With no one to take them to mandis, most farm commodities fall below MSP

Prices of most agricultural commodities have slipped below their minimum support prices (MSP) due to issues such as chronic labour shortage and stoppage of transport following the 21-day nationwide brought into force on March 25 to contain the (Covid-19).

The situationhas created supply pressure at mandis close to the farms, as cultivators are not able to get their produce to the much larger Agricultural Produce Market Committees (APMCs) located quite some distance away. Worse, with very few hands working on the fields, a large part of the crop has not been harvested and risks rotting away.

While black gram (urad beans) in Sedan (Karnataka) mandi is selling at Rs 4,200 a quintal, or a 26 per cent discount to its MSP of Rs 5,700, pearl millet and wheat in Etawah (Uttar Pradesh) and Saja (Chhattisgarh) are currently selling at discounts of 22 per cent and 30 per cent to their respective MSPs.

All including paddy, oilseeds and other agriculture and horticultural products have recorded a sharp decline in their prices over the past two weeks, following disruption in transportation from farm to mandi to consumers.

“Farmers are currently unable to sell their produce due to disruptions in logistics services and labour shortage. Hence, they are selling in distress at nearby mandis, due to which prices falling below MSP,” said Madan Sabnavis, Chief Economist, Care Ratings.

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While the government has relaxed logistics norms and allowed inter-state movement of trucks with some riders, transportation of produce from the farm to the mandis and from there to the consumer remained restricted. This restriction has caused consumer prices of moving up.

Meanwhile, hundreds of hectares of land with mature wheat crop in Punjab, Haryana and Uttar Pradesh is waiting to get harvested. Horticultural crops such as onion, grape, pineapple and mango remained un-harvested in Maharashtra, Gujarat and Madhya Pradesh. Farmers are struggling to harvest green and leafy vegetables in several other parts of the country.

“Mature agricultural produce should be harvested at the earliest. If it remains un-harvested for whatever reason — labour shortage or problems in post-harvest management on logistics — the crop will simply go to waste. Based on their experience of this hardships and the (actual) price received for their produce, farmers would take a decision whether to sow the same crop or switch to something more remunerative next season,” said Vijay Sardana, an expert in agricultural commodities.

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The 21-day nationwide that came into force on March 25 to prevent the spread of sent the entire agricultural and horticulture sector into a tailspin. Migrant workers from Uttar Pradesh, Bihar, West Bengal and other states had started travelling back to their native places, causing a huge shortage of workforce.

Sabnavis forecasts problems in supply of to continue till the Covid-19 situation normalises. Given that the monsoon season, which is two months away, would anyway disrupt supply, food inflation would remain elevated, he added.