Kar­nataka’s corn grow­ers caught in a maze of low prices, pro­cure­ment de­lays, sur­plus stocks


Shankar, tra­di­tion­ally a paddy grower of Vad­nalli vil­lage in Kar­nataka’s Da­van­gere dis­trict, shifted to maize this kharif sea­son on his five-acre land. Rea­son: wa­ter scarcity. But the switch didn’t bring him any respite as maize prices dropped due to a surge in out­put and slack de­mand from the poul­try in­dus­try and starch-mak­ers.

The modal prices for maize now range be­tween ₹900 and ₹1,300 a quin­tal across var­i­ous mar­kets in Kar­nataka, the largest pro­ducer of the grain dur­ing kharif sea­son. In Da­van­gere, the ter­mi­nal mar­ket for the coarse ce­real, the modal prices were around ₹1,200 — way be­low the min­i­mum sup­port price (MSP) of ₹1,425/quin­tal .

De­plet­ing wa­ter ta­ble

“At these prices, I may get to re­cover the cost in­curred. Noth­ing more,” he says. Yet, there is no other op­tion for Shankar, who had brought around 15 quin­tals of maize to the Da­van­gere mar­ket­yard to sell. In the pre­vi­ous year, he was forced to leave his land fal­low due to a drought in the re­gion.

“There is talk of open­ing pro­cure­ment cen­tres, but I don’t have the pa­tience to wait as one doesn’t know how much long it’s go­ing to take. I need money to re­pay the loan of around ₹50,000 taken from a com­mis­sion agent so that I can raise a loan again in early Jan­uary to plant paddy, when wa­ter is re­leased in the Bhadra canal,” he adds.

Shankar’s fam­ily, which owes ₹5 lakh to a nationalised bank, is un­able to raise fur­ther credit through the for­mal chan­nel. “We have a long-stand­ing relationship with the com­mis­sion agent, who gives us money when re­quired,” Shankar says adding that the cy­cle goes on.

Fed up with er­ratic rain­fall pat­tern af­fect­ing the field crops, Shankar plans to con­vert at least 2 acres of his hold­ing into are­canut plan­ta­tions this year. But the scare of de­clin­ing wa­tertable in the re­gion is pre­vent­ing him from tak­ing that risk. “A cou­ple of our neigh­bour­ing farm­ers have sunk borewells that have been a failure. I am a bit hes­i­tant,” he adds.

Sim­i­lar is the story of Hanu­man­tappa of Na­garkatti vil­lage, who had grown maize on about 2 acres. “I was sup­posed to get an yield of around 25 quin­tals per acre, but the even­tual out­put was around 14 quin­tals. A se­vere at­tack by army­worms has shrunk yields in the re­gion this year,” he adds.

The ris­ing labour cost has made cul­ti­va­tion of maize ex­pen­sive, Hanu­man­tappa says es­ti­mat­ing the cul­ti­va­tion cost at ₹17,000 an acre, de­pend­ing upon the qual­ity of seeds used. “At a price of around ₹1,230/quin­tal, I barely man- Work­ers gath­er­ing the grains spread out for dry­ing at the APMC mar­ket yard in Da­van­gere, Kar­nataka the ter­mi­nal mar­ket for maize in the coun­try

age to re­cover the Hanu­man­tappa adds.

Farm­ers of the Da­van­gere re­gion are also sell­ing their pro­duce at the far­m­gate to traders at around ₹1,100 per quin­tal. APMC of­fi­cials say­dis­trict author­i­ties have al­ready made rec­om­men­da­tions to the State gov­ern­ment to start mar­ket pur­chases, con­sid­er­ing the fall in prices.


De­layed pro­cure­ment

It’s not just in Kar­nataka that­maize prices are rul­ing be­low the MSP. Even in Gu­jarat, Ma­ha­rash­tra, Tamil Nadu, Ut­tar Pradesh and Te­lan­gana such is the case.

As prices have re­mained be­low the MSP since the start of the har­vest sea­son from mid-Oc­to­ber, the de­mand for pur­chases by the gov­ern­ment, un­der the price sup­port scheme, is get­ting louder in Kar­nataka.

