Devinder Sharma is a distinguished food and trade policy analyst. An award-winning Indian journalist, writer, thinker, and researcher well-known and respected for his views on food and trade policy. Trained as an agricultural scientist, Sharma has been with the Indian Express
After two years of back-to-back drought, in 2014-15 and 2015-16, it was a bountiful monsoon showering its blessings in Kharif2016 that brought respite to the drought-affected regions reeling under the scorching sun for two years at a stretch. But no sooner had the monsoon rains withdrawn and it was time to sow the winter Rabi crops that the unnatural hazard of Notebandi stuck.
It came as a heavy blow. In many ways the blow was so severe for farming communities across the country that even after withstanding the fury of the two successive years of drought, the pain left behind by this shock therapy will take at least a year or two to ease off.
The bitter harvest has resulted in farm income falling by as much as 50 to 70 per cent within a short span, and the disastrous implications it leaves behind on the livelihood security of millions of small and marginal farmers will be too difficult to be ascertained.
A good monsoon coupled with a higher Minimum Support Price (MSP) the government announced for pulses resulted in an area expansion especially under tur and moong.
Despite a high procurement price of Rs 5,050 per quintal for tur (including a bonus of Rs 425), prices crashed. At one stage, wholesale prices were ruling between Rs 3,666 per quintal in Andhra Pradesh and Rs 4,570 per quintal in Karnataka. The story of tur is the same as that of moong. Against the MSP of Rs 5,225 per quintal, an increase over Rs 4,850 per quintal that was given a year earlier in 2015, reports showed the prices crashed.
Now, let’s look at mustard. At a time when the biotech industry is lobbying hard to introduce a genetically-modified mustard variety, saying that there is a dire need to increase production of oilseeds so as to reduce the import burden, farmers have produced a record 33.6 million tonnes of mustard and that too, without the use of GM (genetically modified) seeds.
According to reports, against a MSP of Rs 3,700 per quintals, mustard is selling at anything between Rs 2,800 and Rs 3,400 per quintal. There are at least 293 markets in the country where mustard is selling at a distress price.
The problem is in managing the surplus rather than increasing production.
Not only these three crops, the prices also crashed for tomato in Chhattisgarh, Andhra Pradesh/Telengana, Jharkhand, Madhya Pradesh and Punjab, forcing irate farmers to dump tomatoes on to the roads at a number of places.
Potato prices too slumped, forcing farmers to give it for free. In Andhra Pradesh, even prices of red chilli, a cash crop, crashed. Vegetable prices haven’t looked up since the days of demonetisation. The list is endless.
The depressing farm scenario is clearly visible at a time when the government has promised to double farm income in the next five years. In a reply in Parliament, the Minister of State for Agriculture and Farmers Welfare said that an expert committee has been constituted, which will consider and recommend various strategies to be adopted, as well as recommend an institutional mechanism to review and monitor implementation to realise the goal.
The committee has met five times and has come out with the same flawed prescription that has been the bane of Indian agriculture.
Accordingly, farm viability is possible when the cost of cultivation is reduced, yields per hectare are increased and farmers get remunerative prices for their produce.
To meet these objectives, the minister said the government has been implementing various schemes – soil health cards, neem coated urea, Paramparagat Krishi Vikas Yojna (PKVY), Pradhan Mantri Krishi Sinchai Yojna (PMKSY), National Agricultural Markets (eNAM) and Pradhan Mantri Fasal Bima Yojna (PMFBY).
The mere fact that the experts have not been able to figure out any sensible roadmap to increase farm incomes clearly shows the drought that exists at policy planning.
All these schemes are nothing but part of the public sector investments that are needed to support sustainable farming practices. This is certainly welcome. More so, at a time when the annual outlay for MNREGA is much higher than that for agriculture.
But it is completely wrong to package it as the mechanism to double farmers’ income. To put it in perspective, constructing a flyover in a city is an infrastructure investment that is required, but it cannot be seen as a component of the 7th Pay Commission.
First of all, let’s take a look at the existing levels of real farm incomes. As per the Economic Survey 2016, the average monthly income of a farm family in 17 states is Rs 20,000 a year. In other words, the average monthly income in agriculture in these 17 states is less than Rs 1,700.
