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Summary

Amidst a bumper mustard crop projected to hit 14 million tonnes, farmers are dismayed as prices plummet below the Minimum Support Price (MSP), with mandi rates in key producing states like Rajasthan, Madhya Pradesh, and Gujarat falling short. Despite increased acreage and market arrivals, farmers face losses, while traders attribute the price slump to imports of cheaper edible oils and holding back of last year's production.

Highlights

Record Mustard Production: The mustard crop is projected to reach a record production of around 14 million tonnes this year, surpassing the previous year's production of 12.64 million tonnes.

Disappointing Prices Below MSP: Despite the increase in production, prices of mustard in the market have fallen below the Minimum Support Price (MSP), causing disappointment among farmers.

Increased Acreage: A significant increase in acreage, particularly in states like Uttar Pradesh, Vidarbha, Marathwada, Jharkhand, Assam, eastern Uttar Pradesh, and Bundelkhand regions, has contributed to the rise in production.

Market Arrival and Prices: Mandis across the country received 1 lakh tonnes of mustard between February 18-25, with Rajasthan being the largest contributor. However, average mandi prices remained below the MSP, with Rajasthan at ?4,820/quintal, Madhya Pradesh at ?4,520/quintal, and Gujarat at ?4,858/quintal.

Farmers' Losses and MSP Assurance: Farmers are facing losses of ?1,200/quintal while selling mustard, despite assurances from the Agriculture Minister to buy at MSP. There are concerns about the implementation of these assurances by bureaucrats.

Holdings and Import Impact: Traders and processors indicate that 15-20% of last year's production was withheld by farmers in anticipation of better prices. They attribute the lower prices to uncontrolled imports of cheaper edible oils from other countries.

Suggestions for Government Action: Suggestions have been made for the government to decide imported duties on edible oils based on mustard oil rates, factoring in the MSP of mustard.

Price Dynamics: With an MSP of ?5,650/quintal and 42% oil content, the mustard oil price should be ?135/litre for processors, excluding other costs. However, the current retail price is at least ?10 lower than this in Delhi NCR.

Conclusion

The paradox of plenty grips the mustard market as record production fails to translate into prosperity for farmers. While increased acreage and arrivals should have been cause for celebration, the reality of prices dipping below MSP reflects a systemic issue plaguing agricultural markets. Urgent action is needed to address the imbalance between production and price realization, including measures to curb imports and ensure timely MSP implementation. Sustainable solutions are essential to safeguard the livelihoods of mustard farmers and strengthen the resilience of India's agricultural sector against market volatility.

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