Civil Lines
Why farmers are sceptical even after a bumper kharif crop
THE CURRENT kharif season has been exceptional. Over 8 million more hectares are under cultivation compared to last year. There are now more people in the farms; most of them had once quit agriculture and migrated to towns and cities but are now back in villages due to the COVID-19 lockdown. There has also been a significant increase in the acreage of almost all crops; the area under rice, which sustains the maximum number of farmers in the country, is largest in the past five years.
To add to the cheer, the latest report by the State Bank of India (SBI) says the agriculture sector has been immune to the impacts of the pandemic. Rather, this is the only major economic sector that would witness a growth of 3 per cent this fiscal year; the rest are going to shrink. Earlier on June 2, the Union government increased the minimum support price (MSP) of 14 kharif crops to provide relief to farmers.
Hopes float in the corridors of the finance ministry. Many say this would help revive the economy, if not this financial year, then definitely in the next one. They say it because they believe that an increase in agricultural yield will lead to more income, which, in turn, would lead to more consumption among rural Indians and eventually add to the sluggish national economy.
But farmers don’t appear jubilant. In recent times, they have not seen a natural correlation between the yield from their farms and the income from it. Rather, the more they produce, the less they earn. This is despite the consistent increase in demand for food in the country. Small wonder, immediately after the declaration of MSP, farmers took to the streets, demanding a higher assured price and citing huge losses even with an enhanced support price. According to a report by the Organisation of Economic Cooperation Development and the Indian Council of
Agricultural Research, Indian farmers have lost 45 lakh crore due to “non-proper” pricing of the product between 2000 and 2017. Even MSP, which the government pursues as the primary support system to ensure fair price, covers just 6-10 per cent of farmers.
This is also a concern for the political leadership as the promise to double farmers’ income by 2022-23 is hardly 30 months away. Ideally this year should have been that springboard to catch up with the target. By 2022-23, to achieve this target, a farmer’s annual income has to be at least 192,694 from 96,703 in 2015-16. This needs a 10.4 per cent annual income growth till the target year, according to the government’s own estimate. For this, the income ratio of a farmer has to fundamentally change: the current ratio of 60:40 from farm and non-farm income has to be turned into 70:30. But this involves a farmer increasing his/her investment on farming by 12.5 per cent annually. This is possible if he/she earns enough to invest more.
The government committee that recommended ways to double farmers’ income also said that the biggest challenge is to monetise farmers’ produce, meaning to ensure more economic return. This has not been possible. Rather in the past five-six years, farmers are increasingly facing a glut in the market for their produce.
A bumper harvest is expected again in the winter. But under the prevailing circumstances, no one can say for sure if the government will ensure a fair price for it. The food stock in its granaries are already too high, thus curtailing its capacity to buy more at MSP. For the farmers, it means another round of distress selling or even not being able to sell their harvest. This will lead to a loss in income and add to their debt burden. It is a disturbing climax to a seemingly milestone year.
Everybody is rejoicing at the expected bumper harvest this kharif, except those who have made it possible