Noise over man­dis drowns out sup­port for cor­po­rate si­los

The first of a two-part se­ries finds out why farmers in Pun­jab are spooked by the new leg­is­la­tion

Business Standard - - FRONT PAGE - SAI MANISH

It’s early morn­ing at the 200,000tonne Adani wheat silo at Dabra vil­lage in Pun­jab’s Moga district, and a group of el­derly farmers is get­ting ready for an­other day of ag­i­ta­tions af­ter spend­ing the night at the protest site. Else­where in the state, farmers have been demon­strat­ing at other Adani-run wheat si­los, Re­liance re­tail chains and pri­vate road toll booths, de­mand­ing the abo­li­tion of The Farmers’ Pro­duce Trade and Com­merce

(Pro­mo­tion and Fa­cil­i­ta­tion) Act that was re­cently pushed through Par­lia­ment by the Modi gov­ern­ment.

In a sense, the Adani silo is what the new law seeks to es­tab­lish across In­dia. And to the protest­ing farmers, it is a sym­bol of all that will go wrong in their lives.

The silo, set up by Adani Agri Lo­gis­tics in 2007, is the largest in In­dia. In 2008, the Prakash Singh Badal gov­ern­ment des­ig­nated it as a no­ti­fied gov­ern­ment pur­chas­ing point (mandi). There is an­other Adani wheat silo of sim­i­lar ca­pac­ity at Kaithal in Haryana and oth­ers of smaller ca­pac­i­ties at six lo­ca­tions in Mad­hya Pradesh.

The idea was that farmers could take their pro­duce di­rectly to th­ese si­los with­out go­ing to the man­dis. The silo would weigh the pro­duce and take the farmers’ wheat. And the Food Cor­po­ra­tion of In­dia (FCI), which pays crores of ru­pees in rent to Adani Agri Lo­gis­tics for run­ning the silo through a 30-year con­ces­sion agree­ment, would pay the farmers di­rectly in three days.

The logic be­hind turn­ing th­ese si­los into gov­ern­ment no­ti­fied man­dis was two-fold: save the farmer and the gov­ern­ment the 2.5 per cent that com­mis­sion agents get at man­dis and quicken the process of sell­ing farmers’ wheat stock. The gov­ern­ment’s new law des­ig­nates all such si­los, ware­houses and any place of col­lec­tion and ag­gre­ga­tion of farm pro­duce as ‘trade areas’, and any farmer or com­pany is free to sell and buy in th­ese trade areas.

The ques­tion is, has this model worked for farmers in the 12 years of its ex­is­tence?

Adani Agri Lo­gis­tics cer­tainly thinks so. “Farmers are so happy with the ef­fi­cient and trans­par­ent func­tion­ing of si­los that they do not need to be lured with any in­cen­tive. They have come to the si­los year af­ter year for the last 12 years. Once a farmer comes here, he will not go to any other mandi even if he has to wait for some time,” says Puneet Mehndi­ratta, vice-pres­i­dent at Adani Agri Lo­gis­tics.

Some farmers agree that they have ben­e­fited from tak­ing their wheat to the Adani silo. A few kilo­me­ters’ drive through lush paddy fields from the Adani silo, lies the vil­lage of Daroli Bhai. Laib Singh, a farmer in his 70s, says, “We ben­e­fit more by tak­ing our wheat to the Adani silo. Here my pro­duce comes to five to seven quin­tals more weight as com­pared to gov­ern­ment man­dis.”

“How­ever, though in the early years they paid us ~20 more than the min­i­mum sup­port price (MSP), those in­cen­tives have been gone for many years.”

Gur­mail Singh, an­other el­derly farmer in the vil­lage, too, says that there are ad­van­tages to tak­ing their pro­duce to the cor­po­rate-run si­los. “It takes around three hours to give my wheat at Adani. In man­dis it would be al­most three days be­fore the wheat would be taken by com­mis­sion agents. But of late, the wait­ing time has in­creased at the silo and they have also started re­ject­ing wheat,” he says.

