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Chilli prices in Andhra Pradesh markets rise following MIS implementation threat

While Andhra Pradesh approached the Union government to take up 100 percent of the quantity in an MIS, it only resulted in the standard 25 percent acquisition.

Saicharan Sana

Published Mar 04, 2025 | 11:40 AM ⚊ Updated Mar 04, 2025 | 12:23 PM

Andhra Pradesh initiates Market Intervention Scheme to support Chilli farmers

Andhra Pradesh initiates Market Intervention Scheme to support Chilli farmers

Synopsis: Following the implementation of the Market Intervention Scheme in Andhra Pradesh to protect chilli farmers, the prices have stabilised in the markets. Between 21 February and 3 March, the Bedki and Teja varieties saw a price increase, with an additional ₹1,140 and ₹570 increment. The Andhra Pradesh government, with approval from the Union government, implemented the MIS on 22 February after chilli prices fell below the trigger price of ₹11,781 per quintal.

After the Union government announced the implementation of the Market Intervention Scheme (MIS) in Andhra Pradesh — following the decline in chilli prices — the markets have been witnessing a rise in prices, which has helped farmers break even. For some varieties of chilli, the market prices are above the trigger price.

The MIS scheme came into effect on 22 February, to stabilise chilli prices in the state after they fell below the trigger price of ₹11,781 per quintal.

Meanwhile, the market participants requested that the market intervention be kept in abeyance till the price goes up and stabilises. They fear that implementing the price stabilisation could limit the price at ₹11,781 and prevent it from rising further.

According to AgriWatch, an organisation that monitors market price trends daily, there hasn’t been a major difference in the open market prices.

The Union government had also decided to expand the scope of the loss sharing due to MIS to 75 percent from the earlier 25 percent. The decision was made at a meeting chaired by Union Agriculture Minister Shivraj Singh Chouhan in Delhi on 21 February.

However, as of Monday, 3 March, the loss incurred due to MIS is being shared equally — 50 percent each — by the state and Union governments, sources said.

Related: Centre to expand scope of MIS to 75 percent

Difference in prices

Seven varieties of chillies are available in the markets of Andhra Pradesh; Fatki (No. 5), Bedki, Sannam, Teja, LCC 334, NCDEX, and N 273.

Between 21 February and 3 March, the Bedki and Teja varieties were the only ones which saw a price increase, with an additional ₹1,140 and ₹570 increment.

Meanwhile, the Sannam and LCA 334 varieties each saw a decrease in their minimum price by ₹1,140. The prices of Fatki, N 273, and NCDEX varieties, however, saw no change.

The Andhra Pradesh government, with approval from the Union government, implemented the MIS on 22 February after chilli prices fell below the trigger price of ₹11,781 per quintal. The state government had said they would implement MIS if prices fell below the trigger price.

Under this scheme, the Union government is procuring 25 percent of the total produce, amounting to approximately 2.5 Lakh Metric Tonnes (LMT) of the total 10 LMT produced.

Since February, Chief Minister Chandrababu Naidu had been actively pushing for greater intervention, urging the Union government to increase procurement beyond the current limit.

With chilli farmers facing declining prices, rising production costs, and export challenges, Naidu has consistently sought financial relief measures to protect their livelihoods. The government intervention, wherein the state and Union governments bear the loss, has helped stabilise the price.

While the state government has to arrange the capital to make the payment upfront, the Union government will reimburse its share.  According to the Union Agriculture Ministry’s directions, the MIS is expected to function until 22 March, a period of one month.

Also Read: Andhra Pradesh considers establishing boards to protect mango and chilli farmers

Poor market conditions distressing farmers

Andhra Pradesh has witnessed a major drop in prices for its chillies across the last three years. While it was sold for ₹20,500 during the 2022-23 financial year and ₹20,000 during 2023-24, the current prices are hovering between ₹13,600 and ₹11,400.

The state is home to 1.8 Lakh chilli farmers, a majority of whom are located in the Palnadu and Kurnool regions. The chillies from the state are exported to countries like China, Sri Lanka, Bangladesh, Thailand, and Indonesia.

However, due to the increase in production across those countries, except China, the volume of exports has taken a dip. Additionally, storage units at the Krishnapatnam port have filled up, causing farmers to opt for the Chennai port, increasing transport costs.

The prevalence of Black Mould Disease and increasing production cost of ₹3-3.5 lakh per acre has also distressed chilli farmers. Andhra Pradesh government had also approached the Union government to procure 100 percent of the quantity in an MIS.

(Edited by Muhammed Fazil.)

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