Nitu Kumari Indiaepost
Dr Harvinder Kaur, Assistant Professor, SD College Ambala said that the farmers should be encouraged to do crop diversification and produce commercial crops. 80 crore people are given food security for months. If government purchases all food grain production on MSP would cost 17 lakh crore which is half the amount of the union budget. Someone is playing with data. Food production is not a waste which will be thrown or dumped.
She further said that the government would compensate the farmer only the difference between the market price and MSP, not the whole MSP. Wrong interpretation of the data as according to the whole MSP of the crop creates confusion among common men. Moreover, the farmer is producing to feed the population of the nation. The question arises that if you have enough to eat then why Global Hunger Index is going down and even ranked below Bangladesh and Pakistan. Indian people know hunger well. A food grain surplus nation cannot rank as low as India in the Global Hunger index. The common myth that we are the huge producers of food grains and export a big amount of food grains may be because we are exporting more and consuming less. The per-capita consumption of grains started declining in 1990 and this trend continued in later two decades and a recovery in 2011 -2020 unfortunately this decline was not taken seriously as academicians interpret it according to the Lorenge curve that with increasing income a consumer diversifies his consumption and spends a lesser amount on the consumption of food grains and more on fruits, nuts and animal products. But in the case of India, this doesn’t happen as proven by GHI and malnutrition among children.
If demand disappeared or declined for food grains, where did the grain go ?. For the last ten years, India has emerged as a big cereal exporter and we are not a food surplus state but consume fewer food grains. There is no authentic surplus food grain in the country. Any surplus visible in the forms of large exports and overflowing FCI stocks can be attributed to the fact that the average Indian was not able to maintain her already low level of grain consumption over the last thirty years. All myths regarding ‘food surpluses’ are really based on the dystopia of the endless pangs of hunger, under-nutrition and the consequences that the average Indian and her children have borne over the last thirty years. Needless to say, this ‘average Indian’ is located far away from the glittering lives of the metropolitan cities and invisible from the world of policy-makers. 196 million people are undernourished and malnutrition is the top cause of death and disability. It is clear that food security remains a serious challenge. India now ranks 97th out of 107th countries in terms of hunger and continues to be in the ‘severe’ hunger category according to the GHI of 2021. These situations clearly prove that food is not accessible in India. South Asia has the highest child wasting rate of any region, and India is the worst performer. At 17.3%, India’s child wasting rate is only slightly better than it was last year, at 20.8%.
Kaur further said that sometimes in the present scenario, I feel that the government is more worried about the marketing of agricultural output instead of production. The focus should be on the production and diversification of crops. Farmer faces two types of risks, one is marketing and the second is adverse weather. To cover the risk of marketing MSP should have a legal provision and for unfavourable weather conditions, the insurance of crops should be done by the government. Farmers should be encouraged to do crop diversification and produce commercial crops. For diversification and commercialization, more crops should come under MSP. To increase the income of this sector Argo processing centres should be established at the village level and Storage godowns at the panchayat level and the farmers should be made stakeholders in these processing units. Agriculture should be promoted as a profession instead of an occupation and farming should be made entrepreneurship. In China, a 1% increase in agriculture growth reduces 0.7% income inequality. So can be achieved in India if we will not ignore the backbone of the economy.
The government has started many schemes to uplift this sector. Currently, there are cash or income support schemes. The 2020-21 Union Budget allocated Rs 750 billion ($10.6 billion) for the direct income transfer scheme PM-KISAN.
However, the latest OECD assessment says that India is one of the few countries that has penalized farmers to keep consumers happy. The international measure of a government’s budgetary and other subsidies to farmers is the Producer Support Estimate (PSE), developed by OECD which uses this for its annual tracking of global agriculture supports. In simple terms, this measure estimates what a farmer receives at the farm gate. OECD assesses that it is negative 5.7 per cent for Indian farmers, or that the government has actually taxed the farmers. In 2019, Indian farmers lost $23 billion this way. In contrast, Norway offers 60 per cent support to its farmers. India’s negative PSE benefits the consumers in terms of cheaper food or our obsession to control wage good inflation. Mostly, government support and policy intervention keep the wholesale price low and also help distribute cheap produce through the public distribution system to keep food inflation low. This way, consumers gained a benefit of $80 billion.
