The Farmers’ Unethical ’Partners’

We proudly claim that India lives in its villages. However, even after 67 years of Independence, there is no change in the life of farmers. In fact, their situation seems to be deteriorating, due to a number of factors.
Probably the most chronic and acute problems is the exploitative and unethical practices of the so-called medium and large size trading/agro processing businesses. These businesses talk the marketing language of ‘win-win’ to procure farmers’ produce and then betray the farmers’ trust.

Such agents speak the comforting language of care and empathy for farmers’ condition before the deal and a totally different language afterwards. In effect, this amounts to betrayal of the trust farmers impose in them. Experience reveals that they only look at profiteering and do not care to even keep their word as per the contract, leave alone care for the hardships of the farmers. The story of farmers’ producers companies in Telangana is self-explanatory in this regard.

Access Livelihoods Consulting India Limited (ALC India), a Hyderabad-based organization, works for sustainable and equitable economic development of the marginalized communities. Under the Women Farmers Enterprise Programme, initiated with the funding of Small Farmers’ Agribusiness Consortium (SFAC), Ministry of Agriculture, Govt. of India, ALC India formed Women Famers’ Producers Companies to promote and incubate producer-owned enterprises for collectivization, to raise bargaining power of farmers and to have a greater role in the value chain of their produce.  In 2013-14, under the Minimum Support Price initiative of SFAC, the Women Farmers’ Producer Companies (WFPCs) in Telangana provided direct benefits to 560 farmers. In the process, the nascent producer company did modest business.  In 2014-2015, the MSP rate was lower than the market rate. The WFPC requested ALC India to identify buyers to carry out procurement at the village level to ensure benefits to the farmers and assured supply to the buyer. With these objectives, the ALC India team contacted some reputed companies but the discussions did not yield good terms of exchange.  During this time, Mr. Purushotham Rudraraju of Farmer Pulse Industries Private Limited approached ALC India and expressed an interest to procure red gram of farmers of Kodangal Mandal, at the village level. He informed ALC India that he is on the Board of Directors of the Farmer Pulses Pvt. Ltd.  He was accompanied by Mr. Pradeepa Gouda, Managing Director of FPPL, for the discussions.

The detail of both persons is provided below;

i) Mr. Pradeepa Gouda, Managing Director,
Farmers Pulse Industries Pvt. Ltd. , #231 §,232 and 233, Road No.
14, KIADB Kolhar Industrial Area, Bidar – 585 401, Karnataka
Mobile- 9663408888
Office: 08482-221345,232290
Email:pradeepfppl@gmail.com

ii) Mr. Purushotham Rudraraju, Board of Director, Farmers Pulse Industries Pvt. Ltd. and Vice-President, Source Trace Systems
Plot No. C, Saroj Aprartment, Flat P.H.
SBO Colony, Dharam Karan Road, Ameerpet, Hyderabad – 500 016, TS.
Mobile- 9849437812
Email: purushotham_23@yahoo.com

Both expressed concern for the farmers. During their meeting with the WFPC and ALC Indi, both Mr. Purushotham and Mr. Pradeep offered an assurance that they will purchase the red gram from farmers as per the Tandur Market rate and will pay in 10 days for the red gram procured (agreement attached).  ALC India had checked the credentials of Farmer Pulse Pvt. Ltd. at its level. Reuters Market Light, the communication and marketplace solutions company, informed ALC India that Mr. Purushotham is an authentic person and he is on the board of directors of Farmers Pulse Pvt. Ltd. and hence that there need be no worry about the transaction. ALC India also checked the credentials of the company on India Mart at  indiamart.com/farmers-pulse/aboutus.html. After reviewing these facts, the farmers’ producer company entered into a simple agreement. In the agreement, Farmers Pulse Industries Pvt. Ltd., the buyer, agreed to release the payment for red gram procured in 10 days from the date of procurement.
As per the agreement, in 3 FPCs of Kodangal Mandal, the red gram procurement was started on 18/12/2015. Initially M/s Farmers Pulse Industries Pvt. Ltd (FPPL) released the payment on time but after procuring bulk quantity, Mr. Pradeepa Gouda, Managing Director of FPPL started giving excuses. He offered excuses that  he was waiting for a bank loan but hadn’t received the amount.  At the same time, Mr. Purushotham stopped answering ALC India’s calls. Till date, the two representatives and the company procured 3592.5 Qtl of red gram. When they started procurement, the price was Rs. 5200/-. At present, the market rate is Rs. 7000/-. Still, the buyers have to pay Rs. 19, 57,349/- against the procurement.

The Women Farmers Producer Company is demanding the payment with 16% interest or asking for the amount to be paid for at the present market rate. Now, after the procurement is over, the language of the buyers has changed, to our dismay. Mr. Pradeep and Mr. Puroshotham are behaving rudely. They have told us that whenever the money will be available, the payment will be made. At the beginning of the procurement, Farmers Pulses Pvt. Ltd. has provided Rs. 80, 00,000/- Post Dated Cheque (PDC) as a security to WFPC.  Because of 3 months delay in receiving payment, the Women Farmers Producer Company informed FPPL that they would present the Post Dated Cheques for payment. Mr. Pradeep and Mr. Purushohtam indirectly warned ALC India and the FPC not to use the PDC. They said that if it was done, then the cheques would bounce and then they would take more time to release money or will not pay anything.
As a result of FPPL and Mr. Pradeep and Mr. Purushotham not honouring their commitments, the Women Farmers Producer Company is in real trouble. As a facilitating agency for procurement, WFPC has the responsibility to pay farmers for the amount procured from them. WFPC has already taken a loan to pay the farmers because most farmers carried out their farm work with credit and farmers have important commitments to honour. The Women Farmers Producer Company haven’t received anything in the dealing. On the contrary, they are losing money. The women board of directors are under pressure as the shareholders farmers are asking the directors when FPPL will release all the payments due. Because of the immense pressure to answer the member farmers, the board of directors are threatening to suicide. Still, both Mr. Pradeep and Mr. Puroshotham are unmoved. They have not given any commitment regarding the release of the amount. At present, both Mr. Pradeep and Mr. Purushotham are not responding or picking phone calls from ALC India.

The story thus explain how people like Mr. Pradeep Gouda and Mr. Puroshotham are exploiting farmers for their profiteering, with scant respect for their own word of the law of the country. There seem to be no strong policies and rules to safeguard the interest of farmers. That seems to be the only reason why unscrupulous operators like Mr. Pradeep Gouda and Mr. Puroshotham are taking undue advantage of farmers. If this type of farmers’ exploitation does not stop, farmers’ will be pushed to take extreme steps. Further, while governments try to promote producer companies, such operators damage the efforts to create a truly equitable ecosystem for farmers.

The farmers were cheated at every stage, at the time of purchasing agri input, at the time of harvesting, at the time of selling produce. If this is the experience of farmers, the question remains: who is there to safeguard the interest of farmers?

Dear Sharadji,
    a bounced checque is a non bailable offense, if I remember correctly .
PDC is sure shot way to take head on I believe . I will suggest to consult lawyer regarding PDC and start legal proceedings .

I remember one person giving PDC to my father  for a commitment and later refused . My father took legal advice, field case and that person has to come to my native begging to stop the legal process .

Wish all the brothers and sisters best luck .

Regards,
Prashant

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The cheque must be presented on the correct time or it weakens the case.

Prashant is right, consult a lawyer and present cheques accordingly. PDC won’t be worth the paper it is printed on, if its not presented.

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