The bone of contention is the `restriction' which makes it statutory for the traders/millers to get a permit 48 hours in advance before the transhipment of the commodity.

While SOMA threatened to close their mills if the government refused to lift the restriction, the state industries minister Suresh Mehta, who headed the seven-member sub-committee, refused to budge under pressure.

The talks between SOMA and the cabinet sub-committee, lasting over two hours at Gandhinagar on Tuesday, remained inconclusive as both the sides stuck to their grounds. Strangely, the State cabinet, which religiously held its weekly meeting every Wednesday, cancelled it at the eleventh hour as `there is no agenda'.

The Saurashtra region of Gujarat, comprising six districts, produced about aquarter of the country's total groundnut. SOMA insisted that Gujarat was the only state which imposed such a restriction and it only bred corruption. It claimed that 40 to 50 per cent of the groundnut or oil was illegally sent out of the state, mostly to Mumbai. And, since the groundnut oil produced in the state is not allowed to be sent out, a large stock of groundnut remains unsold, resulting in farmers getting less prices.

SOMA claimed that the farmers were now getting far less prices than Rs 250 per 20-kg sack in November 1996 and Rs 260 around the same time in 1997.

Contesting the SOMA's claim, state's civil supplies minister Jaspal Singh, who is also a member of the cabinet sub-committee, claimed the prices ruled between Rs 300 and Rs 310 per sack. He said that the restriction was just a regulatory measure to check unauthorised stocking and movement of the commodity. He struck a note of warning that once the restriction was lifted the groundnut oil prices are sure to cross even Rs 1,200-mark for a15 kg tin.

On the other hand, according to Bharatiya Kisan Sangh, a farmers' body, nearly one lakh sacks (20 kg each), arriving in various markets yards of the region, fetched at least Rs 260 to Rs 280 per sack -- which is certainly higher than the previous years.