Spo­radic protests are be­com­ing com­mon across the grow­ing re­gion, with farm­ers de­mand­ing open­ing of

cen­tres. Kar­nataka has al­ready ap­proached the Cen­tre seek­ing its per­mis­sion for the com­mence­ment of pro­cure­ment op­er­a­tions. How­ever, sources said that the Cen­tre has con­veyed to the State gov­ern­ment that pro­cure­ment would be al­lowed pro­vided maize is used for the pub­lic dis­tri­bu­tion sys­tem. With hardly any tak­ers for maize in the PDS, Kar­nataka wants the Cen­tre to pro­cure and use the grain for dis­tri­bu­tion in the Cen­tral pool.

KT Gan­gad­har, Pres­i­dent, Kar­nataka Ra­jya Raitha Sangha (Hasiru Sene), blames the Cen­tre for re­moval of maize from the PDS, re­sult­ing in a price fall. “The Cen­tre is solely re­spon­si­ble for the drop in maize prices. If they are un­able to dis­trib­ute maize un­der the PDS, they should ex­plore mea­sures to ship-out the grain by sub­si­dis­ing ex­ports,” Gan­gad­har adds.

Grow­ers are los­ing up to ₹500 per quin­tal due to the pre­vail­ing low prices. About 30 per cent of the ex­pected ar­rivals for the sea­son has al­ready hap­pened. “The Cen­tre should im­me­di­ately step in to start the pro­cure­ment and bail out grow­ers. If they don’t have an in­tent to pro­cure, then why an­nounce an MSP for maize at all?,” Gan­gad­har asks.

Higher in­ven­to­ries

Ac­cord­ing to the first ad­vance es­ti­mate, maize pro­duc­tion in the coun­try is seen at 18.73 mil­lion tonnes (mt) dur­ing the kharif sea­son — marginally lower than last sea­son’s 19.24 mt. The higher carry-for­ward stocks is also weigh­ing on the prices of the ce­real, trade sources said. Around Da­van­gere alone, traders es­ti­mate that some 5 lakh tonnes of maize are still be­ing held by stock­ists and traders.

Be­sides, the slack buy­ing from poul­try cor­po­rates such as Cargill, Go­drej Agrovet, CP Feeds and Su­guna is ag­gra­vat­ing the trou­bles. More­over, the im­pact of de­mon­eti­sa­tion on the sen­ti­ment is still vis­i­ble, with only a fourth of the 60odd traders ac­tive this year, sources said.

“The de­mand is not that great now. It is match­ing arpur­chase ri­vals,” said Srini­vas of Srini­vas Traders in Da­van­gere, who pur­chases the grain for com­pa­nies such as Cargill. The ar­rivals will pick up in the sec­ond week of De­cem­ber “when we ex­pect stock­ists to en­ter the mar­kets,” Srini­vas said.

“De­mand is very poor at this time. Had the gov­ern­ment ini­ti­ated the pro­cure­ment, things would have sta­bilised. Pri­vate play­ers would have en­tered the mar­ket by now,” a trader in Da­van­gere said.

Cheaper maize from Bi­har

Also, the easy avail­abilty of maize from Bi­har at rel­a­tively lower prices has drawn buy­ers. Traders point to the ris­ing out­put in con­sum­ing States such as Tamil Nadu, Gu­jarat and Ma­ha­rash­tra for the slack de­mand and sub­se­quent fall in prices.

While ad­mit­ting that cheaper maize from Bi­har was avail­able in the south­ern mar­kets, B Soundarara­jan, Chair­man, Su­guna Hold­ings, un­der­lined the need to boost the pro­duc­tiv­ity of maize grow­ers through bet­ter and im­proved seeds.

TN Prakash Kam­maradi, Chair­man, Kar­nataka Agri­cul­tural Prices Com­mis­sion, says that farm­ers should be or­gan­ised into col­lec­tives so that they can make value-added maize prod­ucts by them­selves and over­come crises as these.

This is the six­teenth in the se­ries on Farm Dis­tress. The first ar­ti­cle ap­peared on Novem­ber 16. The pre­vi­ous ar­ti­cle ap­peared on De­cem­ber 5, on Ma­ha­rash­tra’s cot­ton grow­ers.

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