An FCI of­fi­cial at the Moga base de­pot ex­plains that Adani’s si­los save the gov­ern­ment crores of ru­pees on three counts – daily wages to labour, the trans­port cost from mandi to ware­houses and the cost of gunny bags to store and trans­port wheat. Be­sides, the si­los have neg­li­gi­ble wastage of wheat as op­posed to its own ware­houses.

Farmers ag­i­tat­ing at the Adani silo in Dabra dis­miss this ar­gu­ment. “Big com­pa­nies will of­fer at­trac­tive prices for one or two years. Once farmers start sell­ing to them, they will ar­ti­fi­cially de­press prices. Isn’t this what Re­liance Jio did? Of­fer free phones and data, cap­ture the market, and then start charg­ing more. Farmers will be­come slaves of big cor­po­ra­tions,” says Buta Singh, 72, a farmer protest­ing at the Adani silo site un­der the ban­ner of the Bhar­tiya Kisan Union Ekta Ugraha (BKU)..

“The new bill will fin­ish off man­dis and re­duce gov­ern­ment pro­cure­ment. There is no law that guar­an­tees MSP to farmers.

The gov­ern­ment gives us a guar­an­tee for only rice and wheat. This year we got Rs 700 for maize al­though its MSP was Rs 1850 per quin­tal,” adds Gur­nam Singh, an­other farmer.

Gur­nam Singh feels that big com­pa­nies will start hoard­ing grains at their huge stor­age fa­cil­i­ties. “Cur­rently, the gov­ern­ment guar­an­tees that no farmer will be left with un­sold wheat and rice at man­dis. If com­pa­nies hoard grains at their si­los then they will turn us away from their gates. Who will we sell to then?”

Apart from t he mam­moth Adani si­los in Moga and Kaithal, there are hundreds of other pri­vate ones across the coun­try. In fact, the gov­ern­ment has ap­proved an am­bi­tious plan to build 10 mil­lion tonnes of silo stor­age ca­pac­ity in the com­ing years. Ten of the 62 si­los will be in Pun­jab and the rest will be in Haryana, West Ben­gal, Ra­jasthan and Bihar. Most will have ca­pac­i­ties of 50,000 met­ric tonnes.

Prem Vatsa’s Fair­fax Group has also emerged as a big player in the silo busi­ness. The Group, which is a ma­jor­ity share­holder of the Na­tional Col­lat­eral Man­age­ment Ser­vice (NCMS), has bagged at least 15 con­tracts, in­clud­ing three each in Pun­jab and Haryana, to build 8 lakh met­ric tonnes of silo stor­age in the coun­try.

At present, Adani Agri Lo­gis­tics has 8.75 lakh met­ric tonnes of silo stor­age ca­pac­ity, and is build­ing an ad­di­tional 4 lakh met­ric tonnes ca­pac­ity at Kan­nauj i n Ut­tar Pradesh and Darb­hanga and Sa­mas­tipur in Bihar.

Many of the farmers Busi­ness Stan­dard spoke to in Sangrur, Ludhiana and Moga dis­tricts also fear that the new law will go against their in­ter­ests as it states that any dis­pute be­tween the farmer and the com­pany or trader can be set­tled only through the sub divi­sional mag­is­trate (SDM).

“What can a lowly SDM do be­fore a big com­pany? Now even if the gov­ern­ment de­lays pay­ments, we know that the money will come. A farmer can’t do anything if com­pa­nies refuse or de­lay pay­ments. This law will turn us into slaves,” says Ra­jbir Singh, a farmer in Sangrur,

The logic be­hind turn­ing si­los into gov­ern­ment-no­ti­fied man­dis was to save the farmer and the gov­ern­ment the 2.5 per cent that com­mis­sion agents get at man­dis. But most farmers dis­miss the ar­gu­ment

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