Maharashtra: Dhule farmers unearth Rs 2,000 crore MSP scam

Farmers claim produce not procured at MSP approved by the government

An alleged scam concerning Minimum Support Price (MSP) to the tune of Rs 2,000 crore has been unearthed by a farmers’ association from Dhule in northern Maharashtra. The farmers’ association in their petition has claimed to have found major discrepancies in the MSP fixed by the Central authorities and those offered by APMC traders to the farmers.

The farmers claimed that APMC, Dhule, and the agricultural and marketing ministry have not been adhering to the MSP while procuring the farm produce. As a result, farmers end up selling almost 40 per cent to 45 per cent lower than the MSP to traders, thus leading to financial losses for farmers. They claim that failure to get an appropriate price for their produce leads to financial distress.

Mohanish Thorat, advocate representing farmers in HC 

The situation is so grim that a farmer Hiralal Patil, 84, from Maglur, Amalner taluka, Dhule, has been receiving from the local district administration his income certificate with a minus figure since 2017-18.

Irked by this exploitation and to fight for farmers rights, a civil writ petition before the division bench of Bombay High Court at Aurangabad was filed by Satya Shodhak Samaj Sangh, and the court has recently issued notices to almost nine different state and central bodies, including APMC, Dhule. The matter is slated for hearing on July 22.

The issue

Advocate Mohanish Thorat, representing the whistleblower farmers attached to Satya Shodhak Samaj Sangh, Dhule, said. “The grievance of the petitioner is that the state government has authorised bodies established for purchasing the crops from farmers at MSP. The final MSP rates approved by the Cabinet Committee on Economic Affairs (CCEA), the Central government, tend to be lower than those recommended by the Maharashtra State Agricultural Prices Commission (MSAPC). However, the market committee and retail       traders purchase the crops from farmers below this MSP thereby duping farmers out of a legitimate price for the produce.”

Historical context

According to Advocate Thorat, no official price-fixing authority existed until 2015; State Cropping Price Committee recommendations were not mandatory. A Government Resolution (GR) on April 23, 2015 established the Maharashtra State Agricultural Prices Commission with agricultural experts and officials, and as per the GR, the prices are recommended based on geographical and weather conditions.

“Interestingly, the GR also mandates that the state government compensate farmers for the difference between Central MSP and state recommendations. However, since 2015, no compensation has been paid to farmers in Maharashtra, despite the difference.  

Moreover, section 32-D of The Maharashtra Agriculture Produce Marketing (Regulation) Act, 1963, mandates market committees to prevent purchases below MSP, but the same has been overlooked for personal gains by traders operating from this APMC market,” said Thorat.

Numbers speak

Several representations were filed to highlight the cheating of farmers, with substantial monetary losses, e.g., R3.94 crore only for maize in October 2022 and pertain to one APMC at Amalner, Dhule. The figure for the entire state is double the yearly budget of the state.

In Maharashtra, there are 305 Agricultural Produce Market Committees (APMC),   so 305 × Rs 3.94 crore = Rs 1,203 crore only for maize and that too in one month.

Rights of farmers

The significant financial shortfall should rightfully belong to the farmers. The state government is responsible for protecting farmers' rights but appears to support private traders.  

Though the farmers' plea for a private complaint in the local Judicial Magistrate court seeking FIR against those guilty, yielded a result, as the court found prima facie truth in the farmers’ complaint and had directed the local police to register FIR, but still there was no progress made by the police in arresting or probing against the private influential traders named in the FIR, said advocate Thorat.

Advocate Thorat said, “As contemplated in the Maharashtra Agriculture Produce Marketing (Regulation) Act, 1963, under Section 32D of the said act states that, “It shall be the duty of the Market Committee to make such arrangements and to take such steps as may be prescribed to prevent purchases of agricultural produce in the market area below the support price fixed by the government.”

What farmers say

Vishwasrao Patil, 60, a whistleblower and petitioner said, “The farmers in Maharashtra are facing the worst financial distress due to the exploitation by traders. These traders are procuring the farm produce at a price below the MSP. We are hopeful that farmers will get justice, as we have faith in the judiciary and the court.”
Hiralal Patil, 84, a farmer turned activist and petitioner said, “I have got a minus income proof certificate from our tehsildar, and that itself explains my financial status. Today, farmers like me are struggling to earn a fair income from our crops, irrespective of us putting our best efforts into cultivating. We need immediate government intervention.

What next

The petitioner has requested the court to issue a writ of mandamus or issue direction to the respondents to start the MSP centre prior to the commencement of every harvesting season. 

For Kharif crops, the harvesting season starts on October 1 and January 1 for rabi crops. Please have been made to adhere to section 32 (D) of Maharashtra Agriculture Produce Marketing (Regulation) Act 1963 so that the state government could compensate the farmers, the difference in amount to date from 2015, so as to avoid further deaths of farmers. 

Rs 3.94 cr
Alleged losses suffered by maize farmers in Oct 2022

The scam explained in numbers

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