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Middlemen to be nailed

Observing how middlemen were contributing to the rise in prices the state government has decided to regulate their role in the market.

mumbai Updated: Jan 14, 2011 01:34 IST
Sayli Udas Mankikar

Observing how middlemen were contributing to the rise in prices the state government has decided to regulate their role in the market.

The state marketing department has ordered an inquiry into malpractices at the Agriculture Produce Market Committee (APMC) at Navi Mumbai where the process of bidding for commodities has not been transparent for the past few years, department sources point out.

“Although much of the hike was attributed to unseasonal rains, we received a lot of complaints saying that middlemen were taking in huge margins. We were also told that the bidding process, especially in the Navi Mumbai market where Mumbai gets its food supplies from, is not transparent. So I have asked the director of marketing to inquire and give me a report within a week,” marketing minister Radhakrishna Vikhe Patil said on Thursday.

Vikhe Patil said after the report is out, he will bring it to the notice of the market committee and if it does not take cognisance of the malpractice, it will be dissolved.

The issue came to light when onion prices had hit the roof in December and the state’s marketing department learnt that agents were manipulating prices. Retail prices of onions shot up from Rs15-20 a kilogram to Rs75-80 a kilogram.

A market committee is supposed to facilitate the process in which farmers are able to sell their produce at reasonable prices.

Traders and agents, who are provided godowns and shops in the market are supposed to purchase the produce from farmers in an open bidding process. The price at which they buy the produce should be supervised by the APMC.

“What we have learnt is that a ‘under the kerchief’ system is practiced in which farmers are paid less money and the selling price charged to retailers is very high. These costs get indirectly passed on to consumers,” Vikhe Patil said. In the under-the kerchief system, traders or agents cover their palms with a kerchief and the farmer has to ask for a price by holding the agent’s fingers. The number of fingers a farmer holds determines the price. For example, two fingers could mean Rs200, three fingers could mean Rs300.