Helping Indian farmers to get the right prices

Biz@India

October 2018

Orange Festival 2017 organised by MSAMB

Subhash Deshmukh, Minister of Co-operation, Marketing & Textile, State of Maharashtra & Chairman Maharashtra State Agricultural Marketing Board, Pune

The Maharashtra State Agricultural Marketing Board (MSAMB) has undertaken several initiatives to help farmers from the state to get the right prices for their produce. Biz@India speaks to Deepak Shinde, general manager, MSAMB about the new schemes.

What are the major schemes by MSAMB to help farmers get the right price for their produce? How beneficial has the Agriculture Pledge Finance Scheme been for the farmers?

The major schemes of MSAMB are the Agricultural Pledge Loan Scheme, Farmers Weekly Market, Subsidy Scheme for export of agriculture commodities by sea route, E-NAM and Air fright subsidy scheme for domestic trade to eight states.

Under the Pledge Loan Scheme, farmers will get remunerative price for their produce. The crops that are covered under this scheme are moong (Mung bean), tur (split pigeon peas), udid (black gram), soyabean, paddy, sunflower, kardai (safflower), chana (gram), Jawar (sorghum), bajra (millet), maize, wheat, rajma (red kidney beans), turmeric, bedana (pomegranate), cashew nuts and betel nuts. Under the scheme, the farmer gets agricultural pledge loan up to 75 pc of the value of the produce prevailing in the market with an interest rate of six percent. The farmer is allowed to avail this facility up to a period of 180 days. Till date MSAMB has disbursed EUR 22 million under this pledge loan scheme and almost 20,000 farmers have been benefited from it. Farmers are generally seen getting at least 15-20 pc price rise after three to four months of storage period.

Are you planning to come up with new godowns in the state? If so where and how many of them?

Yes we are. MSAMB has submitted a proposal of EUR 13.5 million for construction of 108 godowns in the 108 Agriculture Produce Market Committees (APMCs) in the state under the Rashtriya Krushi Vikas Yojana (RKVY). Government has sanctioned the project with subsidy amounting EUR 5 million to construct the godowns. The remaining investment will be from APMCs and the MSAMB.

There has been an upheaval in the wholesale market in Maharashtra with traders refusing to participate in auctions. How did it affect the market?

Recently trader communities functioning in APMCs protested against the proposed amendments in the state marketing law. The proposed amendments were regarding prosecution of traders who would engage in trading under minimum support price (MSP) for foodgrains. Thereby the traders restrain themselves from taking part in auctioning to protest against these proposed amendments. However, the state government has made it clear that the proposed amendment is regarding statutory minimum price, to be declared for the commodities, which are not covered under MSP. Because of this protest few wholesale markets remained close for two to three weeks.

The state government is working on a model to enable farmers fetch MSP for their produce in the open market. How will it create open markets and end the current market monopoly?

The Government of Maharashtra is keen to make provisions in its Marketing Act to provide alternative channels so that farmers can get good rate. For example deregulating commodities, encouraging direct marketing by corporate houses, establishment of private markets, restricting markets areas of APMCs etc. All these would assist in reducing current market monopoly and on the other hand in giving farmers their choice to sale produce.

What is the situation of farm export in the state since MSAMB has decided to give subsidy to Farmer Producer Companies (FPCs) and co-operative institutes?

MSAMB recently launched the export subsidy scheme for FPOs, so it is better to wait for the result. But FPOs are enquiring for the scheme. A proposal was under consideration of MSAMB for financial assistance to cooperative societies, farmer producer organisations for direct export of fruits and vegetables (excluding grapes), if exported through sea route. Therefore a Transport Assistance Scheme has been launched. An air fright subsidy scheme has also been launched on pilot basis for domestic trade for eight states.