Procurement price is below the market price

Rural farmers who have waited long to benefit from the coconut procurement drive of the National Agricultural Cooperative Marketing Federation of India Ltd. (Nafed) find themselves in a predicament, for the latest procurement price offered by the federation is below the open market price.

Nafed is offering Rs.14.25 for a kg of de-husked coconut whereas the open market price is between Rs.14.50 and Rs.15.

With the disparity in price, Nafed will not be able to procure the stock and provide relief to the disgruntled coconut farmers, who were expecting a better deal from the authorities.

Since the yield is on the verge of a decline, the farmers have no option but to sell their produce at a better price in the open market.

The farmers say the price in the open market will scale up when the supply of coconut decreases owing to seasonal changes and other reasons. A better price and procurement initiative should come from the government at a time when the yield is good but the price low in the open market, they say.

K. Johnson, leader of a State-level farmers’ forum, says that in the current scenario, coconut cultivators will not be satisfied with a procurement price that is below Rs.25 a kg. “Most of them are fed up with the ever-increasing labour costs and poor returns from the trade,” he says.

The Nafed procurement drive has been pending in the district since the beginning of the year. Though some grama panchayats have been successful in coordinating the procurement drive with the support of agricultural offices, the project funded by the State government is yet to benefit large-scale farmers.

“As per a Nafed decision, the large-scale procurement drive was expected to begin in the district on Friday. But the disparity in support price kept the farmers disinterested,” says a worker at a regional procurement centre in Thiruvambadi.

The process can begin only after the revision of the declared procurement price or a fall in the open market price, he says.

The situation was the same last year when the much-hyped Nafed copra procurement drive failed to benefit a large number of the farmers. Prolonged delay in identifying some primary agencies had played spoilsport then. Official sources say the tainted image of some of the collection agencies prevented Nafed from completing the identification process in time.