Date:22/09/2007 URL: http://www.thehindu.com/2007/09/22/stories/2007092250170100.htm

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Sago industry in the grip of middlemen

R. Ilangovan

Tapioca is cultivated on 1.3 lakh hectares in State
Many farmers prefer to sell produce to middlemen

SALEM: The agriculture-based sago and starch industry, once thriving, is today struggling for survival. A heap of serious issues confronts both the industry and the tapioca farmers who provide the raw material. Informed sources now put at least a part of the blame for the travails on the middlemen in the sector.

Tapioca is cultivated on nearly 1.3 lakh hectares in the State, producing 48 lakh tonnes of the crop . Tamil Nadu is a top grower: the average per hectare yield is 38 tonnes. It is grown on 21 per cent of the State’s irrigated lands. This is the major crop in the districts of Salem, Namakkal, Erode, Tiruvannamalai, Villupuram, Dharmapuri and Karur, and sustains more than three lakh farmers. A significant section of them are tribals. Some 800 sago and starch factories depend on the crop.

But even as the industry faces ordeals, the middlemen earn quick and easy money at the cost of the industrialists and the hardworking peasants. Farmers allege that they form cartels and operate between the farmers and industrialists, controlling the industry and dictating prices.

“We suffer at various stages. Here these middlemen decide the price and take Rs. 25 as commission for a bag of 75 kg that sells at Rs. 200. The farmers are not permitted to sell their produce directly to the industry,” says United Farmers Association president C. Vaiypurai. He wants the industry to evolve a system of issuing receipts with particulars on every purchase.

Many middlemen lend money to farmers in the form of advance for the crop. They enter into an unwritten agreement which stipulates that they sell the produce to them.

The nature of the crop favours them. It should be moved to the factory within 24 hours of its harvest or else it tends to lose the starch content — on the basis of which the industrial units fix the price, says a farmer who grows the crop on 2 acres in Karumanthurai Hills near Attur in Salem district. Hence, instead of taking chances, many farmers prefer to sell their produce to the middlemen.

The middlemen have huge transport and labour facilities at their disposal. The industry and the farmers are now pinning their hopes on an assurance extended by Agriculture Minister Veerapandi S. Arumugam to the farmers and the industrialists that the issue would be dealt with “sternly.”