price for the grower but in a sort of clandestine deal. All these players create a market Padmavyuha in which the poor farmer becomes a modern day Abhimanyu. But unlike his Dwapar Yuga counterpart, he lies down even without having a chance to display his valour.

As we spent a day at Warangal market, this heart-rending dubious scene came alive before us. You don't need to study Swaminathan or Jayati Ghosh. A visit to the market yard and an interaction with any farmer or even a passive observation would unfold this – needless to strain your intellectual faculties.

The state government itself estimated the cost of production of cotton per quintal at Rs 5,174. The Swaminathan Commission recommended the minimum support price (MSP) to be 50 per cent over the cost of production. Therefore, the state government urged the Centre to fix the MSP for cotton at Rs 7,761.

But, the MSP was fixed at Rs 4,100, which is less than even the cost of production by Rs 1,074. Is this the way to save farmers from the brink of suicides? Will such politics give farmers bharosa? In fact, due to prolonged dry spell, the yield per quintal fell below 3 quintals per acre from an average normal yield of 8 quintals per acre.

Thus, the farmer is not in a position to get even the cost of production even if he gets MSP. But, the market cheats him and gives him a pittance of what is due to him. On October 19, our market odyssey at Warangal began early at 8 am. The MSP declared by government to save farmers from market magic is Rs 4,100 per quintal. But, there is condition to this: the moisture content should not be more than 12 per cent.

It's a herculean task to convince the CCI officials on the moisture content. These corrupt officials, who have already struck a deal with the traders ready to squeeze the farmer, make every determined bid to reject the farmer's produce rather than procure it.

The CCI fixed Rs 4,005 per quintal of cotton that came to the market on this day. But, out of the 3,726 famers who brought 25,928 bags, the CCI reportedly procured only 263 bags from 14 farmers. Alas, this is the state intervention in the agricultural markets. By 11 am, the CCI counters wore an empty look.

When asked, the farmers had a unanimous reply. “We had enough experience. They would any how say that moisture content is high. We have to pack and unpack our bags.”

The traders purchased cotton from farmers paying the price ranging from Rs 2,600 to Rs 3,800 per quintal. There are instances of traders buying cotton at a much less price from farmers and selling it to CCI in the evening itself in the fictitious names of farmers. Thus the state agencies often turn out to be support systems for middlemen rather than farmers.

The minimum support price itself does not cover even the cost of production. Now, even that MSP is elusive at the market place. On an average, the CCI purchases never cross 10 per cent of the market arrivals. How can they stabilise the prices and prevent market exploitation?

Someone who gives speeches on farmer suicides and talks about bharosa should first spend a day at the market place and silently observe the facade of market. This is not the scene unique to Warangal. It only typifies market place everywhere.

Even the Minister for Marketing, T Harish Rao, expressed disappointment over the cotton purchases by Cotton Corporation of India. The minister himself disclosed that when cotton was procured from 84 centres in 2014, this time the CCI procurement is taking place in only 32 centres.

The Socio Economic Outlook of the Government of Telangana promised to revamp agriculture to reinvent Telangana. But, the agricultural markets are no different in the separate state of Telangana shattering the hopes of farmers who expected a policy reversal in the new state.

Restructuring of markets may take more time. But, as Prof Kodandaram himself remarked, at least the way should have been laid by now. Farmers of only cotton crop in one market yard on one particular day are losing one to two crore rupees due to market manipulation. The state agencies remain a passive spectator to the spectre of exploitation continuing every day for all crops at all market places.

The government should initiate at least immediate measures to save farmers from this market magic. P Janga Reddy, president, Telangana Rythu Sangam, said that the state government should declare Rs 1,000 per quintal as bonus on cotton. The moisture limit should be increased to 15 per cent instead of 12 per cent. Meanwhile Harish Rao said that he would take delegation of MPs to Union Minister to impress upon him the need for increased MSP and CCI purchases.

The situation is not unique to cotton though this particular case study is illustrated in this article to understand the nature and character of market manipulation haunting farmers. For instance, the state government itself estimated the cost of production of paddy to be Rs 2,627.

The state government proposed to the central government a MSP of Rs 3,941. But, the Government of India fixed the MSP at Rs 1,450. But, farmers across the agricultural markets are getting an average price of Rs 1,100.

Similarly the cost of production for jowar is estimated by state government to be Rs 2,289. The state government proposed MSP at Rs 3,433. But, the central government fixed the MSP for jowar at Rs 1,590. The respective figures for maize are Rs 1,830, Rs 2,745 and Rs 1,325 only.

A similar variation is seen in the case of all the other crops like Ragi, pluses, ground nut, soya bean, sesame, etc.

The system for state intervention in agricultural markets was introduced in India to protect both farmers and consumers from the market fluctuations. When there is a glut in the supply, the prices would fall and the farmer would lose. Similarly, when there is a surge in demand, the prices would rise causing price rise.

The state intervention in agricultural markets through state agencies like CCI, Food Corporation of India (FCI) etc is aimed at providing income security for the farmer and food security to the consumer. But, the data reveals that the MSP failed to ensure income security to the farmer. While the MSP itself fails to cover even the cost of production, the prevailing situation at the market place is driving the farmers to distress sale, making agriculture a negative economic proposition.

Unless this milieu is checked and corrected, the woebegone stories of farmer continue to pour in. Ex gratia cannot save farmers. Remunerative prices will only enable farmers to live with dignity and self-respect.