Facing falling prices: mustard growers cry out for help, better avenues to market End-shutdown

Samay Singh, a mustard seed farmer in Gudawali village, is busy harvesting but worries he won’t get a better price for his produce this year as the wholesale rate on mandi here has already plummeted below the price. minimum support (MSP) of Rs. 5,450 per hundredweight.

Last year, Singh had harvested three bushels of mustard seeds on his half-acre plot and sold them at an average rate of Rs 7,000 per bushel. This year, the yield is higher than when there was no pest infestation and he expects a production of at least four quintals, but he fears that this time he won’t even get MSP.

Harikishan Sharma, a farmer from the Dheeg block, is shocked by mustard prices that started to fall from October 2022, well before the harvest and somewhere he feels cheaper imports of palmolien are to blame.

In the past three months, mustard prices have fallen from Rs 8,000 per quintal to Rs 5,200 per quintal at Bharatpur mandis, the center of mustard production and processing, according to these farmers.

Farmers in this district now only have two options to sell their produce. One is to mandis and the other to millers or processors. There was a third option, that is, the commodity derivatives market, but the extension of the ban on mustard derivatives until December this year has left them no choice.

However, the first two options are not without their pitfalls as at every step of the transaction farmers are exploited and cheated and ultimately get a lower price for the product, says Devraj Fouzadar, CEO of Dheeg Wheat and Mustard Producers Company.

Narrating his recent experience, Fouzadar said that farmers bring the produce to the mandis with great difficulty. In April 2021, at the peak of the harvest season, he took an aggregate stock of mustard into a mandi and delivered it to the lab to test the oil content on which the price is determined.

The oil content in the mustard seed is around 42 percent in this area, but the lab report showed as low as 37-38 percent and consequently the price we got was lower, he told PTI.

Even millers and processors were no less, as they rigged the scales and paid farmers less. About 3 percent difference in 100 kg of mustard is a loss for farmers, he added.

“Fed up with the experience of mandi and processors, we were looking for different avenues to sell our products,” said Fouzadar, adding that he learned about the commodity derivatives market in one of the workshops during the Covid-19 pandemic in 2020 when he was transporting the product. to the physical mandis it had become difficult.

“We tried our hands on the ‘put option’ by hedging around 1000 quintals of mustard at a specified rate of Rs 5050 per quintal on NCDEX. In April 2021, we saw that the actual rates in the market were ruling at 6500 rupees per quintal. So, he did not exercise the put option and decided to hedge in futures, but by then the ban was in place,” he said.

Just before the ban on mustard derivatives in December 2021, mustard prices had reached Rs 8,300 per cwt, but the price dropped immediately after the ban. Fouzadar said he had to sell the produce at Rs 7,600 per quintal in the mandi before prices fell further.

Ramchandra Choudhary, a farmer and retired cooperative bank officer, said a small exposure farmers had to mustard derivatives through the Dheeg Wheat and Mustard Producers Company helped them get daily mandi rates on their mobile phones and they were aware of the daily price trend. .

Farmers are now aware that they should not sell the product all at once and should wait for the price to improve. They are also convinced to trade smoothly in the derivatives market, where grain analysis and testing is done scientifically. Even the price that farmers get is at least Rs 250-300 per quintal higher than the mandi rate.

Roop Singh, chief executive of the Uthan Mustard Producers Company in Astawan village, said he waited until the end of December 2022 to tap into the derivatives market.

“Hoping that the ban will be lifted after December 2022, we bought about 412 quintals of mustard from farmers at Rs 7,000 per quintal. But the ban was extended for another year and we were forced to sell in the range of Rs 6,041-6,650 per quintal. quintal. Our FPO faced a cumulative loss of Rs 3 lakh,” he said.

Now, in the absence of mustard derivatives trading, Singh is left with no choice but to sell into mandi or to millers/processors this time around.

The farmers of Bharatpur are highly dependent on mustard cultivation for their livelihood as it is the only cash crop produced during the rabi season. Farmers are unable to get significant harvests in the kharif season due to poor soil quality, lack of rain and hard groundwater. The same situation prevails in other districts like Alwar, Dholpur, Dausa and Sawai Madhopur district of Rajasthan.

Expressing concern over falling mustard prices, the edible oil industry body SEA has demanded the government to start purchasing and restrict imports of refined palm oil as part of steps to stem the price decline. .

The country’s total mustard production is estimated to be a record 12.81 million tons in crop year 2022-23 (July-June), according to the second estimate from the Ministry of Agriculture. Rajasthan, Madhya Pradesh and Uttar Pradesh contribute 75 percent of the country’s total mustard production.

(Only the headline and image in this report may have been modified by Business Standard staff; all other content is auto-generated from a syndicated feed.)

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