If this is true, I don’t know how these families must be surviving year after year.
At the national level, the NSSO works out the monthly average income that a farmer derives from farming operations to be just Rs 3,000 per family. Compare this with the basic salary of a chaprasi at Rs 18,000 per month. It becomes obvious how agriculture is being neglected.
Even the non-farm workers do much better. Last September, the government raised their minimum wages by 42 per cent, from the existing Rs 246 a day to Rs 351 per day, bringing it to a minimum of Rs 9,100 for a month. No wonder, the first-ever socio-economic survey for rural areas, published in 2015, says that for 70 per cent of India’s 125-crore population, which lives in rural areas, poverty is a way of life.
As I said earlier, more of the same is not the answer. I find that what is now being prescribed as the way forward to double farm incomes is almost the same that I have been hearing over the past 20 years, if not more. Reducing cost of production, for instance, is not in farmers hand since the external inputs are priced by markets and the average increase in the prices of inputs like machines, fertiliser and pesticides has been to the tune of 600 to 1,500 per cent in past two decades, on a conservative estimate.
The output prices of farm produce have certainly not kept pace, as a result of which farm indebtedness has been multiplying. In Punjab, for instance, studies show 98 per cent rural households in debt, with 94 per cent households spending more than the income they derive. The objective behind what the NITI Aayog/Nabard and agricultural universities proposes as the roadmap for increasing farmer’s incomes hinges on the dire need to raise crop productivity. It is believed that the higher the crop productivity, higher will be the farm incomes. To my understanding, this is a flawed hypothesis that the universities have promoted all these years. Let me explain.
Take the case of Punjab, the country’s food bowl. Punjab has 98 per cent assured irrigation, the highest anywhere in the world. Even the United States is able to provide only 12 per cent assured irrigation for cereal farmers.
Now, let’s look at the crop productivity.
At 4,500 Kg/hectare, Punjab’s productivity of wheat is the highest in the world. In the case of paddy, Punjab’s productivity is 6,000 kg/hectare, which matches the highest productivity of 6,700 kg/hectare in recorded in China.
With such higher crop productivity of wheat and rice, and with 98 per cent assured irrigation, I see no reason why Punjab farmers should not be the most prosperous in the world. But unfortunately, Punjab has turned into a hotspot of farmer suicides.
There is hardly a day when I don’t see reports of farmer suicides happening in Punjab. Does it not mean, therefore, that what is being proposed by the policy makers as the roadmap for doubling farmers’ incomes is terribly flawed?
This is perhaps the reason why those farmers who continue to commit suicide do not see much hope in the promise of doubling farmers’ income in the next five years. They simply couldn’t wait for the next year!
The only semblance of hope has come from the Uttar Pradesh Chief Minister Yogi Adityanath. Writing-off Rs 36,359-croroe of outstanding loans of 85-lakh small and marginal farmers, including striking Rs 7,000-crore of farm NPAs, and setting up 5,000 purchase centres for wheat procurement are steps in the right direction.
Last year, hardly 8-lakhtonnes of wheat was procured in UP, which is just 3 per cent of the total production. This year, the target has been raised to 80-lakh tonnes, a jump by 10 times. Thus, the bulk of the 97 per cent of wheat growers were not able to get the MSP, and perhaps this was the reason why farmers from adjoining areas routinely carried the wheat harvest to be sold in the nearby mandis of Haryana.
At the same time, the decision to purchase 1-lakh tonnes of potato at Rs 487/quintal is welcome. This is a realistic option to help farmers at the time of a glut. This policy of extending procurement at the time of a price crash is actually what the NITI Aayog has to learn from Yogi Adityanath. I wish the same policy is expanded to include crops like pulses, tomato, chilli and mustard. etc. facing distress.
All the states need to be directed to follow this strategy. Expanding the prevailing network of APMC mandis all across the country, from the existing 7,000 to the estimated 42,000, is the dire need. Public sector investment on setting up APMC mandis, and subsequently providing village link roads to the mandis, should receive top priority. This is more important than constructing 8-lane highways not even knowing whether these are required or not.
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