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New Laws Paralyse 70% of MP’s Mandis in Six Months

As many as 47 mandis recorded no business in October while the number was 41 in September. Farm produce is being sold at half the MSP.
Anjaj mandi MP

Bhopal: The fear of farmers’ over the three new farm laws will dismantle the Krishi Upaj Mandis and system of procurement under the Minimum Support Price (MSP) and leave farmers at the mercy of corporations has become apparent in Bharatiya Janata Party (BJP)-ruled Madhya Pradesh.

Months before the Union Government passed all three farm laws in Parliament, the BJP government in the State had amended the MP Krishi Upaj Mandi Adhiniyam, 1972 and enacted Model Mandi Act on May 1, 2020. And MP State Agricultural Marketing Board notified it to the state mandis on June 24. The amendment allows traders to purchase without levying any market fee, cess or levy outside mandi areas without having license.


Six months down  the line, out of 259 mandis in the state, 47 reported zero business in October while 143 have recorded a massive drop of between 50% to 60% in business between June (when the three farm ordinances were put in place) and October, according to the Madhya Pradesh’s Mandi Board data available on the E-Anugya website of the state government. The remaining 79 mandis were functional because of the flow of vegetables and fruits, claimed Mandi Board officials.

Out of the 47, ten mandis in Gwalior, which include seven in Shivpuri, were non-functional in September. Six mandis in Indore reported no business that month while six mandis in Jabalpur’s Seoni were without work. In October, 15 mandis in Sagar district, 14 in Jabalpur and nine in Rewa had nothing to show for.

The data further revealed that 298 sub-mandis of the state, which run seasonally, have recorded zero business in the last six months and are on the verge of closure. The board has failed to pay salaries and pensions to its employees for the last couple of months.

With the subsequent drop in business at Mandis, the Board’s tax collection has also dropped – by 64% – in comparison to the previous fiscal during the same period.

In the fiscal year 2019-2020 (April 1 to March 31), the Board had collected Rs 1,200 crore as tax, but, in the last six months – since the ordinance and laws came into effect – the board has only collected Rs 220 crore as tax, which is only 36% of the total tax collected in the same period in the previous financial year.

Year-wise gross tax collection of Mandis in MP

MP table

Source- Mandi Board data, Amount – in crore

The MP State Mandi Board, an autonomous body, which is run under rules framed by the MP Krishi Upaj Mandi Adhiniyam, 1972, collects 1.5% tax from registered traders and shares 0.5 % of the tax with the state government. The government uses the funds for various welfare and development schemes. From the remaining one per cent of tax collected, the board pays salaries and pensions to their employees and spends on infrastructure at the mandis. The state has 45,000 registered traders.

On October 7, the BJP-led state government reduced tax collection rates at Mandis to 0.5% from 1.5% due to pressure from agriculture traders. The move was seen as another blow to the Mandis, which were already incurring losses due to the new Farm Laws which allowed private mandis to operate without a license or pay any taxes.

“The new laws have cast a shadow on nearly 190 Krishi Upaj Mandis of the state out of the total 259 mandis. For the last couple of months, 47 mandis of the B, C and D grade categories have recorded no tax collection, while the remaining 143 mandis have recorded a sharp fall of between 50% to 60% in business since the new laws came into effect,” said B.B. Faujdar, convener of Sanyukt Sangharsh Morch Madhya Pradesh Mandi Board.

In addition, the 298 sub-mandis, which work only seasonally, have also recorded no business in the last six months and are on the brink of closure, he added.

The State has 259 mandis and 298 sub-mandis divided into seven divisions. It has 6,500 employees including 1,500 women, 2,500 pensioners and nearly 9,000 registered labourers, but the new laws left them in peril.

Faujdar, former Karyapalan Yatri of the Mandi Board (First class officer) further said: “In the year 2019-20, the board has given Rs 446 crore to the state government as tax share from its total collection of Rs 1,200 crore. Besides, the Board has also given a loan of Rs 1,248.64 crore to the government till date, but the Government wants to shut it down with this new law just to profit traders and corporate houses.”

