Cotton MSP fraud led to suicide by farmers

Evidences including forged cheques, illegal bank transactions, and statements of victim farmers have revealed an unholy nexus between CCI purchase officers, TS and AP marketing yard committees and marketing department officials and moneylenders-cum- traders-turned politicians.

Investigation has revealed that these men above have formed a “cotton mafia” and are allegedly denying farmers the MSP for cotton and amassed huge wealth. While the market rate is around '4,000 per quintal, farmers are being forced to sell cotton to traders for Rs 1,200 to Rs 1,500.

Recent CBI raids at the residences of cotton purchase officers of CCI unearthed gold biscuits, silver bricks and huge amounts of cash. The bureau has booked cases of disproportionate assets against the accused CCI officials.

In the first case, CBI searched the house of senior cotton purchase officer K. Naga Mangeswara Rao of Warangal. “We found Rs 2 crore worth of assets in searches including several gold biscuits, silver bricks, gold jewellery and cash and properties. His take-home salary is only Rs 27,000. In another case, during searches at the house of J.K. Sharma, the CPO, we found Rs 1.43 crore of assets disproportionate to his known sources of income,” said a CBI source.

When CBI had served notices to 40 farmers who sold cotton in the market yard in Vemulawada, it was found that only six were genuine and the rest falsely created by traders.

CBI has written to state officials for a list of cotton farmers who committed suicide to check whether they were part of the victims’ list in the scam that may run up to 2,000 farmers per yard. In addition to DA cases, the CBI Hyderabad has also booked two other cases under Prevention of Corruption act , cheating and criminal breach of trust against CCI officials, the marketing yard department of TS government and cotton traders.

The first case was booked based on directions of the AP High Court regarding a writ petition filed regarding irregularities from 2004 to 2008. The second case was booked suo motu by the CBI regarding allegations in cotton purchases pertaining to 2012 to 2014. A sources in CCI said, “Apart from our officials and the marketing department, several cotton traders like Sammi Reddy, Malla Reddy and B. Bhaskar are being questioned regarding the case.”

The cases pertain to Jammikunta, Vemulavada, Gangadhara and Karimnagar yards and the scam may have spread across the three states. The CBI Visakhapatnam unit meanwhile registered three cases against CCI officials and the Agricultural Marketing Committees of Guntur, Krishna and Prakasam in Andhra Pradesh for allegedly releasing payments to traders based on forged documents.

R. Jeya Kumar, the then branch manager of Cotton Corporation of India in Guntur; cotton purchasers Rayapati Purnachandra Rao, D. Rajasekhar Reddy, G. Varun Raghuveer, and CCI centre in-charges of Guntur Nandigama and Mylavaram have been named in the cases.

“Cotton is a commercial crop that involves investment. Most of the traders are money lenders cum local politicians. Each of them will have control over at least 400 farmers to whom he lends money at high interest rates. When cotton is rejected at the market yard, the farmer has no option but to stay back and wait for days. The trader then approaches him and the farmer sells it for a lesser price. However, the trader then sells the same rejected cotton to the CCI at higher prices. Meanwhile the cheques are issued in the name of the farmers who pre-sign them or are issued in the name of fake farmers or the traders forge the signatures of the farmers.

Though CCI rules say cheques can’t be issued in a personal name, the CCI was issuing them in the name of the person. Due to this, the traders could encash them,” said a CBI source. TS marketing minister T. Harish Rao said, “We will take the report from CBI and initiate action against erring officials of the TS Marketing. The alleged scam took place prior to the formation of our government. After we came to power, we have given cotton farmers identity cards and have also ensured that payments are made online and we are ensuring that farmers get MSP.”

Telangana Marketing department joint director, Mr Samuel, who oversees 88 market yards in five districts of TS including Warangal, Khammam, Karimnagar and Adilabad said, “The MSP is Rs 4,100. I took over in September and from then there are no irregularities. Farmers who own half an acre or one acre of land will not come to the yard and they sell the produce to traders in the villages.”

A source said, “While interrogating some of the suspected officials, we found that brothers, sons, daughters of employees were working in the same organisation. Interestingly there is a pattern in the recruitment wherein majority of the officials belong to one particular group of the society. There is a need to probe the recruitments.” Sources in the Cotton Corporation of India said some of the temporary jobs were interview based and there was no written test for them.