Civil Lines
A good monsoon is no longer good news for farmers
WHEN THE National Statistical Office released the advance estimate of gross domestic product (GDP) growth for the fiscal year of 2019-20, the over optimism for farmers—with an above normal monsoon—just fizzled out. India would have 5 per cent GDP growth in the current financial year, the lowest in 11 years. In 2018-19, GDP growth was 6.8 per cent.
Every sector of the economy has slowed down, but what worries the most is the continuous decline in the agriculture sector that employs around 42 per cent of Indians. This will be the second consecutive year the farm sector has not registered significant growth. In 2019-20, it is expected to grow at 2.8 per cent; in the last financial year, it was 2.9 per cent. It is stagnating, one can argue.
In 2019-20, farmers suffered huge losses in terms of trade and earning. In absolute terms, GDP from agriculture in the third quarter was
R3,651.61 billion. In the second quarter, it was
R4,335.47 billion. It means between two quarters or six months, agriculture GDP dipped by R683.86 billion. This is the kind of economic loss for farmers who also account for the significant percentage of India’s poor.
Worse, this comes at a time when farmers have accumulated huge debt. This is mostly due to straight loss in earning because of crop damages and less remunerative price for produce. In the last six years, farmers have endured four below normal monsoons and widespread extreme rainfall events. There is a perception that agriculture production has been increasing; almost every year it has been breaking previous record.
But the production growth rate has been dipping. During 2009-14, foodgrain production grew at annual average of 5 per cent. In the next five years, this reduced to annual growth of 3 per cent. In 2011-12 and 2017-18, there was a 40 per cent of drop in farm workforce.
The advance estimate for the economy has another bad news for farmers, who have been doubling up as migrant daily-wage labourers to sustain their basic minimum lives. One of their biggest alternative sectors of income is the construction in urban areas and of public infrastructure. But growth in the construction sector in 2019-20 grew by just 3.2 per cent compared to 8.7 per cent in the last fiscal.
There are already talks of a government stimulus for the private sector to boost the economy. In the last one year many corporatefriendly tax incentives have been declared. Besides the cash support of R6,000 farmer in three instalments, there is no other scheme or plan to boost the agriculture sector. Just as the private sector has got doles from the government to boost demand, farming communities who are also consumers, need a booster or a new deal to revive their economy. Nitin Gadkari, the Union minister for micro, small and medium enterprises, recently announced a grand plan to revive the rural economy. Gadkari said that his government aims to increase the turnover of the rural economy from current R1 lakh crore annum to R5 lakh crore through incentivising local produce and processing.
But Gadkari has failed to provide details on how this leap in rural economy would be achieved. The government has committed to double farmers’ income by 2022, which has been decreasing in recent years. Farmers are hoping that this doesn’t become one of the government’s many well-known grand promises without a vision to effectively achieve them. per
Despite a good monsoon, farmers are staring at another season of loss. They have accumulated huge debts due to crop damage and less remunerative price for produce