Thousands of state Mandi Board officials held a massive protest in the state capital on October 3, 2020. The protesters tried to picket the Vallabh Bhawan against the state government’s Model Mandi Bill, which was drafted on the lines of the three Farm Laws.

Gopaldas Agarwal, president of Sakal Anaj Dalhan Tilhan Vyapari Mahasangh Samiti, a state-level association of traders said: “The recently passed laws are good for the traders, but bad for farmers and the existing mandis. The traders are purchasing farm produce outside the mandis, it is why tax collection has reduced in the state mandis.”

Why will a trader come to the mandi if he has to pay a lot of tax while the same produce is available outside without any tax or license? Agarwal asked. “Moreover, the money that the traders have invested in the mandi setup over the years would have gone down the drain and crippled their existence,” Agarwal said.

“It is true that the new laws have no protection for farmers and for mandis while giving a free hand to the traders," he added.

No Purchase on MSP

The Shivraj Singh Chouhan-led BJP government, and its ministers, have been refuting claims of scrapping MSP and the closure of the Mandi Board, calling it propaganda by the Opposition. However, the state hasn’t any produce since June 5.

“Since the new farm laws came into effect, the BJP-ruled Madhya Pradesh Government hasn’t purchased any farm product, whether its soybean (MSP Rs 3,850 per quintal), Maize (MSP Rs 1,825 per quintal) or Moong (MSP Rs 7,050 per quintal). All the products are being sold at lower rates outside the mandis,” said Kedar Sirohi, a farmer leader from Harda.

Only wheat had been procured by the Government at the MSP this year – Rs 1, 925 per quintal – between March and May. Among states, MP has topped in wheat procurement this year with a record 129 lakh tonnes leaving Punjab in second.

Badal Saroj, state convener of All India Kisan Sangarsh Coordination Committee (AIKSCC), claimed that the government’s claim of smooth-running mandis and procurement at MSP was a lie.

“Since the new laws were enacted neither has the state government purchased any farm produce on MSP, nor supported the mandis. He said that with the tax reduction, “the price of farm produce crashed. All the produce, either inside or outside the mandis, is being sold at nearly half the MSP rate and the government has a record of it,” he added.

“Chief Minister Chouhan and Agriculture Minister Kamal Patel both are just lying to the farmers every day,” Saroj lamented.

Interestingly, at odds with Prime Minister’s Narendra Modi’s slogan of ‘One Nation, One Mandi’ in the context of the three laws, CM Chouhan said: “I have decided that whatever is the yield produced by the farmers of the state, it will be procured. But if some other person from a neighbouring state comes to the state to sell his produce, then his truck will be seized and he will be sent to jail.” He made the above remark while addressing a farmers’ rally in Nasrullaganj in Sehore district on December 3.

twit sc shot

Despite multiple attempts to contact them, neither Sandeep Yadav, Managing Director of the State Mandi Board, nor Agriculture Minister Kamal Patel, responded to calls.

'We Will Intensify our Protest,' says Farmer Leader

The Samayukta Kisan Morcha, a federation of around 500 farmer organisations has resolved to intensify its agitation against the three Farm Laws enacted by the centre. After dismissing the protests as ill-informed and motivated, the Centre has offered to make some changes to the laws, but after the failure of five rounds of initial talks, unsatisfied farmers have now called for Bharat Bandh on December 8.

Shivkumar Sharma ‘Kakka Je’, Convener of Rastriya Kisan Mazdur Mahasangh (RKMM), who is representing the state’s farmers in the ongoing farmers' protest, claimed: “We put forth simple demands in all the five meetings with the Union Ministers and officials: Scrap the all three farm laws passed hurriedly just to benefit big traders and corporations and criminalise purchase of farm produce below MSP though a law.”

“Until the Government agrees to our demands, we will intensify our protest,” he added.

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