Why didn’t Madhya Pradesh farmers gain from farm growth?

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Indore, Harda, Mandsaur (MP): Ghanshyam Singh Pipawat, 45, a farmer from the Ujjain district of Madhya Pradesh, has a question for Prime Minister Narendra Modi.

“When Modi declared notebandi, he said this would be the last time people will have to stand in line. Then why am I standing in a 2-km-long line to sell my onions for just Rs8 per kg? Yeh line nahi hai kya? Raste par la diya Modi ne (Is this not a line? Modi has brought me to the street),” Pipawat says bitterly.

On 13 June, he had lined up his tractor loaded with onions outside a wholesale market at Unhel, on the road linking Ujjain to Mandsaur. When we met him on the morning of 16 June, Pipawat was still in the queue, along with 200-odd vehicles waiting to enter the agriculture produce marketing committee (APMC) market. Pipawat and other farmers had been living on the road for three to four days, eating in the shade of their tractors what they could buy from street food stalls.

“We are running out of cash,” said Narayan Singh Ajna of village Rupakhedi. “Even if we manage to sell our onions, we won’t be carrying cash with us back home because the procurement money would be transferred to our accounts through RTGS (real time gross settlement),” says Ajna, expressing dissatisfaction with the electronic transfer of money to bank accounts. He had joined the queue on 12 June.

In India’s model agriculture state, farmers are unhappy that outsiders are misled by the claims made by their astute chief minister Shivraj Singh Chouhan. Mint explains here why farmers in Madhya Pradesh have not gained much from the rise in farm productivity.

On the ground, farmers and activists tell a different story. “We accept Chouhan’s claim that farm productivity has risen in Madhya Pradesh. But the credit goes to the farmers. What have they gained? Far from a substantial increase in remunerative prices, farmers here have lost even what they used to get three years back,” says Kedar Sirohi, founder-member of Aam Kisan Union that has been the face of the farm unrest in the state.

Pravesh Sharma, senior fellow at Indian Council for Research on International Economic Relations (ICRIER) and former agriculture secretary of Madhya Pradesh, said the current agrarian unrest is “partly on account of Madhya Pradesh’s success rate over the years, achieved due to investment in irrigation, increase in productivity, and cost realization by farmers. The crisis now is a combination of market failure and policy failure. There have not been structural reforms and changes supplementing increase in productivity,” Sharma told Mint on the phone.

He recommends three long-term policy and market measures to help the state sustain its agricultural growth. “There has to be a strong farm land leasing law to allow land pooling and consolidation of land at the back end. Two, Madhya Pradesh, and any state government, and Centre need to carry out radical market reforms to enable farmers to reduce cost of production. Farmers need to be freed up from the APMC markets. Three, there has to be diversification and shift towards non-crop husbandry and fishery farming to insulate farmers from price volatility and rough cycles,” Sharma said.

Farmer leader Sirohi raises the issue of withdrawal of bonus of Rs150 per quintal of wheat that Chouhan introduced in 2007-08. The bonus was paid by the Madhya Pradesh government to wheat farmers above the minimum support price (MSP) that the centre fixed. Chouhan’s sop had the desired effect. Many farmers in Madhya Pradesh shifted to producing wheat in 2007-08.

Manoj Sharma in Harda district was one of them. “In 2008, the MSP of wheat was Rs850 for a quintal and Chouhan gave a bonus of Rs150 above MSP. So, I shifted from soyabean to wheat. I was getting the bonus every year since then, but it was withdrawn in 2015,” said Sharma, who now grows wheat and moong (green gram). This year, he sold his wheat for Rs1,400 a quintal when the MSP is Rs1,625. “But government stopped purchase at MSP on 31 May and traders drove down the price to Rs1,400,” Sharma said.

Sirohi cites this as an example of how the government treats farmers. “The bonus on wheat helped Madhya Pradesh gain a second position in the country in highest production of wheat, and win as many as five Krushi Karman awards from the Centre. Yet, in 2014, when the Modi government came, it struck down the bonus. The wheat price has moved from Rs1,000 in 2008 to Rs1,625 in 2017, which the farmer is not getting. And what is the rate of consumer inflation? The farmer is also a consumer!” says Sirohi.

If such anger was simmering among farmers in Madhya Pradesh, why did it never surface before? “This is not true. There have been low-intensity protests all these years. But this time, the protest became very intense because one, it was the farmer who was on the street, and two, no external power was able to divide us on caste or communal lines this time,” says Aam Kisan Union’s founding member Sunil Golya.

From the Mandsaur-Ratlam-Neemuch belt that borders Rajasthan to Harda, which is close to the border with Maharashtra, farmers growing a range of crops such as grains, oilseeds, medicinal and herbal plants, fruits and vegetables, and spices, have stories to tell that punch holes in every agri-success story that Madhya Pradesh has advertised.

For instance, the state prides itself on being the first to be selected under the Modi government’s e-NAM scheme (e-National Agriculture Market). An APMC staffer at the Mandsaur mandi, one of the 50 mandis selected under e-NAM, shows the laboratory for scientific testing of the produce to determine its grade. “Currently, registration of traders and farmers is underway at most of the e-NAM mandis. But there is no clarity on how produce grown in Madhya Pradesh will be bought by trader in another state using this portal and how that would be transported,” the staffer told Mint requesting anonymity.

This staffer said anger among farmers at the mandis had increased after 8 November, when traders, who were paying in cash earlier, started making electronic payments.

Amrut Patel, another Aam Kisan Union founding member and farmer in Harda, said the Harda mandi has been at the forefront of market reforms since 2007 when an electronic procurement monitoring system (e-uparjan) was started. Harda is also among the 50 selected under e-NAM, and there are platforms designated as e-auction points.

“But actual e-auction has not started,” said Patel. Ironically, on 17 June, around 1,000 vehicles carrying moong were waiting at the Harda mandi for a normal auction to begin. “The rush is because government will buy moong at MSP of Rs5,225 per quintal only till the end of the month. When this purchase stops, traders will buy at Rs3,500. This is the time when I should be in my farm for sowing operations, but I am here in the line to sell moong,” said Harda farmer Kailash Hudi.

Kedar Sirohi said demand for farm loan waivers has gained traction because of the drop in procurement prices, demonetisation, which snuffed out cash and hit banks ahead of this kharif season, and the government’s failure to buy farm produce at MSP. A blanket loan waiver in Madhya Pradesh would cost Rs83,000 crore and benefit 5.8 million farmers, an agriculture department official said, requesting anonymity.

At Mandsaur mandi though, farmer Nandkishore Patidar from Sindpan said more than 70% of Madhya Pradesh’s 8.2 million farmers (2011 Agriculture Census) would not need a loan waiver if they were paid fair prices for their produce.