This is opposite to what most countries do: Keep agricultural produce prices higher than the global level and make the consumers and government supports to compensate for it as done in China. This means a good return to farmers. Even America highly subsidise it’s farmers.
Government support for producers has remained negative in the last two decades in India. While allocations for fertilizer and food subsidies increased between 2018 and 2019, both fertilizers and food subsidies were lowered for the financial year 2020-21 (by 10.8 per cent and 37 per cent, respectively).
Indian farmers suffered a cumulative loss of Rs 45 lakh crore ($ 600 billion-plus) between 2000 and 2016-17 on account of being denied their rightful income. If we calculate the backwards working of income reducing effect on the economy then this figure may be very high. No doubt the loss of farmers is someone’s gain as poor consumers $ 80 billion . No doubt the income of rich corporates has increased because of this loss of farmers and this income is going to be converted into black money and will increase income inequalities among sectors. Indian economy is going towards unbalanced growth by neglecting the primary sector. According to the new economic policy, the target is to reduce the burden of the population on the primary sector but it has done no preparation for this as where the surplus working population will be adjusted and without a strong rural infrastrcture.
NITI Aayog itself had admitted that between 2011-12 and 2015-16, the growth in real farm incomes had prevailed at less than half a per cent every year, 0.44 per cent to be exact. For the next two years, the growth in real farm income had been ‘near zero’, according to agriculture expert Devender Sharma.
The small and marginal farmers account for 85 per cent of the total landholdings and hold close to 40 per cent share in the total ‘marketable surplus.
The small and marginal farmers will be ruined by the market interventions. Markets are complex institutions representing economic relationships embedded in the prevailing socio-political realities. The price formation in a particular market is dependent on the demand and supply dynamics as well as a myriad of structural factors. The balance of bargaining power between any two parties determines the price formation in a commodity market. Consequently, a floating demand does not necessarily guarantee a better price for the seller if the buyer is a monopolist. Similarly, the absence of a monopoly buyer does not guarantee high prices to the seller if the demand is slow or declining. The demand and supply itself is influenced by a number of factors that are often outside the realm of market transactions.
With globalization and a revolution in transportation, the market demand and supply are influenced by so many factors. For agricultural commodities, natural and weather-related events further add to the complications of the demand-supply dynamics. This has meant far greater fluctuation in agricultural commodity prices after trade liberalization. There have been periods in history when prices have boomed but are frequently followed by huge slumps wiping out past gains for small to big farmers. In light of this, any blind claim that deregulating markets and allowing the free play of private players will improve crop prices for farmers appears to be on unstable grounds at best, and spurious at worst.
In India, the situation of agriculture and farmers are so degradable and pathetic that if farmers will have other option for their livelihood then about 45% farmers will leave this occupation. As a remedy for this and to save the lifeline of the economy the budget expenditure on rural infrastructure should be increased and storage godown and Argo processing units can be started at the village level and labour movement can be stopped then no one will leave its birthplace if they will earn enough to feed their family. We have to generate work for a majority of people as an additional source of income by setting up Agro processing units and a huge investment in rural infrastructure so that each villager will get employment. The same can be done by making farmers stakeholders in agro-processing units and the producer will get a share in value addition by these processing units. Loans by banks should be kept secret instead of declaring them defaulters they should be given time to repay in easy instalments.
About 195 million hectares is total arable land in India and of this only, 38% have irrigation facilities. Efforts should be done to increase the irrigated land. According to the data of NCRB, the lack of irrigation facilities is one of the major reasons for the increasing suicide rate among farmers of Maharashtra. According to Yogender Yadav, the head of Swaraj India, there are three main intertwined crises in the agriculture of India.
