Rahul Maganti

Sharmila Joshi

Editor

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On a
hot summer day in May this year, Gottam Hanimi Reddy travelled 105 kilometres in
a truck from Tripurapuram village
in Nuzendla mandal
to Guntur, hoping to sell the eight quintals of mirchi he had cultivated on his
five-acre farm. This was the last harvest; he had come to the market thrice in
April, when he sold the chillis at prices ranging from Rs. 6,000 to Rs. 8,000 per quintal, depending on the variety – Mirchi LCA334 or Guntur Sannam. 

Now he
was at the NTR Agricultural Market Committee Yard in Andhra Pradesh’s Guntur town
again, waiting for three days, hoping to sell off the load if the prices
increased. Sitting outside the farmers’ mess at the mandi (market) on a day when mirchi sales for the 2017-18
agricultural season were closing, he said, “Today, the prices have fallen
further and the commission agents are only giving 4,200 rupees per quintal. All
of them form a cartel and decide the price at their whims and fancies.”  

Pushed
to a corner, Reddy had to decide if he should take the load back home and keep
it in cold storage or sell it at the low price. “I can’t afford the AC [air conditioning] costs
and moreover, a quintal – two tikkis [bags] of 50 kilos each – costs 1,000 rupees
for transport one way,” explained Reddy, about his choice to sell at the poor
price. He paused, then said in a low voice, “The links of the brokers with the AC
people [cold storage suppliers] is well known. It’s a win-win for both.”

Reddy
had spent around Rs. 2 lakhs per acre as investment on seeds, fertilisers,
pesticides and labourers’ wages – and there was his and his wife’s labour too.
This had yielded 20 quintals per acre in the 2017-18 mirchi season from October to
March. Around 100 quintals in total, at a cost of roughly Rs. 10 lakhs. In previous years, this was somewhat profitable
– with prices at a high of Rs. 12,000-15,000 per quintal in 2015-16 (reportedly
due to increased demand in the international market), and at least Rs. 10,000
in some other years, allowing cultivators to break even.

“Now,
tell me how much loss I had just this year alone?” Reddy asked. “Last year
[2016-17], I ended up with a loss of 4 lakhs. I now have a debt of 9 lakhs
[some of it bank loans, the bulk from private moneylenders] at an interest rate
of 36 per cent.”  

In the
2016-2017 agricultural season, there was a flood of mirchi in the market. Many
farmers had cultivated the crop, hoping for prices as high as what was on offer
in 2015-16. Besides, when the cotton crop was attacked by the pink bollworm,
those farmers too switched to mirchi, hoping to do better. But then prices
fell to an all-time low of Rs. 1,500-3000 per quintal. Over 10 mirchi
farmer suicides were reported in local newspapers across Andhra Pradesh (See <a id="4962" linktype="page">Mirchi is not so hot anymore in Penugolanu</a>).

“While
input costs have increased from 30,000 rupees to 2 lakh rupees per acre during
the last 10 years, the prices have remained the same,” says Nagaboina Rangarao,
a Vijayawada-based activist with the All India Kisan Sabha (AIKS). Low prices
have forced farmers to try to cultivate other crops. From 4.65 lakh acres of mirchi
cultivation across Andhra Pradesh in 
2016-17 with a total produce of 93 lakh tonnes, in 2017-18 mirchi
was cultivated only on 2.5 lakh acres (according to data given by the secretary
of the Guntur market yard),  and the
produce by the end of the season was just 50 lakh tonnes. 

“The brokers and the
officials claimed that the high supply and low demand was the reason for low
prices last year. But, this year, despite the low supply and high demand, the
prices have not increased much,” says 24-year-old Mohammad Khasim from Tripuranthakam village of  Prakasam district, who burnt a part of his
produce in March 2017 in front of the Guntur yard, as a mark of protest.

And
when farmers cultivate amid losses, the agricultural labourers they hire can
suffer even more. Mirchi is a labour-intensive crop and requires three to
four rounds of labour – the first when seeds are sown, the next to remove weeds,
followed by cutting the crop and separating the mirchi based on variety. “The
first two tasks are usually done by women. Men do the cutting – and these costs
alone are around 1.5 lakhs per acre – 300 labourers work for two days to pluck mirchi from
an acre of crop,” says Alturi Rami Reddy, who owns two acres in Meduru village of Gampalagudem mandal
in Krishna district. 

