The Bureaucrat, the Mandi Middleman, and the Illusion of MSP

You must have often seen it on TV news:

On a highway in Uttar Pradesh or Maharashtra, farmers dump hundreds of quintals of tomatoes or potatoes onto the road and walk away, because they are unable to fetch even 50 paise or ₹1 per kilogram at the mandi (wholesale agricultural produce market). Even the freight costs of transporting the produce to the mandi have to be paid out of their own pockets.

And at that very moment, on that very day, in a supermarket in Delhi, Mumbai, or Bangalore, an ordinary urban consumer is buying those exact same potatoes for ₹30 to ₹40 a kilo, and a 15-gram packet of potato chips for ₹20!

What kind of economics is this?

The person who grows the food does not get ₹1, while the consumer’s pocket is being picked. So, into the belly of which python is this 30-fold profit in the middle disappearing?

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The Mandi Committee Syndicate and the Web of Brokerage

In the eighth chapter of their book ‘Ujadti Kheti, Ujadte Gaon’ (Devastated Agriculture, Ruined Villages), co-authors N. Singh and Vimla Singh expose this nexus between government Agricultural Produce Market Committees (APMC), middlemen, and state procurement agencies.

They explain that the Minimum Support Price (MSP) is announced with great fanfare every year for 23 rabi (winter) and kharif (monsoon) crops. But the ground reality is that the Shanta Kumar Committee report itself admits that a mere 6 per cent of the country’s farmers actually benefit from MSP, and that too primarily the wheat and paddy cultivators of Punjab and Haryana!

Across the rest of the country—be it Bihar, eastern Uttar Pradesh, or Madhya Pradesh—government procurement centres either do not open on time, or excuses of a shortage of bardana (gunny bags) are concocted, or the farmer’s crop is rejected on the pretext of ‘excess moisture’ and ‘refuse’.

Exhausted and defeated, the poor farmer sells his crop to that very arhatiya (commission agent) standing outside the mandi at ₹400–₹500 below MSP. And that very night, in collusion with the government centre, that same arhatiya gets a fraudulent receipt cut in the farmer’s name and pockets the entire MSP profit for himself!

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The Bitter Truth from the Book

“This syndicate of the administrative machinery and middlemen is so powerful that whichever law may come, the fleecing of the farmer’s pocket remains a certainty. The farmer needs immediate cash for his crop because he has to purchase fertiliser and seeds for the next sowing, arrange his daughter’s wedding, or pay for medical treatment. Taking advantage of this very helplessness, the market robs him. Until an arrangement of guaranteed procurement and cash payment at the ‘farm-gate’ (the edge of the field) is put in place, the farmer can never become prosperous.”
— ‘Ujadti Kheti, Ujadte Gaon’ (Chapter 8)

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What Is the Real Solution?

1. Legal Guarantee of MSP: Procurement by any trader or corporate entity below the stipulated Minimum Support Price must be declared unlawful and a punishable offence.
2. Government Procurement and Storage Centres Across Villages: There should be a well-equipped warehouse and a transparent digital procurement centre for every cluster of five gram panchayats (village councils), where farmers can directly weigh their produce and have the money deposited into their bank accounts within 24 hours.
3. Empowering Farmer Producer Organisations (FPOs): Farmers must form their own cooperative enterprises that connect directly with retail markets and urban consumers, thereby eliminating the 70–80% commission pocketed by middlemen.

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A Pertinent Question to Ponder (The Book’s Message)

If an automobile, mobile phone, or pharmaceutical company enjoys complete freedom to fix its prices after adding a profit margin over its costs, why shouldn’t the farmer who feeds the nation have the right to determine the price of his crop? This chapter of the book ‘Ujadti Kheti, Ujadte Gaon’ lays bare this entire machinery of plunder.