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Buying rights

Buying rights in madhya Pradesh (mp), the Indian Tobacco Company (itc) has been buying foodgrains directly from farmers. On December 12, traders operating in mandis (wholesale foodgrain markets) all over mp went on an indefinite strike in protest against this practice, saying it would make them redundant and even wipe out the small merchants.

Says Radheyshayam Maheshwari, president of the Bhopal Grain and Oilseeds Merchants' Association, "The (state) government has been favouring multinationals. Earlier, the Congress-led government had amended the Madhya Pradesh Krishi Upaj Mandi Adhiniyam, 1972, to make direct purchasing permissible and this Bharatiya Janata Party-led government is doing the same by providing them special facilities.' The amendment was made in May 2002, when Digvijay Singh of the Congress was the chief minister.

But according to D V Ram Kumar, head-mp operations, International Business Division (ibd) of the Rs 12,000-crore itc, provisions regarding direct purchasing were already there in the 1972 act. "Only some conditions like issuance of a licence by the Mandi Samiti for direct purchase to a private company on payment of Rs 10,000 as licence fee, were redefined in 2002. It's not for itc only, but for any private company,' he explains.

Buying directly from farmers saves itc the 3-4 per cent profit the mandi traders used to make. Besides, mandi traders cannot sell anything other than agricultural produce to farmers under the 1972 act. But this provision does not apply to itc 's purchasing centres because they lie outside the mandi area. Alleges Ghanshyam Das Sahu, general secretary of traders association of Ganj Basoda mandi in Vidisha district, "The government has allowed itc to bypass every rule. We, inside mandis , cannot sell anything to the farmers, but itc is selling everything from pesticides to tractors at its purchasing centres.'

ibd began its operations in the year 2000 and now has 42 purchasing centres in mp. Besides, itc has opened 1,750 e-choupal (information centres) , each equipped with a computer with Internet facility and usually serving 5-6 villages. A villager trained in net surfing is incharge of each e-choupal and uses the Internet to compare foodgrain rates at different mandis and pass this information to farmers along with the rates offered by itc. For soyabean, a major crop in mp, ibd offers Rs 10-50 more per quintal than mandi rates. As a result, the number of farmers selling to ibd is increasing (see table: Direct deals).

But traders claim ibd does not play fair. "If itc offers Rs 1,250 for one quintal of soybean, it cuts Rs 30 to 40 for moisture, damage and other things and gives only Rs 1,220. Whereas, a mandi trader pays the rate fixed in an auction,' alleges Kishore Kumar, a mandi trader in Bhopal. Counters Ram Kumar of ibd : "We offer the rates for Fair Average Quality (faq). If the quality of the consignment is not up to faq level, how can we give same rates? Even in mandi auctions , traders check the quality of the consignment before fixing the price. '

Meanwhile, the traders called off their strike on December 22 after the mp Mandi Board formed a committee to work on the

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