Madras HC restrains TANFED’s organic manure tender over inflated pricing

The Madras High Court has put the brakes on fertiliser procurement tenders in Tamil Nadu in response to a public interest litigation (PIL) alleging massive inflated pricing of manure that seriously affects small farmers.

The judicial intervention came after Jothibasu, a 51-year-old farmer, launched a legal battle, alleging that organic fertilisers supplied through the Primary Agricultural Cooperative Credit Societies (PACCS) were ineffective -- essentially repackaged soil -- yet sold at exorbitant rates.

Fertiliser prices plunge

Speaking to The Federal, Jothibasu questioned the pricing: "Before this tender, the price was around Rs 30,000 per tonne in 2023. Now, they are quoting Rs 15,000. How is such a sudden drop possible? We believe this happened only because we approached the court."

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He presented an RTI document as evidence to back his claim.

The petitioner’s lawyer, M Purushothaman, pointed out that the agriculture department mandates the use of five tonnes of organic fertiliser per acre.

At Rs 30,000 per tonne, this would be unaffordable for small and marginal farmers if purchased through the Tamil Nadu Cooperative Marketing Federation Ltd (TANFED).

What are PAACS?

PACCS were originally established to provide agricultural credit to small and marginal farmers.

There are 4,451 PACCS in the state and they procure fertilisers from TANFED. These societies operate under the Tamil Nadu Cooperative Department and provide short-term agricultural loans. The National Bank for Agriculture and Rural Development (NABARD) refinances a portion of the funds.

In the financial year 2023-24, NABARD sanctioned Rs 4,290 crore as a credit limit to the TNSC Bank, the apex cooperative bank of Tamil Nadu.

Cheating farmers

Jothibasu alleges that a portion of these loans, meant for fertilisers, is directed towards purchases from select suppliers at inflated rates. If farmers refuse to buy from TANFED, their loan disbursement may be delayed or reduced.

A farmer from Kallakurichi district, pleading anonymity, confirmed this. "The Scale of Finance (SoF) determines how our loan is split between seeds, fertilisers and other expenses. For example, if Rs 10,000 is allocated for fertilisers in a banana plantation, PACCS forces us to buy fertilisers from TANFED at much higher prices. If we refuse, we still get the loan, but instead of Rs 10,000, we might receive only Rs 7,000 or 8,000," he said

Costly manure

The farmer also accused TANFED of forcing farmers to accept overpriced products (Rs. 25,000–30,000 a tonne) as part of low interest loans from NABARD while local bodies offer identical "City Compost" for Rs. 1,000–3,000 per tonne.

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Jothibasu argued that this violates the Fertiliser Control Order (FCO) of 1985 which mandates fair pricing for such essentials.

The case has stirred tensions between state cooperatives and the central government since Jothibasu’s PIL named the Union ministries of agriculture and chemicals, NABARD and the Fertiliser Association of India alongside Tamil Nadu’s agriculture and cooperation departments.

Collusion against farmers

He claimed that NABARD loans — meant to aid farmers — are exploited to dump substandard manure, with private suppliers allegedly colluding with TANFED for profit.

The case was first heard on December 5, 2024 before a bench comprising Chief Justice KR Shriram and Justice Senthilkumar Ramamoorthy.

Madras HC acts

Taking note of the petitioner’s allegations of inflated pricing, the court directed the Tamil Nadu government and TANFED to submit their responses by January 2, 2025. But TANFED failed to file a counter-affidavit within the deadline.

Jothibasu also filed a separate petition before the same court, challenging the tender process of purchase of bio-stimulants by Tamil Nadu’s agriculture department.

He had sought an injunction to stop these tenders, warning it would perpetuate the scam.

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Tendering frozen

The bench granted the respondents, including TANFED, until April 15 to file counter-affidavits, with the next hearing set for June 12.

The petitioner’s counsel said the court had frozen until then both bio-stimulants and organic manure tender-related actions, potentially disrupting fertiliser distribution ahead of Tamil Nadu’s farming season.

Bio-stimulants refer to substances or microorganisms, typically derived from natural sources, which, when introduced to plants or their root zones, promote their inherent processes. This results in improved nutrient absorption, increased resilience to stress and enhanced quality and yield of crops.