Farm sector faces problem of plenty
: Indian farmers are currently faced with a problem of plenty. A bumper crop has led to procurement prices plunging, pushing them deeper into the depths of despair.
The crisis has been compounded by inept state governments. Onion growers in Madhya Pradesh have been on the streets for days demanding better prices for their produce, but the administration failed to respond in time.
It finally woke up after protests turned violent this Tuesday, leaving at least five farmers dead. Ironically, the bumper production which ought to have been a boon is proving to be a bane.
The agricultural ministry estimates that 273 million tonnes of vegetables will be produced this year, but it is unlikely that either the farmers or the consumers will benefit. Only middlemen stand to gain since the Agriculture Produce Marketing Committee laws bar farmers from selling their produce directly in local markets. They can sell only through commission agents.
The Reserve Bank of India has already sounded an ominous warning, stating that the crisis could spread further with the market price of pulses hovering well below the minimum support price (MSP).
Further, the horticulture sector is not even covered by the MSP system, leaving a vast majority of farmers vulnerable. The Centre’s price mechanism covers only 14 of the 51 major crops. It includes staple food items such as wheat, rice and cereals but not vegetables.
Vegetables are perishable and growing them entails a fair degree of risk. But recent trends show more farmers growing vegetables, setting off a vicious cycle of glut followed by falling prices. Last year, farmers in Madhya Pradesh, Maharashtra, Andhra Pradesh, Uttar Pradesh and Punjab dumped their winter crops such as potato and tomato on the road. This year, farmers in Rajasthan and Maharashtra are facing a similar desperate situation.
Farm sector still employs 60% of India’s population even though contribution of agriculture to gross domestic product (GDP) has fallen from 18% in 2013-14 to less than 14% in 2016-17.
The National Institution for Transforming India (Niti) Aayog estimates a further fall to 10-12% by 2025, meaning that the farm sector will expand at a much slower rate than the overall economy.
So, there is understandably growing clamour for loan wavers for farmers. The calls have grown louder especially in BJP-ruled states since Uttar Pradesh’s new chief minister Yogi Adityanath announced such a measure.
But data suggests that loan waivers are at best a temporary balm and cannot bail out farmers in the long term. India has a capacity to store just 35% of its total produce and 40% of agriproduce worth an estimated 96,000 crore rupees is wasted every year.
What can make the difference though are better storage facilities and steps to do away with middlemen.
Hard labour must be rewarded and the farmers certainly deserve better price for their produce. They are the country’s backbone and we cannot continue to fail them.
THERE IS A GROWING CLAMOUR FOR LOAN WAIVERS FOR FARMERS BUT ACCORDING TO DATA, IT AT BEST WOULD BE A TEMPORARY BALM