Tuesday, March 30, 2010

A top official of one of the leading wholesale mandis of Delhi told TSI on the condition of anonymity, “Average price of onions in the Azadpur Mandi can’t be the same as that of the wholesale mandis in Nasik and its adjoining areas in Maharshtra. Onions in Azadpur Mandi must be priced higher due to addition of transportation cost from Nasik to Delhi. People of Nasik get to eat cheaper onions than people in Delhi as they reside in the onion hub of the country.”

The story, however, is somewhat different. Commission agents reach the farms of Maharshtra ten days before the onion harvest begins, buys onions at cheap rates and hoard it for few days. Since they buy directly from the farms, they buy very cheap and they sell at high prices. However, APMC Azadpur chairman Jai Kumar Bansal denies these allegations while speaking to TSI. “Onions not only come from Maharshtra but also from Rajasthan,” he added.

Though the commission agents’ prosperity has increased manifold in the last decade, life of the average farmer remains pretty much the same. Roop Singh, a small vegetable grower in Sonepat district of Haryana, comes everyday to the mandi to sell his vegetables. He says, “These arhatias decide the price and we are forced to sell as we cannot return with the vegetables.” One more startling revelation was the presence of a large number of people who trade on the licence of arhatias and pay rent to them. These people trade on the behalf of the arhatias. These fake commission agents have monopolised the market and neither the government nor the APMC seem to have any control over them. We talked to few such commission agents who accepted working for a big vegetable commission agent Mange and Sons in the Azadpur Mandi. He tells, “We pay the rent of Rs 6,000 per month for this small space and I am not alone. There are around 70 more persons like me who trade on behalf of Mange and Sons. We decide the price and not the farmers.”

Bansal has no solution to this problem. He even pleaded ignorance about presence of such fake commission agents. However, if TSI could find such fake commission agents in a day, he, with his experience of five years at his post, should be knowing better.

Rakesh Tikait, spokesperson of Bhartiya Kisan Union, says, “The nexus between traders, commission agents and retailers is obvious. The cold storage lobby also plays a crucial role and they have emerged as a big pressure group in Uttar Pradesh.”

Prices of potato and onions have started falling. But they do not know the game behind this. People are now overjoyed that at last prices have started coming down. But they are completely unaware of the larger game being played. The official in the mandi explains this-

News is spread through media about record production of potatoes.

Now, the farmer thinks that it will be difficult to dispose off crop as there will hardly be buyers due to the glut of potatoes in the market.

He sells potatoes to these commission agents at a very low price due to fear of further fall in prices.

Traders have already booked cold storages in western Uttar Pradesh. They will hoard the potatoes for the time being and after 3 to 4 months, when prices shoot up, they make a killing.
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Source :
IIPM Editorial, 2009


An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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