In its 2014 poll manifesto, BJP had promised to guarantee farmers a price equal to 1.5 times the cost of production. However, finance minister, Arun Jaitely made the announcement in the budget speech for 2018-19. The minimum support prices [MSPs] determined on the basis of this formula will be applicable to crop production starting ensuing kharif season [April-September, 2018]. Later, replying to the debate in the parliament, Jaitely clarified that the production cost would be taken as ‘A2+FL’. A2 costs basically cover all paid-out expenses, both in cash and in kind, incurred by farmers on seeds, fertilizers, chemicals, hired labor, fuel, irrigation etc whereas FL is the imputed value of unpaid family labor. Under the extant dispensation, the Commission for...
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Category: Pricing Policies & Subsidies
Are credit institutions helping poor farmers?
Even as elections in India have turned into a day-in-day-out affair, two issues that political parties invariably focus on are (i) alleviating farmers distress and (ii) promoting inclusive development taking all sections of farming community on board. Yet, what is happening on the ground is the reverse of what is proclaimed. The more parties promise addressing farmers’ plight, the more the latter end up getting further impoverished. The more they harp on ameliorating the conditions of farmers from backward classes, the more they get entrenched in backwardness. A vivid manifestation of this dichotomy between what is preached and what is in practice is available from a research paper by Chirala Shankar Rao [an assistant professor at the Council for Social...
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Food – why consumers pay more but farmers get less?
In the just concluded Gujarat assembly elections, BJP got yet another chance to form the government for the sixth time in a row. But, unlike in the past, when it won by a comfortable margin, this time it barely scraped through getting 99 seats in the house strength of 182. A major reason was its dismal performance in rural areas. In particular, the farmers voted against the party expressing resentment over anti-farmer policies followed by the state government resulting in meager income even leading to suicide in some cases. A vivid manifestation of this is available from the Saurashtra-Kutch region where BJP got only 23 out of a total of 54 seats. The farmers suffered due to increase in cost...
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Reining in bogus claims
Unshackle farmers from subsidy and control raj
Dr Ramesh Chand, Member [Agriculture], NITI [National Institute for Transforming India] Aayog – the new incarnation of erstwhile Planning Commission – has reiterated that prime minister’s commitment to double farmers’ income by 2022 is doable. The average income of a farmers’ family in India is about Rs 6400 per month, but the variations across states are huge. For instance, in Punjab the average income is a high of Rs 18,000 per month, in Bihar, Odisha and Jharkhand, it is less than Rs 5000 per month. This may point towards the possibility of increasing farmers’ income manifold [even more than 100%]. If, farmers of Punjab can do it, there is no reason why those in other states cannot come up. But,...
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Food subsidy – reining in bogus claims alone is not reform
According to the medium-term expenditure framework [MTEF] statement recently released by the finance ministry, the food subsidy bill of the union government is projected to increase from Rs 145,000 crore during the current year to Rs 175,000 crores during 2018-19 and further to Rs 200,000 crores during 2019-20. This comes as a big disappointment to all those who have been anxiously looking forward to Modi – government deliver on its reforms agenda especially in regard to food subsidy which is a big resource guzzler – next only to interest payments and pension. Considering that such an assessment [steep increase] is being made less than two years before its term comes to an end implies that no reform is in the...
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Farmers not yet out of middleman’s clutch
The Indian agriculture scenario is known for continued impoverishment of the farmers arising due to vagaries of nature on the one hand and poor realization from selling their produce on the other. Ironically, low price paid to the farmers does not translate in to low price for consumers either; instead, the latter pay high price. If, both farmers and consumers are losing then, without doubt, it is the middleman who is making gain. The middleman/trader exploits every conceivable situation, be it surplus production or shortage to his advantage. Recent developments in Madhya Pradesh [MP] in regard to supply and prices of onion and tomato bear ample testimony to this harsh reality. Early this year [January-February], farmers in the state were...
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Farmers need empowerment, not write-offs
When, prime minister, Modi during his high octane campaign in the run up to assembly elections in Uttar Pradesh [UP] promised loan waiver for farmers [albeit small and marginal/poor] in the state, he might not even have contemplated that state-after-states would be confronted with similar demands. In retrospect, this is precisely what has dawned on the political establishments particularly in states ruled by BJP viz. Maharashtra, Madhya Pradesh, Haryana etc. The irony is that whereas, BJP had voluntarily made a commitment in a poll bound state, the demand for loan waiver has surged even in states where it was not a poll promise. Those states have been coerced in to granting waivers using the modus operandi of protests and demonstrations....
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INDIA’S PULSE DILEMMA
While the Government has done its bit to boost the output of pulses, it has done little to check the nexus between politicians and grain traders For several decades, production of pulses in India has fallen substantially short in terms of consumption. This persistent deficit has led to intermittent bouts of spike in prices as imports (needed to plug it) have often come after lag and have failed to reach consumption points in time — courtesy: Handling, storage and transportation bottlenecks. Pulses are an important source of nutrition, especially for vegetarians. It is also a critical component for the diet of the poor. This nutrition-poor link, which is juxtaposed with hike in price, has also been exploited by opposition parties...
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Unholy politician-trader nexus – behind farmers plight
For several decades, production of pulses in India has fallen substantially short of consumption. The persistent deficit has led to intermittent bouts of spike in their prices as imports [needed to plug it] have often come after lag and failed to reach consumption points in time – courtesy, handling, storage and transportation bottlenecks. The import of pulses in large quantity also resulted in huge outgo of foreign exchange exacerbating balance of payment problems especially during times when the macro-economic fundamentals were weak [for instance, during early 90s and 2012-13/2013-14]. This also affected the ability of the government to remain glued to the path of fiscal consolidation. Pulses are an important source of nutrition especially for vegetarians and a critical component...
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