To be addressed through entities like Nafed and NCCF.
The recent protests by farmers in the vicinity of Delhi underscore a major oversight by India's agricultural economists and policymakers in creating a sustainable and effective framework to ensure fair compensation for farmers.
While scientists succeeded in engendering the Green Revolution and farmers increased “output” leading to food security for the nation, the latter are ensnared in a lowincome trap. This reflects agroeconomics’ inability to deal with the issue of “price”.
The NSS survey 77th round of the Situational Assessment of Agricultural Households (Report No 587) reveals a grim reality. The average monthly income per agricultural household is ₹10,218. A household consists of 4/5 persons, the per capita monthly income therefore is just ₹2,500.
Of this, the net surplus from crop cultivation is 37 per cent and the highest share is wages (40 per cent) — most households earn more by labouring for others (see table). In response, some economists have cited a simplistic “demandsupply” theory and said that even dismantling the Minimum Support Price (MSP) system will favour farmers.
Leaving farmers to the vagaries of “demandsupply” will not be in their interest and not even consumers, especially because a logical outcome of this theory will be free agri imports/exports and the resultant price volatility.
Also, the assumption that farmers in sectors like dairy/poultry/fisheries (where there is no MSP) are flourishing is fallacious. The average monthly income of ₹10,218 represents households engaged in allied sectors too (Reply to Lok Sabha Unstarred Question No 741 dated February 7, 2023).
The irony of dairy farmers receiving just ₹35 for one litre of milk “poured”, when one litre of bottled water itself retails for ₹20, is lost on agrieconomists. There is undervaluation of labour and output in dairy too. The absence of protests does not mean that the problem can be wished away.
SOLUTION AT HAND
But there is a solution with which the Centre is actively engaged — building the cooperative network. What has been missing in our agri ecosystem is a working model of mediated value chains at least in identified essential commodities — grains, pulses and, say, ‘TOP’ or tomato, onion potato —