Far from subsidy allocations coming down, as the Economic Survey had recommended, there is significant increase not reflected in govt balance sheets Economic Survey 2020: The food subsidy figure mentioned in the budget are reimbursements to FCI, and other state agencies engaged in similar operations on behalf of the Union. —————————————————————————————————– Economic Survey 2020: In the 2020 Economic Survey, released on January 31, the chief economic advisor (CEA), K Subramanian had recommended some reduction in food subsidy by limiting the scheme’s coverage, and increasing the issue price of foodgrains. One was, therefore, looking forward to announcement of a major reform in this regard in the Union Budget for FY21 presented by finance minister Nirmala Sitharaman the following day. While the speech...
More
Comments are closed
Category: Agriculture & Foodgrain
Drastic cut in food subsidy – real or fudged
In the Economic Survey [2019-20] released on January 31, 2020, the chief economic advisor [CEA], K Subramanian had recommended some reduction in food subsidy by limiting coverage of the scheme as also by increasing issue price of foodgrains. In this backdrop, one was looking forward to announcement of a major reform in this important area in the Union Budget for 2020-21 to presented by the Finance Minister [FM], Nirmala Sitharaman on the following day. Even as the speech was devoid of any such announcement, however looking at the numbers, one comes across the revised estimate [RE] of food subsidy for 2019-20 at Rs 109,000 crore – a steep decline of 40% from the budget estimate [BE] of Rs 184,000 crore...
More
Comments are closed
Loot in farmers’ name continues unabated
A high level committee on ‘road-map for agriculture and rural sector in the next five years’ has recommended corrective steps to reduce agricultural subsidies and use the money thus saved [it has estimated the savings to be Rs 10,000 – 15,000 crore annually] for investment in rural areas for creating livelihood opportunities by empowering Farmers- Producer Organizations [FPOs], Joint Liability Groups [JLGs] and making small and marginal farmers diversified producers. It has also suggested providing FPOs and other forms of collectives a proper eco-system to grow and diversify operations. The government spends close Rs 450,000 crore on agricultural and food subsidy every year. This includes food: Rs 175,000 crore; fertilizers: Rs 100,000 crore; PM-KISAN: Rs 90,000 crore; power [centre plus...
More
Comments are closed
Food subsidy – who are the beneficiaries
The Government is considering downward revision of ‘reserve price’ of rice from Rs 2,785 per quintal to Rs 2,250 per quintal for selling food under the Open Market Sale Scheme [OMSS] during the current financial year [FY] 2019-20. However, there is no plan for any revision in reserve price of wheat, and the current reserve price of wheat Rs 2,080 per quintal will continue to prevail throughout the remaining period of 2019-20. The scheme is run by the ministry of food civil supplies and consumer affairs to dispose off wheat and rice stored in buffer stock [also known as the ‘central pool’] kept by the Food Corporation of India [FCI] – the agency which is 100% owned by the Government...
More
Comments are closed
Agri-credit not going where it should
Successive governments have show-cased loans from scheduled commercial banks [SCBs], state cooperative banks [SCBs], district cooperative banks [DCBs] and regional rural banks [RRBs] [also referred to as institutional loans] to farmers at concessional rate of interest as demonstration of their commitment to help them increase their income from agricultural and allied operations. Modi – government has often proclaimed this as one of the potent instrument of doubling farmers’ income by 2022. The total amount of agricultural credit increased from about Rs 915,000 crore during 2015-16 to Rs 1065,000 crore during 2016-17 and further to Rs 1170,000 crore during 2017-18. As per directives of the Reserve Bank of India [RBI], farmers get short-term crop loans up to Rs 300,000 at subsidized...
More
No comments
Reforming agri-markets – a hoax
An inter-ministerial panel for rural and agriculture sectors has identified trade barriers within the mandi system [mandi is state-run market yards known as agricultural produce marketing committees (APMCs)] that continue to hurt traders dealing in food commodities, which, in turn, affects farmers. The panel cites this as a major factor responsible for lower farm income. Arguing that farmers need freer access to markets for selling their produce , it has recommended removal of the inter-state mandi tax [levy collected from traders when agri-products are sold from one state to another] and replacing it by a single pan-India mandi tax. It has also mooted a pan-India licence valid across all mandis [a total of 585 in 16 states and two union territories]. The panel...
More
No comments
How sugar turns bitter for the consumer…
The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal of the food ministry for creation of four million tons of sugar buffer stock between August 1, 2019 and July 31, 2020. The government will spend Rs 1,674 crore towards the cost of carrying the stock. The amount will be directly credited into farmers’ accounts on behalf of sugar mills against their cane price dues. It has also decided to keep the Fair and Remunerative Price (FRP) of sugarcane unchanged at Rs 275 per quintal. FRP is the minimum price which mills have to pay farmers to buy sugarcane – the raw material for making sugar. The price is applicable to sugarcane purchases made during the sugar marketing year...
More
No comments
How sugar turns bitter for the consumer?
The Cabinet Committee on Economic Affairs [CCEA] has approved a proposal of food ministry for creation of 4 million tons of sugar buffer stock during August 1, 2019, to July 31, 2020. The government will spend Rs 1,674 crore towards the cost of carrying the stock. The amount would be directly credited into farmers’ account on behalf of sugar mills against their cane price dues. It has also decided to keep Fair and Remunerative Price [FRP] of sugarcane unchanged at Rs 275 per quintal. FRP is the minimum price which mills have to pay to farmers for purchasing sugarcane – raw material used in making of sugar. The price is applicable to the sugarcane purchase made during October 1, 2019...
More
No comments
Are farmers happy under Modi?
In the follow up to BJP’s defeat in the three major states in central India viz. Madhya Pradesh, Rajasthan and Chhattisgarh last year, there was a widespread perception that a major factor behind this was resentment among farmers [besides the unemployed youth] with the alleged anti-farmer policies of incumbent governments in these states as also those pursued by the union government. Under Modi – dispensation, the prices of farm products had increased at a slower pace than those of the non-farm products or the ‘terms of trade’ moved against agriculture [a jargon used by economists to describe the phenomenon]. As a consequence, farmers’ income grew slower than non-farm income which – analysts argued – prompted them to vote against BJP....
More
No comments
Modi 2.0 – will farmers get a fair deal?
If, despite strong resentment among farmers – an important constituency that decides a party’s prospects in elections – Modi got a resounding mandate to rule for another term, it showed their faith in the ability of this prime minister to deliver on his promises – most important being doubling their income. Of course, one can’t rule out the role of PM – KISAN [announced in the interim budget for 2019-20, under it, the centre gives cash support of Rs 6000/- to all small and marginal farmers every year] in bolstering its prospects. But, this is not an amount big enough to bring about a lasting transformation in their living. In order to achieve that, the most crucial requirement is assurance...
More
No comments