Cash crunch forces farmers to sell paddy below MSP

BHUBANESWAR: Thanks to a good monsoon, farmers were hoping for a good return from the field. But at a time when they should be putting all their energies in harvesting crops, shortage of cash is forcing them to sale paddy at a rate which is far lower than the government's minimum support price (MSP).
Demonetization has hurt farmers badly and in desperate need for cash to make payments to labourers engaged in harvesting, they are avoiding selling paddy in the market yards run by the government.
"We have to make immediate payment to labourers. Instead of waiting for the entire harvest, we have simultaneously started selling paddy to keep the cash flow and. The labourers are reluctant to take old notes. Where is the time to go to the market yards?" asked Tinu Bhoi, a farmer from Janhapara village in Bargarh district.
Sale in the market yards - it is from here that the Odisha state civil supply corporation procures paddy through primary agriculture cooperative societies (PACS) - means waiting for days to get their payments transferred into their accounts, leave alone the added difficulty of withdrawing cash.
The problem is more acute in Bargarh district (termed the rice bowl of Odisha as it contributes to about one-fourth of the total paddy procured annually in the state), because harvesting is at its peak there. In other parts, the harvest is yet to begin in a full-fledged manner.
In Bargarh district, peasants are selling paddy at Rs 800 to Rs 850 per gunny bag (which holds about 75 kg of paddy). The government's MSP is Rs 1470 per quintal, which when calculated for 75 kg, comes around to Rs 1100 per bag, resulting in a loss of Rs 250-300 per gunny bag.
With demonetization affecting cash flow to co-operative banks, farmers are also apprehensive that if they sell their produce in the market yards, the payment might be delayed.
"They are not ready to take a chance. Middlemen understand the situation and are out to exploit them," said Lingaraj Pradhan, who is involved in organising farmers' movements in Bargarh district for the past two decades.
The government formally began paddy procurement from Bargarh on November 15. For the first two days, there was hardly any purchase because PACS secretaries went on strike demanding clearance of pending dues. On Thursday, around 9,000 quintals of paddy was procured from farmers.
Food supplies and consumer welfare minister Sanjay Dasburma said there is no reason for farmers to sell paddy below the MSP. "I appeal all farmers to sell paddy through the market yards. There won't be any problem. At the same time we will increase monitoring to keep a check on middlemen from exploiting them," the minister said. This year, the state government has set a target to procure nearly 44 lakh metric tonnes of paddy.