Januboina
Ankalamma, who comes to work on Rami Reddy’s farm from Ganugapadu village in the adjacent Tiruvuru mandal,
travelling 15 kilometres in a tractor, says, “When we ask the farmers to
increase the wage [and also make it equal, instead of Rs. 250 for men and Rs.
150 for women], they rue that they are already paying us more than we deserve.
They tell us that they are in losses themselves because of the lack of a good
price for mirchi.
If the government makes sure that the farmer gets fair and profitable prices
for the produce, it is likely that the farmer will increase our wages
too.”  

The
Guntur yard is the largest in Asia, where more than 400 commission agents operate
as brokers between farmers and buyers or exporters. They get a commission of
Rs. 3 to Rs. 5 for every Rs. 100 paid to the farmer, which is deducted from the
final amount the farmer receives. “Over half of them don’t even have licenses
but operate because they have links with politicians. The nexus between the
officials, brokers and the politicians keep the rates low and farmers lose
lakhs of rupees every day,” says Nagaboina Rangarao of the AIKS, which has led
agitations against the cartel system and low prices. 

On
February 1, 2018, the mirchi yard in Guntur went digital with eNAM
(electronic National Agriculture Markets), with which buyers can buy from
anywhere in the country. The Guntur yard is one of 585 Agricultural Produce
Market Committee (APMC) markets in the country that is trying this out as a
pilot project. The project started on April 16, 2016, and is aimed to be an all-India electronic
trading portal which links the APMC mandis to create a unified
online national market for agricultural commodities. This,
the government claims, if implemented properly, could break the local cartels
and increase competition among buyers, thereby giving fair prices to the
farmers.

The brokers
at Guntur have opposed the digitisation and refused to buy any produce bought
by farmers to the yard. In turn, in
March this year, the farmers protested the brokers’ refusal to buy. “We can’t
take our load back. So we blocked the Chilakaluripet road [adjacent to the yard] and forced the
administration to put eNAM on hold for some time,” says Khasim. 

In
April, eNAM restarted at Guntur. Venkateswara Reddy, secretary of the market
yard, says, “It is back, but we haven’t been able to interlink this market with
the rest of the markets in the country.” So the digitisation has not increased
the price of mirchi.
“eNAM is useful if the markets are linked. Otherwise, the local agents who form
a cartel offline will now form a cartel online,” says Sarampally Malla Reddy, Hyderabad-based
all-India vice president of the AIKS. “Moreover, eNAM is another step in
corporatisation of agriculture and opening up the agricultural sector to big
corporates.” In other words, a solution to end agent-controlled cartels could
shift the exploitation axis to big companies. 

“What
the government should instead do is to announce a minimum support price (MSP) which
has been a demand of the farmers for some time,” says Malla Reddy. “It should
also involve the Andhra Pradesh State Cooperative Marketing Federation Ltd and the
National
Agricultural Cooperative Marketing Federation of India Ltd in the marketing
process – these were systematically dismantled after the 1991
liberalisation – rather than force technology and digital processes on farmers,
especially where there is a lack of infrastructure to implement eNAM.” In the
past, the federations procured produce from farmers and were a buffer,
minimising the role of commission agents. 

With
or without the promises or pitfalls of digitisation, farmers like Hanimi Reddy
are waiting for the day when they need not wait for days together at the market
yard to sell their produce at a fair price – and return home dejected.

Waiting for fair prices in Guntur

گنٹور میں مرچی کی مناسب قیمتوں کا انتظار

ന്യായവിലയും പ്രതീക്ഷിച്ച് ഗുണ്ടൂരിൽ

நல்ல விலைக்காக காத்திருக்கும் குண்டூர் மிளகாய்

ଗୁଣ୍ଟୁରରେ ଉଚିତ ମୂଲ୍ୟକୁ ପ୍ରତୀକ୍ଷା

ন্যায্য মূল্যের অপেক্ষা গুন্টুরে

గుంటూరులో గిట్టుబాటు ధర కోసం రైతుల ఎదురుచూపులు

गुंटूरमधली रास्त भावाची प्रतीक्षा

Guntur

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Waiting for fair prices in Guntur

After investing lakhs, often on loan, mirchi farmers in Andhra encounter cartels of agents at the market yard, who dictate low, loss-inducing prices – and the state’s plans to digitise sales haven’t helped either

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