Chief Minister Vasundhara Raje has urged the centre to extend the procurement of groundnut crop till March, hinting at a potential farmers' unrest, even as the National Agricultural Cooperative Marketing Federation has given signs of cutting down on the procurement owing to its precarious financial condition.

In a letter to Prime Minister Manmohan Singh, Ms. Raje has requested the UPA government to expedite the “allocation of necessary financial support” to NAFED so it could continue with the procurement.

“Rajasthan has had a bumper crop of groundnut this season and more than 20 lakh bags (70,000 MT) of groundnuts have been procured,” said the chief minister.

Another arrival of about 29 lakh bags of groundnut pods was expected soon, she wrote, which would also need to procured by the NAFED.

“Due to inadequate budget allocation...NAFED is finding it difficult hiring godown space, procuring gunny bags and (ensuring) timely payments against groundnut procurement,” wrote Ms. Raje.

She expressed concern that if these problems persisted, it would lead to major unrest amongst farmers in Jodhpur, Bikaner, Nagaur and Churu — the main groundnut growing districts of the state.

The NAFED had started procuring groundnut crop from states like Gujarat, Rajasthan, Andhra Pradesh and Maharashtra among others towards the end of the last year, after bumper production sent market prices of the legume below the Minimum Support Price of Rs.4000 per quintal.

In Rajasthan, the procurement had started on November 15

The federation — which is the nodal agency for procurement of 16 commodities including oilseeds and pulses at Minimum Support Price under the central government's Price Support Scheme — is reportedly facing an acute financial crunch.

Owing to mounting debts (of about Rs.2000 crore), NAFED has announced cutting down salaries of its 500 employees by 10 percent from the next month.

"As of now we are somehow managing to run the operations, but if employee salaries start getting cut from next month, price support operations will suffer," a senior NAFED official was quoted as saying, by Business Standard, earlier this month.

The situation has reached a stage where, failing to get financial support from the centre, NAFED is reportedly considering selling its bio-fertiliser units in Bharatpur (Rajasthan) and Indore (Madhya Pradesh) to 'healthier' cooperatives like IFFCO and KRIBHCO.