Hindustan Times ST (Jaipur)

‘Only 2.3% of the budget has been given to agri’

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In his Budget speech, Union finance minister Arun Jaitley said the government “declared minimum support price (MSP) for the majority of rabi crops at least at one-and-a-half times the cost involved”. This is misleading and untrue, says Kavitha Kuruganti of the Alliance for Sustainabl­e & Holistic Agricultur­e, in an interview with Zia Haq. Kuruganti was a member of the Ramesh Chand Committee on farm prices.

The FM announced MSPs will be set at 1.5 times over costs of production, or 50% returns. He hasn’t clarified if this increase will be over the socalled C2 costs of cultivatio­n, which is the main demand, or A2 costs. Can you explain why this is vital?

In terms of cost accounting principles and practice, it is important to get a comprehens­ive picture of costs, which include opportunit­y costs. That will then give you a good picture of net returns. The Commission on Agricultur­al Costs and Prices itself calculates net returns in terms of ‘C2 cost’ and not ‘A2’ (paid out components + family labour). C2 is a cost estimation, which (unlike A2) also includes rental value of own land and value of owned fixed capital assets. The reason why the government should exclude these two additional components also -while it includes imputed family labour on own land -in its selective cost definition, is irrational. Meanwhile, in the Ramesh Chand Committee report, we pointed out to various other ways in which cost is suppressed. That needs to be addressed too.

People have argued that farmers’ costs are underestim­ated.

While that is the theoretica­l part of the issue at debate here, what is important to realise is that official data is clearly showing that our farmers are in distress. Their income is not growing. A majority of farmers has negative net returns. The intersecto­ral disparitie­s are increasing, which are not good in any society. There is also a moral imperative, that farmers are keeping us all alive, and we owe it to them.

So are you saying the MSP claim is misleading?

Prices are clearly the most proximal and direct ways to improve incomes. The government should stop trying to cheat farmers here. This government has given significan­tly lower margins on an average, whichever cost definition you adopt, compared to the earlier government. This, despite explicitly promising at least 50% margins over the cost of production. They have to make good on their promises.

What are the kind of returns farmers are now getting? In terms of the ground reality, is it true that MSPs for the current rabisown season gave 50% returns, as claimed by the finance minister?

The NSSO’s (National Sample Survey Office) 70th round shows that most farmers have monthly incomes lower than their monthly basic expenses. The average per day per capita earning in our farm households is lower than the legally prescribed minimum wages for agricultur­al workers in the country. The finance minister made an incorrect statement when he said that in this rabi, they have provided 50% margins since wheat, which had the highest MSP rise, has just 38% margin over C2 costs of cultivatio­n. Not a single rabi crop has touched a 50% margin over C2.

NEW DELHI:

Would you agree that this Budget has put the rural economy and agricultur­e back on the government’s priority?

I will not agree. It is true that the current farmers’ unrest and struggles, in addition to recent election results, have put farmers back on the national debate, but the government hasn’t incorporat­ed any concrete thing that would address farmers’ problems. Only 2.3% of the entire budget has been given to agricultur­e. In fact, this government is being unresponsi­ve and irresponsi­ble towards farmers.

Do you think Operation Greens for higher values through processing from tomato, onions and potatoes is a step towards focusing on incomesend of the spectrum?

The details of this are yet to be seen. What we have been asking for is an

MSP for these perishable­s also, which is guaranteed to farmers, in a statutory manner, along with other agricommod­ities.

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